PROGRAM NEWS: One sign of how multinationals are taking Africa more seriously is Unilever’s decision to turn the continent into one of its eight global operating regions. Mr David Mureithi, Managing Director, Unilever West Africa, speaking at the company's Annual Dinner in Ghana last week, said that although 2011 was the first year of the creation of Unilever West Africa, the company had achieved a turnover of GHC180 million ($106.5 million) representing a growth of 38 per cent over the same period in 2010. It was therefore aligned to its ambition to double the size of business by 2015.
Moving from specifics to the macro scale Professor Klaus Schwab, in his pre-Davos briefing for the World Economic Forum, talks about a new model being needed “…to account for the fundamental power shifts that have already and are continuing to take place. I am thinking not only of the seismic shifts of geopolitical and geo-economic power from West to East and from North to South…. Power has become much more distributed.”
Seismic shifts and the new focus on foreign markets in Asia, Latin America and now Africa, presents an enormous challenge for the leadership development sector. Part of Unilever’s approach has been to encourage high-potential African’s based in Europe to return to Africa to take leadership roles. Standard Chartered Bank has located its core leadership development centre in Asia to ensure they build an ‘Asian’ leadership culture. There are clearly many approaches. There are also many different angles to cover – cross cultural issues, global teams, global vs. local brand building not to mention the basics of accounting, finance and law in unfamiliar jurisdictions.
With these challenges come huge not-to-be-missed opportunities, and the overriding question for progressive businesses is how to equip their senior leaders to operate effectively and develop teams to expand business in foreign markets. Where in mature Western markets will companies find 38% annual sales growth?
"Everyone recognizes that the world is flat," notes Wharton marketing professor Z. John Zhang. "But not everyone seems to notice that flat doesn't mean homogeneous. There are remarkable differences in cultures, language, and behavioral norms that carry over into the business environment. Bringing your business onto foreign soil without this recognition can set you up for many surprises."
In recent years, cultural issues have accounted for a significant percentage of organizational failures in foreign markets. So leaders now need to find the cultural adaptability necessary for success. "You need to be sensitive to differences” says Professor Zhang, “If you're doing business in China, for example, you may be comfortable with the way people look and speak, which may lead you to assume that the way their businesses are run is very similar to yours. But that assumption is incorrect. There are vast differences beneath the surface."
Zhang cautions that entering a foreign market with any assumptions can be dangerous. "In a foreign business environment, you need to understand different events and decisions, so you rely on assumptions that were formed in your own environment. These assumptions should be left behind. In the foreign market, they don't have the same political systems or ways of interacting, for example. You might learn the hard way that your assumptions don't hold up.”
Further Information
Leading in Foreign Markets – up-coming program April 9-13 2012 Aresty Institute of Executive Education, The Wharton School
Some other relevant programs:
Global Leadership 2020 Tuck Business School at Dartmouth
International Directors' Program INSEAD
International Project Management INSEAD
International Program for Management Development ESADE
