As companies increasingly expand into emerging markets, they often find it advantageous to establish regional headquarters (RHQs) capable of overseeing growth operations and managing offshore activity in the region.
But while many find it acceptable to simply appoint leaders from corporate HQ at these new outposts, this practice commonly ends in failure. Although they are successful in their home offices, Western and European executives don’t always have the cultural background or competencies needed to manage overseas operations.
As a result, many organizations are relinquishing control and decision-making to regional executives. Due to the scarcity of skilled leaders, though, choosing effective ones represents a major challenge – but it’s a challenge on which business success hinges.
As a starting point, HR should consider what it wants out of the RHQ, and use that as selection criteria to pinpoint leaders who can deliver on that value.
Three common value-driven specializations of RHQs include:
- Resources – for RHQs whose primary goal is overseeing resource allocation, companies should seek leaders with directive and pace-setting managerial skills. Since resource decisions made by corporate headquarters usually stand firm, these leaders will need to be obedient and understand their role in following instructions.
- Synergy – many RHQs need to align processes and implementations across departments in the region, thus requiring leaders who are visionary, participative, and affiliation-oriented. These leaders are able to view business as a whole and understand how each moving part contributes to overall vision.
- Learning – RHQs who specialize in knowledge, such as R&D units or corporate think tanks, should try to acquire leaders with skills in coaching and participation. The “softer” features of this leader are considered ideal for encouraging innovation and collaboration.
Although situational considerations such as organizational culture need to be considered, assessing desired RHQ output should always be a critical first step when appointing regional leaders.
Many companies are expanding into new global markets, but not all parties are ready: according to Kern/Ferry International, only 1% of executives in China and 8% in India are equipped to lead corporate growth efforts.