Recently I was struck by something General Electric’s John Rice said about developing internationally savvy leaders. Rice is the vice-chairman and global operations head of a multinational that is doing an excellent job of, as he put it, “optimising big and global with local.” What does it take to grow the necessary talent? “It’s an art and a science,” Rice says.
What struck me was that in thinking about the leadership shortage hampering today’s emerging multinationals – companies with global ambitions in rapid-growth markets such as Brazil, China and India – most of us have been focusing too much on the science and not enough on the art. It’s no secret that these companies struggle with talent shortfalls.
The problems start with senior leadership teams that lack international experience. Internal management pipelines are thin, forcing companies to poach talent from rivals, which invites all the problems of high turnover and salary inflation. Few have worked out how to reward and retain high performers in markets that are foreign to them. And although C-suite leaders may have a strategic vision of how talent should be cultivated, they aren’t always able to spread it through the ranks.
Companies in rapid-growth markets are well aware that these problems critically constrain their international expansion. When my organisation commissioned a survey of more than 800 business executives working in 35 markets, not even a third of them expressed strong confidence in their top management’s ability to build and execute a global talent strategy.
So it makes sense that emerging multinationals are turning to the science pioneered by Western companies – the best practices of organisations that have been “internationalising” for decades. Experience suggests, for example, that candidates for promotion to higher management positions must have done stints outside their home markets. This in turn suggests that the processes by which high potentials are developed and international assignments are given should be integrated. Other practices include aligning individuals’ career goals with overall business strategies, establishing uniform metrics for talent management and investing in globally consistent learning platforms.
All this is sound advice. My concern, based on what I have seen around the world, is that it won’t be enough. Unless a company also thinks about the art of global leadership, it will never reach its full potential on the world stage.
By “art” I mean values and habits that are hard to measure or to instil through some step-by-step process but that show up unmistakably in great companies’ cultures. I’m talking about a commitment to inclusive leadership. Leaders who create high-performing teams that are greater than the sum of their parts value difference as opposed to merely tolerating it. They are curious about other cultures and know to check their own assumptions. They encourage discussion, actively engage conflicting points of view, and inspire teams to think creatively, all while pursuing a common mission.
Probably most leaders believe they are inclusive. Diversity, after all, is a fact of life for any global enterprise, and most everyone accepts the idea that talented people come from all backgrounds, genders, ages and experiences. But in practice, it takes time to listen to people express ideas in unfamiliar accents or styles. It takes humility to accept that someone else might have a better idea. It takes patience to mediate a clash of cultural assumptions.
Just as companies adopt the tools and processes of world-class talent management, they must think about how to invest in these more subtle strengths. Learning the science of leadership will keep emerging global firms growing. But only by mastering the art will they become giants.
Beth Brooke is the global vice-chair of public policy and executive sponsor of diversity and inclusiveness for the Ernst & Young network.