"The Jack Welch of the future cannot be like me. I spent my entire life in the United States. The next head of General Electric will be somebody who spent time in Bombay, in Hong Kong, in Buenos Aires. We have to send our best and brightest overseas and make sure they have the training that will allow them to be global leaders who will make GE flourish in the future."
Jack Welch, former CEO, GE
Jack Welch’s comment above highlights the key talent management challenge multinational companies face: global business needs managers with truly global perspectives and operating experience. Expatriate assignments – assigning executives to different country operations within the global company – is the most critical element in developing that kind of managerial talent. Making expatriation work, for both the company and the individual executives, has become an important task for multinational companies.
A new report from CEO Forum, Expatriate Leaders: The Australian experience (PDF 1.3MB), looks at the experience of expatriate managers leading Australian subsidiaries of global companies. The report, sponsored by Fragomen, is made up of three sections. Section 1, Expatriate Assignments in Context , examines at how (and why) expatriate assignments have been used by MNCs, and what challenges both individuals and companies face. Section 2, Expatriate CEOs Speak, describes the result of a survey of 39 expatriate country managers leading Australian operations of multinational companies. Section 3, Implications for Companies and Expatriate Country Managers, attempts to draw out some lessons for both the manager contemplating an expatriate assignment, and the company planning further expatriate appointments.
The survey of expatriate country managers (ECMs) is at the heart of the report. Less than a quarter (24%) ECMs had had any working experience in Australia prior to their appointment as Australia country manager, confirming that, for many MNCs, Australia is seen as a relatively unproblematic operation (studies of expatriate appointments to more complex country manager roles like India and China show the overwhelming majority of appointees to these roles have prior in-country experience). For some years now the literature around expatriate managers has emphasised preparation, yet it would appear more still needs to be done: the majority of surveyed ECMs (60%) rated the quality of the preparation they received from their companies as being either poor or fair. Almost the same figure (57%) had the same opinion about the preparation their partner/families received.
While not an issue specific to ECMs, a surprising finding was how poor many ECMs rated their handover experience, and how short that handover experience was. Almost half (43%) of ECMs rated the quality of the handover experience as being only poor or fair, with the most common complaint being that the period was too short. Short handover periods were the rule rather than the exception, in fact, with 32% of ECMs reporting no overlap at all with their predecessor. Fortunately, however, most ECMs found the initial stages of their role made easier by the local management team: 72% of ECMs found the local management team cooperative or very cooperative.
Finding suitable housing for ECMs was also something of a problem: exactly half (50%) the ECMs found obtaining suitable housing either more difficult or much more difficult than they expected. Given the importance of this to both ECM and partner/family adjustment, this is an issue that may require more attention from both ECMs and their employers in the preparation phase of an expatriate appointment.
The good news, however, for both ECMs considering coming to Australia, and for the companies trying to sell the benefits of a posting to Australia is the reported experience of the ECMs in Australia. Most ECMs (69%) reported that they had found the personal and professional experience of being an Australian country manager either better or much better than they expected (only 5% found it was worse). Managing in Australia, it seems, can offer the ECM some unexpected personal and professional satisfactions.
