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Feature The global executive
80%
The number of international
transfers originating from
China will increase by 80%
between 2010 and 2014,
according to Ernst & Young.
Main drivers for sending
people across borders
86%
Project-based
84%
Managerial and strategic
75%
Developmental
50%
Other
32%
Employee-driven
Most common reason
Least common reason
14%
16%
25%
50%
68%
Source: Ernst & Young’s Global Mobility
Effectiveness Survey 2011
generation, so they will become more global.”
Ernst & Young’s research backs this up:
companies expect to increase the number of
international transfers originating from China by
80% between 2010 and 2014, and those from
Russia and Africa by 67%. India will see less
growth (13%), but from a far higher baseline,
given it has an average of three times as many
outbound assignees as incoming ones.
This highly visible change reflects an even
more fundamental one: if the expat executive
model seems still to be thriving, it is because its
very purpose has adapted to a more globalized
business environment. “The idea of people being
sent out from head office to colonize the world
ended more than 10 years ago,” says Peter
Ferrigno, the EMEIA Area Leader for Human
Capital at Ernst & Young. This reflects the way in
which many companies have moved away from a
model in which a central head office, frequently
with distinct characteristics shaped by the
business’s country of origin, controlled what
were essentially branch operations abroad.
Instead, leading firms today are seeking to create
more integrated, global operations.
Inevitably, this has affected the role of the
global executive. At a broad level, executives
going abroad no longer resemble high-ranking
foreign dignitaries from the corporate center, but
are increasingly arriving to work as equals with
others. In line with this, the primary objectives in
sending them have grown more complex. The
main ones now include:
Filling vacancies/project support
This objective has always been an important
driver of international transfers and remains the
most common reason for sending employees
across borders. Globalization and modern
technology, however, allow a greater use of
international talent in this way and new forms of
assignment for global executives. Indeed, Waty
notes an increasingly common phenomenon,
especially within Europe, of business travelers
who spend weekdays in one country and return
to their homes in another country for the
weekend. Others companies are embracing
“virtual” international assignments, notes Steele,
with executives working as part of teams in
another country while remaining in their own
home countries. “It is not ideal but, with
technology, it is increasingly feasible and
increasingly being done,” she says. This also
avoids many of the practical difficulties and costs
of sending people to another country.
Knowledge transfer
The benefits of bringing knowledge from one
part of the company to another have also always
been a driver in the use of international
executives, but the direction of flow is no longer
one-way. For example, Indian and Chinese
executives often have more experience with the
intricacies of outsourcing, says Waty. They can
bring such expertise along on placements in
Europe or North America. Greg Schupp, Partner
for Human Capital at Ernst & Young in the United
States, sees this cross-fertilization as an
important benefit of modern expatriate postings.
“The more diverse and inclusive your teams can
be, the more global and thought-provoking they
become. The solutions they propose tend to be
better for the organization.”
Developing executives
International transfers have also always been
used for executive development, and as a benefit
to retain talent. But in global companies, the
scope of these opportunities has changed. These
sorts of assignments – especially short-term
ones – are happening earlier in careers, notes
Steele. Her own company has found that, in
emerging markets, taking new local hires and
giving them international exposure is a fast and
efficient way of growing talent. Ernst & Young’s
Global Mobility Effectiveness Survey indicates
that this practice is common in emerging
markets with, for example, junior executives
making up half of outbound assignees from India
– in part to make up for the lack of experienced
senior executives to provide mentorship. “If you
find decent people in a small country, sometimes
they outgrow the local market,” says Ferrigno.
“You need to take people like that into the global
talent pool.”
Creating the company’s future leaders
International exposure is becoming ever more
important for businesses seeking to train
leadership prospects. The reason is simple. “If
only 5% of your business is in the home country,
and you’ve only worked there, how qualified are
you to sit on the board?” asks Ferrigno. Novartis
has institutionalized this in its leadership
development processes. Once a year, its
executive committee looks at people who have
the potential to become future leaders of the
company and then considers how international
postings should figure in their development. “We
are 150 countries,” explains Waty. “A successful
global executive is someone who can hit the
ground running, can pick up the nuances of the
new location quickly, can spot the issues quickly
and begin delivering on the issues in a very short
space of time. They should also be able to bring
an insight into how other markets operate and
other ways of doing things.”
Getting the most out of international
assignments
If these goals are met, sending executives across
borders can create substantial value for
companies, but at a cost. Although dependent on
the location and position, Schupp estimates that
the total expense may be as high as three to five
times that of the base salary of an executive who
stays at home. “The cost is such that you have to
make sure there will be a benefit,” adds Steele.
10 T Magazine Issue 07 Ernst & Young