Beyond Asia: developed-markets perspectives

Reevaluating leadership models

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Rapid-growth markets are becoming the global centers for key corporate activities, necessitating considerable investment in talent.

Increasingly, rapid-growth markets are becoming the global centers for corporate activities as well as the focus for international competition.

Rather than establishing R&D facilities in China or India for the local market, some companies are using these centers as global hubs to develop products and services to sell around the world.

This demands a much higher level of investment in managerial and executive talent than may have been necessary earlier.

Recommended actions:


  • Make sure that the right depth of management capabilities is in local markets to assume bigger, more global roles
  • Make the necessary organizational changes to ensure local autonomy

As rapid-growth economies become more important, and as Asian companies become global players, developed-market companies that want to compete successfully must hand over decision-making power to where it matters most. This means investing in talent so that managers in local markets have the capability to assume bigger, roles that are more global.

This strategy is highly valued at Yeo Hiap Seng, a Singapore-based food and beverage company with a presence in 25 markets, including developed markets such as the US, Australia and Europe. “It’s crucial to build a management team with a more expansive global mindset,” says Koh Boon Hwee, non-executive Chairman of the Board.

“We want our managers to have the independence to operate autonomously.”

In practice however, it goes against decades of organizational behavior at developed-market companies. For managers at headquarters who are accustomed to wielding global decision-making authority, it can be difficult to accept that responsibility for the world’s most dynamic and fast-growing markets is no longer in their hands.

“The biggest challenge is not at the top of the company, but in the middle layer where you are shifting responsibilities and duties that have been accumulated over time, often with a great deal of sweat and tears,” explains Nani Beccalli-Falco, President and CEO of GE International.

Even if companies can make the necessary organizational changes, they still need to build the depth of talent among country managers being assigned such great responsibility. “Taking on a global role requires real bench strength of managerial capabilities in the overseas subsidiaries,” says the Judge Business School’s Williamson.

“Instead of just being asked to sell, distribute or produce for the home market, these managers are suddenly being asked to become a global business manager for a product or segment, and that is a huge step to take.”

 


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