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THE CEO’S GUIDE TO:

P R E PA R I N G
FUTURE
GLOBAL LEADERS

By

David Tessmann-Keys

and

Richard S. Wellins, Ph.D.

© Development Dimensions International, Inc., MMVII. All rights reserved.


CONTENTS

3 Globalization: The World Is Our Stage

5 Global Leadership Opportunities and Challenges

10 What Is Global Leadership?

16 Great Global Leadership Defined

23 Identifying and Developing Your


Global Leader Talent Pool

31 Facing the Global Leadership Imperative

33 Best Practices of Four Global Giants

37 Endnotes

38 Contributors

39 Authors

40 About DDI

1
Ever since Marco Polo led his team to Cathay SECTION : ONE
(now China) to confab with Kublai Khan (grandson
of Ghenghis), global business—and the talent to
Globalization: The World Is Our Stage
conduct it—have become increasingly important
to corporate growth. Rapid changes in logistics New Customers, Markets, Capital, and Suppliers
and information technology have accelerated the Around the World

pace of globalization in recent decades, creating a Globalization means a blossoming of business opportuni-
ties as never before. New markets are available to firms
21st-century infrastructure for worldwide com-
with the resources to get their goods and services in front
merce—yet executives leading these global
of customers; purveyors of Starbucks, McDonald’s,
efforts still confront many of the same skill devel-
Ferrari, and Gucci not only line the streets of London or
opment and management challenges that Polo Chicago, but Melbourne and Shanghai as well.
faced nearly 800 years ago. Computers from Acer (Taiwan), Lenovo (China), and
Toshiba (Japan) boot up in North America; and beverages
It’s now, of course, far easier to operate around
from Tata Group grace grocery shelves around the globe.
the globe than ever before, even amid political
Capital markets have similarly globalized. The inflow of
conflicts. The opportunity for any firm to conduct
capital for emerging markets and developing countries
business with anyone and operate anywhere has
more than doubled from 1995 to 2005 ($323.3 billion to
led to multicountry supply chains—product devel-
$674.5 billion), while outflows for emerging markets more
opment in one country, sourcing of raw materials than quadrupled ($245.5 billion to $1.18 trillion).3
and components from a second, assembly in a
third, and marketing, distribution, and sales any- Global Business Challenges Commensurate
With Rewards
where. For example, merchandise trade from just
Along with increased access to global sales, capital,
the European Union (EU) to North America was
goods, and services come a slew of strategic and opera-
more than $360 billion in 2005, and trade to the
tional challenges:
EU from Asia was more than $512 billion.1
• Newfound competitors emerge from all corners of
Workforce demands are equally staggering: U.S. the globe. So even as businesses tap into the low-cost
multinationals alone employed 9.1 million persons opportunities for sourcing or offshoring, they also
overseas in 2005.2 Who will lead them? contribute to a global trend toward commoditization—
making it harder than ever for firms in every industry
to maintain margins and profitability.

2 3
• Risk of asset loss—both physical and intellectual—is a
real and growing problem. Taking any portion of an SECTION : TWO
organization overseas exposes a firm’s proprietary
processes, products, knowledge, and brand/corporate
identity to different intellectual-property mindsets and Global Leadership Opportunities
even corporate predators. Yet many companies have no and Challenges
choice as they follow customers in order to retain busi- In many ways, customers, suppliers, and capital are the
ness. When General Motors shifted billions of dollars in easiest pieces of the global puzzle to assemble, especially
parts business to India, China, and elsewhere, suppliers when compared to developing a leadership team to
either moved with them—or were left behind. manage that puzzle profitably. Companies that invest in
• Unfamiliar regulations can present huge challenges. developing global leadership talent find new opportunities
Companies going global often collide with regulatory and and better execution, while companies that don’t face new
litigious risks that in no way resemble those found at risks and potential failure of their multinational strategy.
home; these risks may include severe business penal-
Opportunities
ties and even forfeiture of assets. Senior executives
responsible for regulatory breaches may also find them- • Strong brands increase access to top talent: Firms
selves in a foreign jail with little legal recourse. that invest significant resources into developing strong
global brands enjoy greater access to leadership candi-
• Inflexible business models derail many global efforts.
dates around the globe, helping recruitment of superior
Not every business model translates across cultural and
talent (e.g., multilingual, global experience). While the
economic boundaries around the globe. While every
fight for the best of these candidates is aggressive, the
organization has a unique DNA that underpins its
IBMs, Toyotas, and Intels of the world have a head start
success, a global company frequently must balance its
in developing a global leadership pipeline.
core DNA with the unique culture and attributes of the
host country, region, or market. • Competitive advantage: For firms with adept global
leaders on board, the competitive playing field tilts
Overwhelming as these risks may seem, they are all
significantly in their direction. These leaders not only
manageable—and most companies can either build or buy
know the customs, culture, and etiquette of the region or
an infrastructure (logistics, technology, financial systems)
regions in which they operate, but, more importantly,
to support their global ambitions. The tougher challenge by
they understand the nuances of business in those
far is developing global leaders who can make the infra-
areas—small differences that can determine success
structure serve customers and shareholders profitably—
and failure. These can be as simple as awareness of
both now and in the future.
cultural negotiation norms, or as complex as knowledge
of the supply chain relationships in a particular country.

4 5
• Expansion of capabilities: The impetus for much global or inexperienced graduates for pennies on the dollar
expansion is focused on low-cost procurement, but the compared to salaries in [New York] or London,” reports
potential for much more is available to the right leaders. ChinaSolved Blog. “Or you can get the real thing—over-
Global leaders recognize and cultivate the potential of seas educated, highly trained, experienced bilingual
every asset within their global portfolio. Global leaders Chinese experts fresh from one of the big consulting
will leverage additional opportunities and talents that firms or investment banks—but you will probably pay
emerge from a new location over time, such as product more than you do back home.”4
design or customer service. • Increased business risk related to global talent
• Global leaders develop other effective global failures. Poor leadership and decision making at any
leaders: Honda initially leveraged its network of global level are debilitating. Once a company becomes global,
leaders to establish a strong presence in North America, such failures make international success all but impossi-
bringing Japanese execu- ble. Bain & Company reports that more than 60 percent
tives to guide North of geographic moves fail entirely, and only 17 percent of
Companies that invest in
American facilities. Now companies achieve sustained, profitable foreign growth.5
developing global leadership
talent find new opportunities through a global leadership Many well-publicized global failures ultimately can be
and better execution, while program in North America, traced back to executive shortcomings. While the inane
companies that don’t face new the firm is transferring those flops grab headlines (Kentucky Fried Chicken’s infa-
risks and potential failure of mentored under global lead- mous “eat your fingers off” branding in China), more
their multinational strategy. ers around the world, even recent failures point to inadequate global leadership.
back to Japan. “We send For example, Home Depot sold its stores in Argentina
our leaders to different and Chile in 2001 amid upset local vendors who
organizations, to different plants, to help get them start- objected to their frequent demands for lower prices,
ed up,” says Kim Smalley, AVP Human Resource exclusive deals, impatience with out-of-stock items, and
Management, Honda of America, MFG. “Most of the general arrogance.6 Culture clashes have also caused
focus so far has been on the North American side, but another major U.S. retailer to struggle in Germany.7
you increasingly hear about taking a North American What’s more, failures in the form of missed or ignored
associate and dropping them into one of our Japanese opportunities also occur daily around the globe, throt-
or other global facilities into a leadership role.” tling overseas efforts, often in ways unseen.

Challenges • With increased diversity comes the need to unify


around common goals. Maintaining organizational
• Competition for global leader candidates has heated
focus, direction, and motivation among an increasingly
up. Hiring front-line workers around the world is rarely an
diverse leadership team and workforce is a task that few
issue, but finding skilled senior executives has become
domestic leaders encounter. In a global firm, it’s not
increasingly difficult and costly. “At the low end of the
unusual to lead or work with executive and management
HR market, you can hire busloads of unskilled laborers

6 7
teams brought together from around the world. While broad
corporate goals may seem superficially clear, they could
Aligning Global Diversity
be understood and internalized differently by members of a
culturally diverse group—making motivating and managing
Diversity among employees in terms of cultural
far more complex.
background leads to a richer, more sophisticated
and more effective corporate environment. But
A successful global HR function will constantly adjust the bal- diversity in the form of misaligned corporate goals,
ance between a strong corporate culture and local cultural objectives, and processes—especially as the result of
differences. According to one DDI study, even as 85 percent leaders disconnected from operations around the
of global companies try to establish a corporate culture in all globe—is a potential disaster.
locations that’s consistent with the goals and vision of the
company, 88 percent also report that local culture and cus-
Jeff Albright, President of the Asia Region, Briggs &
toms have a “moderate to great” influence on the way they
Stratton, says, “As your organization grows, the risk
conduct business in particular locations.8 Similarly, 90 per-
is detachment from the core message and detach-
cent of global leader companies (vs. 71 percent of a peer
ment from the core office. … There’s a risk of an
group) say “our businesses are aligned around a common
outpost becoming detached enough that they see
corporate culture,” according to a Fortune study, and 85
themselves as a different unit, they don’t see—they
percent “are effective in integrating operations globally to
don’t feel—a kinship to the headquarters.”
exploit economies of scale.”9 For a corporate giant such as General Electric,
in which there are as many as 10 different distinct
• Business models don’t translate easily overseas. Just
because a proven approach to products, processes, or serv-
business units operating nearly autonomously, that
ices works well in one country or market doesn’t mean it will
may not be a problem. But for Briggs & Stratton:
work well in another. What consumers value around the
“where we’re selling engines and end products—
world varies widely. In Thailand, for example, one of the
there’s a risk that our vision becomes separate from
world’s largest toothpaste manufacturers packaged tooth-
the corporate vision, and we’re moving in opposite
paste in its common economy-sized containers, only to find
directions, or it’s difficult to coordinate,” says
out that a portion of its buying public could not afford the
Albright. “Business alignment equates to better
large-sized containers. Global leaders will leverage local
business decisions and a better bottom line.”
market research to find these answers ahead of time.

8 9
• A well-meaning U.S. vice president sent to Argentina, who
SECTION : THREE equates familiarity and trust with calling people by their first
names, spends a week calling his Argentinean executive
team by the wrong name without any appropriate titles of
What is Global Leadership? respect (e.g., professor, doctor)—when he inadvertently
Most companies today understand that the development chooses the second of the two surnames (the mother’s)
of human capital must be a management priority; this is doubly rather than the first (the father’s name), neither of which is
important for initiatives that extend around the globe. Because the “familiar” first name.
while some leadership traits are transferable anywhere around
the world—e.g., trust and mutual respect—there is more to the • The purchasing director of a fledgling multinational is insulted
when his potential Russian manufacturer declares that
global leadership equation. Good leaders don’t necessarily
they’ve presented their “final offer.” The director storms from
make good global leaders.
the room and the lousy deal, not knowing that “final offer” in
Global Leadership Differs from Leadership Russia is rarely the final offer, and that persistence leads to
outcomes that can be far more attractive.10
There is a role for every leader, and, not surprisingly, that role
may or may not involve an overseas assignment. Myriad • A key executive at a food manufacturer in Brazil was upset
criteria make up a good global leader (see pages 16–21), but that local staff would frequently wander back from lunch late.
even without a formal list, it’s easy to see how good leaders and He repeatedly took offense with the practice, and let his
good global leaders differ. It would be folly, for example, to take negative reactions carry over into other activities with staff,
an able leader who’s been in one location for a decade and nearly poisoning relationships. Ultimately, he learned that it
assume that his talents will automatically translate to managing was a national phenomenon and that staff were still doing
a foreign operation or overseeing a global operation dispersed their work and taking care of
in multiple countries and interacting with multiple cultures. business—and so he adapted It would be folly, for example, to
and built in extra time for take an able leader who’s been
Even when good leaders transfer their skills well overseas, they
meetings when they occurred in one location for a decade and
still need to invest time and effort into acquiring the appropriate
near the lunch “hour.” assume that his talents will auto-
cultural sensitivities about the regions in which they operate.
The simplest slip-up can often send a global corporate relation- Thras Moraitis, General matically translate to managing
ship spiraling downward: Manager, Group Strategy and a foreign operation or overseeing
Development of Xstrata, a global a global operation dispersed in
• An executive from Texas insists on giving his new China part-
diversified mining group, says multiple countries and interacting
ners an old-fashioned bear hug upon greeting them and with multiple cultures.
that many cultural issues can be
uses various hand gestures when making his points—not
overcome by getting out of a
knowing that China executives typically do not like personal
Western mindset. “In the West we basically sit down and we
contact and that gesturing is distracting (finger-pointing often
say these are the facts. We’re both going to make money. This
is seen as offensive).
obviously works for both of us, let’s do the deal. It doesn’t quite

10 11
work like that in most of these other countries that we are assessed against “total costs” (which incorporate
now going to become more active in. Particularly in India, logistics/ transportation charges, potential delays, size of
in China, in Korea, relation- purchased inventories, frequency of deliveries), cost
ships are absolutely crucial. savings can still be substantial.
Global leaders are most often
And so, the ability to not
individuals “born” with certain • Demand-side cost savings: If a major customer asks
only adapt to the new style
traits, but who are then “made” you to move overseas with it, you may feel you have no
of working with people, the
into the model of a global leader choice. Fortunately, you may also be surprised at the
patience you need, picking
through coaching, experience, cost savings you achieve while satisfying your client.
up the cultural clues that are
and support tools. Japan-based auto supplier Denso has taken its
perhaps more subtle than
$30 billion business into more than 30 countries to stay
we might be used to, under-
close to customers such as Toyota, recently forming a
standing what people are saying to you when they say cer-
new company in Thailand to support production planning,
tain things, all of that’s crucial.”
information systems, and training for its companies in the
Jeff Albright, President of the Asia Region, Briggs & Stratton, Asia and Oceania region.11
says, “Those that come in with some humility, those that
• Operational expertise and innovation: It’s every exec-
come in with respect for local people, and those who come utive’s tendency to believe that nobody does anything as
in to learn—that honestly are humble enough to think that well as the home office. Yet there are countless product,
they can learn something from the local environment and process, and service innovations emerging around
local people—are the people that end up with an endearing the globe. The only way to access those skills or that
connection with the staff and end up becoming not just a proprietary knowledge is to engage with other global
leader for those people they have a native tongue to share, firms, often through partnerships and joint ventures.
but go across cultures and across languages. That to me
is the number one key. To make a connection, you have to • 24/7 business: For processes such as product develop-
be humble enough to get down and talk to the people and ment or programming, many firms are now orchestrating
try to learn from them.” networks of global teams such that the hand-off of
projects allows work to chase the sun. Companies are
The Rewards of Global Leadership no longer limited by the work hours of their home coun-
try. Some North American hospitals are sending complex
Despite the many opportunities for executives to find them-
diagnostics work, such as brain scans, overnight to India
selves committing one of the aforementioned “bloopers,”
so that results are ready for review the next morning.
the rewards from operations headed by well-seasoned
global leaders keeps organizations pressing forward: • Growth: There is no greater lure for global firms than the
potential of new customers gained by getting a foothold
• Supply-side cost savings: Even with a growing aware-
in a foreign country. Imagine if Starbucks had limited
ness that sourcing from low-cost regions needs to be
itself to only domestic coffee houses. For an increasing

12 13
number of global firms, a majority of revenue will eventu-
ally be generated from overseas operations. Take auto Global Demands Define Success Profiles®
manufacturing: 40% of auto sales and 55% of auto
Thras Moraitis, General Manager, Group Strategy and
production will occur in Asia by the year 2020 (with China Development of Xstrata, a global giant in mining, says
and India being the most prominent emerging markets), there are many ways in which globalization has
up from 25% of sales and 35% of production in Asia in changed his company and the roles of leaders within it.
2005 (of which Japan alone accounted for 10%).12
“At the practical level, it obviously changes the
Setting up shop overseas, even with able global leaders,
demands on senior executives and the kinds of skills
is difficult. But the swiftest really do win the global race. they need to have,” says Moraitis. That starts with the
For example, Motorola worked long and hard to establish practical travel demands on leaders with multigeo-
wireless services within China beginning in 1987, recogniz- graphic responsibilities, moving to and from the 18
ing that the country would bypass development of a countries across every continent in which Xstrata does
complete landline infrastructure for both voice and data. business. “But I think it goes way beyond that into the
This involved risk—China would not accede to the WTO for kind of skills you have to have to carry with you wher-
another 14 years—but considerable reward as well. Where ever you go. You have to be able to adapt, literally
is your wireless China? And how will you assemble the immediately, as you land in a new location, to the local
global leadership team to get there quickly? customs, approaches, and management styles in order
to be effective.”
Can Global Leadership Be Grown?
That ability to adapt needs to be supported with a solid
Global organizations need executives who excel at collab-
management style, explains Moraitis, yet one that can be
oration, innovation (turning new ideas into new products
customized to a new environment. A criterion for the
and services), and managing change. Such talented
kinds of executives that will be successful under those
individuals rarely walk off the street and into an effective
conditions and in Xstrata is cultural affinity, but also the
leadership position. Global leaders are most often individ-
ability to manage in an ambiguous or unfamiliar envi-
uals “born” with certain traits, but who are then “made” into
ronment… and discovering that it doesn’t always work.
the model of a global leader through coaching, experience,
and support tools. “That’s the stress it places on the individual, on the one
hand, and on the way we look at the appointment of
“By far the biggest thing is exposure and experience,” says
senior executives,” he adds. “So when we worked with
Moraitis of Xstrata, “and I think you’ll find most people will
DDI to develop our own Success Profile®, cultural affin-
learn how to do this kind of thing the more they get exposed
ity, the ability to work in an ambiguous environment,
to it. And perhaps they need a bit of coaching because
and high energy were very important, specifically
some of the learnings are a little bit more nuanced than you
because our senior executives are traveling a lot, finding
might imagine... but the balance of it is in experience and
themselves in unusual environments.”
learning.”

14 15
Moraitis’ observation isn’t lost on most successful global DNA Components of Great Global Leaders
firms. Although they scour the world for qualified leadership Global leaders are a breed unto themselves. Part inherent
candidates, they still invest in developing global leaders nature, part life experience, they have the magic mix of
with the capabilities to move and lead from continent to skills to create competitive advantage for the companies
continent as business needs require. What those leaders they serve. Based on years of research and nearly four
ultimately must have are attributes that position them for decades of experience in
global success. growing leaders, we have
There is a significant difference
developed a blueprint for
between excellent leadership
global leadership success.
and excellent global leadership.
Our research specifically
But what makes the difference?
SECTION : FOUR looked for leaders who
For one thing, an individual’s
could successfully cross
hardwiring—the personal style
countries, economies, and
Great Global Leadership Defined cultures to achieve wide-
and attributes he or she brings
to the table—greatly affects how
What does a truly great global leader look like? And how reaching, global objectives.
he or she operates globally.
can you identify these individuals who will excel on a world
DDI conducted research
stage? Our research proves that there is a significant differ- with 25 senior human
ence between excellent leadership and excellent global resources and operations executives at 22 global organiza-
leadership. But what makes the difference? For one thing, tions across a wide range of industries. That work has led
an individual’s hardwiring—the personal style and attrib- to a list of 10 factors that make up the “leadership DNA” of
utes he or she brings to the table—greatly affects how he a standout global operator. These factors are global lead-
or she operates globally. ership differentiators—pivotal elements that spell success.
For aspiring and incumbent global leaders, knowledge, Detailed briefly here are the competencies, experiences,
experience, and competencies are all critical, but it is the and personality factors that back up these essential qualities:
personal attributes—including potential “leadership derail-
• Intellectual Grunt: Operating as a leader at the execu-
ers”—that are most likely to predict success or failure. It’s tive level is complex in any country. Operating a global
essential to measure these qualities—including values and organization with multiple regions, economies, political,
motivation—when selecting leaders for global roles. It’s social, and cultural factors; and an understanding how
important, for instance, when seeking to identify future these factors influence strategy is enormously complex.
global leaders to consider just how they can be molded. Global leaders are sharp. And they are street smart.
Can you teach someone to be sensitive? Can you teach They are going to be working all the time, and they also
energy? Or cultural fit? need to be thinking all the time—on their feet. When a
great deal of information needs to be crunched and com-
puted, the capacity to deal with ambiguity—as well as
complexity—is crucial.

16 17
• Contextual Chameleon: Effective global leaders must mainly because they didn’t have people skills. A
be able to adapt to unfamiliar roles and environments. “People Black Belt” has the ability to stop, listen, and
While this is important in any leadership role, it’s impera- understand how to adjust his or her approach to get the
tive when working across multiple geographies. You desired result.
can’t change as a person, • Global Explorer: An American senior-level executive
but you have to be sensitive who runs a multinational division in China classifies
Great global leaders often face
to what’s acceptable within visiting executives into two groups. The first kind arrives,
unpredictable challenges as
different cultures. Great goes directly to the most Westernized hotel available,
they leverage an organization’s
global leaders should visits the office, and leaves. Quite possibly a good
capabilities in emerging market-
understand their own per- leader, but a good global leader falls into an entirely dif-
places. Displaying entrepreneur-
sonal styles as well as how ferent category and modus operandi. He has a passion
ial flair, these leaders must be
they need to change in to understand the native culture. How do things work in
able to utilize highly developed
order to be effective. this country? These leaders want to know how decisions
analytical and decision-making
“Handig” is a Dutch term are made, and how the unique local environment
skills in order to successfully
that refers to the character- impacts individuals at work or changes the business
manage unfamiliar environments.
istics of Dutch leaders who, landscape. Global explorers are passionate about
through their roles as trad- understanding. If you want to spot someone like this,
ing mediators between nations, gained a reputation as look for someone who isn’t afraid to ask questions. He or
extremely adaptable, flexible, and skilled. For this rea- she must not think “my way is the only right way,” or that
son, Dutch leaders are often seen as perfect candidates the home country’s way is the best answer. Keep in
for expatriate assignments. mind the quote that appeared on the back of Jacques
• People Black Belt: Black belts represent the highest Cousteau’s research vessel, “Il Faut Aller Voir,” which
level of mastery in martial arts or Six Sigma. For a global means, “We must go and find out for ourselves.” Global
leader, mastery of emotional intelligence is essential, as explorers are curious information seekers by nature.
is the ability to understand how to engage, motivate, and • Visionary: Great global leaders often face unpredictable
inspire individuals within various cultures. These leaders challenges as they leverage an organization’s capabili-
need to know how to adjust their styles according to each ties in emerging marketplaces. Displaying entrepreneur-
situation. Engaging and motivating in France, for ial flair, these leaders must be able to utilize highly devel-
instance, is a different process than what’s needed to get oped analytical and decision-making skills in order to
the same result in China. An executive vice president at successfully manage unfamiliar environments. They
one of the world’s most global banks once said that he have the ability to take business to a higher level. Take
never saw people fail in global assignments because for instance Mukesh Ambani, chairman and managing
they lacked technical skills, experience, or intellectual director of India’s Reliance Industries, who is creating
horsepower. They were ineffective, he emphasized, what promises to be the world’s largest startup ever—

18 19
Reliance Retail, a chain of small and supersize retail through the door. As the most powerful representation of
stores that will change the face of business in India. your organization’s strategy and values, you have to be
Aiming to create 1 million jobs and reach $25 billion in able to turn up the energy. Globally speaking, business
annual sales, Ambani’s goal is to increase the standard happens 24/7, and leaders must maintain a consistent,
of living in his country. His goal is both visionary and positive demeanor in a fast-paced, always-on environ-
global, in that it involves setting up airlines and trucking ment. The common theme here is a need for boundless
routes that never before existed in India. Ambani, and energy: When the lights go on, you have to be ready to
other leaders with vision, are not afraid to say, “Let’s go put on a show. And don’t forget—a global leader may be
for it.”13 in 10 different countries in 10 days.

• Company Poster Child: As the living embodiment of an • Master Mobilizer: Global leaders are often required to
organization’s values, a great global leader is, more start up or manage new operations—but they don’t
often than not, the most powerful representation of the always have traditional resources available within a cor-
enterprise in a foreign environment. If global clients get porate infrastructure. They need to be able to influence
to meet just one person from the organization, this is the corporate decision makers in order to obtain what they
person you want them to get to know. As George Fisher, need to get the job done. Able to “light a fire” under
the former CEO of Kodak—which was also one of first 10 others, these leaders need to be both flexible and highly
companies in China—once put it, you are the company. organized. They know how to find the right people for
You represent corporate values. People may never get the right jobs and organize the right teams to accomplish
to go to your headquarters to see how you operate, so their goals.
you have to bring the corporate culture to them. Global
• Integrity: Acceptable business practices vary from one
leaders need to be humble, confident (though not arro-
culture to another. In the face of challenging local con-
gant), and open to both change and feedback.
ditions, global leaders must demonstrate the highest
• Humility: A great global leader is a “continuous learner,” level of integrity. They must be able to have the courage
always prepared to question and analyze his or her own and resilience to stick with their decisions. They must be
approach while adapting to various cultural environ- honest, committed, and able to perform consistently in
ments. When operating in unfamiliar territory, a leader many different situations. They are genuine, providing
with humility is open to being “wrong” and willing to true opinions and promoting trust among others. In other
adjust strategies accordingly. Be wary of the “my way or words, these leaders are “solid as a rock.”
the highway” philosophy. A leader who can lead with
In addition to the DNA described in this section, some com-
humility never thinks his or her values are the center of
mon global leadership derailers to watch out for include
the universe.
impulsiveness, low tolerance for ambiguity, arrogance,
• Unbridled Energy: Imagine you’ve flown for 30 hours micromanaging, self-promoting, volatility, risk aversive-
across the world to a foreign country. Upon landing you ness, defensiveness, imperceptiveness, eccentricity, and
travel for a few more hours to a branch office and walk approval dependence.

20 21
Broad Perspective SECTION : FIVE
Every organization that has successfully grown
leaders and placed them around the globe has some Identifying and Developing Your
model or template of global DNA upon which
Global Leader Talent Pool
it develops executives. Honda of America is no dif-
ferent, but Kim Smalley, AVP Human Resource Global leaders don’t just appear out of thin air. Ask
Management, places a premium on the ability to yourself—especially if you are already a successful global
have a broad perspective on issues—especially if leader—how much of the DNA of global leader was in your
that perspective is outside the corporate box. makeup prior to any development experiences. That’s why
organizations must work harder to identify and attract
Smalley says he’s been spending time ensuring that potential global leaders; to sift through their ranks to select
“we’re building a solid base so that when guys like the best and the brightest; and to continually develop the
me leave in another six, seven years, we’re handing leadership skills required for the international stage.
it off to a group of people that are probably much
better prepared than we ever were to ascend into A comprehensive approach for developing global leaders
some of these leadership roles.” He says that there must be a core component of the overall strategic talent
are moments when global leaders have “got to be plan for any global firm, including:
courageous, to step out and challenge things.” • Start with the end in mind. Define what it will take for
In large far-flung enterprises such as Honda, your organization to succeed globally over the next 3-5
bureaucracy can grow as the organization grows. years. You’ll need to determine the key challenges
That can be a problem, which is why global leaders (business drivers) that leaders must face to successfully
need to question the status quo, and, in doing so, execute against your strategic and cultural priorities.
feed innovation and growth. Ask yourself: Do we have enough leaders to tackle
these challenges? If not, how can we accelerate their
“There are times you’ve just got to take a good hard
readiness?
stand and say, ‘You know what? We’re not going to
do that.’ [You] step up and challenge people to look • Paint a clear picture of what global leadership suc-
at new and creative ways of doing things, and not cess looks like for your organization by developing
get so caught up in ‘This is the way we’ve always a Success Profile® for key positions. The Success
done it.’ It’s real easy to fall victim to that trap.” Profile® will include the essential experiences, knowl-
edge, skills, personal attributes, and motivations your
global leaders will need for exceptional performance.
This business-focused metric for leadership success
can leverage the aforementioned DNA components,
but must be relevant to your organization.

22 23
• Be realistic. DDI’s research proves there is a significant identifying and progressing candidates have both a solid
difference between great leadership and great global understanding of leadership potential factors and the criteria
leadership. But what makes the difference? For one against which to judge candidates.
thing, an individual’s hardwiring—the personal style and
By instituting an effective process, organizations will have
attributes he or she brings to the table—greatly affects
clear criteria for predicting leadership potential, as well as
how he or she operates. While some of these attributes
the tools to quickly integrate decision makers’ perspectives.
can be developed, many cannot.
Ultimately, a strong process will provide you with the ability
to identify and focus development resources on people
LET’S BE REALISTIC who will yield the highest return on investment and provide
a pipeline of qualified leadership talent to meet increasing
1 2 3 4 5
demands.
- Adaptability - Strategic - Leading - Building - Communi-
Thinking Through Strategic cation
- Adjustment
Vision & Working
Such a practice also helps companies avoid common
- Sociability - Resilience - Global
- Cultural/
Values Relationships Business mistakes, including:
- Accurate - Risk Taking - Driving Acumen
Self Insight Interpersonal

- Inquisitiveness
Effectiveness - Strategic Execution - Developing • Focus on current performance,
- Building Trust Decision - Global Talent
- Humility Making Economics • Inconsistent criteria,
- Interpersonal - Driving for
Sensitivity Results • No common vision for future global leadership,
- Managing
Ambiguity & • Unchallenged perspectives and opinions,
Complexity
- Energy • Provincialism—“promote your own” strategies, and
- Culture Fit
• Singular focus on strengths with not enough attention
LOW DEVELOPABILITY HIGH to weaknesses.
The result of a successful identification process is that you
While some personal attributes can be developed, many cannot. The key
is to be realistic. will more readily identify high-potential global leaders—and
you may be surprised by some of the top contenders.
Early Identification of Potential Global Leaders
Assessing and Selecting Global Leaders
The first objective for firms embarking on a global leader-
There are few HR decisions more important than assessing
ship strategy must be to identify potential global leaders,
the readiness of high-potential candidates for global lead-
both within the company and among external candidates.
ership. A robust assessment helps organizations to accu-
Successful organizations have in place systematic
rately assess and develop new, aspiring, or experienced
approaches for early and reliable identification of high-
leaders relative to the ideal Success Profile® for a global
potential leaders. It’s critical that those involved in
role. Once an in-depth evaluation of a leader’s strengths

24 25
and development needs is in hand, the data can be lever- ladder not only exhausts both time and resources, but often
aged several ways. results in disaster through underperforming operations,
In the short term, the results enable you to make better botched market entries, or
hiring and promotion decisions, so that you can dramatically irreversible regulatory and No firm achieves a 100 percent
increase the probability of successful executive perform- financial problems. success rate in moving
ance and reduce time to business impact. In the mid- to Companies with successful candidates to global leadership
long-term, assessment data is often used to accelerate selection systems assess placements. But successful
development, so high-potential global leaders are ready candidates in a variety of organizations dramatically
when you need them. ways, including the use of improve their overall operational
competency models, tests, and financial performance by
At the executive level, an effective assessment process
simulations, and behavioral moving that success rate as close
measures candidates against your most important business
interviewing. These solu- to perfection as possible.
drivers (e.g., enter new global markets, execute competitive
strategy, drive profitability), cultural priorities (e.g., values tions leverage the latest
and beliefs), and leadership requirements for upcoming knowledge and technology to provide leaders with the data
global positions (e.g., business acumen, develop talent, and skills they need to make the right selection and promo-
drive execution). tion decisions for global positions.

One proven method of readiness assessment is to place One independent product-safety testing and certification
new, aspiring, or veteran executives in a business simula- organization we know does this exceptionally well. With
tion as a global leader for a day. During this experience, more and more of its customers moving manufacturing
prospective global executives are bombarded with scenarios facilities out of the U.S., this organization needed to migrate
from staff, asked to make decisions that they would likely some of its operations to China to support customers’
encounter in the real world, and put action plans in place. needs. The company needed to develop and execute a
Participants also make presentations on global business selection system to hire 80 engineers in Suzhou and 26 in
strategy, coach staff, and interact with the media. At DDI, Taipei. With a world-class selection system, this organiza-
individual and group assessment results are analyzed tion not only found the engineers it was looking for, but also
against a company’s business drivers to determine where integrated operations. The system worked so well that the
and how talent should best be deployed and developed. company is leveraging it to ensure quality and consistency
worldwide.
No firm achieves a 100 percent success rate in moving
candidates to global leadership placements. But successful Developing Global Leaders
organizations dramatically improve their overall operational There is no one-size-fits-all global leadership development
and financial performance by moving that success rate as approach. DDI has helped to conceptualize, design, and
close to perfection as possible. These companies understand develop leadership programs around the world and in
that pushing a marginal candidate up the global leadership every industry. Best practices often include:

26 27
• Cross-cultural executive development that often • Performance tracking measurements and systems
brings together senior leaders from around the world. to ensure that global leaders are fulfilling the mission
Focused development helps these leaders navigate relative to their corporate assignment (e.g., operations,
three pivotal transitions—those related to the global financial, growth goals), but also succeeding at the
organization, their new roles, and their own personality intangibles related to global leadership.
as it plays out on a world stage. Rather than being a
One organization that has incorporated best practices like
one-time event, executive development experiences
these is Xstrata. In recent years, Xstrata has acquired a
should be built to drive sustainable, transformational
change—both for the organization and the individual. number of firms, says Thras Moraitis, General Manager,
Group Strategy and Development, and so the company
• Foreign assignments and experiential training that,
for the executive, offer a taste of working and leading has taken the initiative to help build global competence
overseas—ideally “stretching” them out of their comfort among incoming managers. Within business units that
zone. For the company, this represents an opportunity to are run fairly autonomously, leaders are “alive to the fact
test the candidate’s capabilities in a contained setting that we have to create this cultural exchange and opportu-
(e.g., where they can’t do too much damage if they fail). nities to teach people new things. They tend to actively
• In-country leadership coaching, peer mentoring, rotate people through their careers geographically to give
and “buddy” systems that make sure that no one them new ideas on how to do their same business, but in
global leader, regardless of position, feels like they’re
a different geographic environment.”
going it alone.
At the group level, Xstrata has two development programs,
• Support networks that enable global leaders to bring a
the first of which is for “young high flyers” between the
broader base of knowledge to any business issue. Such
ages of 28 and 35 who have the potential to be top senior
networks also help address the personal challenges
faced by global executives (e.g., support to ease families executives. This program tries to find opportunities for
into foreign lands). them to gain multicultural experience, either by moving
physically to another location or by taking on a role like
• Global “landing” training that provides the basics
regarding country language, beliefs, values, communica- marketing or sales that naturally gives them exposure to
tions, behaviors, and dress/attire. other cultures. The second program is for the most senior

• Online performance-support systems that swiftly bring executives in line for the next business-unit CEO positions,
resource materials, on-the-job tools, tips, and insights to giving them an opportunity to work and meet people from
the desktops of active global leaders. Virtual coaching other industries and countries.
tools provide guidance, action planners, assessments,
worksheets, and performance tools, helping leaders
maintain corporate focus, policies, and procedures.

28 29
Developing Leaders Worldwide at Philips SECTION : SIX
Philips is one of the world’s most recognized brands,
especially in consumer electronics, but behind that
brand is a large, complex global organization that Facing The Global Leadership
employs more than 120,000 people. While Philips Imperative
had long focused on identifying and developing its Although most organizations today understand the need to
high-potential leaders as part of its succession be global, many focus solely on building the infrastructure
management initiative, it had never offered a global for global expansion and do not invest time and effort into
leadership development program for its general leader identifying, selecting, and developing the talent necessary
population. to succeed globally. Leadership on the global stage is
Philips built a core curriculum, bringing together different—and smart companies are increasing their invest-
courses that addressed several important leadership ment in developing leaders who can deliver results.
skills, including communicating for results, making
Are You Building a Global Leadership Talent Pool?
effective decisions, and contributing to change initia-
If your organization is unsatisfied or unsure of the quality of
tives. In 2006, more than 11,000 leaders went through
its global leadership base, the following questions may help:
at least a portion of the core leadership curriculum.
It has been delivered in 35 of the 62 countries where • Willingness: Does your organization recognize the need
Philips maintains a presence, with more locations being to build a global leadership talent pool? Are you and
added all the time. other leaders ready to move in that direction?

Philips has discovered that by providing development • Resources: Are you willing and able to put the time,
opportunities to its leaders, it has realized a competi- effort, money, and intangible resources against global
leadership identification, selection, and development?
tive advantage in recruiting leadership talent. “It’s an
attractive element for new employees or future new • Talent: Do you have the potential talent on board to
employees,” says Wiesje ten Hoor, global program jumpstart your global leadership initiative or will you have
director. “From a recruiting standpoint, it has had an to look beyond your organization’s walls?
enormous impact.” • Human resources skills: Do you possess the HR talent
and tools and/or the consulting expertise at your side to
“If you benchmark what we are bascially doing at this
make global leadership a reality in your organization?
moment, I only know of a handful of companies that are
doing learning and development on a global level,” If you answered yes to all of the above, then your organi-
says Jan Aernout, global commodity manager of learn- zation is ready to start down a path to global leadership that
ing and development. “We want people to develop. will enable it to leverage new markets, attract new
We want people to learn.” customers, find new sources of capital—and grow beyond
your wildest expectations.

30 31
Global Leadership Roadmap
SECTION : SEVEN
CREATE YOUR GLOBAL VISION
1
Clearly define your global vision as well as the strategic
and cultural priorities for your organization. Best Practices of Four Global Giants
ESTABLISH GLOBAL LEADERSHIP REQUIREMENTS
2
Determine what it will take for your organization to succeed Apotex Inc., Ontario, Canada
over the next 3-5 years. What are the key challenges
(business drivers) that leaders must face to successfully
Human Capital:
execute on your priorities? Start with the end in
mind by developing a Success Profile® for exceptional • The largest Canadian-owned pharmaceutical company,
performance. employing more than 6,000 people in research, develop-
ment, manufacturing, and distribution facilities worldwide.
IDENTIFY HIGH-POTENTIAL LEADERS • In the last few years, Apotex has hired more than
3 1,200 new employees.
Identify those leaders in your organization who have the
highest potential to be great global leaders. • To meet the growing world demand for Apotex
medicines, the company is hiring hundreds of new
ASSESS READINESS AND SELECT TALENT qualified technical professionals.
4
How do you know who’s ready for the world stage—and Key Differentiators for Global Leaders:
who’s not? Gauge readiness of leaders to assume
• Able to communicate an inspiring and compelling vision.
global leadership roles in your organization. Leverage
the assessment and selection data you collect to make • Innovative management skills that bring the creative
successful hiring and promotion decisions. talents of others to market.
• Able to act in a concise and precise way even when
ACCELERATE DEVELOPMENT the world around them has been turned upside down.
5
Determine and deliver the right mix of experiences aimed
Global Leadership Strategies and Best Practices:
at developing your senior executives and high-potential
leaders. • Provides either a “buddy system” with an international
leader or puts staff into a six-month exposure position.
DEPLOY TALENT • Throws potential global leaders in deep water to see
6
Decide how you will deploy your talent around the world. if they can swim (i.e., take on a large project and
At the end of the day, the ultimate objective is to deter- succeed, have the “right stuff,” exhibit adaptability).
mine who will have the highest probability of achieving
Global Leader Challenges:
your global vision and executing successfully against
your business and cultural priorities. • The inability to extract business success from global
leaders in a short period of time (it may take a minimum
of five to 10 years).

32 33
Microsoft Philips
Washington, United States The Netherlands
Human Capital: Human Capital:
• The world’s largest software company, Microsoft has • Royal Philips Electronics is a global leader in health-
offices on every developed continent and into the far- care, lifestyle, and technology, and employs approxi-
thest reaches of the globe, employing approximately mately 121,000 employees in more than 60 countries
71,000 people from Algeria to Zimbabwe. worldwide.

• In the last 10 years, Microsoft’s headcount has grown


Key Differentiators for Global Leaders:
by more than 246 percent.
• Intellectual flexibility to take a perspective that is global.
Key Differentiators for Global Leaders: • Ability to engage and mobilize the workforce in such
a way that they sign up to the direction.
• Experience working in different geographic regions
because it breeds cultural sensitivity. • Ability to influence—because your dependence on
people not under your control is much higher.
• Cultural sensitivity—ability to connect with people
on a different level. Global Leadership Strategies and Best Practices:

Global Leadership Strategies and Best Practices: • Identify a specific group within the talent pool who will
make the most effective global leaders.
• Getting rising global leaders into a variety of offshore
assignments, from startups to mature units to turn- • Develop a career program for global leaders that
around scenarios. includes experiences in two to three countries,
business lines, and role models.
• Providing a coach who has global experience.
• Develop competencies of entrepreneurial business
• Offering an appropriate level of support on the strategy (strategic direction) and people leadership.
personal/private side.
• Give global leaders five to seven years to develop.
Global Leader Challenges:
Global Leader Challenges:
• Trying to not have many assumptions when entering
into new countries—be prepared to start all over again. • Building a larger pool of global leaders in order to
fuel growth.
• Providing global leaders with an engaging environment
and developmental opportunities that can turn into
career opportunities.

34 35
Citi, New York, ENDNOTES
United States 1
“Merchandise trade of the European Union (25) by region and
economy,” World Trade Organization, 2005.
2
“Summary estimates for multinational companies: Employment,
Human Capital: sales, and capital expenditures for 2005,” Bureau of Economic
• Citi is a financial services company with more than Analysis, April 19, 2007.
300,000 employees and approximately 200 3
Global Financial Stability Report, International Monetary Fund,
million customer accounts in 100 countries serviced September 2006.
by more than 5,000 bank branches and consumer
finance offices.
4
“Searching for the middle of the HR market in China,”
ChinaSolved Blog, www.chinasolved.com/blog.
• Citi has an HR staff of approximately 3,000 5
James Root and Josef Ming, “Making foreign moves pay off,”
outside the United States.
Bain Brief, December 1, 2005, Bain & Company.

Key Differentiators for Global Leaders: 6


Scott Larson, “Culture clash: Vendors and rivals say Depot’s cold
shoulder doomed effort in South America-Reporter’s Notebook,”
• Exceptional leadership goes a long way regardless Home Channel News, December 17, 2001.
of country.
7
“Wal-Mart: Struggling in Germany,” European Business,
• A multicountry leader needs multicountry experience, Businessweek, April 11, 2005.
knowledge, and awareness. 8
Sheila Rioux, Paul Bernthal and Rich Wellins, Globalization of
HR Practices, Development Dimensions International, 2000.
Global Leadership Strategies and Best Practices:
9
Telis Demos, “Going Global: The most admired companies
• Spend time defining roles and competencies—metrics
are more focused on managing from the center than on local
tied to competencies.
initiatives,” Fortune, February 24, 2006.
• Tailored action planning for global leaders that 10
All examples created based on cultural information from
includes identifying high potentials, individual coaching International Business Etiquette and Manners,
and development plans, offsite assistance programs www.international-business-etiquette.com.
(e.g., Harvard/London School of Business), and job 11
“Denso’s Asia and Oceania regional headquarters establishes
rotation.
new company in Thailand,” Denso Global, April 3, 2007.
• Growing global leaders up from local businesses within 12
Foresight 2020 Economic, Industry and Corporate Trends: A report
the country; reducing the number of expatriates. from the Economist Intelligence Unit sponsored by Cisco Systems,
Economist Intelligence Unit, 2006.
Global Leader Challenges:
13
Ron Moreau and Sudip Mazumdar, “India’s Mr. Big,” Newsweek,
• Accelerating development of global leaders and September 18, 2006.
getting them up to speed more quickly.
• Getting global leaders to work together with staff as
a common team with common goals. The CEO’s Guide to: Preparing Future Global Leaders was
developed in cooperation with The MPI Group’s John Brandt and
George Taninecz. MPI is located on the web at www.mpi-group.net.

36 37
CONTRIBUTORS AUTHORS
DDI would like to recognize the following executives who
shared their insights and experiences with us. Their contri-
butions were invaluable in helping us to develop The CEO's
Guide To: Preparing Future Global Leaders. Thank you to
these global leaders as well as those who wished to remain
DAVID TESSMANN-KEYS is a Senior Vice President at DDI
anonymous.
and leads all of its operations outside the Americas (30 inter-
Jeffrey Albright Aaron Feen Elaine Moyies national offices in 25 countries) with responsibility for sales,
President of the Director of Marketing, Management
marketing, business development, consulting, operations,
Asia Region, Advanced Micro Devices Development & Sourcing
Briggs & Stratton Manager, Switzerland, and financial performance. He has an extensive background
William Feldman
Corporation Global Markets Director, Nestle in organizational development consulting and has managed
Karen Angeny GE Advanced Materials Ed Oxford large-scale projects focusing on organizational reengineering,
Senior Manager John Harker Vice President
succession management, selection, and leadership/workforce
Human Resources, Head of Human Motorola University,
Agere Systems Motorola development. David consults with many industries around
Resources & Corporate
Carol Banford Affairs, Markets & Jef Pauwels the world. Some of his clients include AP Moeller-Maersk,
Managing Partner– Banking, EMEA, VP Learning and BHP, U.S. Navy, Merck, Cisco, Santos Oil and Gas, Boeing,
International Client Citi Organizational
ESG Reinsurance Ltd., Ok Tedi Mining, Coca-Cola, Hastings
Services, Danny Kalman Effectiveness,
Grant Thornton, LLP Philips International Deering, and SingTel Optus.
HR Director,
Mike Barriere Panasonic Europe Kathy Repa
Managing Director, Pamela Koseck MOD Director,
Global HR Strategy Senior Manager, Asia Pacific,
& Development, DaimlerChrysler Kraft
Citi Corporate Academy, Greg Rough
Andreas Blank DaimlerChrysler AG Executive General
Senior HR Manager, Mark Masterson Manager, Gyprock and
Microsoft Vice President, Cemintel Fibre Cement, RICHARD S. WELLINS, PH.D., is a Senior Vice President at
Wayne Bunch Pacific, Asia, CSR Limited
DDI. He leads DDI’s Center for Applied Behavioral Research
Vice President Human Africa Operations, Ursula Schwarzenbart
Resources Programs, Abbott Director, and consults with clients worldwide on talent management
Tenneco Bill Mills Global Diversity Office, issues. He has written for more than 20 publications and pub-
Maureen Constantine Chairman and Chief DaimlerChrysler AG lished six books, including the best seller Empowered Teams:
Group Human Executive Officer, Markets Kim A. Smalley Creating Self-Directed Work Groups That Improve Quality,
Resources Director, & Banking, EMEA, AVP Human Resource
GKN plc Citi Management, Productivity, and Participation. He has made dozens of pre-
Edward Cumming Thras Moraitis Honda of America, MFG sentations at numerous professional conferences around the
Music Director, General Manager, Sir Kevin Smith world. His research has been featured in Fast Company, The
Hartford Symphony Group Strategy Chief Executive, Wall Street Journal, CNBC, Fortune, and numerous interna-
Orchestra and Development, GKN plc
Xstrata tional publications. He recently served as a judge for CNBC’s
Ron Davidson
Vice President, Asian Business Leader of the Year Award Program involving
Human Resources, interviews with over 120 CEOs across eight countries.
Apotex Inc.

38 39
ABOUT DDI
It’s a grow-or-die marketplace. And having the right talent
strategy is crucial. Development Dimensions International
will help you systematically and creatively close the gap
between today’s talent capability and the people you will
need to successfully execute tomorrow’s business strategy.

We excel in providing a full range of talent management


solutions covering the entire employee lifecycle, including
testing, selection, onboarding, performance management,
leadership development, and succession planning.

DDI is all about giving you the kind of business impact you
want over the long term—that’s what we call realization.
The work we do together is tied to your organization’s
strategies and becomes part of your business and your
culture.

And if your business is multinational, DDI has 75 offices


located in 26 countries—precisely the kind of global
resources needed to implement your talent initiatives
effectively and consistently worldwide.

Take a closer look at www.ddiworld.com/


globalleadership.

The CEO’s Guide to: Preparing Future Global Leaders is


the second in a series. To receive the first booklet, The
CEO’s Guide to: Talent Management, please contact DDI’s
Client Relations Group at 1-800-933-4463.

40 41