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Enterprises are often guided by tunnel vision while kickstarting global operations even though, peripherally, the world around is changing. Businesses are traversing borders and oceans to explore newer markets so that they can build their brand presence in countries and cultures much different from theirs.
While incorporation and legality in these new lands may be of technical nature, one of the most pressing questions surrounds leadership hiring — a decision even data can't fully help with. The problem with the traditional startup checklist — an all-time favourite of global corporations — is that it can send your company into an unexpected nosedive if priorities aren't in check.
Consider the roadmap of most organisations: a market is first discovered and an expansion plan is diligently sketched. Data is collected to understand how much investment goes into registering the entity, building infrastructure, operations, sourcing, etc. This is largely followed by a hiring spree that is seldom overlooked from the culture standpoint.
One of the biggest pitfalls that affect enterprise survival is limited investment in hiring. Scaling your investment in people and culture is as important as infusing capital into the plant, the equipment, and the processes. When companies get their people factor wrong, they are mostly in denial as all brands are self-proclaimed epitomes of “best people practice” workplaces.
Wrong hires create domino effects on ROI due to conflicts in relationships, mismatch of roles, expectations, and outcomes. In reality, many companies make these mistakes, and often learn the hard way round without drawing up a plan to address the issue in the first place.
International expansion is not just a question of diversifying operations or strategizing regionally, it’s more about getting your brand to cross cultural barriers and customer expectations through various channels and stakeholders. You cannot expect your brand to cater to a local consumer base if you reinforce thought and imagery that is unfamiliar to them.
Executive Leadership hiring plays a critical role in weeding out such inconsistencies and making the brand flexible in the regional context. Asia has been a preferred investment destination for many global corporations. However, instituting a business here can be best managed only if enterprises team up with a reliable hiring partner. The continent, although often seen as a region with common culture and ethnicity, is actually a smorgasbord of cultures and people.
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Culture is the trump card that ultimately vaults your company to success. There are no two ways about the role culture plays in reaching out to employees and customers. If a global company opts for stellar candidates with the right skills, experience, exposure, and yet, is a misfit with the culture of the land and of the organisation, it can greatly demoralise their subordinates who may be locals. Congruence in cultural outlook is an important factor; some employees, for instance, favour reporting to leaders who understand their heritage and values local conventions and customs.
Culture is the trump card that ultimately vaults your company to success. There are no two ways about the role culture plays in reaching out to employees and customers. If a global company opts for stellar candidates with the right skills, experience, exposure, and yet, is a misfit with the culture of the land and of the organisation, it can greatly demoralise their subordinates who may be locals. Congruence in cultural outlook is an important factor; some employees, for instance, favour reporting to leaders who understand their heritage and values local conventions and customs.
Global companies, especially those based in developed nations, are likely to get caught in the cultural tangle when they insist on having seasoned leaders from within the organisation to infuse the same culture at the startup. Such leaders may be functionally well-equipped to deal with tasks, but their lack of soft skills at their new place of appointment may prove detrimental in the long run.
“Understanding culture is critical in hiring the best leaders. It takes no less than a year to understand a specific culture; thus, it’s best to use professional companies that know these cultures, in country, to assist,” observes San-Marie Barnard, Principal Consultant and Executive Search Associate, Jack Hammer.
Cultural nuances give rise to a lot of ambiguities especially in communication, which is the lifeline of any business. Although we communicate in English, cultural nuances influence the way we speak, question, or express our opinions. These inflections may seem minor, but the bearing they will have on employee-manager relations, performance, conflict resolution, and crisis management is too big to ignore. If teams need to work together towards a common goal, they need to be aligned together by words that carry the same force of meaning.
The education system in every country is different and revolves around governmental and socio-economic paradigms. The talent pool is largely a reflection of sociological factors that define their educational structure and the skills training offered in their institutions. Affordability and access to quality education are also some of the key factors that push certain candidates to attend small technical colleges. Others with better qualifications or scholarships are more hopeful of making it to national or private universities.
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Understanding the beliefs and value systems that shape behaviours and actions are important when laying the bricks for your organisational culture. Smaller technical colleges focus more on skills and don’t operate from a full-fledged campus; students lack the wholesome experience gained in a campus, which has a complete effect on the individual, from gaining independence, managing time and priorities, building relationships, getting involved in projects, clubs, etc.
Emotional intelligence, cognitive thinking, interpersonal influence, active listening, and resilience make all the difference when hiring for a new location. One of the factors that global startups fail to identify in their expanding markets is soft skills. Most of the time, strategy and expansion take precedence, as does the technical competence of the leader heading the new branch.
While strong technical competence is pivotal for a new startup, they are mostly saddled with ambiguities and poor direction due to the relocation process. The initial three or six months are always shrouded in a haze; the headquarters wrapping up strategy, budgeting, and resource planning. The lack of a local leadership or pioneer team that has experience in starting new operations can be the start of a roller coaster ride along an unfamiliar path.
Driving short-term goals or building long-term ones to make profits all require solid project management skills. This applies to project completion and even the commercialisation of products. No matter who is hired, the investment remains a cost in the books. There’s more to the experience and competency of these hires. That’s why soft skills need to be at the top of the list.
Leaders should possess a natural flair to communicate, build interpersonal relationships, and encourage action to help them work seamlessly with specialists and decision-makers. Leaders need to balance both IQ and EQ to realise all the ambitious goals expected out of them.
The success of global ventures is purely dependent on how decisions are made, strategy is driven and pacts are signed. Those who have diverse startup or expansion experience are always in a better position to anticipate challenges, industrial variations, and gauge what will and won’t work depending on local operating conditions.
“Now, more than ever, soft skills for leaders are the utmost requirement for success. The ability to communicate, empathise, stay humble and give respect to the country you are entering makes a huge impact,” says Ricardo Nugent, Managing Partner, Nugent & Delgado (ND) Executive Search, Peru & Member of IRC Global Executive Search Partners.
Expecting HR policies on roles, responsibilities, and job grades to stay uniform across the globe is a tall order. Though the unanimous verdict may favour consistency of job roles around the world, local practices may bring in subtle ambiguity. Global startups need to be mindful that although job titles may be the same in different locations, they may not share the same level of experience, authority, leadership qualities, and capabilities.
For instance, a Plant Manager in Malaysia is equivalent to a Factory Manager in Germany. Correspondingly, Plant Managers in Germany are what they would call “Plant Directors.” Job role definitions are hence dubious without universal grading. “It is important to educate your client on what this looks like in the country of employment. International grading systems do help with this especially from a consistency point of view,” adds San-Marie Barnard of Jack Hammer.
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Foreign markets may sound attractive due to low operational costs but corporations need to take calculated risks especially when hiring the key leadership team. The “low-cost” mentality shouldn’t dent their focus while hiring the right talents. Keeping hiring costs low with lower salaries would have a direct effect on bottom lines too. A better option would be to attain market reports on rewards or collaborate with executive search firms so that salary structures can be benchmarked alongside the data of candidates being targeted.
“South Africa has been known as a low-cost hub for highly-skilled tech talent. Over the last couple of years, global tech firms (such as Amazon Web Services, and others) have actually based their operations in South Africa and offered globally weighted packages for skills. The impact of this is that salaries in this segment have been driven upwards, making it unaffordable for startups either locally or globally to leverage the formerly lower-paid skills,” says Debbie Goodman, Group CEO, Jack Hammer.
It is important to get the cost of investment in talents right from the strategy development phase. While the company may have the best infrastructure, nothing can work unless talents are motivated to perform. If high attrition kicks in as a result, the company stands to lose the entire investment.
Although most employees join for the exposure and opportunity, a gradual wearing out of the initial excitement leads to external comparisons. HR personnel in these offshore entities are hired to co-ordinate interviews and distribute offer letters. They do not build an organisational structure, list job grades, or create a reward system that will guide the recruitment, retention, and development of employees.
“What’s also under-estimated are logistical elements such as working across time zones, and being able to hire, onboard, and manage remote staff. This is a part of the Covid-19 conversation, but leaders have had to learn to do all of these people-related tasks differently. In startups, where everyone is double and triple-hatting, if leaders don’t have the skills to remote-hire and manage, it’s going to be a tough leadership journey,” adds Goodman of Jack Hammer Executive Search.
Nebulous as your expansion plan may seem at first, things may fall into place once you get the right team to support your business journey. Overlooking traditional concepts are critical to employee and consumer expectations. As culture takes the forefront in the Future of Work, companies must build their strategy on its foundation rather than the other way round.
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