Leading Across New Borders. Karen Cvitkovich

The demand for development and full engagement from talent in India, the Philippines, and elsewhere either leads to change or disengagement.

      The Business Case for a New Global Talent Model

      The smartest organizations understand that the key to this globalization game is talent: having the right kind of people in the right place at the right time to realize their growth goals. The right place is where the growth is happening now – and the right time is yesterday.

      For many organizations, talent is the rate-limit on global growth, and the biggest challenge they face in moving toward a successful global model. Global leadership capacity, in particular, is the key binding constraint. In a recent survey, executives reported that “just 2 percent of their top 200 employees were located in Asian emerging markets that would, in the years ahead, account for more than one-third of total sales.”13 More broadly, CEOs in Western multinational corporations (MNCs) identify the ability to hire, develop, and retain talent in fast-growth markets as the main competitive differentiation in today's market.14 Companies that get their global talent strategy right will set the course of their organization toward success and avoid becoming corporate dinosaurs.

      More than any other factor, global talent has become the definitive gauge by which companies are measured and a key indicator of whether they will succeed or fail in the global market. Thirty percent of U.S. companies admitted in a survey that they have failed to exploit their international business opportunities “because of insufficient internationally competent personnel.”15 In another study, one in four global CEOs reported that they were “unable to pursue a market opportunity or have had to cancel or delay a strategic initiative because of talent constraints.”16

      Most business leaders recognize how critical it is to have a good global talent strategy. But many, if not most, are struggling to both define what a good global talent strategy looks like and how to implement it. In an executive survey, “76 percent believe their organizations need to develop global leadership capabilities, but only 7 percent think they are currently doing so very effectively.”17 The challenges in attracting, developing, and retaining global leadership talent are myriad and include inexperienced local talent in key growth markets, radical variance in leadership models across key locations (some models are difficult to transition to global roles), scarcity of globally experienced and locally savvy leadership talent, poaching, job-hopping, and increased competition from local companies in the war for talent.

      1

      John Hawksworth and Danny Chan, “The World in 2050: The BRICs and Beyond; Prospects, Challenges and Opportunities,” PricewaterhouseCoopers, 2013, www.pwc.com/gx/en/world-2050/assets/pwc-world-in-2050-report-january-2013.pdf; “The World in 2050: Will the Shift in Global Economic Power Continue?,” PricewaterhouseCoopers, 2015, www.pwc.com/gx/en/issues/the-economy/assets/wo

1

John Hawksworth and Danny Chan, “The World in 2050: The BRICs and Beyond; Prospects, Challenges and Opportunities,” PricewaterhouseCoopers, 2013, www.pwc.com/gx/en/world-2050/assets/pwc-world-in-2050-report-january-2013.pdf; “The World in 2050: Will the Shift in Global Economic Power Continue?,” PricewaterhouseCoopers, 2015, www.pwc.com/gx/en/issues/the-economy/assets/world-in-2050-february-2015.pdf. See also “Global Trends 2030: Citizens in an Interconnected and Polycentric World,” European Union Institute for Security Studies, March 2012, http://europa.eu/espas/pdf/espas_report_ii_01_en.pdf.

2

“The World in 2050: The BRICs and Beyond,” PricewaterhouseCoopers.

3

Chrystia Freeland, “Globalization Bites Back,” The Atlantic, May 2015, 83.

4

Danny Quah, “The Global Economy's Shifting Centre of Gravity,” Global Policy 2, no. 1 (January 2011), 3–9.

5

Carlos Ghosn, interview at Stanford Graduate School of Business, “Carlos Ghosn of Nissan/Renault: Look Ahead, Don't Stand Still,” February 4, 2010, www.youtube.com/watch?v=yChtop17sd8.

6

Jim O'Neill, “Who Defines the Next Economic Giants?,” New York Times, December 4, 2014, www.nytimes.com/2014/12/04/opinion/jim-oneill-who-defines-the-next-economic-giants.html?_r=0.

7

See David Jin et al., “Winning in Emerging-Market Cities: A Guide to the World's Largest Growth Opportunity,” Boston Consulting Group, September 2010, 5–6. According to this report, “By 2030, the number of emerging market urban dwellers will increase by another 1.3 billion,” and this will drive 67 percent of world GDP growth by 2015.

8

“Five Megatrends and Possible Implications,” PricewaterhouseCoopers, April 2014, Directors edition, www.pwc.com/en_US/us/corporate-governance/publications/assets/pwc-corporate-goverance-directors-megatrends.pdf; “Asia will represent 66 % of the global middle-class population and 59 % of middle-class consumption by 2030, up from 28 % and 23 %, respectively, in 2009.”

9

Dobbs, et al., “The Four Global Forces Breaking All the Trends.”

10

Jeffrey Passel and D'Vera Cohn, “U.S. Population Projections: 2005– 2050,” Pew Research Center, February 11, 2008, www.pewhispanic.org/2008/02/11/us-population-projections-2005-2050/.

11

Rand Corporation, “Foreign-Educated Health Workers Play Vital Role in the U.S. Health System,” ScienceDaily, November 4, 2013, www.sciencedaily.com/releases/2013/11/131104162708.htm.

12

“The Global Leader,” Corporate Leadership Council (CLC) Human Resources, Corporate Executive Board, Executive Briefing, February 2012.

13

Martin Dewhurst, Jonathan Harris, and Suzanne Heywood, “The Global Company's Challenge,” McKinsey Quarterly, June 2012.

14

“15th Annual Global CEO Survey

13

Martin Dewhurst, Jonathan Harris, and Suzanne Heywood, “The Global Company's Challenge,” McKinsey Quarterly, June 2012.

14

“15th Annual Global CEO Survey 2012: Delivering Results, Growth and Value in a Volatile World,” PricewaterhouseCoopers, 2012.

15

Shirley Daniel and Ben L. Kedia, “US Business Needs for Employees with International Expertise” (paper presented at the Conference on Global Challenges and US Higher Education at Duke University, Durham, North Carolina, January 23–25, 2003), cited in Pankaj Ghemawat, “Developing Global Leaders: Companies Must Cultivate Leaders for Global Markets,” McKinsey Quarterly, June 2012.

16

“15th Annual Global CEO Survey 2012,” 8.

17

Developing the Global Leader of Tomorrow, a joint project of Ashridge Business School as part of the European Academy of Business in Society (EABIS) and the United Nations Global Compact Principles for Responsible Management Education (PRME), based on a survey conducted in 2008, cited in Ghemawat, “Developing Global Leaders.”