Diversity
Diversity - Global Mission, Global Management and the Global Financial Crisis
As a matter of ongoing market research during search assignments and general networking, we map the organisation charts of companies and divisions / subsidiaries of these in the industry segments in which we operate. From this information, our experience is that large international companies (most of which make over 50 per cent of their revenues outside their home markets) still have Senior Management teams that do not reflect the global nature of their current business or future plans. Does it matter?
We think so, yes.
It’s not just that business because business has globalised, companies need directors with the background, experience, and knowledge of these markets. It is because everything is connected, which not only creates opportunity but as we saw with the unfolding of the GFC, volatility in the financial and commodity markets unleashed a new era of change which will most likely fundamentally alter many commercial assumptions.
One lesson from this is that the company needs to respond globally to survive, and this means a greater awareness to ensuring that Senior Management brings the diversity needed to offer advice and local intelligence around the world. Without international directors at HQ to develop the strategy and monitor the risks, companies risk being lost in home country myopia.
Determining what resources are needed is part of a rigorous HR planning process that can be effectively supported by the right search partner. It should be carefully tailored to your company and its strategy. Where it used to be sufficient to have a director representing a market who had been educated in or had a placement in that market, we know now that the contribution to diversity goes much further. In fact, some of the best international directors we have spoken to are multi-cultural and multi-lingual foreign nationals who, while they may not be easy to attract, add enormous value.
It would be interesting to track the financial performance of companies in this respect and it may well be something that you are benchmarking internally, for example do full subsidiaries or divisions where foreign nationals represent (say) 40% or more of Senior Management perform better on key business indicators than average?
This is where we can help. As we have found recently in searches completed in Eastern Europe and Asia, it is apparent that Senior Regional Business Development there is not covered because you have a director who spent two years working for a global company in Moscow or Hong Kong. You need local national expertise in these markets, carefully aligned to acknowledge distinctions among the diverse cultures: experience in Russia may not be all that useful in Ukraine and experience China not aligned to your growth in Korea.
A regular review process is needed; internal succession planning and training is critical to building the right management for the future but recruiting in external talent that brings something new to the table is no less essential.
Farn Williams Thought Leader topics /Diversity & Globalisation
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