Managers at international
businesses must expect to move country regularly. Could this help create a
class of cosmopolitan, constantly mobile workers?
Nick Leeson, the legendary
destroyer of the 233-year-old Barings Bank, was by his own admission naive,
immature and unworldly when he was working in Singapore in the 1990s.
Left unsupervised he secretly
ran up £830m in trading losses before he was discovered. Barings was
subsequently sold to a Dutch bank for £1.
Raw pride and a reluctance to
admit that he was failing stopped him telling anyone about his rapidly climbing
losses, he explained in a recently published book.
Mr. Leeson did not claim to be
discombobulated by working in an alien environment, indeed he enjoyed the
tropical social life. But he has said that if he could put the clock back, he
would not have got on the plane to Singapore.
How many of today’s budding
global warriors will end up wishing that they too had not “got on the plane to
Singapore”?
Until a few years ago the
expatriate executive was widely understood to be someone acquiring a building
block of career experience that would benefit him or her and the company.
In the last few years the
spread of globalization has reached the point where businesses in global
markets now expect their managers to relocate with few guarantees for the
future on either side. Increasingly these move-able executives will be Asian,
particularly Indian and Chinese, as regional domestic Giants reach out into the
world.
The old-style western
expatriate has not always been appreciated. The 19th century British Prime
Minister, Lord Palmerston, said that when he required advice in handling a
foreign country he would ask a 20-year expatriate for his opinion and then do
the opposite.
But at least in the 19th
century working overseas was considered a high risk gamble at best or akin to
taking holy orders. It was rarely – as today – deemed ordinary and easy.
In external appearance most
modern businesses, superficially shaped by similar management solutions, tend
to look familiar. But the reality is that diverse cultures, histories and
stages of development make the intramural corporate experience very different,
at least in emerging economies if not everywhere.
Western executives are
increasingly attracted by the monetary and intangible rewards offered by
ambitious Asian groups. At the same time, established global businesses
blithely talk of building up diversified multinational managements made up of
staff holding a variety of different values and attitudes.
“Some people love the speed of
it, the variety and excitement and the opportunity. But there are others who
really don’t welcome this and do not relish what’s going on,” says Edwin Sim,
managing director of
Human Capital
Alliance, a consultancy.
“You have to know what kind of
person you are. Modern management is tricky enough in one’s own culture. You
need energy, flexibility and a certain toughness to do it in another country,”
he adds.
Conventional academic
preparation might help an executive avoid becoming another Nick Leeson (who had
no formal training), but will probably do little on its own to unravel exotic
business practices.
India may be poised to
overtake the US as the world’s biggest producer of MBAs, but that doesn’t mean
a foreign MBA will be able to spring open business mysteries that remain as
delicately localized as they ever were, says Jane McKenzie, professor of
management knowledge and learning at Henley Management College in the UK.
“That’s not the way education
works. We provide a set of business tools and logical rigour. Ultimately our
students have to take what is valuable for them out of the course and adapt
that for local conditions,” says Prof McKenzie. “Anyone who claims paper
qualifications are a panacea is a fool or a charlatan.”
Academic research has
unsurprisingly found that expatriates with the most positive and flexible
attitudes flourish best. A PwC Study discovered, less obviously, that almost
two-thirds of foreign assignment failures were blamed by companies on the
mismatched expectations of their executives.
Manifold factors can cause a
clash between an expatriate’s pre-arrival assumptions and the reality, some
only tangentially related to the work culture, such as climate, isolation or
problems with a spouse.
Findings like this have
encouraged some experts to conclude that a cosmopolitan managerial class,
effortlessly confident in a multinational environment, must emerge to serve
global business. Some argue that tomorrow’s managers will be “global souls” who
habitually dabble in multiple cultures, to use travel writer Pico Iyer’s
phrase.
The management pundit John
Adams has suggested that such future internationalists will evolve while
accompanying their parents on overseas postings.
So is a self-perpetuating
managerial class destined to run global business?
Perhaps not. Languages and
international experience are valuable but not everything, says Anders
Lundquist, managing director of Bangkok-based headhunter Pacific 2000. “If an
executive is at ease with himself, confident in his expertise and willing to
adapt, he can go far. It’s a matter of character and energy, as it always has
been,” he says.
A recent study by Erasmus
University, Rotterdam, found that if a manager could survive the first six
months in a foreign country without undue strain, the chances of eventual
success were high. If, however, the shock of arrival was not quickly
controlled, executives often became demoralized and foundered.
“The world is everybody’s
oyster in the longer term,” says Prof McKenzie. “When logistically there are no
management barriers left, we will be left with cultural differences.
“Whoever manages the space
between these cultural differences is doing something important.
