In a survey on globalization conducted by Ernst & Young, the majority of companies responded that diversity of gender, ethnicity, and experience are important components of a successful management team. These respondents stated that financial performance and overall reputation would be improved by incorporating diversity throughout an organization. Despite their own advice, many upper management teams are composed exclusively of people from one country. In order to capitalize on opportunities in emerging markets, it seems beneficial to have managers with first-hand knowledge of business around the world.
The idea to take a business to a new international market often originates from one person. In order to find opportunities abroad and to determine where they will be most effective, it is important to have trustworthy leaders who are able to fully understand differences between countries. Without the ability to make these decisions quickly, companies may be beat to the market by competitors.
The ability to select and develop leaders from diverse backgrounds is not always simple to master. Each global leadership position will require different skill-sets than a typical position at home. While it is easy to hire someone who looks and acts similarly to existing leaders, it is often more challenging when global experience is a necessity. If international hiring can be mastered, it may prove to be the differentiator that fosters global success.
Another important skill for all international leaders is that of improvisation. While old business methods may work very well at home, many factors in international markets can change that. Leaders must be capable of adjusting to unforeseen difficulties when assimilating to cultural and economic peculiarities. A “cookie-cutter” approach to international markets is almost never successful. Leaders in global markets must be trusted to make decisions seeming counterintuitive to management at home.
Trust is the most difficult concept that leaders of global firms must master. They cannot micromanage international branches if they want them to be successful. As is often the case, hiring and talent management are instrumental to long-term success. Diversity of thought and experience should be embraced to foster an innovative business environment.