Navigate around the Quicksand in the Global Marketplace

U.S. businesses urgently need to develop global leadership skills

by Kathleen Brush, Ph.D.

roundtableGlobalization has been the buzzword of the decade, yet many U.S. business managers are still unaware of the skill sets they urgently need to compete in a global market. There are 32 developed countries with 1 billion potential customers and 162 developing nations with 6 billion people, many heading into the middle class for the first time, with all the attendant needs and desires, which means the most attractive business opportunities in this century will be outside the United States. Identifying the best bets and tapping into them, however, requires new and augmented skills.

The IMF has forecast $27.3 trillion in economic growth between 2011 and 2016. Eighty-seven percent will occur outside the United States, most of it in developing countries. The forecasted growth for developing China, India, Africa and Latin America is two to four times that of the United States and the European Union. In 2013 and moving forward, U.S. business leaders will not come out on top without developing new skills to navigate the global opportunities. Managers need to increase their understanding of how other countries operate.

Create strategies with a global context. Being able to evaluate opportunities and threats around the world has to be a fundamental skill and one that is exercised regularly. This is because political, economic and social issues are different and they change. How different are they? How about new regulations that appear without notice; judicial systems that do not administer justice; economic systems that can’t support the needs of operations, workers or goods; and social cultural systems that condone corruption. Managers will have to go beyond assessing populations and demographics and into an analysis of workforce skills, labor regulations, availability of credit and health care, and the quality of the transportation infrastructure.

Manage and motivate employees from different backgrounds. There is a good chance that Employee A from Country A won’t be motivated by the same things as Employee B from Country B. In part, this can be cultural; for example, pitting employee against employee may inspire the competitive spirit in Americans, but contests for individual supremacy can be culturally offensive for many others. Or the differences may be regulatory, such as between the United States, where it’s relatively simple to terminate an underperforming employee, and the many countries where it will cost a fortune and even require external approvals.

Build relationships rather than filing lawsuits. Businesses need to lose the crutch of legal systems to ensure contractual commitments are met. Cross-border litigation is always expensive and time-consuming. Worse, justice does not always prevail. Exchange the art of suing with the art of building relationships because that’s how most of the world outside the United States makes sure commitments are met.

Know when affordability trumps innovation. American managers have always preferred to focus on products with superior innovation versus lowest price, because the former fetch a premium. That will no longer be a slam dunk. In many countries, successful products will deliver country-specific basic functions that are priced for the market. These consumers don’t care about innovation; they care about basic, affordable functionality.

Read financial statements. What if financial data is unreliable due to cultural inclinations, political machinations or manual reporting systems? Gone are the days of blindly valuing what comes in black and white.

Embrace new bottom lines. Maximizing shareholder value has been an American mantra. In other countries, businesses are expected to have multiple bottom lines that take into consideration shareholders, employees, the environment and the community. Managers in the 21st century will need to become super-motivators who drive productivity and innovation, create competitive products, and generate more sales and increased profits. These will support higher wages, increased hiring and investments in clean technologies — in addition to shareholder value.

Keep a strong moral compass. Operating within unfamiliar, unpredictable places can make it challenging to distinguish the gold mines from the land mines. Some cultures will see bribery, the concealment of data and quality shortcuts as business as usual. Today’s leaders know that a strong moral compass is the only reliable navigator of behaviors and decisions.

Kathleen Brush, author of The Power of One: You’re the Boss, has more than two decades of experience as a senior executive with global business responsibilities. With a Ph.D. in management and international studies, she has been teaching, writing and consulting on international business and leadership for companies of all sizes, including those that are public, private, foreign and domestic.


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