A relatively small set of multinational enterprises (MNEs) constitutes the bulk of the world’s trade. In fact, the largest 500 MNEs represent over 90% of foreign direct investment and conduct more than half of the world’s trade. The expansion of the European Union, recent revisions to NAFTA, free trade agreements between China and the Association of South East Asian Nations (ASEAN), and India and ASEAN will ensure that the majority of trade will remain intra-regional.
To facilitate these international business dealings, organizations must have competent global leaders. A number of studies have looked into what characteristics, personality traits and leadership styles are conducive to leading global endeavors.
This article shares the results of our own findings and compares them with other research efforts to develop a blueprint for recruiting and developing global leaders. Our hope is that these insights will optimize your organization’s potential for succeeding as a multinational enterprise.
DNL Global Inc. has been conducting an ongoing study of international project teams. The study considers three distinct groups to illustrate what competencies are needed in leading successful teams:
- Experienced US-based project managers
- Experienced global project managers
- High performing global managers
The following graphs illustrate the preliminary findings of this ongoing study and highlight both similarities and differences between managers in the three categories.
When the work style characteristics of the three groups are considered (Figure 1), top or high performing global project managers exhibit more spontaneity, flexibility and focus than the other two manager groups. Interestingly, these managers also show less self-reliance than other project managers. One way to interpret this is that top global project managers are more likely to create and depend upon competent team members rather than their own efforts.
The findings that highlight personal adjustment characteristics (Figure 2) also illustrate some interesting differences among the three study groups. While experienced US-based project managers and experienced global managers have about the same emotional intensity, high performing global managers demonstrate a significantly higher level of passion. (We define this as a passion for work and resiliency.) We found that these managers were able to build and maintain relationships over long distances through virtual environments.
The other significant difference among the three groups is in the area of personal adjustment. High performing global managers have higher self-expectations, expecting much more of themselves than their counterparts. Our findings also show higher emotional intensity and a slight decrease in the amount of objectivity between top global managers and the other two groups.
In considering interpersonal and leadership styles, the strongest style among all three groups is competitiveness, followed by assertiveness. This may illustrate a “knee-jerk” response to the need for achieving results over the need to build relationships. We predict that the sociability rankings will increase as it becomes more evident that social skills are needed for long-term success as a global manager.
Manager Personality and Work Style
We also identified 10 personality and work style competencies that were evident in all types of project managers, but particularly so in global managers:
- Relationship management
- Business acumen
- Cultural agility
- Customer service orientation
- Strategic thinking
- Team leadership
- Decision making
- Organizational awareness
Stewart Tubbs and Eric Schulz of Eastern Michigan University found many of these same personality and work style characteristics in a 2005 study. Tubbs and Schulz used the “Big Five” personality dimensions (extraversion, agreeableness, conscientiousness, emotional stability and openness to experience) along with locus of control to describe successful global leaders.
Conscientiousness is described as dependability, responsibility, achievement orientation and persistence. This personality characteristic corresponds well with the personal adjustment characteristics of emotional intensity and self-expectations found in our study. People exhibiting an internal center of control feel they have greater control over events than do those with an external locus of control. This characteristic is complementary to the competitive leadership style found in our research.
Tubbs and Schulz developed taxonomy of global leadership competencies and meta-competencies based on interviews and discussions with over 50,000 leaders of organizations in North America, South America, Europe and Asia. Table 1 represents the seven meta-competencies and their related 50 sub-competencies that were found in this study.
|Table 1: A taxonomy of competencies in global leadership.|
|Understanding the Big Picture|| Demonstrating knowledge of the entire organization|
Using systems theory
Effectively utilizing technology
Demonstrating global sensitivity
Utilizing effective compensation
Demonstrating ethical practices
|Attitudes are Everything|| Demonstrating a vision|
Showing inclusiveness and respect for diversity
Demonstrating appropriate confidence in self and others
|Leadership, The Driving Force|| Inspiring others|
Going against outdated or ineffective practices
Varying leadership to the demands of the situation
Demonstrating sensitivity and empathy
Seeing nuances of alternatives, not just either/or extremes
Serving as an appropriate role model
|Communication, The Leader’s Voice|| Demonstrating appropriate emotional intelligence|
Using active listening
Skillfully using language
Skillfully using body language
Effectively giving oral presentations
|Innovation and Creativity|| Developing an innovative organizational climate|
Improving creative decision-making
Using weird ideas that work
Avoiding indecision based on old paradigms
Encouraging people to use and develop their creative abilities
|Leading Change|| Creating transformational change|
Developing a continuous learning culture
Building support mechanisms to create and sustain change efforts
Managing the change process
Developing change agents
Encouraging individual change
Encouraging structural change
|Teamwork and Followership|| Learning to focus|
Employing no-fault problem solving
Developing a team oriented culture
Developing team-based incentive and reward systems
Managing your boss
Navigating organizational politics
Supporting others on the team
Developing self-directed work teams
While the terminology used in the Tubbs and Schulz study differs from that in our study, there are some obvious similar themes. Both studies highlight the fact that effective global managers must understand the overall environment, organization, employees and customers. Since most managers don’t come into leadership roles possessing all the recommended qualifications, organizations must seek out candidates who can be developed into great global managers.
Can Your Company Develop Global Managers?
As both the DNL Global Inc. and Tubbs-Schulz studies indicate, the skill sets of a competent manager within a localized environment differ from the skill sets of competent global managers. As most organizations promote from within, a major question for organizations is whether or not local managers can make a successful transition into international leadership roles. In a recent Human Capital Institute poll, over 50% of the respondents believed that about half of the managers that transition into international roles do so successfully. If the results from this informal poll reflect normal trends, organizations have a 50/50 chance of transitioning their selected managers into international roles with positive results.
Our findings indicate that only about 20% of all global managers are naturally talented in the required leadership competencies. Half of those who don’t possess the natural competencies will receive enough training to make them successful, but the other half will eventually need to be reassigned because of poor performance in a global market.
According to Paul Davies, managing director for Onshore Offshore Ltd., the challenge for organizations is determining what specific development opportunities will benefit the 40% underperformers. One commonly suggested development program involves allowing high potential managers to take on global responsibilities with the support of a mentor or formal training program. Many experts agree that while some individuals do show a natural propensity towards global leadership, training and development can be extremely successful in creating strong managers.
David Creelman, senior director and CEO at Creelman Research, believes that everyone can improve upon their natural abilities. However, the speed at which they improve will vary dramatically. Roger Campbell of BearingPoint and Karl Moore of McGill University both believe that global management skills are, indeed, enhanced by giving high performers opportunities to hone their skills. It’s not just potential global managers who need training programs; individuals responsible for selecting international leaders must also have specific skills. Creelman believes that if hiring managers have previous global experience, they’ll be in a better position to pick up the subtle but distinct competencies that are required by each host country.
Davies talked about the hierarchical business structure resulting from India’s highly hierarchical historical culture. New leaders in India need to be aware of the fact that it’s almost anti-cultural for Indian employees to challenge their managers. David Murphy found similar cultural differences when studying global leadership qualities valued in Mexican firms. In a random sample of executives in Mexico City, Murphy found that the Mexican culture valued the ability to make hard decisions and administrative skills more highly than any other. This finding was in contrast to US executives, who valued leadership ability and top management potential.
These findings beg the question of what additional criteria must be considered in making global leader selections. Moore sees some interesting correlations between competent global leaders and their home environment. He states that there are an isolated number of countries that have two or more distinct cultures present simultaneously (Belgium, Singapore, Canada in Quebec, Switzerland and Holland). Evidence suggests that individuals living in these areas have an increased ability to be successful global managers because of their experiences living in bicultural environments. Moore says that there’s a “richer pool of candidates from these countries,” than from any other.
One advantage that these bicultural leaders have over others is their ability to handle the various cultural differences. Figure 4 illustrates how these individuals are able to maintain low stress levels because of their abilities to identify with both their own parent culture and the host culture. As this figure shows, individuals become highly stressed when they are unable to identify with the host culture. Managers have moderate stress levels when they’re able to highly identify with their host culture but not with their own. The optimum state is when an individual is able to identify with both their parent and host cultures.
We can’t overemphasize the differences between cultures. While Moore has found that bicultural environments create more competent global managers, Davies’ experience in India found that attitude is the most important characteristic of effective leaders. Davies believes that what is most important for future global managers is the ability to have a feel for the subtleties and nuances of the host culture. For example, Davies stated that when he worked in India, he had a difficult time holding two distinct cultures in his head at the same time. What became important for him was to acknowledge that there were two different realities and perceptions that he needed to respond to.
The task of finding and selecting managers for global leadership positions isn’t easy. We offer three points to remember as you embark on this challenge:
- Hiring managers must have some personal experience in order to know what qualities to look for.
- Potential candidates must possess key competencies and exhibit specific behavioral tendencies in order to be successful.
- Organizations must create vibrant development opportunities for their global managers to ensure a high success rate.
Given the time, effort and monies invested in creating effective global management teams, a 50% success rate must be improved upon in order for organization’s to remain competitive.
The competition for effective global managers will only increase over time. Rosabeth Moss Kanter of Harvard University states: “In the future, success will come to those companies, large and small, that can meet global standards and tap into global networks.” As the world “flattens,” individuals possessing global leadership expertise will be in high demand. Roger Campbell believes that successful multinational businesses will take the approach of attracting these key individuals by establishing a reputation for being an “employer of choice” and by creating organizational cultures that are attractive to these distinctive leaders.
Whatever the selection criteria used by multinational employers, it’s clear that a strategic and holistic approach to global manager acquisition is needed. The research findings regarding managerial competencies can be helpful to businesses in developing their global management recruitment efforts. If nothing else, it’s extremely important that organizations acknowledge the fact that the skill sets required in normal local managerial positions are quite different from those required in global management situations.
DNL Global Inc.
Human Capital Institute
Human Capital Institute Webcast: “Acquiring Great Global Managers”
Onshore Offshore Ltd.
Thomas Friedman’s The World is Flat: A Brief History of the Twenty-first Century
David Murphy’s “Global leadership potential in Mexican firms”
Alan M Rugman1 and Alain Verbeke’s “A Perspective on Regional
and Global Strategies of Multinational Enterprises”
Stewart Tubbs and Eric Schulz’s “Exploring a Taxonomy of Global Leadership
Competencies and Meta-competencies”
Jeffrey G. Williamson’s “Globalization, Convergence, and History”