The Development of the Global Leader

Though it seems clear that exceptional global leaders have specific competencies and character traits, we think it is important to understand how these qualities develop. Most global organizations have procedures (whether formal or informal) for testing a candidate's aptitude for a global leadership career. Candidates are often selected according to their performance in the organization in their country of origin, their self-described desire for an international post, or simply because they have no dependants. Candidates chosen for such training are then nurtured by the prevailing corporate culture, which—at its best—is a kind of ladder, providing support and encouragement for global leadership development. However, it is essential to understand that the foundation for the development of the exceptional global leadership practices described earlier is laid in childhood experiences, which in turn are affected by cultural socialization patterns, all of these exposures consecutively building on each other. Early managerial responsibilities and international projects foster (not create) global leadership competencies by building on that foundation. We would go so far as to argue that if the right foundation is lacking in a given individual, “global leadership” training within the organization will be of little use. In the selection of future global leaders, global organizations would do well to look into the backgrounds of potential high-flyers, scrutinizing early childhood and educational experiences.

Tradition, Training, Transfer, Teamwork, and Travel

By tradition, we mean the early influences that shape a young manager's world view. The more intercultural experiences children have early in life, the more likely they are to develop the kind of cultural empathy necessary for effective leadership in a global setting. Because of the impact of early socialization, exposure in childhood to different nationalities and languages can be a determining factor in how well an adult deals with cultural diversity later in life. Children of mixed-culture marriages, bilingual parents, or diplomats or executives who move frequently also have an advantage.

Training, Transfer, Teams, and Travel

These four elements most often occur together. At a preliminary stage of a young executive's career, international executive training courses have become almost a requirement for future global leaders. Many organizations send their high flyers to an MBA program such as that offered at INSEAD, a business school in Fontainebleau, France, that has no national identity and is a breeding ground for attitudes of cultural relativity. INSEAD students work in mixed-nationality teams over their 10-month course; a typical group might include one American, one Frenchman, one Russian, one Japanese, one Swede, and one Brazilian. They spend part of the program at the Singapore campus. As these individuals work together on various projects, they develop the necessary cross-cultural mindset, minimizing ethnocentricity.

On-the-Job Training

On-the-job training offers an education of another sort, and it is no less vital. Exposure to international leadership experiences early in one's career is important (by experiences we mean concrete project responsibility). This experience should include working with multicultural teams. Such experiences hone a person's capacity to cope with difficult leadership challenges later in the career cycle. Travel, for pleasure and business, is essential, as are transfers that stretch young executives in new ways, especially if they occur in conjunction with an internationally oriented human resource system and an organizational support system conducive to the management of global careers. (This support system must take into consideration the family situation of the global executive, just as the hiring process must include criteria for selection according to that situation. The spouse or partner must be supportive, adaptable, adventurous, and mobile. Children are also an extremely important factor. The hard truth is that the majority of expatriate assignments that fail do so because the family of the executive cannot adapt.) This kind of early international experience is a good test of a young manager's global leadership potential.^[17]

Nokia is a good example of an organization that looks for young employees with a firm grasp of cultural relativity and then provides opportunities for people to develop their leadership potential. This organization goes even further, providing continuing opportunities for older executives.

As the number-one maker of mobile phones in the world, Nokia is now a household name. The 136-year-old Finnish company, once a manufacturer of everything from rubber boots and toilet paper to TVs, transformed itself under CEO Jorma Ollila into a producer of cutting-edge mobile phones. A large part of Nokia's success is due to its ability to turn from a provincial organization with 60% of its business in Finland 10 years ago into a truly global organization with only 4% of its activity in Finland in 1999. Of the 44,000 employees hired in the past three years, half work outside Finland. The organization is flat and highly decentralized, with R&D centers in Japan, the United Kingdom, and Finland; factories in Texas and China; and a design center in California.

Innovation on a global scale is a core value at Nokia; not surprisingly, global leadership is a key preoccupation among the members of the board. They take a leading role—as faculty members—in the Panorama Leadership Program, an action-learning program for senior executives. A central feature of the program involves giving executives greater geographical familiarity. Each year, one module of the program takes place in a different area of the world—an area in which the company wants greater market penetration or which is viewed as a potential provider of new technology skills. Thus executives have to spend time in, for example, China, Japan, or the United States. These seminars, which help to create multicultural groups, represent the kind of cross-cultural exposure that has put Nokia at the forefront of the industry.

Companies like Nokia stand out as exceptional organizations that are farsighted enough to devote time and money to identifying and developing truly global leaders. These organizations are ahead of the game because they already have in place a set of values, attitudes, and behavior patterns that center on cross-cultural empathy. They have gone to great lengths to hire and build up a critical number of globally competent employees—the pool from which leaders of the future will come.

Contrast these leading global firms with companies that use their foreign subsidiaries as parking lots for redundant employees when times are lean at home. Or compare them with companies that send expatriates to take charge when an expensive and important new factory or project is due to come on line in a subsidiary, passing over the local employees who did the initial groundwork. Predictably, the local executives resent such decisions and act accordingly; the expats (and their families) are equally unhappy, stressed by a hasty move to an unfamiliar environment with little preparation (a cursory language program at best) and often culturally isolated in an expat “ghetto,” with no guarantee of a job in their home country when the foreign assignment is finished.

The global mindset of the organization, as these examples illustrate, is—and should be—shaped from the top, though that shape will vary from company to company. For Percy Barnevik, former chairman of ABB, a strong corporate culture is a great equalizer. At ABB, the culture was codified—a kind of Rosetta stone—in ABB's policy “bible.” This 21-page document describes ABB's values; among them, how ABB should create a global culture, what can be done to understand others, the benefits of mixed nationality teams, and how to avoid being turf defenders. ABB's official language is English, although Barnevik used to remind native speakers to be patient with colleagues who are less proficient.

One of the indicators that an organization is truly global is the number of nationalities represented on its board. Most U.S. organizations with global operations still have boards composed entirely of Americans. The same point can be made of many European and Asian corporations. A mixed-nationality executive board shows the outside world that the organization is committed to globalization and integrates different perspectives, and it offers an antidote to signs of ethnocentricity within the organization. It also demonstrates that the top jobs are not the exclusive bailiwick of certain nationalities. Most important, a truly global board can accomplish the function of effective decision making based on diverse perspectives.

There is no easy solution to the development of leaders in a global age, but companies that carefully select and strategically develop people with global leadership qualities (like Nokia) and use them at all levels in the organization will have a competitive edge sooner rather than later. (See Figure 2-1 for an overview of the developmental action steps involved in the making of a global leader.)