Read the full script of Module 10, Episode 8 of the Global Growth Master Class below. Want to get certified on global expansion? Simply click here to access the complete course today.

Vision and Core Value Alignment

Let’s get more practical about management techniques and in doing so answer the question:

What management best practices do Global Class Companies implement to succeed at scale?

 To successfully manage a multinational organization, specific skills and management principles are required to navigate the complexities of the task at hand. Effective managers at Global Class Companies use the following top ten best practices to establish and maintain a strong connection across borders. It’s also worth noting how many of these management skills are aligned with the “Leadership Skills for Distributed Organizations” characteristics in the Global Class Team Building Framework detailed in Module 3.

Best Practices for Building Bridges to Manage Across Borders Include:

• Vision and Core Value Alignment

• Culturally Conscious Management

• Balancing Localization and Complexity

• Building a Team of Interpreneurs

• Effective Communication

• Balancing Autonomy and Speed

• Transparency and Trust

• Localized Empowerment

• Prioritization and Focus

• Removing Obstacles

Let’s talk about each one.

Culturally Conscious Management

When it comes to expanding into new global markets, it is essential for management to be culturally aware and to adjust their management tactics accordingly to local norms. As introduced in the last module, Culturally Conscious Management is a contingency approach to management that factors in these local nuances as well as the stage of growth in each market to engage and empower a diverse team distributed across a global footprint. This concept also ties together a number of the concepts discussed throughout the course, including the commitments, team building, and localization, as well as elements of the Global Class and Interpreneurial mindsets.

Global Class Companies inherently have a more globally-minded management strategy when their headquarters is no longer confined to a single building in one location, and the market operations and functions are formally separated from HQ. This shift to a more distributed management model requires greater consideration of cultural differences.

The third commitment, Trust and Autonomy, aligns with the mindset of culturally conscious management. This approach aims to acknowledge and reinforce the value that local teams bring in understanding the nuances of their respective markets. Trust-building and granting autonomy are crucial components of this approach. 

Recognizing the importance of local knowledge is essential for successful localization, and granting autonomy to local teams not only empowers them but also facilitates localization initiatives. Granting trust and autonomy also enables HQ to play a supportive role, balancing command-and-control measures with local practice adoption. 

Therefore, it is the responsibility of interpreneurs at HQ to promote culturally conscious management and translate management best practices into local best practices.

With this contingency approach, high-performing, established teams in a growth phase require different management tactics than newly formed, underperforming teams. Culturally conscious management takes this contingency approach a step further by considering the impact of cultural factors on management strategies.

For instance, in the Netherlands or Denmark, it is common to provide direct feedback and tackle issues head-on, while in Japan, this style of feedback is uncomfortable for employees. Hence, we’ve seen companies adapt their feedback model to focus on written feedback to avoid cultural issues. 

Additionally, different cultures are accustomed to particular business structures. In many Latin American countries, employees are more accustomed to hierarchical management structures compared to the flatter organizational structures in Silicon Valley.

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Culturally insensitive decisions can arise when there is a tendency towards HQ-centric management, such as grouping together vastly different regions like Europe, Africa, and the Middle East under a single management entity known as EMEA. Culturally conscious management, which is a hallmark of Global Class Companies, involves building a company culture and organizational structures that take into account local nuances and avoid treating diverse regions as homogenous. 

In Japan, for example, since saving face and respecting authority are core tenets of Japanese business culture, the way to approach resolving conflict between HQ and the local team will differ. While in other cultures a conflict or open dialogue may be more accepted, in Japan, where it would not be culturally acceptable for a local team to disagree with HQ. A more effective solution would be for HQ and the local market leadership to jointly decide on the best strategy and path forward with the local market leadership ensuring that the local team executed the plan. And then HQ executives would come in and command the local market lead for his or her great work. 

In fact, if a local team disagrees with HQ you may see them deliberately worsen a situation to demonstrate that their approach was superior to that of HQ instead of openly contradicting HQ.

The bottom line, a management model that works well in a company's home market cannot be blindly applied across the entire global organization. Cultural nuances must be considered and appropriate adaptations made.

This is an excellent illustration of the advantages of hiring the right individual (an interpreneur who can bridge cultural differences), aligning with a strategy (such as the Four Commitments for Successful Global Growth), and adapting the Global Class management approach to local contexts. To achieve success, Global Class Companies must combine their culturally conscious management approach with a clear division of roles, responsibilities, and decision-making authority between headquarters and local offices.

Culturally conscious management is a leadership approach that stems from the interpreneurial mindset. It enables leaders to navigate cultural differences and nuances by making adjustments that acknowledge culture while driving better results. At the heart of this management style is empathy, which stands in stark contrast to the traditional image of a confident American company entering an international market and imposing its own practices (as Walmart did in Germany, where customers were uncomfortable with the retailer's insistence on a friendly and smiling staff). Culturally conscious management combines cultural intelligence and emotional intelligence to create Cultural EQ, leading with empathy and understanding while also adeptly navigating cultural differences. Implementing this approach can also help reduce Org. Premium as the organization expands.

Vision and Core Value Alignment

Vision and core value alignment are crucial in managing any organization, but they become even more important when managing an international organization due to the additional challenges posed by physical distance and cultural differences. It is essential for managers to consistently reinforce core values and connect them with decision-making. It’s also important that these core values and corresponding company culture resonate with each of the local teams across a diverse footprint and that local teams don’t feel compelled to just support some of the core values and not others. Developing a set of clear leadership principles can help international team members understand appropriate behavior and establish positive habits, leading to decision-making that benefits the organization.

Balance Localization and Complexity

As previously mentioned in several modules, achieving a balance between the localizations implemented in new markets and the complexity that they create is crucial for global agility and is a key skill of Global Class Companies. Failure to strike this balance can result in a challenging management scenario when the company is operating in multiple countries and managing multiple models, impeding progress and scalability.

Building a Team of Interpreneurs

Building a successful team is one of the biggest challenges for companies seeking to expand globally. To achieve this, effective teams prioritize characteristics and cultural fit within the company, as guided by the Global Class Team Building Framework, over simply hiring based on experience. It is important to remember that building a team of the wrong individuals can lead to failure in implementing global growth strategies and ultimately result in lost time and money.

Moreover, identifying and nurturing Interpreneurs within your organization, and proactively hiring Interpreneurs both at HQ and in local offices will pay dividends in building and sustaining a global footprint.

Effective Communication

Effective communication is essential for success and a key function in the Global Class Management (GCM) Model, as outlined in the Four Commitments for Successful Global Growth. However, communication can also be a significant obstacle for international organizations due to the added layer of translation required, both in terms of language and culture. Interpreneurial leaders who are successful in the global expansion are those who are able to facilitate effective communication despite these challenges.

The disparity in face time between employees at headquarters or in more favorable time zones and those at local offices can create inequities in a globally distributed team. It is crucial to be aware of the advantages that some employees have and to address any disparities that may arise. Differences in business culture and respect for hierarchy can exacerbate these disparities. To address this issue, Heini Zachariassen, founder and former CEO of Vivino, implemented virtual face-time sessions between the global leadership team and local teams, enabling distributed workers to communicate directly with HQ leaders.

Balancing Autonomy and Speed

Throughout the course, we have emphasized the need to balance autonomy between HQ and local offices. Our conversations with executives on the topic produced varying responses. Those with experience in a local office tended to favor more autonomy, while those solely involved in international expansion at HQ preferred less. However, all agreed that managing autonomy is crucial and requires intentional processes. Autonomy, which is closely linked to control, can be adjusted as needed based on the stage of global growth, as illustrated by the Autonomy Curve concept introduced earlier. Ultimately, the question of how much autonomy to grant local teams boils down to determining what responsibilities and decision-making power the local office should have.

The speed of execution is closely linked to autonomy. When local teams are given more autonomy by HQ, they can act more quickly in response to local market dynamics. However, if there is a lack of alignment between HQ and the local team, communication may break down and hinder the speed of execution.

Transparency and Trust

Being transparent about the decision-making process and rationale can promote trust between HQ and a local office, even when the local team is not involved. This transparency is achieved through effective communication. Building trust at all levels of the organization is crucial for implementing operational and go-to-market strategies, the two components of the LPA framework, as well as engaging with customers and cultivating the brand's local reputation.

Localized Empowerment

Empowerment is the result of trust and autonomy, which motivate teams to take action and achieve results. In terms of management practice, motivation is the foundation of empowerment. As stated in Aaron's book The Young Professional's Guide to Managing, "Belief is the core of motivation... Motivation is generally derived from external sources, whereas empowerment is self-generated. It emerges when someone deeply believes in what they are doing." Empowerment involves giving people the power and authority to achieve their goals.

Along these lines, a previous book (“I” or “Aaron” depending on the narrator) developed a formula for translating internal motivation into empowerment that involves four stages: impact, engagement, fulfillment, and empowerment. Starting with impact, allowing an employee to have an impact will increase their engagement, leading to fulfillment. This fulfillment generates empowerment, which creates a self-initiated impact, thus completing the cycle.

Prioritization and Focus

With limited resources and many tasks to accomplish, it is crucial to guide the local team's efforts toward the most impactful areas. Prioritization and focus are essential in achieving success and are considered fundamental principles of the Global Class mindset, as discussed in module two. Effective planning and clear communication, such as the strategies mentioned earlier, along with resources like the Global Growth Playbook, can help identify and remind the team of the areas of focus. The resource alignment commitment should support these main areas and establish boundaries, which are facilitated by the Localization Resource Team (LRT).

Removing Obstacles

According to one of (“my” or “Aaron’s” depending on the narrator) previous books, management often overlooks the role of removing obstacles, despite its importance. Although setting a vision and providing motivation are commonly discussed, removing obstacles is a tool that the most effective managers use. It keeps the team focused, builds momentum, boosts job satisfaction, promotes employee retention, and helps the team overcome challenges. Feedback Loops are an effective tool for uncovering obstacles and keeping track of how they are being removed.

When working internationally, various obstacles can arise, such as bureaucratic processes at HQ that impede local autonomy, inadequate resources, or cultural conflicts that require adaptation of the operating model to achieve success.

Competent managers understand that when they have assembled the right team, they should allow them to take charge and perform without interference. Removing operational obstacles paves the way for the organization to reach its full potential. This belief is consistent with the Global Class approach, which advocates that HQ serves as an enabler and supporter rather than a controlling entity.

NOTE: Don't miss out on the next episode! If you want to continue learning about global expansion strategies and dive deeper into the course material, simply click here to access Module 10, Episode 9 of the Global Growth Master Class.