Meeting the Global Imperative of Local Leadership Talent Development in Hong Kong, Singapore, and India

Transcription

1 Meeting the Global Imperative of Local Leadership Talent Development in Hong Kong, Singapore, and India KELLY DUNNAGAN, MIREILLE MARAGAKIS, NICOLE SCHNEIDERJOHN, CAMERON TURNER, AND CHARLES M. VANCE As companies continue to expand abroad, there remains a paramount challenge of ensuring strategic control to meet company standards and goals and to coordinate global operations. Traditionally, such control has been maintained by sending tried and true managers from company headquarters as expatriates to head up foreign operations. But in the face of this costly traditional approach for leadership staffing in foreign operations, there is increased awareness among multinational firms that their potential leadership talent is not restricted by their headquarters national boundaries. MNCs are increasingly looking to their employees worldwide as a viable source of future talent for leadership staffing throughout their global operations. The results of field interviews with local leaders of American firm subsidiaries located in Singapore, India, and Hong Kong revealed four key local leadership development approaches: reinforcing a company culture of leadership development, identifying and codifying leadership talent, enhancing high potentials visibility, and developing pervasive mentoring relationships. The cases examined here show that talent identification and development are essential elements of an effective long-term talent management strategy that should be ingrained within a company s deep cultural values and priorities, as well as reinforced by performance evaluation and reward systems Wiley Periodicals, Inc. The opportunities and competitive pressures of globalization continue to steer firms small, medium, and large toward increased expansion abroad. With this continued expansion there remains a paramount challenge of maintaining strategic control of those operations to meet consistent company standards and goals and to coordinate global operations. Traditionally, such control has been maintained by sending a tried and true manager from a multinational corporation s (MNC s) headquarters as an expatriate to the new foreign operation. While strategic control of the foreign subsidiary continues to be a top priority, shifts in the competitive business environment push MNCs toward tighter fiscal spending policies and overhead control, compelling them to explore viable, less costly alternatives to expatriation (Vance, Paik, & Chow, 2011). Along with growing concerns about reducing traditional high expatriate assignment costs in the face of fierce competition, there is increased awareness that potential leadership talent is not restricted by national boundaries. As Vance and Paik highlight in Managing a Global Workforce (2011), MNCs are increasingly looking to their local host-country employees as a source of future leadership talent for both local operations and worldwide. The development of local leaders has increasingly become a competitive strategic tool for MNCs. Local talent understands the host country s culture and business environment, and their employment with a foreign subsidiary s operations provides MNCs with a cost-effective labor force. Putting in place leadership development programs that are specifically tailored to the local workforce is just one step of 52 c 2013 Wiley Periodicals, Inc. Published online in Wiley Online Library (wileyonlinelibrary.com) Global Business and Organizational Excellence DOI: /joe January/February 2013

2 Exhibit 1. Profiled Companies Hong Kong Singapore New Delhi, India Company Citibank Turner Broadcasting International JDA Systems General Motors Interviewee Terry Endsor, Group Steve Marcopoto, President Stephen McNulty, Yeshwinder Patial, Head of HR Regional VP HR Director a firm s talent development goals; however, it provides various advantages to the MNC s foreign subsidiaries. Leadership development programs serve as the backbone to a firm s long-term talent management strategy, as well as increase employee morale and talent retention with realistic perceptions of career advancement opportunities. Executive managers of MNCs have various methods at their disposal to distinguish host-country talent as high potentials for leadership development opportunities. Often through performance appraisals and interdepartment nominations, these high potentials stand out from the rest of their colleagues, enhancing their visibility and skills to different areas of the MNC. Leadership development programs aim to cultivate a host-country talent s skills, visibility, network, and experience. Often these programs are supported by executive- and top-level management, which further enables local talent to grow within the company. Leadership development programs utilize training tools such as mentoring to continue to expand the high potentials skills and abilities. Various leadership development approaches, occurring in formal and informal settings at the host country and abroad, increase the likelihood of host-country talent to expand beyond borders, allowing them to showcase their newly acquired abilities while further ingraining the leadership culture of the MNCs by providing international exposure and growth opportunities. We recently had the opportunity to interview local executives and managers in operations of American MNCs located in Hong Kong, Singapore, and India to identify cutting-edge practices in local leadership talent development. By looking at MNCs from all levels of development stages within the outer offices and from a variety of industries, an overall theme began to develop. Broken down into teams of three to five interviewers, we navigated our way through the hustle and bustle of three prominent countries on the world stage. The interviewees varied in levels of executive leadership, from the expatriate and CEO of Turner Broadcasting International in Hong Kong to the host-country national director of human resources in New Delhi for General Motors. From these field interviews, four major leadership development approaches emerged: reinforcing a company culture of leadership development, identifying and codifying leadership talent, enhancing high potentials visibility, and developing pervasive mentoring relationships. We will now examine each of these approaches with MNC case illustrations from the four companies (see Exhibit 1). Reinforcing a Company Culture of Leadership Development at Citibank Regional Headquarters, Hong Kong Many of the strongest leadership development programs are those that are deeply ingrained within the larger business culture, supported by formalized leadership programs, and reinforced by a visible commitment from the highest management levels in the company, including the CEO. In fact, strong support from the CEO and top management has been found to be the most critical factor affecting the success of leadership development efforts (Choi, Yoon, & Jeung, 2012). This tone from the top approach suggests that the CEO builds and endorses Global Business and Organizational Excellence DOI: /joe January/February

3 leadership development initiatives that connect with employees not only through passive means, such as corporate newsletters or regular communication, but also through active roles, such as teaching classes and workplace coaching. This investment in leadership becomes embedded within the larger business culture and unmistakably signals leadership development as a top strategic priority. This strategy has proven to be highly successful in succession planning, identification of high-potential individuals, and overall leadership development and individual career growth. Citibank Hong Kong reinforces this culture of leadership development. Citibank s reinforcement of its leadership culture through formalized programs and a visible commitment from senior management has helped the organization acquire, retain, and build a local arsenal of future respected industry leaders, many of whom will move on to enjoy global careers. Citibank Asia represents all businesses of the global multinational financial services corporation. Specializing in consumer banking, institutional client coverage, and private banking from its Asia Pacific regional office in Hong Kong, Citibank takes a very active role in leadership development and investment in human capital. Citibank is a strong advocate of formal leadership programs, ranging from its Management Associate Program developed for young college graduates to its Asia Leadership Program, Business Leadership Program, and CEO Executive Forum. Developmental and leadership training are managed internally and led by senior management under the mentality of leaders developing leaders, which enhances high-potential employee visibility and exposure to senior executives. Formal mentoring relationships are common, providing Citibank mentees access to a network of executives with various forms of expertise that address local individuals developmental needs. Each senior member of the Asia Pacific team coaches or mentors at least one employee at any given time. Citibank believes in placing the right people in the right jobs, clearly defining employee roles, and providing accurate and effective feedback. High-potential employees are identified as individuals capable of performing at least two levels above their current position, and who exhibit the appropriate attitude, frame of mind, and presence and demonstrate the correct values. By promoting a culture of leadership development, Citibank has been successful in building a powerful brand and an enviable leadership program that generates influential leaders who are respected throughout the organization and within the industry. Terry Endsor, group head of human resources at Citibank Asia Pacific, believes that talent recruitment relies heavily on the prospect of future leadership and the influence of existing leaders. He states, Employees join the brand, but they stay for leaders. These leadership development strategies have also had a larger impact on employee retention in the budding Asia marketplace. Endsor adds, People react strongly to good, strong, fair professional leaders. If you build a brand that is credible, people will want to live in your sphere of influence. Citibank s reinforcement of its leadership culture through formalized programs and a visible commitment from senior management has helped the organization acquire, retain, and build a local arsenal of future respected industry leaders, many of whom will move on to enjoy global careers. Identifying and Codifying Leadership Talent at Turner Broadcasting International, Hong Kong In our field research in Hong Kong, it was apparent that there were more expatriates there than in any other country visited. Nonetheless, we found that companies tend to hire a large percentage of local workers and focus greatly on reinforcing leadership culture and identifying and developing 54 January/February 2013 DOI: /joe Global Business and Organizational Excellence

4 high-potential employees. Many MNCs development programs are standardized by headquarters but customized by foreign offices to fit the local surroundings. A global mentality pervaded the area with a vision of identifying and codifying leadership talent in order to support a company s succession planning. This strategy challenged the status quo by ignoring the replacement approach of typical succession planning. Maintaining a typical nearsighted strategy forces many companies to find immediate technical fits for needed leadership positions. To fill these positions for the immediate short term, top talent is usually the only group looked at, as opposed to all talent throughout an organization. Because such a constraint is used for the leadership talent search, positions often are filled by individuals who may be technically capable but lack the cultural skills needed to make a good fit. This misalignment can result in high or consistent turnover. Since the position demands much more than technical competency, the talent search must encompass a broader set of parameters. A strong example of where this type of longterm leadership talent planning has flourished is within Turner Broadcasting International, which distributes news, entertainment, and youth programming on multiple pay-tv platforms in the Asia Pacific region. Turner has approximately 1,200 employees, with a vast majority representing locally grown talent and only about 10 percent of the employees being expatriates. Turner begins its talent search through a program called People Day. Through this program, high potentials and future replacements for executives/top managers are identified with managerial personnel. With this long-term strategy, emphasis is placed on identifying and developing key talent far in advance of a position s need of replacement. In order to gain international experience, locally identified high potentials are sent abroad to regional headquarters for further development and to gain exposure to higher executives. The expatriate model is almost exclusively used for leadership staffing with the opening of new offices, after which time local talent is hired and developed. American expatriate Steve Marcopoto, president of Turner Broadcasting International, Asia Pacific, described how his number two was chosen to be his replacement in the succession plan. A US-educated local Indian manager from one of Turner s satellite locations was moved to Hong Kong (regional operations) and through the leadership programs was identified to fill this number-two spot. In addition to Turner s dedicated People Day leadership program, a People to Watch Group is formed. This group is composed of individuals from the People Day program who have a need for talent improvement to reach their full potential. A plan is tailored for the individual to help improve his or her weaker areas. Outcomes are ultimately determined by an executive roundtable discussion to provide objective and broader opinions. This continued development of deeper talent speaks to Turner s commitment to identifying future leadership talent throughout the whole organization. Turner also uses a variety of development programs designed for different leadership levels to identify even more high-potential talent. Examples of such programs are: the Chairman s Program, in which executives, officers, and higher-ups go over behavioral and business challenges; the Senior Leadership Development Program, which consists of much of the same challenges as the Chairman s Program but is designed for individuals who are one level down; and the Turner Challenge, in which individuals even further down the organization chart grapple with case-based studies. Global Business and Organizational Excellence DOI: /joe January/February

5 All these programs are designed to reach deep within the organization and identify top potential talent and foster their development. With a proper focus on leadership talent identification and development, Turner has been able to stand out as a company that is committed to and invests in its people. Informal yet extremely valuable networking occurs through these sessions involving people from all over the world, resulting in a rather diverse and connected talent pool. This is most noticeable in Turner s Learning Development Program, where 16 to 20 people are selected for a program that lasts 18 to 24 months. These individuals are picked from different functional areas and go to different markets in the Asia Pacific region to gain global learning experience. At the end of the program, the groups present their new business ideas and insights, which are critically assessed by upper executives and designed to improve their persuasiveness and internal advocacy effectiveness, skills that are needed at upper-level positions. Through these programs, Turner has focused on identifying and codifying the best talent throughout the organization. This allows the company to not only have a solid understanding of its talent pool, but also to fill positions with individuals who are culturally sensitive as well as technically competent. This long-term and culturally aware planning has allowed the Turner Asia Pacific office to hold its turnover rate to the single digits. While this accomplishment testifies to employees satisfaction with the company and its investment in people, even more impressive is the fact that Turner has been able to keep such a low turnover rate in the aggressive and competitive environment of Hong Kong. In fact, because Turner has done such a remarkable job of identifying and developing its talent, and since the organization was a first-mover into its market in the region, the company has had to deal with the added challenge of competitive poaching from newer entrants into the labor market who greatly value Turner employees. Turner has shown an ability to maintain a culturally aware and long-termed focus on talent identification in the Asia Pacific region. Through leadership development programs like People Day, deep drawing programs like the Turner Challenge, and global talent programs like the Turner Learning Development Program, the organization has been able to avoid a simple replacement approach to succession planning and focus on building a leadership pipeline. As a result, the company has been able to thrive in a talentcompetitive market while maintaining a single-digit turnover rate. With a proper focus on leadership talent identification and development, Turner has been able to stand out as a company that is committed to and invests in its people. Enhancing High Potentials Visibility at JDA Software, Singapore With its advanced economy and strategic location, Singapore has become one of the most Westernized countries in the Asia Pacific region and has long attracted various multinational companies from around the globe. Although most of these firms started their operations in Singapore by using the traditional expatriate model, today local employees represent a large percentage of the workforce in these companies. Therefore, many of these multinational firms rely on leadership programs tailored to local talent development, and utilize various tools and strategies to identify and train high-potential employees. One such tool is defined as enhancing a potential local leader s visibility in the company s executivelevel culture and initiatives. This strategy, which looks to create leadership academies or formal 56 January/February 2013 DOI: /joe Global Business and Organizational Excellence

6 workshops for high-potential employees, has proven to be prevalent in various leadership development models throughout Asia. These workshops are frequently cross-functional and conducted on an international basis. They also are often led by executives and top management themselves, and serve to provide exposure to high-potential employees and deliver action-learning projects to select participants. Multinational firms who implement this tool in their local leadership development programs benefit from retaining top talent and developing wellrounded individuals who have gained significant experience through these cross-functional workshops and projects. Without this strategy, companies face the challenge of promoting individuals without the necessary international exposure and skills, or searching for talent outside the company. Recognizing top talent from within and enhancing these high potentials visibility and exposure to core company values ensures multinational firms that their subsequent leaders will be equipped with the necessary skills, knowledge, and priorities to run the company s operations in the future. JDA Software is a prime example of a company in which this strategy has progressed. Headquartered in Scottsdale, Arizona, JDA Software delivers bestin-class supply chain management solutions that help businesses grow in revenue, increase profits, and operate in a more efficient and sustainable manner. JDA serves approximately 6,000 clients with more than 3,000 full-time employees spanning 60 countries. The Singapore office is composed of 40 employees, and virtually all personnel in the broader Asia Pacific region are local hires. Only two or three expatriates work in the region at any given time. To provide the proper training and visibility for local high-potential employees, JDA Software boasts various leadership development centers around the world. It also has implemented its own Global Leadership Program, designed for associates at director levels of management who have been identified by company executives as potential future leaders. Although corporate-wide leadership is supported out of the Arizona headquarters, the Asia Pacific leadership development programs are based in the Bangalore, India, offices, which also support organizational development to the Asia Pacific region. Recognizing top talent from within and enhancing these high potentials visibility and exposure to core company values ensures multinational firms that their subsequent leaders will be equipped with the necessary skills, knowledge, and priorities to run the company s operations in the future. One way that high-potential employees at JDA Software gain exposure to executive-level and companywide interaction is through global leadership training conferences. JDA executives within each region have the opportunity to identify high-potential employees, usually at the director or VP levels of management, and nominate them to attend these conferences. About 40 participants are present during these conferences; they meet four times a year virtually, and twice a year at the corporate headquarters in Arizona. During these seminars, external consultants are brought in to talk about different aspects of leadership and multinational organizations. Participants also are trained in financial management and other managerial tools. These employees are exposed firsthand to the leadership initiatives that JDA Software implements and are able to bring the skills and experiences they acquire in these seminars back to their regional offices. Aside from already having an established mentoring program dedicated to all new hires, JDA Software also offers one-on-one coaching for high-potential employees. In this strategy, members of the Executive Leadership Team meet once a year to discuss such topics as company values and to coach participants on how to work as a global team player. Global Business and Organizational Excellence DOI: /joe January/February

7 Since the company seeks to focus on developing its future leaders from within, this strategy is primarily conducted at top executive levels. Team leaders and specialists at JDA Software also are encouraged to share best practices with each other on projectbased assignments. This integrative practice ensures that leaders from all regions are working toward the same global goals. Through formal and informal mentoring relationships, high potentials can go from being merely a fit for a particular position to being the long-term right fit for the company. Partly due to a growing market environment and mostly due to a series of acquisitions made between 2000 and 2010, JDA Software s employee base, as well as its scope of services, has soared. Although classic leadership development tools, such as performance reviews, have always been in place at JDA Software, it was not until 2009 that the organization started building a framework of leadership development, reports Stephen McNulty, regional vice president, Asia Pacific. With company expansion has come more leadership responsibility, and McNulty emphasizes a particular case in which JDA Software took pride in being able to immediately promote a sales manager in Japan to country manager after a sizeable acquisition was made. Exemplified in this case is the confidence and commitment the company has toward the professional development of its high-potential employees. As the company continues to grow, it becomes increasingly essential for JDA Software to continue to focus on local leadership development, using the various strategies and tools that it has in place. Developing Pervasive Mentoring Relationships at General Motors, New Delhi A common leadership development theme is nurturing talent that fits with corporate and team culture. Often individuals technical skills satisfy the performance- and industry-based needs for a position. Yet those who have been identified as leaders tend to have more than just technical skills. They bring added benefits to the organization, fostered outside training sessions through pervasive mentoring relationships. In successful global organizations, a formal mentoring approach is initiated in all global operations from the top down through the leadership of the organization. Senior executives cultivate the growth and development of high-potential talent through shadowing and networking of individuals. Although informal mentoring relationships develop naturally, the result of high potentials varying their expertise while developing personal and professional goals is the same. Through formal and informal mentoring relationships, high potentials can go from being merely a fit for a particular position to being the long-term right fit for the company. General Motors in New Delhi illustrates the importance of mentoring relationships for multinational corporations by endorsing mentoring as the most significant behavioral attribute for leadership development. Renowned for building cars and trucks for more than a century, GM reentered the Indian market in 1994 with a vast army of expatriates, from both the United States and other countries, who had been sent to reestablish operations (closed for 40 years) and to build the foundation and ideology found in GM s headquarters. Since reopening, the number of expatriates has fallen as more local Indian hires have developed into leadership roles. Current estimates of staffing levels of expatriates are at less than 20 percent. Local GM Human Resources Director Yeshwinder Patial credits the company s trusted and quality brand as a strategic tool in attracting applicants from all over the country. Known for its kaleidoscope of languages and religions, India has no shortage of people, with an estimated population of 1.2 billion. This creates a vast talent pool for GM to select from as the company develops its strategy of promoting local leadership 58 January/February 2013 DOI: /joe Global Business and Organizational Excellence

8 talent within the outer offices. Patial admits, however, that there is a crunch for talent while the country grows. He emphasizes that in India we have a lot of people, but not a lot of the right people. GM considers the challenge of selecting the right fit for the company to be a behavioral issue. Looking to bridge the gap between the local office and headquarters, formal and informal means of mentoring are used to develop the local leaders. GM prefers to train its own people to learn the company s systems and goals rather than acquire talent that has already been trained. The training that GM provides is formal in orientation, shadowing, and feedback. Informal aspects are in coaching and mentoring from other leaders and executives. GM does, however, hold managers as mentors accountable in performance evaluations by assessing their ability to develop individuals on their team. Thus, leadership development is a part of the criteria of performance evaluation for each manager. Through these mentoring programs, high potentials are able to experience different types of interactions and behavioral skills. The cultural nuances and understanding of GM s mission are taught in an informal manner rather than in a classroom setting. Mentoring programs advance the behavioral aspects of the leader, teaching the high potentials how to interact in a multinational corporation s setting and bringing additional skills to their team. As companies continue to expand overseas, retaining top talent and developing local leaders from within is not only cost-effective, but also provides the firm with the necessary stability and tools to continue their international expansion into new markets. GM has found that many Indians desire to work for multinational firms for the international exposure as well, making skills in international adjustment vital to the success of the high potentials leadership development. As Patial indicated, India has a limited pool of talent that is difficult to retain. Therefore, to encourage the commitment of those who have been identified as high potential, GM offers opportunities for international rotations, making GM India a major exporter of management talent to other international regions of the company. The Myriad Benefits of Local Leadership Talent Development As illustrated in the case studies above, local leadership development has become a vital part of the growth and success of MNCs in foreign countries. As companies continue to expand overseas, retaining top talent and developing local leaders from within is not only cost-effective, but also provides the firm with the necessary stability and tools to continue their international expansion into new markets. Leadership development programs have been shown to benefit firms in various ways. Not only are local managers potentially able to make more informed decisions affecting the success of local operations, but these local employees also increase the available talent pool for multinational firms for future leadership deployment within the local hostcountry operations, as well as in the surrounding region and around the globe. Our interviews revealed the value of potential leadership talent, regardless of passport, to the firms that were studied. In every case whether in India, Hong Kong, or Singapore executives asserted that their organizations encourage human talent to develop to its full potential throughout global operations, even within the top management echelons at company headquarters. Our interviews also showed that leading global firms are identifying, developing, and tracking local leadership talent from within their local workforce through reinforcing a company culture of leadership development, identifying and codifying leadership talent, enhancing high potentials visibility, Global Business and Organizational Excellence DOI: /joe January/February

9 and developing pervasive mentoring relationships. We note from the cases examined here that talent identification and development are key aspects of an effective long-term talent management strategy that should be ingrained within a company s deep cultural values and priorities, as well as reinforced by performance evaluation and reward systems. Such a focus on leadership development encourages retention, providing a powerful incentive for local talent to remain within firms clearly committed to their professional future. These successful global firms are active in formal leadership group training, as well as in one-on-one coaching and mentoring activities. In addition, conferences, workshops, and seminars are encouraged, which enhance highpotential local employees visibility and exposure to core company values, executive-level initiatives, cross-functional assignments, and extremely valuable within-company global networks that promote ongoing learning and development. Clearly, organizations are no longer going to war for the best talent across the global marketplace. Rather, they are learning that victory will go to the enlightened multinational firms that recognize, value, and develop the precious potential leadership talent already within their local ranks. References Choi, M., Yoon, H., & Jeung, C. (2012). Leadership development in Korea: A Delphi study. Asia Pacific Journal of Human Resources, 50, Vance, C. M., & Paik, Y. (2011). Managing a global workforce: Challenges and opportunities in international human resource management (2nd ed.). Armonk, NY: M.E. Sharpe. Vance, C. M., Paik, Y., & Chow, I. H. (2011) Expatriate versus local staffing of foreign operations. In V. J. Kannan (Ed.), International business in the 21st century (Vol. 2, pp ). Santa Barbara, CA: Praeger. Kelly Dunnagan is the operations manager at American Tours International in Los Angeles. She holds a BA from the University of California at Los Angeles and an MBA with an emphasis in finance and human resources from Loyola Marymount University. She can be reached at kelly.dunnagan@gmail.com. Mireille Maragakis works in the International Licensing department of GUESS? Inc. in Los Angeles. She holds a BA in business administration with an emphasis in international business and an MBA with an emphasis in finance and marketing from Loyola Marymount University. Her areas of expertise include international business and marketing, retail finance, and brand management. She can be contacted at m.maragakis6@gmail.com. Nicole Schneiderjohn is a sports and entertainment associate marketing manager at FOX Networks in Hong Kong. She holds a BA from the University of California at Los Angeles and an MBA with an emphasis in international business from Loyola Marymount University. She can be reached at nschneiderjohn@gmail.com. Cameron Turner is an MBA graduate working in the Global Brand Management department of THQ, a leading worldwide developer and publisher of interactive entertainment software in Los Angeles. His areas of expertise include crossfunctional team facilitation, financial management, international business studies, and brand management. He can be contacted at cameronturner7@gmail.com. Charles M. Vance is a professor of management at Loyola Marymount University in Los Angeles, where he teaches at the MBA and undergraduate levels. He has consulted with numerous multinational organizations and has published widely in academic and practitioner journals on topics related to international talent management. He is the coauthor of Managing a Global Workforce: Challenges and Opportunities in International Human Resource Management (M.E.Sharpe, 2011) and Smart Talent Management: Building Knowledge Assets for Competitive Advantage (Edward Elgar, 2008). He can be reached at cvance@lmu.edu. 60 January/February 2013 DOI: /joe Global Business and Organizational Excellence

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