Emerging Markets: "A Different Game"


In the afternoon session, moderated by IESE Prof. Julia Prats, HR executives in charge of placing high-level executives discussed the hurdles they often face in emerging markets.

Juan I. Apoita, HR vice pesident and member of the board of management of BBVA, discussed the need to clearly define a business strategy in a fast-growing market. The next step is to pinpoint the skills required for those who will executive the strategy. He also stressed the need for formal, open and transparent selection processes when hiring for positions in emerging markets.

"You need a humble attitude" when you go into emerging markets, he said. Managers have to be extremely open to learning from local teams.

Antonio Gallart, chief corporate office and member of the board of management of Gas Natural Fenosa, discussed the attributes his company seeks when hiring for developing markets. The company puts a premium on well-rounded managers, who can mange local teams while supporting the group to maximize value globally, he said. Organizational rotation is also a critical part of the company's HR strategy, as it fosters organizational understanding and flexibility.

Next to speak was Timothy McNicholas, vice president of corporate development for Siemens. Siemens is looking hire 5,000 people in China next year, and of those, 2,000 will be white collar jobs, he said. McNicholas's department oversees the top 300 jobs within Siemens, also determining successors for each post. Through capability maps, Siemens tracks the individual strengths of each person, and most importantly, what motivates him or her, he said. The overarching goal is to, first of all, "put the right person in the right job," then plan for their development and support them in being successful.

Zurich Financial Services's Global Head of Talent Acquisition, April Samulewicz, stressed how recruiting and managing talented executives in emerging markets is "a different game." Executives who may have been highly successful in developed markets face completely different obstacles in emerging ones, and may not be prepared initially. Zurich vets managers who have "fit for purpose" and "speed for purpose" in high-growth areas, she said.

Finally, Didier Tisserand, president and CEO of L'Oréal Spain, weighed in with his firm's approach to finding effective leaders, noting that at the world's largest cosmetic firm, "everything we do is for the long term."

The company's biggest challenge is to develop extremely open-minded managers who are ready to move around the world, and dig deep into local cultures. Every society has a very different concept of beauty, which means consumers prioritize products differently. For example, in Brazil women prize beautiful hair and nails, while in Japan the focus is on having a flawless complexion. Men also have strong preferences that affect buying habits, he said. The dearth of gray-headed men in India "is no miracle," he said, it's due to the fact that many men in the country use dyes.

Finally, Tisserand stressed how successful exapatriate assignments depend upon how well the executive's family integrates into their new enviornment. If family members are happy, the manager has a much better chance of being effective in the post.

Paradoxes of the Globalized World

A common thread that ran through the next panel discussion on "Globalization, International Strategies and Leadership Development," was that fostering leadership in globalized markets requires navigating a world that is riddled with paradoxes.

How do you develop leadership competencies in countries with widely different cultures? How do you foster innovation globally while also keeping a check on a company's core operations? Perhaps most importantly, how do you develop leaders when there is a dearth of good leaders in the world today?

In the case of Spanish savings bank la Caixa, most of its global leaders are being sourced from within the company. As the company's director of human resources, Xavier Coll, explained, "la Caixa is already grooming the company's future prime movers by encouraging them to branch out into other markets overseas," many of which are in Asia and Latin America. The effectiveness of this strategy will be crucial in the coming months as the company gears up to become a listed bank.

Another bank represented on the panel was Citi, whose dramatic fall from grace in recent years has prompted a serious rethink on how to develop the company's leaders of the future. Citi's HR vice-president, Francisco Fernández de Ybarra, said that the bank's main problem prior to the crisis was that it had become "a conglomerate of many disparate companies that never quite fit together." The company is now going back to basics, making sure its leaders focus on its core model so that the bank can become, in Coll's words, "simple again."

Christian Finckh, chief human resources officer of Allianz, said that one of the major challenges of leadership development today was finding ways to attract and incentivize the most talented members of Generation Y. The new generation of young leaders tend to take a markedly different approach to their professional development, seeking greater meaning in their work as well as a healthier work-life balance. One way that Allianz is tackling this challenge is by offering more part-time executive roles to promising young leaders.

For the Spanish telecommunications behemoth Telefonica, global leadership development is all about moving around its most prized executives - those that have a truly global mindset and thrive in a collaborative environment. The company is also making a determined effort to replicate best practices from one country to another. The company's HR strategy and executive talent director, Bernardo Quinn, acknowledged that while "it is easy to move people out of the country, it is often much more difficult to bring them back." Quinn also underscored the immense difficulties of relocating executives' families.

In contrast to Telefonica, the German media giant Bertelsmann adopts a much more decentralized approach to managing its disparate global divisions and subsidiaries. The company relies much less on expatriates, preferring instead to develop managers as "local entrepreneurs."

Christine Scheffler, senior vice president of Bertelsmann and managing director of Bertelsmann University, said that the company expects its executives to be both proactive and entrepreneurial, including in the development of their own career. At the same time, however, there must be "some kind of orientation and continuity for workers, even as the world around them is in a constant state of flux."