GILD 2013: From low-cost labor to managing a matrix – Lessons in global leadership

Modern technology and communications have made globalization not only possible, but necessary. Going global successfully, however, can still be a challenge. So it’s no surprise that the GILD crowd was eager for the session on global leadership. The distinguished panel shared their insights and addressed many challenges that organizations struggle with today.

The panel:

• Orlando Ashford – heads Mercer’s Talent business globally, which partners with clients around the world to drive business performance through effective human capital strategies
• Rafiah Salim – serves as the Director of NAM Institute for the Empowerment of Women (NIEW) an agency under the Ministry of Women, Family and Community Development in Malaysia, and was Assistant Secretary General for Human Resource Management at the United Nations, New York for five years
• Thyagi Thyagarajan – his 38-year global career with GlaxoSmithKline culminated in his role as Regional Director and Senior Vice President for Asia Pacific based in Singapore, a position he held from 2003 till his retirement in 2008
• Sam Lam (moderator) – serves as President and Managing Consultant of Linkage Asia

Following are highlights from the lively discussion.

TT: The data suggests that Asia will get much bigger than it is right now. But the growth won’t be linear–maintaining momentum won’t be easy. Each country has an opportunity to leapfrog where it has come from. China and India have had that opportunity recently. But if you miss that window of opportunity, you miss the opportunity to leapfrog. No doubt, Asia is very dynamic and you can see the signs of a very bright future.

OA: I have two young boys who are currently working on getting fluent in Mandarin and we sent them to China for the summer for immersion. With the growing global importance of China, they’ll need to speak the language.

On lower-cost labor:

SL: A big misconception is that, with the size of the population in Asia, things will be much cheaper, but that’s not the case.

OA: The place to find cheap labor is constantly evolving. Once such a place is discovered, the cost goes up. Many organizations have processes for leadership development but the talent shortage is very real and that forces us to break our paradigms and play on a truly global playing field. That means we need to assess people on their true capabilities, not based on our current habits.

On successful global expansion:

TT: A key challenge is to find the right country managers. They have to have a global mindset and be able to combine eastern and western sensibilities, which is not easy to find.

RS: Ensure you have a strong system for sending people out to other parts of the world before they come back to lead any divisions. If a company is planning to go global, you have to have a system that exposes employees early on. And language is key. If you are operating in a country that speaks a different language, you have to speak that language, too.

On acquiring international experience to build your resume:

OA: Should you take an international assignment to build your resume? The answer is: it depends. I encourage people to do this if you can. My international experience in Turkey was critical for me. The challenge was in how to deliver messages in that setting. What worked is that I admitted what I didn’t know. I didn’t know the culture or the language but I did know what the desired outcome should be. So I talked about that and we focused on how to make that happen in this part of the world. It was one of the richest experiences of my professional and personal life.

TT: In 1979, before the phrase “globalization” was coined, I was asked if I wanted to go to Spain. My first response was, are you unhappy with me? But I found myself in Spain and my boss told me I had better learn Spanish. I set myself a goal to do that but what I found was that while you can learn the language, what you really need to do is connect. It was an amazing experience. It made me see the world through a different lens and it changed my perspective on the world.

RS: My first most difficult international assignment was the UN, which is like a company with 191 board members, all with different agendas. I was brought in to change the management culture in an environment with bureaucracy and quotas. I had a great time but living in New York showed me that the challenge for Americans is to overcome the challenge of being too successful without needing the rest of the world. For example, at home, CNN shows news about the world, but in New York, CNN shows news about America and New York. The American education and news systems don’t address global needs. That was 10 years ago and things are better now, but it’s still a challenge.

On managing global teams:

SL: When executives operate in a global environment, there can be a lot of challenges: language, culture, etc. The ability to say “I don’t know” shows a level of humility that can help. In a cross-cultural environment, you need to go in with sincere questions. Political correctness is less important than sincerity and the desire to learn.

TT: For example, in Korean and other Asian cultures, you don’t push back with bosses–you never challenge, as that is considered disrespectful. You need to understand the cultural differences and then make it safe for them to overcome those cultural instincts. The culture of the team is more important than the culture of the country. You need to create an atmosphere of trust where people can ask questions.

On managing a matrix structure globally:

TT: The matrix is something that has plagued me all my life. It’s easier to operate in a structure with a clear-cut hierarchy. But in today’s interconnected world, the matrix structure is here to stay. It’s harder to fight against it; you need to find a way to work with it. Collaborate with people and influence the way forward. And leverage the informal network that every organization has. It’s hard work, but once you know how to work within the matrix structure, you can work fast.

OA: I agree. We emphasize team building, but when you switch from a traditional structure to a matrix, you need to invest time. You need to have the debate about decision rights. People think that the decision rights from the old structure hold, but you need to have those conversations.

On strategies for building high-performance teams from diverse cultures:

SL: There are two things you need to watch. First is that human beings are fundamentally the same in terms of how we are constructed –how we think, our emotions. We have way more commonality than we think. Second, however, is that the way it is expressed is very different. In order for diverse teams to work well, you need to take care of the common factors and work on clarifying how they are expressed.

OA: When assessing talent, there are two key things we look for: people skills and learning agility. These are critical in work and life in general. When you are in a global environment, you must be able to adapt and be sensitive to others. People who do that better will do well in global assignments.

On how to assess where work should get done:

TT: Initially it was a question of arbitrage for cost efficiencies, but that has a limited runway and companies have gone beyond that. Now, rather than looking abroad to save on cost, companies are looking to create global initiatives where international locations are providing HQ with insight into better approaches and driving innovation.

RS: Language is a key factor. So is labor; not just cheap labor, but educated labor. You also want to look at the infrastructure of the country as well as security. In terms of communications, you need an organizational system for communicating across the world and to invest in bringing them physically together on a regular basis and involving them in management decisions.

We’d love to continue the dialogue. What are your biggest questions and concerns about going global effectively? Or do you have insights you’d like to share? Use the comments below.