Leading on a global scale
Kellogg faculty members discuss opportunities and challenges involved in launching international operations.For executives focused on growing their businesses, operating on a global scale has become essential. And while there are considerable risks inherent to running international businesses, there are also opportunities for incredible rewards. So how do leaders and organizations build strategies and lead teams to ensure successful execution?
Harry M. Kraemer, Russell Walker, and Holly J. Raider, faculty from the Kellogg School of Management, share their expertise and observations on global leadership.
Kellogg: What key strategies should business leaders embrace when entering global markets or managing global enterprises?
Russell Walker: There are many things an executive would want to consider. First of all, how does your domestic product port to an international market? There are strategic questions in terms of pricing — what demographics, what market segment does your product go after? And there are critical tactical considerations, such as: Do you sell your product or services through a channel? Do you operate as a joint venture or proprietary? Do you franchise the product? All those questions have obvious implications for the profitability and long-term viability of an international operation.
Harry Kraemer: Having led a $12 billion global company [as chairman and CEO of Baxter International Inc.], a lot of my thought process comes down to: What are the tools you need to truly develop yourself as a global leader? What do I need to do in order to be more self-reflective and more balanced, and to develop true self-confidence and genuine humility? If I’m not focused on those four principals and I haven’t figured out how to lead myself, how am I going to lead an organization globally?
Kellogg: What challenges might executives face when taking a company global?
Holly Raider: A great puzzle for senior executives is understanding how things work across boundaries. And on the global scale, those are often entrenched in complex boundaries that involve legacies, cultures, and institutional and regulatory dimensions. Executives have similar challenges even at home in the U.S., whether it’s working across functional business units or regional geographies, but they are magnified when leading on a global scale — even if you just take into account geographic distance. It is important for leaders to develop what I call their “inner anthropologist” — to read situations, collect and interpret data, and synthesize that data with their existing business acumen.
Harry Kraemer: It comes down to the fact that every area is different, every country is different. If you don’t have an appreciation for that and try to wing it, you’re going to get clobbered. As you plan to move into a market that is new for you, take the time to truly understand what makes that region of the world unique.
Russell Walker: Yes, the large component that gets discussed, but often missed, is that markets and cultures behave differently. If you are accustomed, for example, to selling a product in the U.S., how it’s sold, priced and positioned will need to be adjusted to reflect sensitivities for the country you’re entering. In the upcoming Executive Education program, Global Leadership: Success in International Business, Harry and I will spend a lot of time with participants exploring how those markets operate, and identifying frameworks around how companies should evaluate or adjust their product or service for different countries and cultures.
Kellogg: What common mistakes do leaders make when entering markets outside the U.S.?
Harry Kraemer: A common mistake, particularly for Americans, is to be ethnocentric and approach everything [as if it were] the U.S. Or thinking, “We’re so big, we’re so powerful, they’ll eventually get it.” No, they’re not going to get it because they’re different and they love what makes them different; the last thing they want to do is become similar to the U.S. People don’t really take the time to truly understand what’s going on elsewhere.
Holly Raider: We have an unconscious bias to assume that things work the same way that we’re most familiar with. We take that on the road and it doesn’t always hold. Good leaders have a learning approach to globalization, where they are observing and gathering informal evidence about whether or not those assumptions hold. That’s one of the essential skills of that inner anthropologist.
Russell Walker: Another major problem is assuming products or services will be used and appreciated in the same way they are here in U.S. Your product may need to be repositioned or customized to capture the international market and that’s something we’ll spend a lot of time on in the course. Participants in the program will walk away with a strong playbook for global leadership.
Kellogg: What role do emerging markets play in global enterprises?
Harry Kraemer: Because emerging markets are so large and are growing so fast, they become critically important, almost unavoidable. What is every global business trying to do? They’re trying to grow, and you want to be in the places that are growing — or, to put a finer point on it, where your business can grow.
Russell Walker: Because of that growth, there’s an aspiration and a demand for new products and services. So those countries — China, India and Brazil — are attractive now. They have a continued appetite for new products and more expensive ones; those are characteristics not necessarily found in more developed markets. This means that even among emerging markets, the notion of “one-size-fits-all” does not fit, so we’ll work with participants to adapt the frameworks on different global contexts. In fact, the principles we’ll teach in the Global Leadership program are relevant to all markets, but even more essential to the growth markets.
Holly Raider: A unique feature of Kellogg’s Global Leadership program is the combined curriculum that helps executives develop both technical expertise on areas such as emerging markets and risk management and the not-so-technical essentials of global leadership. Taken together, we’ll help prepare executive for success leading on a global platform.
Harry Kraemer and Russell Walker teach Global Leadership: Success in International Business, a new Executive Education program offered through the Kellogg School. Held June 25-29 at the James L. Allen Center, the program will teach business leaders how to prepare for challenges and opportunities in today’s global marketplace. Registration is now open: Enroll today.
