In late 2009, consumer goods giant Unilever—a $61 billion company—announced a challenging goal: to double the size of its business.
Unilever’s strategy depends on expanding its presence in global markets, especially in emerging economies. Executives were aware that growth on that scale would require waves of new hiring across those markets. To deliver high levels of performance cost effectively, Unilever is looking to manage these employees in ways that are aligned with a global approach to employee services, while also complying with different statutory requirements and respecting local differences in how people are motivated, developed and paid.
On the other side of the world, Huawei Technologies Co.—a $28 billion Chinese networking and telecommunications equipment supplier—is extending its global reach. As it increases its presence around the world, it is looking to create a talent infrastructure attuned to different markets while building a global culture of shared values and a human resources capability that can support the company’s business operations worldwide.
Tracking the routes to corporate globalization these days is like watching the contrails of jet planes: They come from anywhere and go everywhere. Yet whatever direction a global expansion takes, companies face common challenges, all related to how their people—who ultimately execute business strategy, innovate and serve customers—are sourced, developed and managed.
As executives now understand, cultural differences really do matter. Labor laws vary in what sometimes seem to be irreconcilable ways; attitudes and policies toward workers that are common and accepted in one nation are not necessarily appropriate in another; and leadership styles that are successful at the home office—whether in São Paulo or New York or London or Beijing—may only undermine the operation of those parts of the organization that are an ocean away.
As companies in almost every industry stake a large portion of their growth plans on global expansion, the precision and consistency with which they approach talent management capabilities, HR policies and leadership development must increase. Attracting and retaining skilled workers, stabilizing the labor force in a new market, increasing productivity, structuring an organization so that credible and competent leadership is placed in the right locations, fashioning a culture that is consistent but also accommodates local differences—these are now the activities and competencies that are critical to success.
One of the most profound but also subtle issues companies face as they expand—from West to East and vice versa—is adopting a genuinely neutral global perspective, without presumptions about whose role is dominant.
Julian Dalzell—recently retired after 43 years in HR leadership roles with Royal Dutch Shell, and now on the faculty of the Darla Moore School of Business in South Carolina—sees cause for concern about whether Western companies are sufficiently prepared to meet these challenges. People have grown up with presumptions about their own country’s economic dominance, but other centers of power and influence are rising. “Future executives of our companies,” says Dalzell, “must now be groomed to operate and lead in that environment, whether it’s in terms of new business management skills or simply the emotional and psychological mindsets needed.”