Since 2001, Chinese companies have embarked on the road of going global. Various industries have explored different approaches, e.g. for asset-light companies like online gaming and e-commerce players, their teams are all based in China, but their business presence is overseas; technology and hardware companies with strong cultural attributes like Huawei and Xiaomi; and for early pioneers in overseas business presence like Lenovo and Haier, they chose to acquire overseas companies.
Any company considering going global needs to face and solve a lot of pressing issues, such as strategy, talent, legal affairs and capital. From the perspective of talent, they need to think about the following questions first:
- What kind of talents can take up the task of going global?
- Where are the management talents who can help the company go global?
- Does the management team of the headquarters have any international DNA?
- ……
During the process of communication and cooperation with corporate executives, including actually helping some Chinese companies search for international business leaders, Egon Zehnder has come up with some potential solutions to share with you.
What are the traits needed in going-global talents?
Many executives on the front line of going global pointed out that industry experience is not the only important criterion for choosing going-global talents, while entrepreneurial spirit, sense of identity (believing in own products/business), learning ability, and the courage to step out of the comfort zone are the most needed traits of going-global talents.
- Firstly, entrepreneurial spirit is one of the core traits of going-global talents. People with entrepreneurial spirit usually have a high degree of initiative and innovation, able to maintain a positive attitude in the face of unknown challenges. They are not afraid of failure, willing to try new things, and able to quickly adjust their strategies to adapt to market changes. This spirit not only helps promote the development of enterprises in new markets, but also motivates team members to work together to achieve higher goals；
- Secondly, sense of identity, i.e. trust and recognition of own products, business and brand is also crucial. Only when you truly believe in what you are doing can you commit to it wholeheartedly and remain steadfast in the face of adversity；
- Learning ability is another important trait of going-global talents. The international market environment is complex and volatile, and there are significant differences in culture, law and market demand among countries. Talents with strong learning ability can quickly grasp new knowledge, understand and adapt to different market environments, so as to make correct decisions. This ability is not only reflected in the learning of professional knowledge, but also in the mastery of cross-cultural communication skills and managerial approaches;
- Last but not least, the ability to step out of the comfort zone is also one of the necessary traits for going-global talents. Going global means entering a brand new market and facing brand new challenges and opportunities. Only those who dare to jump out of their comfort zone and embrace changes can find their own place in the new environment, lead their team to move forward amid uncertainties, and promote the development of their company.
Where are the going-global talents?
The topic of ‘where to find talents’ covers a choice among three options: sending Chinese talents overseas, searching for Chinese talents with overseas background, and searching for local candidates in overseas markets. This choice is particularly critical in the context of geopolitical uncertainties.
Many companies will encounter the following problems:
- “Do I need a Chinese executive as a kind of lubricant between overseas operations and headquarters? Finding the right foreigner is much harder than finding the right Chinese, as the mindset and philosophy between foreigners and Chinese are very different.”
- “There are differences in each market, with varied local talents. In-depth assessment of local talents requires much time and effort, and the assessment results are not always satisfactory.”
Finding talents is not an isolated event, which needs to be viewed in combination with the company’s status quo and different stages of going global.
- During the exploratory stage of going global, the company needs a doer who has an in-depth understanding of its brand culture and sufficient loyalty and sense of honour, and who can build a business presence and lead his team to win. At this stage, leaders from the company’s original executive team are often the most suitable candidates, i.e. leaders with all the relevant experience, channels, entrepreneurial spirit and cultural resonance;
- After the enterprise has gained a certain degree of visibility at home and abroad, it is appropriate to select more suitable candidates locally. On one hand, the company’s further expansion of business size in local market requires recruiting more local staff, and local executives will have a natural advantage in terms of communication costs and efficiency; on the other hand, local executives also have certain strengths in foreign government relations and external image. Whether to choose ethnic Chinese or local executives would be the next problem. Local executives may not have a sound understanding of Chinese culture, or may face a dilemma of choosing sides in geopolitical conflicts, so you need to examine to what extent local candidates can identify with Chinese culture and the entrepreneurial culture during the recruitment process;
- When the perfect candidate is nowhere to be found, you may consider forming a duo. Through the team's complementary skills or leveraging external advisors to make up for the team's weakness, you may continue to attract external talents while developing internal bench strength, thus gradually enriching the team.
What capabilities and resources does the company need to have? How to empower overseas business?
If you want to expand into different overseas markets, after sending out talents from your headquarters or attracting external talents, the company headquarters need to play the role of a “super brain”, tell a compelling brand story, and allocate your capabilities and resources. If your headquarters can’t empower local operations in overseas markets, you may need to pay a dear price.
So what are the organizational capabilities that the headquarters of Chinese companies going global need to start with?
- Insight into international market to be able to develop the first group of customers, ride the tide and capture market share;
- Understanding of talents in local market, including compensation policies, labour regulations and recruitment channels;
- The headquarters should play the role of a platform to provide support and resources sharing for each overseas office, including providing unified brand management, marketing, technical support and training services, to ensure that each office can operate efficiently under a unified strategic framework;
- Graded and classified management of overseas markets based on a unified platform. Many Chinese companies going global have divided their overseas markets into different “war zones” and formulated differentiated market strategies;
- The headquarters should have the ability to make quick decisions, and an efficient decision-making pathway and a division of duties mechanism that combines clarity and flexibility should be established between the headquarters and overseas offices, so that they can respond quickly and take effective measures in the event of a crisis.
Closing Note
The road to global markets is not an easy path, and many Chinese leaders of going global initiatives are prepared to live with anxiety and uncertainty for the long term. Nevertheless, this is the inevitable course for an increasing number of enterprises to embark on globalization, and the stepping stone for China to discover and nurture more excellent globalization management talents. We at Egon Zehnder are more than happy to discuss with you a solution to the problem of going global, and make bold attempts to jointly promote the globalization process of Chinese enterprises.
As the Chinese saying goes, it's a long and arduous road ahead, but if you keep going, you'll get there eventually. We always believe in that.
