Tuesday, May 30, 2006

Global Manager

Recently there was a The Indus Entrepreneurs (TIE) meet in Bangalore. The meeting was an opportunity to meet high tech entrepreneurs and would be entrepreneurs with venture capitalists. The meeting itself was not of great interest for me, but the companies represented (directly or indirectly through employees) at TiE is something worth writing about. Most of the companies were startups and yet global companies: Aarohi Communications, Sonoa Systems, EFI, Tavant, RelQ, Open-Silicon to name a few. These companies are called "Born Global" companies. ( Born Global companies are those companies which have operations in multiple companies within one/two years of their existence)

To be successful these companies need Global Managers. The top management and senior management in these companies need to have a special management skills. I have worked in one such company. I am writing this article on what it takes to be a global manager based on my experience and observations at my current firm and learning at B-School.

Successful managers need to have global vision
To be successful, global companies need to develop unique set of capabilities which allows them to:
  • Take advantage of resources available to it on worldwide basis - regardless of where these resources are located. These resources may be company owned or may belong to other independent firms. For example, my current company has the ability to use (third party) factories in Taiwan, Israel, China & Korea.

  • Enter any country it chooses and sell products in any country based on business opportunities. These companies are constantly in the lookout for new opportunities - and are not limited by geographic/national boundaries. My company, for example, has customers in USA, Canada, Israel, Portugal - and is/was negotiating with firms in Thailand, India, Korea, France, Ireland and Japan.

To succeed in a global market place, managers need to have a global vision and a complementing strategy which enables managers to develop a global vision which helps in breaking down existing geographic and competitive boundaries.

The manager’s global vision is shaped by several factors. One of the biggest driving factor is having a global mindset - i.e., ability to look at the global markets as a whole. This can be summarized by the slogan "Think Local Act Global".

Global managers work with the assumption that global markets are best served by adaptation to local conditions - and have local initiatives in different markets around the world. Diversity - ethnic, consumer, geographic, & economic diversity is looked as sources of opportunity. Global strategy focuses on optimal global sourcing, selling standard products and the ability to react globally to competitors’ moves.

External forces which drive global mindset

Company may have a global vision and a global strategy, but manager’s mindset is crafted by several forces internal to the company. In my opinion, there are four influences on the manager:

Leadership View of the world

One of the leading forces is the leadership view of the world. This is often driven by the CEO. A visionary leader can drive the global strategy - but he also shapes the managers’ view and his actions. Often times, top leaders in global companies have worked in many countries. Top leadership team in global companies often consists of members from a diverse set of countries. - See Leadership & Diversity
Top leadership in our firm consists of members from Pakistan, India, USA & Egypt.

Administrative Heritage

Administration style of the company can either be centralized or decentralized. In a global company, administration is often highly centralized. All decisions on use of tangible and intangible assets are centrally controlled. Local business units do not have control over local assets.

Organizational Structure

Manager’s mindset is also influenced by the organization structure. Global companies are structured around products & functional roles Global companies are not structured according regional offices.

Industry forces

No firm can work in isolation. It has to deal with vendors, suppliers, customers and competitors. The need to achieve economies of scale and scope have forced vendors and customers to globalize. For example, my company has to open an office in Taiwan so that we could deal with our vendors better.

Global Manager’s thought process

Managers have to retrain their thinking process to become global managers. This is a difficult task as their thoughts are often crafted by ‘traditional’ practices: Home country practices, ethnocentric views, preference to local/home country candidates/process/procedures etc. These ‘traditional’ thoughts has to be replaced by global thinking. A global manager’s thought process is characterized by:

  • Multicultural approach to reflect global operations
  • Shift of focus on "soft tools" - Vision, process and people to achieve objectives
  • Collaboration with a network of vendors, partners & customers
  • Recruitment from global talent pool - to get best set of people
  • Global transfer of human resources - global learning/training process
  • Creating a learning Organization
  • Focus on big picture - respond rapidly to global business environment changes.

Closing thoughts

In a global economy, high tech companies need to go successfully global. Such companies can then maximize the sales potential from existing customers and attract new customers without stepping into new product ranges, focus on innovation and offer improved and new products,
services and reshape the industry through a network of partnerships. For a strong global performance, the organization needs a group of global managers . Only then the global strategies can be implemented successful - thus making the company successful.

Born global companies which must develop a global mindset from scratch. The primary motivation in these companies are either ‘growth hungry’ or "deliver the best for the lowest price’. Depending on their primary motivation the companies develop a global strategy - which has to be successfully implemented by global managers.

As companies continue to expand globally they need managers who understand global business, operate effectively across cultural boundaries and balance strategic integration with adaptation to local markets. The opportunities the company pursues, and how it deals with the many challenges of a global business approach, depends critically on how good its managers are at interpreting and responding to the dynamic and diverse challenges facing the organization.

Also read:

Diversity & Leadership
Developing a global mindset
Value of International Experience
Why have International work experience?
Leadership for a Global Enterprise
Building a Company of Leaders
The Global Dimension of Project Management


Ashu said...
This comment has been removed by the author.
Ashu said...

Hi Arun,
This is Ashlesha Deshpande.
I am studying Masters in Human Resource Development in University of Minnesota USA. My course contains inputs like integrating adult education with HRD. I had an assignment "International perspectives on HRD" Your blog helped me a lot to get some really good material for my presentation. You write very well, very clear and convincing. I loved your blog. Just wanted to compliment you for having such an informative blog.Thanks........Keep sharing your thoughts. Ashlesha

varoon vishnu said...

I am varoon doing my masters in UK and this helped me well in one of my assessments as well and it was a good support. keep doing the work arun.