Global leaders

Globalization means more business opportunities and more competition than ever before. New markets are available to every company but new competitors are emerging from every corners of the world. The most challenging task today is developing leadership to manage this vast and complex global business because the traditional management training does not work anymore. Companies that invest in developing global leadership will find more opportunities and better execution, while companies that do not face more risks and potential failure. To start doing business globally, companies need strong “Brand name” because when people have more choices, they will buy the “Brand name” rather than “Unknown brand”. By having a strong brand name, company can hire top people because highly skilled people want to work for well-respected companies. Companies that invest in developing strong global brands enjoy better chances of hiring top candidates with global experience. For example, companies like Toyota, Honda, IBM, Microsoft, Google, Intel, Nokia or Samsung will not have much problem in developing a global leadership management. With globalization, the world is the market; companies with strong leaders can change the competitive equation toward their direction because highly skilled global leaders not only know the customs and culture of the region in which companies operate, but they also understand the issues of doing business in those areas.

The question is where do you find global leaders? The answer is top university. Most top universities do not teaching “theories” and “book knowledge” but practical knowledge that can be used, applied with good results. If you look at the majority of business leaders in the world today, you will find probably over 90% of them came from top universities and many top universities are private schools. The list of Top ten U.S schools has eight private universities. The list of top 100 global schools has 87 private universities. Why private schools are doing better? Because they are very responsive in meeting market demand rather than rely on government supports. Private schools always adjust their curricula based on industry needs in order to get funding from industries. With more funding, they can hire better professors, build better laboratories, have more researches, and recruit top students. Let me give you an example, few years ago, Japanese automobile companies began to built cars in the U.S. Traditional Japanese companies would bring their own management to the manufacturing facilities to operate it the same way they have been successfully doing in Japan but Honda did not do that. They started their recruitment program at top U.S universities and selected the best talents to manage their plan in America. Their philosophy is “Plan globally but act locally” so they relied on people who knew the customs and cultures of the country where they operated rather than their own people. The result was Honda has been the most successful foreign automobile company in the U.S even though it is much smaller than its competitor Toyota. Honda also transferred those global leaders from their plans around the world back to Japan so they can help people there to understand about global leadership. This “Cross-cultural” learning has helped Honda to be very successful in every aspect of their global business because they know how to invest in developing leaders. 

To many people, the word “Globalization” means “low cost” and “High competition” but actually the potential of globalization is not just about cost, competition but also leadership. Global leaders must understand the potential of every people within their business based on their vision of a new way to do business according to local market. They must know how to leverage additional opportunities by looking for new talents that emerge from a new location over time. Hiring workers around the world is not a problem, but finding skilled managers is very difficult and costly. Of course, company can hire thousand unskilled laborers or inexperienced graduates in developing countries for much less than in New York or London, but a potential leader, an educated, highly trained, experienced in local custom and culture is not easy to locate. Poor leadership or bad management at any level can be fatal. Once a company becomes global, such failures can make success impossible and when a global company failed, it usually does not have a second chance. According to the latest research, more than 70 percent of global moves fail entirely, and only 17 percent of companies achieve profitable global growth. Many well-publicized global failures can be traced back to executive’s wrong decision making. Without understand the culture and language, there were so many mistakes such as when Chevrolet introduced their U.S best selling car “Chevy Nova” in South America, they were surprised that they had no buyer even after spending a lot of money for advertising. After several months, they learned that the work “Nova” in Spanish means “Do not run” and who would buy a car that do not run. The same things happened in China when the famous fast food company KFC using the well known advertising in the U.S “Finger licking good” (People love to eat their food and even when they finish, they still licking their finger) but in China it means “People eat their finger off” so who would buy something that make you eat your finger? The successful U.S Company “Home Depot” had to sell its stores in Argentina and Chile in 2001 after local people objected to their general arrogance attitude. Culture clashes have also caused many successful U.S. companies to struggle in Europe, especially in Germany and France. Even today, failures in the form of missed opportunities due to ignorance of culture and local custom also occur daily around the world. More than ever, the need to have good global leaders from the local area where global companies want to do business is becoming critical. According to Harvard University’s report, the recruiting of global leaders in local market is the most intensive despite the economic downsizing and every global company is struggle to find good local leaders. The questions that these global companies asked were: Where can they find local managers? Do local universities have good training programs to develop such leaders? 

Today global companies can build factories anywhere, anytime because they know how but their most challenge by far is having global leaders who can make their investments profitably. The typical requirements for global leaders are: Able to maintaining clear direction and motivation among an increasingly diverse team and workforce; Familiar with both global and local regulations to ensure seamless operational across geographic boundaries. Having ability to create and operate flexible business strategy because not every business model can translate across cultural and economic boundaries. A good global strategy must balance its core business with the unique culture and customs of the local country, region, or market. Having strong knowledge of information technology, especially in project management, portfolio management, and risk management. Be able to integrate technology strategy into the business strategy to ensure that the application of information technology support and enable the business. Having the skill to create natural disaster and business continuity plan, understand business intelligence, data mining and the application of data analysis for knowledge management. These are skills that domestic manager may not encounter but global managers need special training. However, these training are only taught in few top universities and one of the well known trainings for undergraduate students in this area is the Information systems management program at Carnegie Mellon University.

Prof John Vu    

Carnegie Mellon University

Original source: http://www.segvn.org/forum/mvnforum/viewthread_thread,208