Organizations of all sizes are going global. They discover early that global organizations require a different set of leadership skills that include the ability to make informed talent decisions within a new operating model.
By Dave DeSouza

When corporations decide to go global, they must adapt in many ways, and those adaptations impact the need for and type of talent. Organizational changes include new business structures to accommodate globalization, new management structures and new operating models.

From these changes flows a need for talent who have global knowledge, cultural competence and the ability to work within a widely dispersed organization. One of the challenges senior management faces is adapting to the need for talent capabilities required now for global success and developing a new talent pipeline that supports growth and globalization in the future. Not all current managers will be a good fit for a global organization.

Good talent decisions emanating from a successful talent management system will reap enormous benefits that include a collaborative culture of diverse talent, innovation and organizational agility.

Unsuccessful talent systems that do not adapt to the changed organizational structure and needs will have a domino effect of poor performance going all the way to the top. Developing leaders able to make the right talent decisions within a talent management system is key to sustainability.

Closing Decision-Making Gaps is Key to Success
Going after a lucrative market with a global agenda is not something done lightly, and a key success factor is having an engaged, motivated, quality workforce in place. The organization’s ability to select and develop talent, plan for succession, and keep the talent pipeline full will largely determine how competitive the business will be in new markets and how sustainable the organization will be in the future.

Who makes the talent decisions in most organizations – the decisions ensuring operational excellence? It is mostly the middle managers selecting people they believe have earned the promotion, transfer and development opportunities. They also do the performance reviews and assign responsibilities. The leaders are making these decisions within a business environment that is hypercompetitive, depends on rapid access to information, and demands almost constant innovation.

Global expansion adds to the complexity of ensuring high-quality people are in place and in line to keep the organization moving toward goals. The question is: Are all managers throughout the organization prepared to make the right talent decisions?

Because leaders at the very top are coached, mentored and prepped for succession, they are more prepared to make good talent management decisions. That does not mean they always make the right decision, but it is not due to lack of development.

More troublesome is what Gallup research found and reported in “State of the American Manager: Analytics and Advice for Leaders.” Businesses are consistently placing the wrong people in management roles and that leads to poor talent management, which leads to a decline in overall performance. The primary reason for placing managers in the wrong roles is that hiring and promotion is based on past experience and not on the role they must fill. If this scenario is repeated on a global scale as the company grows, past experience and abilities may not apply to the global role requirements.

Adapting to a Dispersed GLOBAL Organization
One of the suggestions to end the cycle of choosing the wrong people for manager roles is to utilize predictive analytical tools to make more informed talent decisions. According to Gallup, the companies utilizing analytics experienced a 48 percent increase in profitability and a 22 percent increase in productivity.

Business intelligence and workforce analytics put in the hands of trained managers can support more effective decision-making. In a global company where operations are dispersed, aggregating data from multiple sources can help businesses make informed decisions.

Even analytics is not enough. An effective talent system provides meaningful development opportunities and identifies the people willing to do the assignments in order to expand capabilities. Managers able to engage employees are also necessary because lack of engagement influences people’s productivity. The organization must hold managers responsible and accountable for talent performance.

The structure of the organization must ensure alignment between business strategy and human capital. When a company decides to go global, its business structure is likely to change.

The Association for Talent Development shared a story about Mercer that demonstrates an actual case of the challenges organizations face when going global. Mercer was originally a geographically based structure, but it moved to a global line of business structure. That changed the management organization and the operating models, impacting talent management and succession planning.

The lessons learned from the change at Mercer were that not all current management people were suited for a leadership position in a global line of business. As people were moved around, another thing happened: the talent pipeline virtually disappeared because the talent system was not adjusted in advance. The global structure also created virtual managers, people who are managing remotely, and the managers developed under the old business model were no longer aware of the most qualified talent for succession.

Making the Right EMPLOYEE Decisions
Mercer addressed the talent deficiencies and needs in two main ways.

First, the company revamped its existing client-facing talent review and succession process to include global talent so more visibility was given to people across the organization. A wider and deeper set of roles were included in the process to create talent pools of people who may have been missed otherwise. Diversity was expanded as a core principle to ensure a range of viewpoints were given a voice across the organization and to ensure diverse talent, critical to a global organization, was included in the process.

The second major strategy involved developing a global leadership curriculum to build management capabilities. Managers attend specially designed leadership development programs. One of the things they learn is using outcomes from performance reviews of junior staff to identify top talent.

If the wrong talent decisions are being made because the talent system is not a good fit for the evolving organization, remaining competitive will be difficult. Going global is a complex process that requires changing the structure, operational model and talent management processes. Without effective decision-makers at every level, success is sure to be elusive.

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