Guy Farrow, partner in charge and managing partner of Heidrick & Struggles Sydney (Australia), learned firsthand what it takes to succeed as a global leader while working with American Airlines in Dallas. He has functional management expertise in e-commerce, finance & planning, operations and sales & marketing. We spoke with Farrow about the need for CEOs to become more globally well-rounded and the value that would bring to their companies.
CEOB: Why do you think global experience is so important today for CEOs?
GF: “Primarily because the companies themselves and consumers are going global at the same time, so to have an understanding of your market, you have to have a global perspective. Take an industry like automotive as an example. If you go back 100 years, Ford was selling to Americans. Now, Ford is selling to a global consumer base. So the person at the helm must have a global perspective.”
CEOB: Our audience is mid-market CEOs, many of them for private companies. Is this relevant for them?
GF: “The Internet has made it easier for all companies to expand abroad, so understanding different markets is an important commodity even for mid-market firms, particularly those which do most of their business in the U.S. but have some global outreach, [whether it’s exporting products or importing of parts].”
CEOB: What global strengths and experiences are boards looking for in CEOs?
GF: “If you went back 10 years, the need was to learn a foreign language, watch foreign news and hang out with lots of people from other countries. Now, to be a global citizen who understands how business works, you have to physically work overseas and get out of the expatriate bubble. Consider Craig Kreeger, the Virgin Atlantic Airways CEO. He ran the international division for American Airlines while sitting in London, which is a very different view than doing it from Dallas.”
CEOB: Should CEOs undertake some training and learning beforehand?
GF: “You can do both, but the value is much more on people who have immersed themselves in doing business. Watching American television and studying in the U.S. isn’t enough. One is the theory and the other is the practice. Theory is great, practice is where the real value is found. Richer executives have the practical experience to marry with the theoretical. “When you get a foreign CEO at an iconic American company, by default, they will be a global citizen. You have to prove your mettle in delivering strong results in a foreign country.”
CEOB: What do CEOs need to know about various cultures?
GF: “In some cultures, business is done more by contract and others by relationships. You need to know which is more important. In Asian cultures, you start a meeting by building a relationship, not talking business. When a relationship is strong, they want to do business with you. The contract is organic and defines where you were at a certain point in time. As the relationship evolves, the contract takes place. I recall a deal with a business in a Middle Eastern country that took 10 years to finalize. In other countries, the contract is the starting point, not the ending point. It’s important to know the difference.”
CEOB: How can CEOs who do not have global divisions build some ‘experience diversity’?
GF: “This would be a personal journey instead of a professional one, unless you’re looking to going into a specific country. You can take courses and speak to people from the area. There are a lot of chambers of commerce, consulates and trade associations. I’ve learned more about countries and cultures that way.”
CEOB: How should CEOs for companies with global divisions expand their global exposure/knowledge?
GF: “Not everyone has the luxury of traveling. Life and family sometimes make it difficult. There is a mindset. You can still try to immerse yourself by learning more, rotating employees and encouraging diversity. Having a diverse management team and diverse staff can also help increase your exposure.”
CEOB: How should companies be training their executives and lower-level management to compete in a global market?
GF: “It’s not enough to let people live in a little expatriate bubble, you really need to give them full responsibility for offshore operations. Also, it is getting much easier to travel from a cost and communication perspective. Coupled with access to Skype and email, the world is a much smaller place. It becomes easier if you’re prepared to take the necessary steps.”