Managing Talent Globally

Do these descriptions fit your firm, or sound credible to you?

• "Managing talent in global organization is more complex and demanding than it is in a national business."
• "The movement of employees between countries is still surprisingly limited."
• "Many people tempted to relocate fear that doing so will damage their career prospects."
• "Yet companies that can satisfy their global talent needs and overcome cultural and other silo-based barriers tend to outperform those that don’t."

If so, welcome to the international "war for talent."

McKinsey has just reported the results of a study involving in-depth interviews with executives at 11 major global corporations and including the responses of senior managers at 22 other global companies to an online survey (more than 450 people in all), about how their firms deal with the multinational challenge of talent management. 

As much as we hear about globalization, and as cosmopolitan as we all like to believe we are, "silo's" are still far too much the order of the day.  But what's important about the survey is not its utility as a snapshot of how multinational corporations manage talent globally, but rather its insight into what differentiates top performers from the also-rans.  While the study's authors are quick to caution that their tools did not attempt to uncover evidence of true causality, and note the absence of a longitudinal dimension, nevertheless there are striking correlations between certain talent-management techniques and financial performance.

But first, what's holding companies back from managing their globally distributed talent as one seamless, whole, asset?  Attitudes like these:

• "Overseas experience is not taken seriously and not taken advantage of" (senior manager).
• "Much valuable experience dissipates [because my firm is in the habit of] ignoring input from returnees, and many leave."
• "People expect to be demoted after repatriation to their home location."

Difficult and uncomfortable as it may be to overcome these familiar ruts of thinking, the hard and strong message of the study is, "Get past it."

To be specific, if financial performance is measured by profit per employee, there is a very high correlation between companies that score in the top third of the survey on ten dimensions of global talent management, and profitability.  In particular, companies scoring in the top third on any one of three critical dimensions of talent management stood a 70% chance of achieving top-third financial performance.    The top three most important practices are:  (a) "ensuring global consistency in management processes;" (b) "achieving cultural diversity in global setting;" and (c) "developing and managing global leaders."

The seven other talent management practices are less statistically compelling, but a few notes about them nonetheless:

• "Translating HR information into action" is the fourth most important, which if nothing else proves that it helps if you have the courage of your convictions.
• On the other hand, "shaping the corporate HR agenda for managing global talent" has a mildly negative correlation with financial performance, which should reassure the smug skeptics of HR's ability to drive performance. 

None of this should be especially shocking or hard to understand, but let's elaborate on it for a moment. 

Why is consistency in talent evaluation across all geographic regions so important?  Simply because if mobility is to be a reality, managers need confidence that people transferring into (or back to) their practice areas have met the same standards their own stay-at-home stalwarts have.  Steven Davis, chairman of Dewey & LeBoeuf, said in a recent Bloomberg Radio interview that the firm takes great pains to assure senior associates rotating abroad that their chances for partnership will not be diminished. 

If you believe the McKinsey statistics, we can make an even stronger statement.  Companies that consistently differentiated themselves from their competitors excelled at:

• Top management encouraging people to get experience across multiple locations;
• Regarding overseas experience as essentially a prerequisite for promotion to senior-most levels; and
• Offering managers incentives to "lose" their most talented employees to other functions or geographies.

So as tempting as it may be to lie back in the cocoon of your departmental, practice group, and geographic "silo," resist at all costs.  Devote serious senior management time to exploding those comfortable silos, and encouraging (and rewarding) global mobility.  And the best place to start is the most common-sensical, the most powerful, and the most true to the tradition of honoring each of your professionals as an individual with unique talents and capabilities: 

Make sure your performance evaluations hew to the same standards worldwide.  Otherwise the unspoken but irrepressible suspicion of the foreign will derail your fondest hopes of achieving the "one-firm firm."