Positioning your business to successfully compete in the international marketplace requires a smart, forward-thinking and long-term growth plan. It should also include an imperative for more diverse leadership at the top, contends global strategy guru and economist Pankaj Ghemawat. And yet, leaders of the world’s biggest companies mirror their home countries far more than the markets they seek to conquer.
His bold statement is backed by data. Only 14 percent of the Fortune Global 500 employs a CEO from outside the country where the company is headquartered, and 73 percent of directors of S&P 500 companies have no international work experience at all. Such statistics speak loudly to Ghemawat’s assertion that the world is just a fraction as integrated as what experts have long believed. They also provide an indication of companies’ diversity and talent development policies, or lack thereof. And the lack of diversity at the top sends the wrong message to internal talent and potential recruits. “At a time when companies consistently cite the lack of qualified managers as the key constraint on their ability to implement their global strategies, the results are chilling,” he cautioned in a recent CNN Money article.
Simply put, global business demands global leadership. Making it happen is clearly more complex. Ghemawat – a renowned authority on business strategy topics who now focuses much of his work helping companies and their leaders better understand and address international challenges and opportunities – proposes several tactical ideas, including:
- Rotate country managers between countries and allow them to spend time at headquarters;
- Establish divisional or business headquarters outside the home country;
- Celebrate success of managers from other countries when they move up the ranks;
- Use corporate universities to bring leaders together; reserve spots for non-natives;
- Emphasize multinational taskforces and cross-border project work;
- When making acquisitions, ensure the quality of the target company’s international talent pool is among the key assessment criteria; and
- Ensure non-natives don’t systematically end up on a slow track.
Ghemawat, professor of global strategy at IESE Business School in Barcelona, presents more actionable advice for CEOs and other executives in his award-winning book World 3.0 (Harvard Business Review Press, 2011), offering refreshing and effective strategies for sustained global growth. You might also be interested in his recent TED talk, in which he illuminates the mindset shifts and policies needed to reap the rewards of a connected, interdependent and diverse world.