PERSPECTIVES A global manager is set apart by more than a worn suitcase and a dog-eared passport. Five top executives describe what global leadership takes and how they look for it. In Search of Global Leaders Perspectives from Stephen Green, Fred Hassan, Jeffrey Immelt, Michael Marks, and Daniel Meiland Reprint R0308B Authorized for use only by Zaid Khartabil in BUAD 301-26 at California State University – Fullerton from 1/24/2022 to 5/18/2022. Use outside these parameters is a copyright violation. www.hbr.org PERSPECTIVES In Search of Global Leaders Perspectives from Stephen Green, Fred Hassan, Jeffrey Immelt, Michael Marks, and Daniel Meiland © 2003 BY HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. For all the talk about global organizations and executives, there’s no definitive answer to the question of what, exactly, we mean by “global.” A presence in multiple countries? Cultural adaptability? A multilingual executive team? We asked four CEOs and the head of an international recruiting agency—all leaders of companies that would by any definition be characterized as global—to contribute their thoughts. They found some common ground. All agreed, for example, that the shift from a local to a global marketplace is irreversible and gaining momentum. And most felt that personal attention from senior management was a critical factor in developing global capabilities. But they differed in other respects—on issues such as the importance of overseas assignments and the degree to which businesspeople need to adhere to local cultural norms. Their essays, which follow, capture a range of ideas that are as diverse and multidimensional as the companies they run. harvard business review • august 2003 Stephen Green Group CEO, HSBC When I joined HSBC in 1982, it was essentially an Asian company, although it did own 51% of Marine Midland Bank in New York. We had around 30,000 employees at that time, mostly English and Cantonese speakers. Today’s HSBC is a very different organization, employing some 215,000 people across the globe. Of the United Nations’ six official languages, our employees are very well represented in all but one. We expanded mostly by means of acquisition, starting with the Midland Bank in the UK—a deal that doubled the size of HSBC, gave us a European presence, and broadened our range of services. Later, we also bought CCF in France. Outside Europe, our acquisitions included Bamerindus in Brazil, Grupo Financiero Bital in Mexico, and, this year, Household Finance in the United States. Today, our assets are evenly distributed between Europe, Asia, and the Americas. We are unusual among the world’s largest banks in that significantly less than half our profits come page 1 of 8 Authorized for use only by Zaid Khartabil in BUAD 301-26 at California State University – Fullerton from 1/24/2022 to 5/18/2022. Use outside these parameters is a copyright violation. A global manager is set apart by more than a worn suitcase and a dog-eared passport. Five top executives describe what global leadership takes and how they look for it. In Search of Global Leaders • P ERSPECTIVES harvard business review • august 2003 entire career, he had been a UK-based executive at the former Midland Bank. One day, he put his hand up and said, “I’m willing to go overseas,” and so we made him country manager for India. He spent three years there and took to it like a duck to water, later becoming country manager for Malaysia, one of our biggest Southeast Asian businesses, before taking up his current job. Twenty years ago, most of our top recruits came from British schools and universities, and today’s top team reflects that bias. But we now have many able non-British managers in our ranks due to recent acquisitions. Today, we recruit at 68 universities worldwide, this year hiring people from 38 different countries, so that our team of the future will be much more representative of our geographic spread of businesses. Because of our recruitment and development practices, many of our people have worked in multiple countries—some emerging, some developed—and in different sorts of businesses, from retail and wholesale to banking and insurance. These global employees act as a kind of organizational glue for the company. The fact that they have all had those experiences also means that many of them have a great deal in common. A British manager with international experience will tend to identify more with a Japanese manager with international experience than he will with another manager who has worked in only her home country. But that doesn’t mean that we’re trying to develop identikit managers. Far from it. If, for example, my French colleagues lost their Frenchness or my Brazilian colleagues lost their Brazilian-ness, life would be a lot duller, and HSBC would be a lot less profitable. We prize our diversity. That’s all part of the richness and fun of working together, and it’s what makes us so creative and responsive to our clients’ needs. Authorized for use only by Zaid Khartabil in BUAD 301-26 at California State University – Fullerton from 1/24/2022 to 5/18/2022. Use outside these parameters is a copyright violation. “We don’t look so much at what or where people have studied but rather at their drive, initiative, cultural sensitivity, and readiness to see the world as their oyster.” —Stephen Green from any one jurisdiction. Even the largest banks typically have three-quarters or more of their profits coming from one home base. In 2002, no single jurisdiction accounted for more than 40% of our profits. Despite the enormous changes in its demographics and business, HSBC has retained a remarkably consistent corporate identity. That’s largely because of the way we develop our senior management team. No one gets to the top at HSBC without having worked in more than one market. If you look at the executives currently running the company’s largest businesses, all of them have worked in more than one, and nearly all in more than two, major country markets. We strongly believe, as many others do, that travel broadens the mind. And if travel alone does that, just think how much more you get from living and working in different countries. Most of our recruits are recent university graduates. We tend not to go out of our way to look for MBAs or people in their thirties. In fact, I think it’s a mistake for companies to have too much of their top talent join their organizations in mid-career. (Though I should admit that I was a mid-career recruit myself!) Our recruitment process is sophisticated, involving a complex process of tests, interviews, and exercises. We don’t look so much at what or where people have studied but rather at their drive, initiative, cultural sensitivity, and readiness to see the world as their oyster. Whether they’ve studied classics, economics, history, or languages is irrelevant. What matter are the skills and qualities necessary to be good, wellrounded executives in a highly international institution operating in a diverse set of communities. In fact, HSBC has long been famous for its cadre of global executives, formerly known as international officers. We now call them international managers, which sounds less militaristic. They are hired with the expectation that they will spend their entire careers with the institution and also be very mobile. But we don’t limit our international development to these managers. HSBC will give any promising executive who expresses an interest in gaining international exposure the opportunity to work overseas. Take the chief operating officer of our UK business. He’s a Welshman in his early fifties. Until about five years ago, he had never worked outside the United Kingdom—for his Fred Hassan Chairman and CEO, Schering-Plough In the 1960s and 1970s, conventional wisdom held that the way to create a global culture was to move employees around and place them in multiple cultures. But that system often didn’t work very well; putting people in foreign settings doesn’t automatically imbue new attitudes, and it is attitudes rather than experiences that make a culture global. Recruiting page 2 of 8 “The CEO has to see himself as the chief developer of talent, no matter how large the company.” —Fred Hassan harvard business review • august 2003 people with the “right” education or with foreign language skills doesn’t guarantee that people have the right attitude either. I’ve met many people who speak three or four languages yet still have a very narrow view of the world. At the same time, I’ve come across people who speak only English but have a real passion and curiosity about the world and who are very effective in different cultures. Having a global attitude is not the same as being able to imitate local styles. It’s just as important for managers to be themselves. I spent 17 years working for a Swiss company as a U.S. resident. In the 1970s, it was considered forward in Switzerland to address people by their first names. But while I would address my superiors using their last names, with my peers and subordinates I followed the U.S. standard of using first names. People were okay with this because they knew I was not being false. Being yourself while also showing interest and openness is at the heart of a global attitude. In the research-based pharmaceuticals industry, employees must have global attitudes if their companies are to survive. And in my new role leading Schering-Plough, I will focus on building those attitudes. Our industry is product driven. We have long lead times—it can take five to 15 years for a new product to be born. Individual product bets are into hundreds of millions, if not billions, of dollars. Once you’ve got an idea that’s been turned into a product, you need to pay back the high cost of R&D, so you need to sell it around the world. Good ideas can come from anywhere, and good products can be sold anywhere. The more places you are, the more ideas you will get. And the more ideas you get, the more places you can sell them and the more competitive you will be. Managing in many places requires a willingness to accept good ideas no matter where they come from—which means having a global attitude. Creating a global attitude was at the heart of the turnaround I led as CEO of Pharmacia & Upjohn. When I joined the company in 1997, it had just gone through the very difficult merger of the U.S.-based Upjohn and the Swedenbased Pharmacia. It was difficult largely because of the serious disconnect between the two corporate cultures—not at all unusual when you bring together two large companies, especially if they’re based in different countries. The cultural differences seriously under- mined the newly merged company’s ability to exploit its winning products. Our research labs in Kalamazoo, for example, had developed an excellent new antibiotic called Zyvox. But the drug was being ignored by many country managers in Europe because they lacked confidence in Kalamazoo’s ability to do research. We went through a big change process at Pharmacia & Upjohn to end that kind of thinking. We established new performance expectations that measured how well our employees demonstrated open-minded behaviors, including shared accountability, transparency, and collaboration across geographies. We called this behavior-based management and made it central to performance evaluation. I invited executives to reflect on these new expectations and to decide whether they were on board. In the end, 12 of the top 20 executives were moved out of their positions. The others stayed on, and the team became very productive because its members all shared a strong commitment to behavior-based management. After the changes, Zyvox was approved and was rolled out in just 12 months in all three major drug markets. In the past at that company, you would have seen very little interest abroad, and even introducing it in one market would have taken years. My experience with that change process convinced me that identifying and developing people with global attitudes requires personal involvement from the top. The CEO has to see himself as the chief developer of talent, no matter how large the company. In 2000, we merged Pharmacia & Upjohn with Monsanto to create Pharmacia Corporation, a company with about 43,000 employees worldwide. I made it my business to know that large organization’s top 200 managers personally—I don’t mean the top 200 according to hierarchy, but according to their potential and the degree to which they contributed to the company’s goals. Some of these people were quite junior, but I tried to know who they were, what their strengths and weaknesses were, and I looked at their performance evaluations. In my last six months there, I had one-on-one meetings with approximately half of these people. I also like to be on the front lines to observe how people are working. When I go to a sales meeting, I don’t sit with the brass from headquarters; I sit with sales reps. In 2000, I went to page 3 of 8 Authorized for use only by Zaid Khartabil in BUAD 301-26 at California State University – Fullerton from 1/24/2022 to 5/18/2022. Use outside these parameters is a copyright violation. P ERSPECTIVES • In Search of Global Leaders In Search of Global Leaders • P ERSPECTIVES Jeffrey Immelt Chairman and CEO, General Electric A good global company does three things. It’s a global sales company—meaning it’s number one with customers all over the world, whether in Chicago or Paris or Tokyo. It’s a global products company, with technologies, factories, and products made for the world, not just for a single region. And most important, it’s a global people company—a company that keeps getting better by capturing global markets and brains. How do you make all these things happen? harvard business review • august 2003 First, human resources has to be more than a department. GE recognized early on—50 or 60 years ago—that in a multibusiness company, the common denominators are people and culture. From an employee’s first day at GE, she discovers that she’s in the people-development business as much as anything else. You’ll find that most good companies have the same basic HR processes that we have, but they’re discrete. HR at GE is not an agenda item; it is the agenda. We run the company so that 300,000 people feel the chairman might enter their world at any time. I spend roughly 40% of my time on people issues; so do our other top leaders. I teach at the Learning Center in Crotonville three or four times a month. In the course of a year, I will review, in detail, five or six thousand internal résumés through a process we call Session C. During that session, I’m not locked in a room with executives; I’ll see 300 people. And I like to spend time in the field with sales reps who’ve been identified as having high potential. A swing through Europe is filled with employee meetings—some hardnosed business reviews, some big customer meetings with sales reps, and some meetings with factory teams. I try to reach down into the organization very hard, all the time. When I meet people who especially impress me, right away I call our HR director Bill Conaty and say, “I want these three people to get a double dip of stock options.” The recognition and reinforcement are immediate. As soon as someone rewards them for their talents, these star performers begin to aim even higher. Second, we devote a lot of time and energy to building up personal networks. This is a big company in a big world. You can’t be a lone ranger and also be a global manager. We spend $1 billion on training, which has the most important benefit of connecting people across the company. We also move people around a lot, for the same reason. When I meet someone, I don’t quiz him to see if he can do the job; I expect that. I don’t look for smoothness. I don’t look for “GE-isms.” I look for a person with a great instinctive feel for his market, his business, and his subordinates. I always ask people about their teams. I want people who bring other people with them. When I do a Session C, half the grade I give is to the individuals and half is to their team. I ask, “Who’s in your wallet?” I want to see who’s in their family, who Authorized for use only by Zaid Khartabil in BUAD 301-26 at California State University – Fullerton from 1/24/2022 to 5/18/2022. Use outside these parameters is a copyright violation. “We devote a lot of time and energy to building up personal networks… You can’t be a lone ranger and also be a global manager.” —Jeffrey Immelt the American Society of Clinical Oncology meeting, the biggest oncology convention in the world. Typically only sales and marketing people attend; I was the only “big pharma” CEO there. All of this contact is time-consuming, but it allows me to keep my ear to the ground, to overcome any hierarchical barriers. Avon’s Andrea Jung takes the same kind of personal approach to identifying and nurturing global talent. She keeps a close eye on high-potential managers even though they may be two or three or four levels below her, and she goes over the list at a private dinner once a year with the board. Her management team is graded not only on how it selects new managers but also on what it does to develop them as contributors to the global community. She’s created a very powerful, very effective business culture in a truly global company, which has much of its sales outside North America. In the past, Avon was very de

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