October 9, 2018

Wanted: A Headquarter Listening

By Axel Kuhlmann

3 min

LeadershipMulti-Industry

Organizations operate in a global environment. They have branches all over and their contribution to the overall business may be north of 50%. But do people in global Headquarters really think and act globally?

Imagine the following conversation in a workshop:

Question: “Who knows your regional market better: you as regional Organization or your global Headquarter (HQ)?”
Regional Team: “We!!”
Question: “What does the global HQ think: who knows your regional market better?”
Regional Team: “The global HQ!”

Sounds funny, but it is not.

An article from Harvard Business Review in April 2015, based on research by CEB & Russell Reynolds Associates, supports the implications of the previous conversation. Research stated that only 5% of surveyed CEOs in China felt their voice was being heard by HQ and 75% of China-based CEOs and executives indicated their HQ did not consult them to define the regional strategy, which basically means HQs believe they know better the Chinese market than their regional leadership teams.

You might think that was a 2015 thing. Well, not at all. In our regular Organizational Development Programs (ODP) with international companies in China – the latest as recent as January 2018 – we put together a mixture of Chinese and non-Chinese executives. There we experience first hand how often Chinese managers respond in a similar vein, in varying proportions that go from 50% to 100%. Non-Chinese executives are always surprised about this, and only when they get to hear their local peers they realize how well reasoned their arguments are. This serves as signal and inspiration to think about the global mindset (or lack there of) in their respective organizations, with discussions in the workshops evolving around the potential causes.


What could be the root cause?

Here are some of the aspects that usually come out:

  • Despite a global presence many organizations still have a HQ-centered way of looking at the world. Why is this happening? For starters putting HQ results first may be due to public listings, tax optimization or others; it is also due to a traditional way of thinking in which HQ sees itself as the “we-are-the-origin” and so it truly believes it knows better; finally, there is a certain fear from HQ that other regions, China in particular, will outgrow them as a result of a faster pace of development and challenge the status quo (i.e. taking over jobs). 
  • Intercultural unawareness or lack of prioritization for intercultural aspects. There is not a clear understanding about the impact in collaboration that things like cultural differences, communication styles, work styles and educational background may have.
  • Other times regional specifications might not be accounted for as circumstances that can actually influence outcomes (i.e. different business environments, technical capabilities,…).
  • And finally, the leadership and collaboration culture as a whole does not reflect the global mindset that is required to run daily international operations.

Of course, the above is not an exhaustive list. The aspects mentioned might be the most common ones but, sure, there are others. If an organization could develop the ability to start questioning itself, to reflect on what needs to be adjusted, or to look at things from a different perspective (i.e. culturally), that would be already a great source of inspiration and a good starting point.

Now, this will pose a big internal challenge for it will disrupt long standing conceptions and imply changes that might move the HQ team out of its comfort zone. As the adage goes “change yourself before you will be changed”, so your organization can be in the driver’s seat.

By stimulating a shift towards change and more agile attitudes at the core of the organization, leadership can turn this approach into a competitive advantage, both in terms of market share and in the labor market.

 

Are you acting and thinking globally?

An easy way to check if your organization has a global and open mindset is to answer the following question: “When was the last time you adapted globally an idea or thought coming from a subsidiary?”

If you can answer this question with some important – small or big, but important – changes in your HQ processes, or across the whole organization, then you might be on the right track. Just be honest with yourself.

In another approach to address this topic you can also use tools like the Global Mindset Inventory (GMI), developed by the renowned Thunderbird School of Management. This tool is especially designed for this purpose, although there are other assessments in the market that serve the same purpose.

 

How does it impact your Organization?

Consequences can be a lack of stickiness or problems with the retention of good talent in your subsidiaries. People who feel respected and recognized are much more likely to stay with the organization. Making the effort of identifying and recognizing their contribution is less costly than having to replace talent, and it benefits the organization as a whole for these contributions can be applied globally. In a nutshell, by listening more carefully, acknowledging contributions and deploying them across the board both the business as well as the commitment of talent improves – making it less likely for talent to take off or for competitors to poach from your organization.

Other possible consequence is the delay in taking important decisions in a fast developing and changing market environment. If the issue is not well understood, and perceived only as local matter, the necessary decisions to address it risk to be postponed forever. You might be inadvertently creating an advantage for your competitors.

Resistance to truly collaborate and share knowledge transparently to find a common solution. This is often the case with China. But what is the alternative? If you want to participate in a market today you have to be a real participant in all meanings. Lack of engagement and poor identification with the company very often have consequences.

To avoid all of that it is important to support and demand a collaborative attitude from all the team in your HQ or home-based factories, across several layers of the company. Many of the issues happen in the day-to-day work between front-line managers or engineers. They need role models with clearly set expectations.

Whoever wants to work in an international company has to have an international mindset and proper language skills. A clear, simple and important message to communicate to staff and new hires.

 

Conclusion

The attitudes between HQ and subsidiaries should be supportive of the systems in place; ensure that all internationally interdependent levels within the organization possess an open mindset – starting with HQ – and it trickles down, from top to bottom, to impact daily operations.

Support / instill this global mindset with regular reviews and give little “nudges” to leadership and teams to steer them in the intended direction.

Being supportive and instilling this open and global mindset should be part of the responsibilities of all executives and managers.


 

Axel Kuhlmann

Executive Coaching

L: English, German

T: +86 158 2187 3871

E: axel@akcc.de