the global leadership marathon

The Global Leadership Marathon

Byron Sulieman

© 2005 Wiley Periodicals, Inc.Published online in Wiley InterScience (www.interscience.wiley.com). DOI 10.1002/ert.20071

There are many similarities between theOlympic marathon race and the race

currently under way in multinational corpo-rations (MNCs) to develop the next genera-tion of global leaders. Competitors comefrom around the globe to enter the race, butonly the most talented and those with thegreatest ambition, determination, andstamina will be able to stay the course.Competitors are told that the MNC race isan equal opportunity competition—that is,regardless of whether they join the organiza-tion in Guangzhou, Bangalore, Chicago, orLondon, they have an equal opportunity tofully realize their potential. However, it ison this latter point that the metaphorbecomes difficult to sustain. In the MNCrace, members of the MNC home countryand their mature market affiliates end uphaving considerable advantage over thosefrom the newly emerging markets.

My career has allowed me to work withpotential leaders from both mature andemerging markets, and I have becomeincreasingly aware of the impact of the con-straints in running the race but only recentlyhave begun to identify their root cause. Ihave concluded that the barriers arise fromthe application of a set of commonly heldleadership-development paradigms that workagainst the intended goal of developing lead-ers from all markets. This article identifiessome of these paradigms and illustrates the

subtle influence they can have on the out-come of the leadership race.

The examples included in this article aretaken from my own career experience aswell as that of my peers in other organiza-tions who are also responsible for developingnew leaders. The examples are used in thespirit of continuous improvement and are notintended to devalue the achievements andongoing efforts of dedicated HR professionalsin these MNC organizations.

GLOBALIZATION VS. LOCALIZATION

Terms such as globalization and global leader-ship are so widely used that their meaningshave become blurred. So I’ll clarify these andrelated phrases as they are used in the con-text of this article.

Globalization is driven by the premise thatMNCs should be led by a leadership teamwhose diversity reflects the markets inwhich it operates. Simplistically, an MNCwith, say, 20 percent of its assets in Indiaand 20 percent in China should have 40 per-cent of top team appointments held bynationals of these countries, and these ratiosshould be maintained up through to themain-board (the CEO and direct reports)level, regardless of whether the organizationis headquartered in New York, Shanghai, orBangalore. Such a top team is a global leader-ship team, and the process through which

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Employment Relations Today

suitable candidates are drawn from acrossthe totality of the MNC and developed tosuccessfully compete for these positions isdefined as global leadership development.

Localization is the base camp that must bereached before the final assault on the sum-mit that is globalization. Localization of theworkforce is in itself a marathon race but itis very much a national-level prequalifier forthe global leadership marathon.

Localization is the process wherebyMNCs reduce their dependence on expatri-ate staff to manage their overseas operationsby replacing them with national staff. Thisprocess was very successfully implementedthroughout the 1990s. MNC annual reportsmay refer to the progress being made toglobalize the leadership team, but a quickglance at the list of executive board directorsin the annual reports of these organizations

reveals that what is really being reported islocalization as opposed to globalization.

Local leaders make local decisions withinthe overall corporate strategy. They may beinvited to contribute as to how the strategycan best be delivered in their home coun-tries but are unlikely to be consultedbeyond this.

Global leaders are required to contributeto the overall debate about the developmentand implementation of the overall globalcorporate strategy and in doing so take aglobal rather than national perspective.

Localization has been with us for awhile. Globalization is still a relatively newchallenge.

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WHAT’S AT STAKE?

MNCs are not the “new kids on the block.” Infact, in 2002, 51 of the 100 largest economiesin the world were companies not countries,and the combined sales of the world’s largest200 MNCs accounted for one-quarter of worldGDP. Despite these impressive statistics, thesesame organizations have not exactly been rolemodels for globalization.

While enjoying global reach in terms oftheir operations, they have, for the most part,continued to remain dependent on the homecountry for the majority of their revenue. Forexample, U.S.-based MNCs typically retain 75percent of their assets in the United States,from which they realize about 66 percent oftheir revenue. In addition, they remainlargely led by a top team consisting in themain of home-country nationals operating aheavily centralized business model and orga-nizational structure. Even from an organiza-tional culture perspective, the home-countryculture dominates their overseas offices.Although some progress was made in the1990s with MNCs empowering their overseasoperations, that progress was halted in thepost-Enron environment.

In recent years, MNCs have successfullyexploited emerging markets in EasternEurope, parts of South America, India, andChina, and established long-term marketpositions in these locations. A consequence ofthis success has been a significant shift inasset and revenue distribution. The MNCoverseas distribution of assets is likely to bemuch less fragmented, and consequently, thehome country is likely to be replaced as themain revenue source by one or more coun-tries from which the MNC derives incomeand invests in assets. Given this scenario, it isunlikely that the current home-office domi-

Localization is the base camp that must be reached beforethe final assault on the summit that is globalization.

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nance in leadership and influence on culturecan be sustained. Therefore, it is increasinglyimportant that an individual’s performance isthe only differentiator in the global leader-ship marathon.

NEW COMPETITION

To date, the only competitors in the race havebeen executives from the mature market sec-tor of the MNC, primarily the home offices(HOs). Localization was driven by the deci-sion to reduce dependence on expatriation,and so senior-level appointments have beenmade from the ranks of home-country nation-als. The increased emphasis on global leader-ship development has resulted in executivesfrom new markets (NMs) entering the racefor the first time.

So let us follow the fortunes of our HOand NM competitors as they set off to securethe top leadership positions in the MNC ofthe future and identify the paradigms theyencounter on the way and their consequencesin relation to the final outcome of the race.

Starting Lineup

Before the race even begins, two paradigmscome into play that affect the talent poolfrom which the HO and NM teams selecttheir candidates. The first is the graduaterecruitment paradigm.

The board of any company has a duty toits shareholders to ensure that the organiza-tion is continually being refreshed with acadre of individuals with the potential to bedeveloped as future leaders. This may there-fore explain why invariably the most rigorousand high-profile trawl of the top institutionsoccurs in the HO country. They invariablyinvolve a series of interviews, often with

The Global Leadership Marathon 13

some of the most senior executives in theMNC, supported by a battery of psychomet-ric tests and business simulations. Successfulcandidates can be assured that even beforethey walk through the office door for the firsttime, they have won the trust and confidenceof the organization as to their alignment withthe values and expectations of the MNC. Inaddition, they will receive an extensiveinduction program in the first few weeks ofjoining, which enables them not only torapidly familiarize themselves with what oth-erwise can be extremely complex MNC orga-nizational issues, but also to develop a net-work of peers and relationships that are oftensustained on a career-long basis.

In contrast, emerging markets, especially intheir formative years, recruit few, if any, freshgraduates, because the focus is on achieving

functional excellence to facilitate rapid growthand market entry, and the search for a futureCEO is certainly not something recruiterswould see as part of their charge. As far asinduction, it does not extend much beyond afew hours dealing primarily with hygieneissues and with little reference made to theMNC world beyond the boundaries of thenational organization. This is not to say thatpotential global leaders cannot emerge fromthis pool, but given the differences in recruit-ment strategy between the HO and NM, theywill emerge by chance, not intent.

The result is the candidate pool fromwhich the HO team can select is likely to bemore motivated to pursue leadership posi-tions, giving the HO team a considerableadvantage even before the race starts.

The increased emphasis on global leadership developmenthas resulted in executives from new markets (NMs) enter-ing the race for the first time.


The second paradigm affecting the selectionpool is the mature recruitment paradigm. Corpo-rate HR departments generally espouse a “one-size-fits-all” approach to leadership develop-ment to ensure, ironically, fairness andequality. However, mature recruits rarely farewell under this approach. Further, the NMmature recruits are at a greater disadvantagebecause the organization spends little timeworking with them, and the environment inwhich they work is much less cosmopolitanthan that of the HO. The result is that the NMrecruits are likely to be much less aware ofcareer opportunities and how to access these.

The Early Stages

The foundation years are those five to sevenyears after recruitment, during which gradu-ates establish their reputations as “experts”in particular functions. The focus is on skillsacquisition. Many opportunities exist for all

individuals at this stage, but the HOs stillhave the advantage. Individuals are coachedby either a quality professional or a leader orfuture leader. Therefore, HO graduatesreceive not only the experience, but also thelanguage and culture of the mainstreamorganization. They become exposed to strate-gic as well as operational issues and alsoknow how and whom to approach to getthings done. By the end of this initial period,the graduates acquire a sound functional/pro-fessional excellence to build on for the restof their careers in the organization.

By contrast, the only regular coachingavailable to the NMs is often from fellow

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emerging-market nationals, who themselvesare often struggling with the culture of theorganization.

The HOs emerge from this foundationperiod certainly wiser in the ways of the cor-poration and how to make things happen andgenerally are able at this stage to progress oneor two levels above their NM counterparts, astheir progression at what in head-office termsis still a relatively junior level is totally unin-hibited by establishment control issues. Inemerging markets, staff numbers at this levelare likely to be closely controlled, and pro-gression to more senior positions can onlyoccur if an appropriate vacancy arises. Thiscreates a career gap that is difficult to close.

Assessing Performance

All competitors in the race toward leadershippositions must show that they are able tomeet the challenges and clear the hurdlesnecessary to attain higher levels in the orga-nization. That is how it should be, but theassessment paradigm gets in the way. In the-ory, performance measures are appliedequally, but in reality HO candidates enjoyseveral advantages over their NM colleagues.Because of the differences in how the NMsand HOs are coached, the HOs may be wellknown to at least one of their assessors.Moreover, when the NMs are assessed onhow they contribute both individually andcollectively to the resolution of a particularissue, this is done in the context of HO cul-ture, with little regard to the cultural normsof the NMs.

As an example, an Indonesian candidatewas labeled “indecisive” because in a simula-tion he took three weeks to communicate withhis factory, resolve the problem, and reach anagreement to go forward, whereas his HO col-

HO graduates receive not only the experience, but also thelanguage and culture of the mainstream organization.

Autumn 2005

leagues who faced a similar situation wereable to hold a meeting within a day to addressthe problem and move on. What none of theassessors realized is that in Indonesia consen-sus must be achieved over a period of timebefore any agreement can be made. TheIndonesian candidate’s actions were totallyappropriate (and actually much more likely toachieve a long-term satisfactory outcome), yethe found himself being marked down.

Faced with this reality, the more savvyNM competitors decide by mid-race to take aslightly different course and learn to changetheir style and approach to be more akin totheir HO fellow runners. By the second halfof the race, the diversity of the startinglineup is diluted. This defeats the objective ofglobalizing the MNC’s leadership.

Mid-Race

The next stage in the race is affected by twoparadigms: the generalist and multiculturalteam paradigms. With respect to the generalistparadigm, there is usually a push to exposeindividuals to a so-called broadening move inwhich there is a change either in terms offunction, business sector, or location to testgeneralist rather than functional specific skills.This fixation with broadening effectively pre-vents exposure to bottom-line accountabilityand people management because such front-line positions are usually entrusted only tothose with deep functional knowledge—not to“generalists” who are just passing through.

Further, although “broadening moves“ arereasonably accessible for the HOs, they aredifficult to deliver in the cost-constrainedbusiness environment of emerging markets,in which management must often think shortterm to deliver HO expectations for assetfinancial performance. The NMs, therefore,


have fewer opportunities to acquire the gen-eralist experience that the MNC favors.

While the NMs struggle to get a betterposition in the leadership race, they are facedwith the multicultural team paradigm—theMNC’s superficial understanding of what ittakes to work with members of different cul-tures. I have facilitated cross-cultural teamsfor many years, and I am amazed at the out-rageous behavior that can be displayed byheadquarter members of the MNC—whetherit be arranging video conferences for 3 A.M.Shanghai time, setting up face-to-face sessionson the eve of Chinese New Year in NewYork, or taking Hindu visitors from Bangaloreto Morton’s Steakhouse for dinner.

Business meetings begin badly with theNM representative feeling unable to engage

in the typical “clubby” conversations peoplehave when they gather for meetings. Onceinto the formal business, things are scarcelybetter. No allowance is made for the fact thatEnglish is a second language for the NMs. Noattempt is made to ensure that they areincluded in the conversation to contribute oreven to clarify their understanding. Wholemeetings may be conducted solely from theHO view and voice. The experience is debili-tating for the NMs, they begin to lose theirstamina at this stage in the race, and the gapbetween the HOs and the NMs grows wider.

The Push for the Finish

The NM competitor who kept up with thepack through the foundation period, made itthrough the assessments, found a broadening

I have facilitated cross-cultural teams for many years, andI am amazed at the outrageous behavior that can be dis-played by headquarter members of the MNC . . .


opportunity in the country, and survivedexposure to cross-cultural teamwork withboth humor and reputation intact finallymanages to emerge from the NM maturerecruit pack and is ready for the final pushfor the finish—the overseas assignment.

The gist of the overseas assignmentparadigm is: HOs are sent overseas to teach,not to learn, and NMs are sent to the headoffice to learn, not to teach. The NM discov-ers this after arriving at the head office withthe enthusiasm of a marathon runner whofor the first time in the race can see the sta-dium on the far horizon. He soon becomesdisillusioned after beginning a series of ana-lytical projects, writing reports that no oneever seems to read or appear interested in.

I have heard of instances in which individ-uals have completed their overseas assign-ments without having any front-line expo-sure. This situation can, in some cases, arise

simply through poor planning, but moreoften than not it results from the systemunwilling to take a “risk” by exposing theindividual to a real decision or customer. Theresult is that what could be a great mutuallearning experience and an opportunity forthe NMs to increase their “organizationalsense of worth” often has the entirely oppo-site effect on the NM competitor.

The HO candidate’s overseas experience isvery different from the NM candidate’s. First,the HOs usually arrive at their new assign-ments with a great deal of self-confidence byvirtue of their previous years of interactionwith the executives in the head office. Theirknowledge of HO culture leads them to

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believe that their overseas assignment is a“teaching” assignment rather than a learningexperience, much to the consternation oftheir local colleagues. Although the overseasassignment is intended as a developmentexperience for all parties, the HO has theadvantage once again, and the NM suffersanother blow.

The final blow is usually dealt through thelocation paradigm, which requires that allmembers of the top team must be located inthe head office. In the unlikely event that anNM candidate does manage to stay with theHO pack, this is generally the “deal breaker.”Given the fact that the seniority of the post inthe head office is greater than anything backhome, a decision to accept it is effectively adecision to emigrate and, not unnaturally, thatis a step too far. And although NMs should beaware of this as a possible outcome beforethey enter the race for a leadership position inthe MNC, they view it as a distant possibility.When faced with the decision, many declinethe post, and all the effort put in by both theindividual and the MNC is wasted.

POST-RACE ANALYSIS

If the race for future qualified leaders inMNCs is to continue, upper-level managerswill have to determine whether their objec-tives are being met the way the race is cur-rently run. Continuing the race using thesame paradigms will produce the sameresults. If MNCs want to achieve true global-ization of their future leadership, greatereffort will have to be made to allow the NMsto compete more effectively with their HOcolleagues. The challenge in this instance forHR professionals is not so much to improvetheir athletes’ fitness but rather to influencetheir MNC to change the rules.

I have heard of instances in which individuals have com-pleted their overseas assignments without having any front-line exposure.

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Byron Sulieman is the founder of BDS Consulting, a Singapore-based consultancy. Hespent 30 years in a variety of HR roles with British Petroleum, including five years ofbeing accountable for BP’s worldwide high-potential leadership program and 12 years asBP’s regional HR director, Asia-Pacific. He has lived in Hong Kong, Jakarta, KualaLumpur, and Singapore and has broad experience in strategic HR management in thisregion. These experiences, along with his role in senior management development at com-pany headquarters, have provided him with a perspective of leadership development fromboth sides of the mature/emerging market interface. He also holds associate positions inFoster Partners (www.fosterpartners.com), a strategic resourcing consultancy formed inJanuary 1990 through the management buyout of a division of KPMG Peat Marwick’sU.S. consulting practice, specializing in Asia-Pacific resourcing for MNCs; in Delta Stom-ack, which consults in the Asia-Pacific region, focusing on coaching and mentoring; andin Competitive Capabilities International (CCI). He may be contacted via e-mail [email protected].

the global leadership marathon

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