International assignments in the old days were exotic perks for a few select executives. Or, they were a means to banish leaders who were making too many waves in the headquarters office.
Nowadays international assignments are becoming a necessity in many organizations. Moreover, top executives need to have international experience if they’re going to have a chance to break into the C-level.
And many companies – not even just global ones – must have executives who understand international markets, foreign supply chains, exchange rate impact on financial statements, international tax and legal issues, and so forth.
These top global executives must also understand the complexities of leading across cultures and how to mobilize a far-flung global operation toward achieving the company’s highest priorities. This is true whether they are staying put in their current office, expatriating to a new country, or inpatriating from an overseas office to the company’s global headquarters.
There is a human resources specialty that helps facilitate executive moves. They are called Mobility professionals (and a group of them recently met at the Bay Area Mobility Managers quarterly meeting in the Silicon Valley). Mobility is the department that takes care of the A-Z’s of getting an executive on the ground in her foreign assignment. Expatriation involves a highly complex – and expensive – series of tasks. There is not just the move and visas, but also the “tax equalization” that makes sure taxes are covered for that executive in both the home and destination countries, and that she isn’t hit with extraordinary taxes given the benefits she receives in housing allowances, kids’ schools, moving, etc.
Did you know that moving an executive to an overseas assignment costs 3-4x their annual salary? Take a mid six-figure executive and we are talking $1-2mm to place them in their overseas assignments. Companies don’t take these costs lightly.
But today making sure your top talent have international exposure is a critical to ensure your management bench strength has the smarts and experience to lead the company three, five and ten years in the future.
Properly preparing executives for these mission-critical global roles is a highly important step. Some companies drop their new international leaders into a new overseas location and expect that “poof!” they are going to succeed working in another culture, time zone and market. This is courting disaster with such a large investment of financial and human capital.
Smart companies today assure their return on investment by developing their future C-level executives through tailored international executive transition programs. These prepare the leader in areas such as creating leverage through diverse national cultures, strategically aligning global and regional organizational cultures, and further advancing their leadership skills. These programs also help the executive assess and groom her new team on the ground in the new locale and mobilize them toward their new mission.
This step greatly enhances the chances of success of the assignment – for both the executive and the organization as a whole. The costs of a failed international assignment are not just in the Mobility costs, but also in the turnover and depleted morale for the team on the ground and their stakeholders around the world.
We have been working with an executive who works for a global organization that has recently placed her in charge of sales and marketing for an entire international region. The company had the foresight to carefully plan and prepare her move months in advance, as she was replacing a predecessor who lasted in the role only a short time. Julie (not her real name) is a rising star in the organization where she has been for over 8 years. She’s proven herself to the most senior people in the organization who recognize her potential to sit in a global C-level role. Julie took the better part of a year assessing her team. She made a number of critical changes “on the ground” in her new location, building her mandate and developing a set of goals and strategies. She gathered her team for a strategic planning and team kickoff retreat, and they are now underway with great enthusiasm and resolve to achieve their team goals together.
After eighteen months of preparation and on the ground architecting, Julie has made a very successful transition as a regional executive. She has established the foundations for her evolution from domestic leader to global leader. The company has a larger asset in terms of management strength that will benefit shareholders for years to come.
If your company is planning to invest in management bench strength through international assignments, you should take these key steps:
- Determine what your company will need in terms of global or international “mindset” and experience for executive leaders to be successful in navigating your company in 3-5 years. Consider from which regions will arise the next phase competitive challenges new business opportunities or supply chain issues.
- Develop a list of high potential talent for future executive and C-level roles. Consider such factors as: cross-cultural curiosity and adaptability; agility to move into new assignments; have strong leadership skills and a demonstrated following as a leader; and long term commitment to the organization and its mission; etc.
- Engage Mobility and Global Leadership experts early as possible to help validate which potentials are qualified for global or international assignments. Assessments to gauge cross-cultural competence can be employed. For example, checking eligibility for visas of domestic partners is a critical early step.
- Develop a game plan for transitioning individuals into their international or global leadership role. This should factor in possible successive roles after completing his/her assignment as well. The point is to develop the leader and your leadership bench strength for the future.
- Engage a qualified Global Leadership consultant to prepare the leader on planning their preparation and entry into the new market. These consultants will help assess what needs to be developed in the leader to prepare them for the assignment and then coach them prior to their move and afterward as they get situated and lead their multinational team in achieving important new goals. This should be planned and coordinated with the CEO or other C-level sponsor.
The old adage goes, “Failing to plan is planning to fail.” To ensure return on investment for shareholders in developing your company’s future C-level leadership, planning a successful transition into a new global assignment makes good sense.
Make sure today’s rising stars have a powerful, successful international business assignment and your company will be all the better prepared to compete in the global marketplace.