Businesses are changing so fast that international human resources managers are having to sprint just to keep up. Technology and the leap to global communications make it possible to gather information instantaneously, to manage products, people and services like never before. Companies, therefore, are able to take advantage of market opportunities to manufacture, distribute and finance in a way we couldn't imagine, says Stephen H. Rhinesmith, president of Rhinesmith and Associates, Inc., and author of "A Manager's Guide to Globalization: Six Keys to Success in a Changing World" [Irwin Professional Publishing, 1993]. Consequently, companies need more globally fluent people than ever before, and are out desperately searching the globe.
"The transition from the industrial to the information age has caught everybody with their pants down with regard to the kind of people they need. There hasn't been a long enough effort to prepare people," he says.
Recruit global talent at home and abroad.
Companies need people in many levels of the organization who can manage their divisions regardless of their locale. It may be a Swedish manager who must interface daily with the rest of a U.S. firm, or it may be an American research scientist who will be working on cross-functional global research teams for six months in South Africa. Whether companies search for global talent within their own shores (as is traditional among American companies) or look elsewhere (as multinational firms are beginning to do), international human resources managers realize they'll have to cast as wide a net as possible to identify talent worldwide—and develop that talent with an eye toward answering immediate business needs as well as those of the 21st century.
Hence, finding and developing competent individuals who are knowledgeable about their business, proficient in languages and technology, multiculturally adept, flexible and open-minded, requires a different mindset than the one with which we traditionally view employees. It requires not only educating people already employed by the company with a more international, less ethnocentric perspective, but it also requires recruitment techniques, compensation policies, succession planning and innovative training, all of which address the question of working in an organization that faces multiple cultural differences daily.
"It takes about five years to develop a globally aware and competent work force that can manage all of this. There's no quick fix, and companies that have a program in which they're developing people who have these talents have a competitive advantage," says Rhinesmith.
It begins with changing the corporate culture. "You can't change the career path of people without changing the human resources system, and you can't change the human resources system without changing the corporate view of itself and its value system," he says. "In order to prepare people, you have to transform the corporate culture. That's another reason it's a five-year project."
Companies are attempting a variety of options. "It's a two-tiered approach," he continues. "One tier is how to get people through the year 1995 [done primarily through training and team building]. The other tier is how we prepare leadership for the next century. That's rotational and career-path oriented."
With career pathing, companies are deliberately rotating people from all over the world. Typically, they'll identify the top global talent. "They start career pathing them so they'll all have foreign experience as well as expertise managing different kinds of organizational situations—start-ups and turn-arounds—and have experience doing that with multinational teams and managing multinational groups. In five to 10 years, the company ends up with individuals who have the kinds of skills necessary to operate in the 21st century," he says.
One of the companies searching for and developing international leaders for the next century is Molex, Inc., a 56-year-old American technology firm that derives more than 70% of its almost $965 million from outside the United States. The company uses a combination of techniques, including career pathing, extensive recruiting and training to maintain a global staff. With more than 8,000 employees worldwide, only 2,300 live in the United States; the rest are local nationals. The firm has 50 expats [anyone living and working outside their home country]—or foreign-service employees. Only half of these expats are Americans.
According to Malou Roth, vice president of Lisle, Illinois-based Human Resources International, global talent often resides outside the United States. "We're a very hard-charging, demanding, fast-growing company, and our international division is larger in the number of people, sales and profits than most U.S.-based companies. It's a dynamic place, and we have always been interested in looking outside our shores for talented people. We've always had people itching to go overseas," says Roth. The company has grown so rapidly overseas that it's long since lost any notion that all wisdom comes from corporate headquarters, or that one has to work in the United States in order to get ahead. "We've recognized that the most important thing we can look for in global talent is the person who understands the local cultures and languages. And you may not find that in the United States," she says.
Molex applies creative recruitment and training strategies.
Molex is committed to scouting and developing international employees in a number of ways. They start by hiring foreign-national students who are currently living in the United States and who have graduated from master's-degree programs. Molex obtains the visas and takes care of all the necessary legal documentation. "We have no problem getting MBAs with engineering degrees who happen to be Japanese. So many of them [students from other countries] want to work for an American company and live in their native country," says Roth. Thus, Molex starts out ahead with employees who not only know a desirable language, but know the target culture and want to work for the firm in their home country.
Molex also carefully screens American applicants in order to hire entry-level professionals, including engineers, who are fluent in at least one other language. This language requirement is an important part of the interview process. With more than 15 languages spoken at headquarters by native speakers, Molex is committed to the value of multilingual competency. Roth is very careful about who she hires because she only has a few openings at the headquarters' location and must be sure that the individual possesses not only the technical and language proficiencies, but the cultural ones as well—and is willing to relocate. The company then continues to design a career path for the entry-level individuals to meet the company's future needs.
The organization has three regional offices: Far East North [Japan and Korea], Far East South [Malaysia, Hong Kong, Singapore, China, Taiwan, Thailand] and Europe. Each region uses the same recruitment techniques. In regions outside the United States, however, the additional language requirement is English. Many of the jobs filled locally are related to manufacturing and operations such as design engineers, quality and finance. Each region has a small pool of people they consider internationally mobile, technically educated and sometimes multilingual.
Molex's international division is quite mature. It started 28 years ago, and it's not uncommon to find people who've worked internationally for 15 years. "We've had more success molding younger people with all the energy and excitement of the company in these entry-level jobs than taking people who've worked for other companies. We've moved up so quickly, and we've done that through extremely demanding long hours and hard work. We want to train people properly from the beginning," says Roth.
But Molex can't fill all of the jobs in this way. The company often moves its people into expatriate assignments even though they weren't originally hired to do international work. These individuals have been with the company for a while and proven themselves. Whether it's a Singaporean who goes to Japan or an American who goes to Italy, the company trusts them and has the confidence that these individuals can fulfill a three- to four-year business mission.
These individuals are tracked and watched carefully. Roth follows up a few times a year to be sure they're getting the kind of training and development their managers believe they need.
Molex also demonstrates its desire to simultaneously develop for the year 2000 while training for the 1990s with its Management Training Program, a program that began in 1980. A cadre of managers from around the world attend a five-week training program over a two-year period, and study with professors from some of the top American universities such as Harvard, Northwestern and the University of Chicago. Approximately 50 people attend the "intense and grueling" program, which includes lectures as well as an opportunity to work together in multinational teams on projects over the course of the class. There are four sections: finance, manufacturing, marketing and human resources. "These are the four mainstream areas we think everybody should know about," says Roth.
The worldwide training program isn't strictly for high potentials. Minimally, individuals must have been with the company for at least three years, have exceeded performance-appraisal expectations and have demonstrated their proficiency in English. There's a language exception for people from Molex Japan, which accounts for approximately 40% of the business and may possibly be extended to include the huge China operation. Roth says the company doesn't want to exclude these people because of the language barrier. The company has graduated eight groups.
These kinds of programs are essential. Companies create a network of people who know each other and who can solve current business problems while building skills and developing relationships that create potential for the next century.
Molex also offers an executive version of the program called the Executive Training Program, in which senior managers broaden their horizons and learn to appreciate their colleagues' jobs. Molex also uses annual worldwide functional meetings to address staffing. While managers in every function can meet, share ideas and exchange information, it's also a time to develop networks that work well for moving personnel from one location to another.
Compensation packages for expats and regular employees should be equal.
One aspect of Molex that distinguishes it from many other organizations—and illustrates its corporate culture of respect for all of its people—is its expatriate compensation policy. "I think if you really believe all this global palaver that everybody is saying, how can you possibly have different expatriate packages for people you're asking to leave their own country? Lots of companies have two-tiered programs—they treat Americans really well. Why would you pay for one guy's house but not the other's? Every expatriate is eligible for everything the American expatriate is eligible for."
This means that the Singaporean and the American expatriate would probably live in the same apartment complex and have their children in the same international school. "Otherwise, it's a recipe for disaster," says Roth.
The compensation package, the career pathing, the training and the recruiting efforts of Molex fulfill the business mission to fully develop its human resources and to build a truly global company. You need look no further than the executive committee, which seats Americans, Greek, Irish, British, Germans, Austrians and Japanese.
British Gas, Exploration & Production, headquartered in Reading, England, uses succession planning as well as worldwide networking as a large part of its approach. The company has approximately 60,000 employees; about 250 of them are expatriates—British or other nationalities—and a few dozen rotators (people who go from one country to another). British Gas is expanding globally for profit growth since regulation in the United Kingdom makes profit margins very tight. Additionally, the United Kingdom is a mature market with limited growth potential.
While the British petroleum firm relies heavily on expatriates from the United Kingdom as well as the United States because of affiliations with many U.S.-based firms, it looks for high-level individuals worldwide. The company selects its individuals based on internal performance appraisals and succession planning. In addition, potential candidates write a paper about the key corporate and personal challenges faced during international assignments. In this way, the HR staff is able to see where international assignees may have unrealistic expectations.
However, in many instances internal personnel aren't available. For example, in the spring of 1993—when the company needed to conduct business in Vietnam—there wasn't an available cadre of American nationals. The more seasoned individuals were Americans from Tenneco. Moreover, the company didn't have British nationals to expatriate. "In that case, we found a Brit who had been working for another oil company in Saigon for four years, was married to a Filipino woman, had a child and wanted to stay in Saigon," says Susie Inwood, human resources adviser for British Gas. "Enterprise Oil didn't need him anymore, so we asked him to work for us."
This scenario isn't uncommon. "We have area managers who have spent so much time negotiating with host-country oil companies or others in the petroleum industry or in the appropriate ministry, that they have an excellent network to tap into. A lot of this is accomplished by word-of-mouth," she says.
However, in locations where the company has had a presence for a while, such as in Tunisia and Trinidad, and in places such as Eastern Europe, the search for talent is different. "It's no problem finding people. The risk is once you've got people on-board and have trained them by furthering their English-language skills, they can get poached," she says.
Businesses need to protect their investment not only for staffing reasons, but also to protect proprietary information. Similar to Molex's approach, British Gas tries to alleviate this problem by engendering company loyalty through some of its remuneration policies—specifically by ensuring competitive benefits. Remuneration may be as typical as a pension plan,which they offer in their facility in Trinidad, or medical benefits and accident insurance, which they offer to all overseas subsidiaries. It may be as unusual as access to foodstuffs in locations where there are shortages, and free lunches in many overseas offices where typically nourishment is poor.
Cross-cultural skills become mainstream requirement.
International human resources managers are asking many questions about what makes desirable global talent. What set of skills do individuals need to manage the kind of business strategies they are undertaking? According to Nancy Adler, a professor of management at McGill University in Montreal, there are two big shifts away from the past. The first is that previously only a very small portion of people in the enterprise needed international expertise. "Now, almost every manager needs at least some veneer of international cross-cultural competencies because they're dealing with suppliers, clients and colleagues from various countries and cultures around the world," says Adler, author of "Managing Globally Competent People," [Academy of Management Executive, 1992, vol. 6] and "Competitive Frontiers: Women Managers in a Global Economy," [Blackwell Publishers, 1994]. This moves cross-cultural counseling into mainstream development instead of the international division.
Secondly, organizations used to focus on getting a small cadre of people to learn a lot about a particular place. They are expected to become country experts because they were working primarily in one location. "Now, you're on multinational task teams, on multinational projects, on business trips that encompass 13 different countries. Companies need global representation, people from multiple cultures who can work in multicultural teams talking about strategy, and that strategy has to be global in content," says Adler.
So the emphasis has shifted from managers being a cultural expert on a particular society to becoming multiculturally-oriented and able to understand what the broadest cultural impact might be on business transactions. Adler suggests that some of the important skills global managers must acquire are: How to work with people who aren't using their native language; how to quickly ascertain whether someone is from a collectivist or individualist culture; how to run meetings; how to negotiate; and how to influence people from other cultural backgrounds.
"Today, successful top management may not need to know everything about 15 different countries, but they certainly will need a sense of cross-cultural differences and the ability to deal with very different people," says Stephen Kobrin, director of the Lawder Institute, a joint program of the Philadelphia-based Wharton School and the School of Arts and Sciences at the University of Pennsylvania. "They'll need the ability to parachute anyplace in the world and be effective. They may not be going for an extended three-year assignment—it may just be going for two days worth of meetings—but if they're going to be effective, they're going to have to know where they are and how to interact."
Personnel Journal, May 1995, Vol. 74, No. 5, pp. 94-101.