If your operations span the globe, you need to develop three very different kinds of managers and then unite them in a common purpose. ACHANGED WORLD AUGUST 2003 BEST OF HBR What Is a Global Manager? by Christopher A. Bartlett and Sumantra Ghoshal 1992 It is hard today to use the word “globalization” without a certain sense of irony, rueful or otherwise. Riven by ideology, religion, and mistrust, the world seems more fragmented, more at odds, than at any time since, arguably, World War Il. But however deep the polit ical divisions, business oper executives still have to figure out Well. The question that Christopher Bartlett and Sumai tions continue to span the globe, and how to run them efficiently and fa Ghoshal pose~“What is a global manager?"-seems therefore even more pressing than it did when their article originally appeared in these Pages 11 years ago. Their answer, too, feels particularly timely. There is rho such thing,’ they write,“as a universal global manager” Multinational companies instead require three kinds of specialists siness managers, country managers, and functional managers~and a set of senior executives to nurture the specialists and coordinate their efforts. Bartlett and Ghoshal provide comprehensively researched examples of all four types of managers, exploring the different skills and perspectives they require to succeed. Theil article lays out model for a management structure that balances the local, regional, and global demands placed on companies operating across the world’s many borders. IN THE EARLY STAGES of its drive over- seas, Corning Glass hired an American exambassador to head up its inter national division. He had excellent con- tacts in the governments of many na tions and could converse in several languages, but he was less familiar with Corning and its businesses. In contrast, ITT decided to set up a massive educa tional program to “globalize” all man- agers responsible for its worldwide telecom business inessence, to replace the company’s national specialists with global generalists. Corning and ITT eventually realized they had taken wrong turns, Like many other companies organizing for world wide operations in recent years, they found that an elite of jetsetters was often difficult to integrate into the cor- porate mainstream; nor did they need an international team of big-picture overseers to the exclusion of focused. experts, 101BEST OF HBR ‘Success in today’s international cli- mate~afar cry from only a decade ago- demands highly specialized yet closely linked groups of global business manag- ers, country of regional managers, and worldwide functional managers. This kind of organization characterizes a transnational rather than an old-line ‘multinational, international, or global company. Transnationals integrate assets, resources, and diverse people in operat- ing units around the world. Through a flexible management process, in which business, country, and functional man- agers form a triad of different perspec- s that balance one another, trans: national companies can build three strategic capabilities: globalscale effi- ciency and competitiveness; national- level responsiveness and flexibility; and cross- market capacity to leverage learn- ing on a worldwide basis While traditional organizations, struc- ‘tured along product or geographic lines, ‘can hone one or another of these capa- bilities, they cannot cope with the chal lenge of al three at once. But an emerg- ing group of transnational companies has begun to transform the classic hier- archy of headquarters subsidiary rela- tionships into an integrated network of specialized yet interdependent units. For many, the greatest constraint in cre- ating such an organization is a severe shortage of executives with the skills, knowledge, and sophistication to oper- ate in a more tightly linked and less clas sically hierarchical network. In fact, in the volatile world of trans national corporations, there is no such ‘thing as a universal global manager. Rather, there are three groups of spe- cialists: business managers, country ‘managers, and functional managers. ‘And there are the top executives at cor- porate headquarters, the leaders who manage the complex interactions be- tween the three -and can identify and develop the talented executives a suc- cessful transnational requires. ‘Tobuild such talent, top management must understand the strategic impor- tance of each specialist. The careers of Leif Johansson of Electrolux, Howard Gottlieb of NEC, and Wahib Zaki of Procter & Gamble vividly exemplify the specialized yet interdependent roles the three types of global managers play. The Business Manager Strategist + Architect + Coordinator Global business or product-division managers have one overriding respon- sibility: to further the company’s global- scale efficiency and competitiveness. This task requires not only the perspec- tive to recognize opportunities and risks across national and functional bound- aries but also the skill to coordinate ac- tivities and link capabilities across those barriers. The global business manager's ‘overall goal is to capture the full bene- fit of integrated worldwide operations. ‘Tobe effective, the three roles at the core of a business manager’ job are to serve as the strategist for his or her organization, the architect of its world- wide asset and resource configuration, and the coordinator of transactions acrossnational borders. Leif Johansson, now president of Electrolux, the Sweden- based company, played all three roles successfully in his earlier position as head of the company's household ap- pliance division. In 1983, when 32-year-old Johansson assumed responsibility for the division, he took over a business that had been built up through more than 100 acqui- sitions over the previous eight years. By the late 1980s, Electroluy’s portfolio included more than 20 brands sold in Christopher A. Bartlett is a professor of business administration at Harvard Business ‘School in Boston. Sumantra Ghoshal is a professor of strategic and international management at London Business School. They are the coauthors of Managing Across. Borders: The Transnational Solution (Harvard Business School Press, 1989) and ‘Transnational Management: Text, Cases, and Readings in Cross-Border Manage- ment (McGraw-Hillrwin, 1992). 102 some 40 countries, with acquisitions continuing throughout the decade. Zanussi, for example, the big Italian manufacturer acquired by Electrolux in 1984, ad built a strong market presence based on its reputation for innovation in household and commercial appli ances. In addition, Arthur Martin in France and Zoppas in Norway had strong local brand positions but limited innovative capability. Asa result of these acquisitions, Elec- trolux had accumulated a patchwork quilt of companies, each with a different product portfolio, market position, and competitive situation. Johansson soon recognized the need for an overall strat- egy to coordinate and integrate his dis- persed operations. Talks with national marketing man- agers quickly convinced him that drop- ping local brands and standardizing around a few high-volume regional and global products would be unwise. He agreed with the local managers that their national brands were vital to main- taining consumer loyalty, distribution leverage, and competitive flexibility in ‘markets that they saw fragmenting into more and more segments. But Johans- son also understood the views of his di- vision staff members, who pointed to the many similarities in product char- acteristics and consumer needs in the various markets. The division staff was certain Electrolux could use this advan- tage to cut across markets and increase competitiveness. Johansson led a strategy review with task force of product-division staff and national marketing managers. Wi the task force confirmed the marketing managers’ notion of growing segmen- tation, its broader perspective enabled Johansson to see a convergence of seg- ments across national markets. Their closer analysis also refined manage- ment’s understanding of local market needs, concluding that consumers per- ceived “localness” mainly in terms of how a product was sold (distribution through local channels, promotion in local media, use of local brand names) HARVARD BUSINESS REVIEWinstead of how it was designed or what features it offered, From this analysis, Johansson fash- ioned a product-market strategy that identified two full4ine regional brands to be promoted and supported in all European markets. He positioned the Electrolux brand to respond to the cross- market segment for high prestige (cus- tomers characterized as conservatives), The global business manager has to achieve an efficient distribution of assets and resources while protecting the competence at hand. while the Zanussi brand would fill the segment where innovative products were key (for trendsetters). The local brands were clustered in the ‘other two market segments pinpointed in the analysis: yuppies ("young and ag. gressive” urban professionals) and envi ronmentalists (“warm and friendly” peo- ple interested in basie-value products) The new strategy provided Electrolux with localized brands that responded tothe needs of these consumer groups. ‘At the same time, the company cap- tured the efficiencies possible by stan- dardizing the basic chassis and compo- nents of these local-brand products, ‘turning them out in high volume in spe- cialized regional plants. So, by tracking product and market trends across borders, Leif Johansson captured valuable global-scale efficien- cies while reaping the benefits of a flex: ible response to national market frag- ‘mentation. What's more, though he took on the leadership role as a strategist, Johansson never assumed he alone had the understanding or the ability to form a global appliance strategy; he relied heavily on both corporate and local ‘managers. Indeed, Johansson continued to solicit guidance on strategy through a council of country managers called the 1992 Group and through product coun- cils made up of functional managers. ACHANGED WORLD AUGUST 2003 In fact, the global business manager's responsibility for the distribution of crucial assets and resources is closely tied to shaping an integrated strategy. While he or she often relies on the input of regional and functional heads, the business manager is still the architect who usually initiates and leads the de- bate on where major plants, technical centers, and sales offices should be lo- cated — and which facilities should be closed. ‘The obvious political deli- cacy of these debates is not the only factor that makes simple economic analysis i adequate. Within every oper: ating unit there exists a pool of skills and capabilities that may have taken a lot of time and in- vestment to build up. The global busi- mness manager has to achieve the most efficient distribution of assets and re sources while protecting and lever- aging the competence at hand. Electrolux’s household appliance division had more than 200 plants and a bewildering array of technical centers and development groups in many countries. It was clear to Jo- hansson that he had to rationalize this infrastructure. He began by setting a policy for the household appliance division that would avoid concentration of facilities in one country or region, even in its Scandinavian home base. Atthe same time, Johansson wanted to specialize the division's develop- ‘ment and manufacturing infrastruc- ture on a“one product, one facility” basis. He was determined to allocate important development and manu- facturing tasks to each of the com- pany's major markets. In trying to ‘optimize robustness and flexibility in the long term rather than minimize short-term costs, Johansson recognized that a specialized yet dispersed system would be less vulnerable to exchange- rate fluctuations and political uncer- tainties. This setup also tapped local managerial and technical resources, What Is a Global Manager? thereby reducing dependence on the small pool of skilled labor and manage- ment in Sweden. Instead of closing old plants, Johans son insisted on upgrading and tailoring existing facilities whenever possible. In addition to averting political fallout and organizational trauma, Electrolux would then retain valuable know-how and bypass the start-up problems of building from scratch. An outstanding example of this approach is Zanussi’s Porcia plant in Italy, which Electrolux turned into the world’s largest washing machine plant. Aftera massive $150 mil lion investment, the Porcia plant now produces 15 million units a year. Although acquisition-fueled growth often leads to redundancy and over: capacity, it can also bring new resources and strengths. Instead of wiping out the division’s diversity through homog- enization or centralization, Johansson decided to leverage it by matching each unit’s responsibilities with its particu: Jar competence. Because of the Scandi navian flair for modular design, he as- signed the integrated kitchen-system business to Electrolux’s Swedish and 103BEST OF HBR Finnish units. He acknowledged Porcia’s ‘experience in component production by consolidating design and production of compressors there, Johansson's re- shaping of assets and resources not only enhanced scale economies and opera- tional flexibility but also boosted morale by giving operating units the opportu- nity to leverage their distinctive compe- tences beyond their local markets. Newly developed business strategies obviously need coordination. In prac- tice, the specialization of assets and re- sources swells the flow of products and ‘components among national units, re- ‘quiring a firm hand to synchronize and control that flow. For organizations whose operations have become more ispersed and specialized at the same time that their strategies have become more connected and integrated, coor dination across borders is a tough chal lenge. Business managers must fashion, a repertoire of approaches and tools, from centralized control to manage- ‘ment of exceptions identified through formal policies to indirect management via informal communication. Leif Johansson coordinated product flow~ across his 35 national sales units and 29 regional sourcing facilities - by establishing broad sourcing policies and transferpricing ranges that set limits but left negotiations to internal supp! ers and customers. For instance, each sales unit could negotiate a transfer price with its intemal source for a cer- product ina set range that was usu- ally valid for a year. Ifthe negotiations ‘moved outside that range, the compa- nies had to check with headquarters. ‘Asa coordinator, Johansson led the de- liberations that defined the logic and philosophy of the parameters; but he stepped back and let individual unit ‘managers run their own organizations, except when a matter went beyond pol icy limits. In contrast, coordination of business strategy in Johansson’ division was ‘managed through teams that cut across the formal hierarchy. Instead of central- izing, he relied on managers to share 104 the responsibility for monitoring plementation and resolving problems through teams. To protect the image and positioning of his regional brands~ Electrolux and Zanussi~he set up a brand-coordination group for each. Group members came from the sales companies in key countries, and the chairperson was a corporate marketing executive. Both groups were responsi ble for developing a coherent, pan- European strategy for the brand they represented. ‘To rationalize the various product strategies across Europe, Johansson cre- ated productline boards to oversee these strategies and to exploit any synergies. Each product line had its own board ‘made up of the corporate productine ‘manager, who was chair, and his or her product managers. The Quattro 500 re- frigerator-freezer, which was designed in Italy, built in Finland, and marketed in Sweden, was one example of how these boards could successfully inte- arate product strategy. In addition, the 1992 Group period cally reviewed the division's overall re- sults, kept an eye on its manufacturing and marketing infrastructure, and su- pervised major development programs and investment projects. Capturing the symbolic value of 1992 in its name, the ‘group was chaired by Johansson him- self and included business managers from Italy, the United Kingdom, Spain, the United States, France, Switzerland, and Sweden. Indeed, coordination probably takes, up more of the global business man- ager’s time than any other aspect of the job. This role requires that a manager have great administrative and interper- sonal skills to ensure that coordination and integration don't deteriorate into heavy-handed control. Many traditional multinational com- panies have made the mistake of auto- ‘matically anointing their home country prodluct-division managers with the title of global business manager. Sophist cated transnational companies, how- ever, have long since separated the no- tions of coordination and centralization, looking for business leadership from their best units, wherever they may be. For example, Asea Brown Boveri (ABB), the Swiss-headquartered electrical en- gineering corporation, has tried to lever- age the strengths of its operating com- panies and exploit their location in critical markets by putting its business managers wherever strategic and orga nizational dimensions coincide. In ABB's powertransmission business, the man- ager for switch gear is located in Swe- den, the manager for power transform- in Germany, the manager for distribution transformers is in Norway, and the manager for electric metering is in the United States. Even well-established multinationals with a tradition of tight central control are changing their tack. The head of IBM's telecommunications business recently moved her division headquar- ters to London, not only to situate the ‘command center closer tothe booming European market for computer net- working but also“to give us a different perspective on all our markets?” The Country Manager Sensor + Builder + Contributor The building blocks for most world wide companies are their national sub- iaries. If the global business man- ager’s primary objective is to achieve ‘global-scale efficiency and competitive- ness, the national subsidiary manager's is to be sensitive and responsive to the local market. Country managers play the pivotal role not only in meeting Jocal customer needs but also in satisfy- ing the host government’ requirements and defending their company’s market positions against local and external competitors. ‘The need for local flexibility often puts the country manager in conflict with the global business manager. But in a successful transnational like Elec- trolux, negotiation can resolve these dif: ferences. In this era of intense compe- tition around the world, companies cannot afford to permit a subsidiary HARVARD BUSINESS REVIEWmanager to defend parochial inter- ests asking of the country.” Nor should headquarters allow national subsidiaries to become the battleground for corporate holy wars fought in the name of globalization. In many companies, the national subsidiaries are hothouses of entre- preneurship and innovation homes for valuable resources and capabili- ties that must be nurtured, not con- strained or cut off. The subsidiaries of Philips, or one, have consistently led product development: In tele- sion, the company’s first color TV ‘was developed in Canada, the first stereo model in Australia, and the first teletextin the United Kingdom. Unilever’s national subsidiaries have also been innovative in product ‘marketing strategy: Germany created the campaign for Snuggle (a fabric soft- ener); Finland developed Timotei (an herbal shampoo); and South Africa launched Impulse (a body perfume). In fact, effective country managers play three vital roles: the sensor and in- terpreter of local opportunities and threats, the builder of local resources and capabilities, and the contributor toand active participant in global strat- egy. Howard Gottlieb’s experience as general manager of NEC’s switching- systems subsidiary in the United States illustrates the importance of all three of these tasks. As a sensor, the country manager must be good at gathering and sifting information, interpreting the implica- tions, and predicting a range of feasible ‘outcomes. More important, this man- ager has the difficult task of conveying the importance of such intelligence to people higher up, especially those whose perceptions may be dimmed by distance ‘or even ethnocentric bias. Today, when information gathered locally increas- ingly applies to other regions or even globally, communicating effectively is crucial. Consumer trends in one country often spread to another; technologies developed in a leading-edge enviror ‘ment can have global significance;a com- ACHANGED WORLD AUGUST 2003 petitor’ local market testing may signal a wider strategy; and national legisla- tive initiatives in areas like deregulation and environmental protection tend to spill across borders. Gottlieb’s contribution to NEC's un- derstanding of changes in the telecom- ‘munications market demonstrates how a good sensor can connect local intelli- gence with global strategy. In the late 19808, Gottlieb was assigned to build the U.S. market for NEAX 61, a widely acclaimed digital telecom switch that was designed by the parent company in Japan. Although it was technologically sophisticated, early sales didn’t meet expectations. is local-market background and contacts led Gottlieb to a quick agnosis ofthe problem. NEC had de- signed the switch to meet the needs of NTT, the Japanese telephone mo- hopoly, and it lacked many features that customers in the United States wanted. For one thing, its software didn’t incorporate the protocol con- versions necessary for distributing rev- cenues among the many U.S. companies that might handle a single long-distance Phone call. Nor could the switch handle revenue-enhancing features like call waiting and call forwarding, which were vital high-margin items in the competi- tive, deregulated American market. What Is a Global Manager? In translating the needs of his US. division to the parent company, Gottlieb had a formidable task. To convince his superiors in Japan that redesigning NEAX 61 was necessary, he had to bridge two cultures and penetrate the subtleties ofthe parent ‘company’s Japanese-dominated man- agement processes. He had to instill a sense of urgency in several corpo- rate management groups, varying his pitches to appeal to the interests of each. For instance, Gottlieb convinced the engineering department that the NEAX 61 switch had been under- designed for the U.S. market and the marketing department that time Was short because the Bell operating companies were calling for quotes. A transnational’s greater access to the scarcest of all corporate resources, human capability, is a definite advan- tage when compared with strictly local companies-or oltsline multinationals, for that matter. Scores of companies like IBM, Merck, and Procter & Gamble have recognized the value of harvesting advanced (and often less expensive) scientific expertise by upgrading local development labs into global centers of technical excellence. Other companies have built up and leveraged their overseas human re- sources in different ways. Cummins En- gine, for example, has set up its highly skilled but surprisingly low-cost Indian Sometimes a country manager must carry out a strategy that directly conflicts with what he or she has lobbied for in vain. ‘engineering group as a worldwide draft- ing resource; American Airlines’s Bar- bados operation handles much of the corporate clerical work; and Becton Dickinson, a large hospital supply com- pany, has given its Belgian subsidiary pan-European responsibility for man- aging distribution and logistics. 105BEST OF HBR Indeed, the burden of identifying, de- veloping, and leveraging such national resources and capabilities falls on coun- ‘try managers. Howard Gottlieb, after convincing Tokyo that the United States would be an important market for NEC's global digital-switch design, per- stiaded headquarters to permit his new engineering group to take part early on in the product development of the next generation switch~the NEAX 61E. He sent teams of engineers to Japan to work with the original designers; and, to verify his engineers'judgments, Gott lieb invited the designers to visit his customers in the United States. These exchanges not only raised the sensitivity of NEC's Japan-based engineers to USS. ‘market needs but also significantly in- creased their respect for their American colleagues. Equally important, the U.S. unit's morale rose. As a builder, Gottlieb used this mu- tual confidence as the foundation for creating a software-development capa- bility that would become a big corpo- rate asset. Skilled software engineers, very scarce in Japan, were widely avail able in the United states. Gottlieb’s first move was to put together a small software team to support local projects. ‘Though its resources were limited, the ‘group turned out a number of innova- tions, including a remote software- patching capability that later became part of the 61E switch design. The cred- ibility he won at headquarters allowed Gottlieb to expand his design engineer- ing group from ten to more than 50 peo- ple within two years, supporting devel- ‘opments not only in North America but also eventually in Asia. In many transnationals, access to strategically important information ~ ‘and control over strategically important assets has catapulted country manag- ers into a much more central role. AS Tinks to local markets, they are no longer ‘mere implementers of programs and policies shaped at headquarters; many have gained some influence over the way their organizations make impor- tant strategic and operational decisions. 106 In most of today’s truly transnational ‘companies, country managers and their chief local subordinates often partici pate in product development commit tees, product marketing task forces, and globalstrategy conferences. Even at the ‘once impenetrable annual top man- agement meetings, national subsidiary managers may present their views and defend their interests before senior cor- porate and domestic executives ~a sce- nario that would have been unthink- able even a decade ago. Of course, the historic position of ‘most national units of worldwide com- panies has been that of the imple- enter of strategy from headquarters. Because the parent company’s accepted objectives are the outcome of discus sions and negotiations involving nu- merous units, divisions, and national subsidiaries, sometimes a country man- ager must carry out a strategy that di rectly conflicts with what he or she has lobbied for in vain. But a diverse and dispersed world- wide organization, with subsidiaries that control many of the vital develop- ‘ment, production, and marketing re- sources, can no longer allow the time- honored “king of the country" to decide how, when, and even whether his or her national unit will implement a particu- lar strategic initiative. The decision ‘made by the North American subsidiary of Philips to outsource its VCRs from a Japanese competitor rather than the parent company is one of the most no- torious instances of how a local “king” can undermine global strategy. ‘AtNEC, Howard Gottlieb spent about {60% of his time on customer relations and probing the market and about 30% managing the Tokyo interface. Gott- lieb's ability to understand and inter- pret the global strategic implications of US. market needs—and the software- development group he built from sctatch let him take part in NEC's on- going strategy debate. As a result, he changed his division’s role from imple- ‘menter of corporate strategy to active contributor in designing that strategy. The Functional Manager Scanner + Cross Pollinator + Champion While global business managers and country managers have come into their ‘own, functional specialists have yet to gain the recognition due them in many traditional multinational companies. Relegated to supportstaff roles, ex- cluded from important meetings, and even dismissed as unnecessary over- head, functional managers are often given little chance to participate in, let alone contribute to, the cor- porate mainstream’s global activity. Insome cases, top management has allowed staff functions to become a warehouse for corporate misfits (ora graveyard for managerial has- beens. Yet at a time when informa- tion, knowledge, and expertise have become more specialized, an orga- nization can gain huge benefits by linking is technical, manufacturing, marketing, human resources, and financial experts worldwide. Given that today’s transnationals face the strategic challenge of re- solving the conflicts implicit in achieving global competitiveness,national responsiveness, and worldwide learning, business and country manag- ers must take primary responsibility for the first two capabilities. But the third is the functional manager's province. Building an organization that can use learning to create and spread innova- tions requires the skill to transfer spe- Cialized knowledge while also connect- ing scarce resources and capabilities ‘across national borders. ‘To achieve this important objective, functional managers must scan for spe- cialized information worldwide, “cross- pollinate” leading-edge knowledge and best practice, and champion innovations that may offer transnational opportu- nities and applications. Most innovation starts, of course, when managers perceive a particular opportunity or market threat, such as an emerging consumer trend, a revo- lutionary technological development, a bold competitive move, or a pending government regulation. When any of these flags pops up around the world, it may seem unimportant to corporate headquarters if viewed in isolation. But when a functional manager serves as a scanner, with the perspective and expertise to detect trends and move knowledge across boundaries, he or she can transform piecemeal information into strategic intelligence. {In sophisticated transnationals, senior functional executives serve as linchpins, connecting their areas of specialization throughout the organization. Using in- formal networks, they create channels for communicating specialized infor- ‘mation and repositories for proprietary knowledge. Through such links, Elec- trolux marketing managers fist iden fied the emergence of cross-market seg- ‘ments and NEC's technical managers were alerted to the shift from analog to digital switching technology. In the same manner, Wahib Zaki of Procter & Gamble’s European opera- tions disapproved of P&G's high-walled organizational structures, which iso- lated and insulated the technical deve- ‘opment carried out in each subsidiary’s ACHANGED WORLD AUGUST 2003 lab. When Zaki became head of R&D in Europe, he decided to break down some walls. In his new job, he was ideally Placed to become a scanner and cross- pollinator. He formed European techni «al teams and ran a series of conferences in which like-minded experts from var- ious countries could exchange informa- tion and build informal communication networks. Still, Zaki needed more ammunition to combat the isolation, defensiveness, and“not invented here” attitude in each The functional manager can transform piecemeal information into strategic intelligence. research center. He distributed staff among the European technical center in Brussels and the development groups of P&G's subsidiaries. He used his staff ‘teams to help clarify the particular role of each national technical manager and tospecialize activities that had been du- plicated on a country-by-country basis with little transfer of accumulated knowledge. In response to competitive threats ‘rom rivals Unilever, Henkel, and Colgate- Palmolive-and to a perceived consumer ‘rend ~ P&G's European headquarters asked the Brussels-based research center to develop a new liquid laundry deter- gent. By that time, Zaki had on hand a technical team that had built up rela- tionships among its members so that it formed a close-knit network of intelli gence and product expertise. ‘The team drew the product profile necessary for healthy sales in multiple markets with diverse needs. In several European markets, powdered deter- gents contained enzymes to break down protein-based stains, and the new liquid detergent would have to accomplish the same thing. In some markets, a bleach substitute was important; in others, hard water presented the toughest chal- lenge; while in several countries, envi- ronmental concerns limited the use of What Is 2 Global Manager? phosphates. Moreover, the new deter- ‘gent had to be effective in large-capacity, ‘top-loading machines, as well as in the small front-loading machines common in Europe. Zaki’s team developed a method that made enzymes stable in liquid form (a new technique that was later patented), a bleach substitute effective at low tem- peratures, a fatty acid that yielded good watersoftening performance without phosphates, and a suds suppressant that ‘worked in frontioading machines (so bubbles wouldn't ooze out the door). By integrating resources and expertise, Zaki cross-pollinated best practice for a new product ‘The R&D group was so success- ful that the European headquar- ters adopted the use of teams for its management of the new brand launch. P&G's first European brand team pooled the knowledge and exper- tise of brand managers from seven sub- sidiaries to draft a launch program and marketing strategy for the new liquid detergent Vizir, which ensured its tri ‘umphant rollout in seven countries in six months, P&G’s homework enabled it to come up with a product that re- sponded to European needs, while Col- gate-Palmolive was forced to withdraw its liquid detergent brand, Axion—which had been designed in the United States and wasn't tailored for Europe-after an a8-month market test. AAs a reward for his performance in Europe, Wahib Zaki was transferred to Procter & Gamble's Cincinnati corpo- rate headquarters as a senior vice pres- ident of R&D. He found that research- ers there were working on improved builders (the ingredients that break down dirt) for a new liquid laundry de- tergent to be launched in the United States. In addition, the international technology-coordination group was working with P&G's Japanese sub- sidiary to formulate a liquid detergent surfactant (the ingredient that removes greasy stains) that would be effective in the cold-water washes common in Japa- nese households, where laundry isoften 107BEST OF HBR done in used bathwater. Neither group hhad shared its findings or new ideas with the other, and neither had incorporated the numerous breakthroughs repre- sented by Vizir despite the evidence that consumer needs, market trends, competitive challenges, and regulatory requirements were all spreading across national borders. Playing the role of champion, Zaki decided to use this development process to demonstrate the benefits of coordi- nating P&G's sensitivity and respon- siveness to diverse consumer needs around the world, He formed a team drawn from three technical groups (one in Brussels and two in the United States) to turn out a world liquid laundry de- tergent. The team analyzed the trends, generated product specifications, and brought together dispersed technical ‘knowledge and expertise, which culmi- nated in one of Procter & Gamble’s ‘most successful product launches ever. Sold as Liquid Tide in the United States, Liquid Cheer in Japan, and Liquid Arie! in Europe, the product was P&G's first rollout on such a global scale. As Zaki continued to strengthen cross-border technology links through other projects, Procter & Gamble grad- ually converted its farflung sensing and response resources into an integrated learning organization. By scanning for new developments, cross-pollinating best practice, and championing innova: tions with transnational applications, Wahib Zaki, a superlative functional ‘manager, helped create an organization that could both develop demonstrably better new products and roll them out at a rapid pace around the world. The Corporate Manager Leader + Talent Scout + Developer Clearly, there is no single model for the global manager. Neither the oldline international specialist nor the more recent global generalist can cope with the complexities of cross-border strate- gies. Indeed, the dynamism of today’s ‘marketplace calls for managers with di- verse skills. Responsibility for worldwide 108 operations belongs to senior business, country, and functional executives who focus on the intense interchanges and subtle negotiations required. In con- ‘rast, those in middle management and frontline jobs need well-defined re- sponsibilites, a clear understanding of their organization's transnational mis- sion, and a sense of accountability -but few of the distractions senior negotia- tors must shoulder. Meanwhile, corporate managers in- tegrate these many levels of responsi bility, playing perhaps the most vital role in transnational management. The corporate manager not only leads in the broadest sense; he or she also identifies and develops talented business, coun- try, and functional managers—and bal- ances the negotiations among the three. It’s up to corporate managers to pro- ‘mote strong managerial specialists like Johansson, Gottlieb, and Zaki, those individuals who can translate company strategy into effective operations around the world. Successful corporate managers like Floris Maljers, cochairman of Unilever, have made the recruitment, training, and development of promising exec- utives a top priority. By the 1980s, with Maljers as chairman, Unilever had a clear policy of rotating its managers through various jobs and moving them around the world, especially early in their careers. Unilever was one of the first transnationals to have astrong pool of specialized yet interdependent senior managers, drawn from throughout its diverse organization. But while most companies require ‘only a few truly transnational managers to implement cross-border strategies, the particular qualities necessary for suich positions remain in short supply. According to Maljers itis this limitation in human resources not unreliable ot inadequate sources of capital-that has become the biggest constraint in mast globalization efforts. Locating such individuals is dificult under any circumstances, but corporate ‘managers greatly improve the odds when their search broadens from a focus on home country managers to in- ‘corporate the worldwide pool of execu- tives in their organization, Because transnationals operate in many coun- tries, they have access to a wide range of ‘managerial talent. Yet such accesslike information on local market trends or ‘consumer needs that should cross orga- nizational boundaries-is often an under- exploited asset. Asa first step, senior executives can identify those in the organization with the potential for developing the skills and perspectives demanded of global ‘managers. Such individuals must have a broad, nonparochial view of the com- pany and its operations yet a deep un- derstanding of their own business,coun- try, or functional tasks, Obviously, even ‘many otherwise talented managers in an organization aren't capable of such a combination of flexibility and com- ‘mitment to specific interests, especially when it comes to cross-border coordi- nation and integration. Top manage- ‘ment may have to track the careers of promising executives over several years before deciding whether to give them senior responsibilities. At Unilever, for example, the company maintains four development lists that indicate both the level of each manager and his or her po- tential. The progress of managers on the “Arist is tracked by Unilever’s Special ‘Committee, which includes the two chairmen. Once corporate managers identify the talent, they have the duty to develop it. ‘They must provide opportunities for achievement that allow business, coun- try, and functional managers to handle negotiations in a worldwide context. A company’s ability to identify individuals with potential, legitimize their diversity, and integrate them into the organiza- tion's corporate decisions is the single clearest indicator that the corporate leader isa true global manager~and that the company isa true transnational. O Reprint Ro308F ‘To onder, see page 143. HARVARD BUSINESS REVIEWCopyright © 2003 EBSCO Publishing