It's Personnel

The world of the modern manufacturer is often not limited to just one plant, one state, or even one country. In order to compete on a global scale, today’s manufacturers need to establish themselves in a worldwide market - and build operations in local markets.

Successful worldwide expansion involves many things, but from a personnel standpoint it’s a tricky combination of finding the right people, understanding cultural differences, having strong corporate vision, and possessing the drive to grow and excel in the market.

Taking advantage of the local market and the benefits that it can provide is vital when expanding overseas. Companies need to embrace the culture and the employees in the local market and can’t define their business by one geographic boundary.

“As offshoring gathers momentum, business will need to evolve their organizational thinking to manage processes across diverse geographies and distinct cultures,” according to a recent study by consulting firm Booz Allen Hamilton. “Companies can no longer afford to think of themselves as ‘American’ or ‘German’, with a few scattered offshore operations. They must start to view their organization as a dynamic global enterprise.”

When establishing a new local market, manufacturers need to be mindful of the region’s cultural background. Hiring individuals for local management and leadership roles involves strong competition because of a lack of qualified top-tier talent, and the process can get further muddled by cultural differences in areas like values, behaviors, and communications, said Lisa Tromba, Vice President in the Industrial Practice of Battalia Winston International, an executive-search company.

“Multinational companies must approach emerging markets with a strong focus and sense of urgency, and leveraging the expertise of seasoned and well-developed U.S. operations executives is the most effective means of getting markets up and running.” Tromba said.

She also advises companies find employees who have the ability to “technically and autonomously manage the operation, have the potential to evolve professionally and the commitment to align with the corporate vision while leveraging local advantages to lead the growth of the business.”

Indeed, those local advantages that Tromba mentions are fast becoming the main push behind offshoring.

“Companies are leveraging offshoring strategically to create competitive advantage," the Booz study found. "As a result, ‘access to qualified personnel’ has increased substantially (by approximately 75 percent in the past two years) as a major driver of the decision to offshore. ‘Increased speed to market’ is another fast-emerging driver, jumping by almost 70 percent in just the past year.”

Although adjustments will be needed for different cultures when working among different local markets, all expansion efforts can be united and maintained by strong corporate values.

Companies echo the concern surrounding managerial control and maintaining operations in different geographical locations, as evident by the Booz Allen Hamilton study, which suggested that efficiency and managerial control concerns are fast becoming the most common concerns of companies looking to expand overseas.

Being able to see the big picture and having an interest in culture remain key attributes for any potential hire for a company that is looking to expand their operations. Tromba believes employees need to be passionate and energetic, of course, but they also have to have the desire to understand the culture behind the local market.

“It is critical to tap into the knowledge contained in local markets and one cannot do that without the ability to connect on a local level.” she remarked.

Education is also an important ingredient in succeeding in global expansion.

“In some cases within large corporations, leadership development programs are being modeled after successful U.S. leadership programs which include a variety of roles spanning supply chain and manufacturing operations across business,” Tromba added. “Programs are being modified to provide similar active learning opportunities with multifunctional dimensions to develop well-rounded management and leadership skills.”

Once a company is confident in the individuals chosen to lead its business efforts in a local market, what’s the next step? Reward those who set themselves apart from the crowd.

“Companies are placing greater emphasis on improving their approaches to identifying both internal and external ‘high potential’ talent and providing those identified with appropriate challenges - basically aligning ‘stars’ with opportunities to shine.”

To the employee, rewards are an incentive. To the company, those rewards are a way of maintaining the competitive advantage of a high-quality workforce that is committed to the company’s expansion goals, and can be integrated into part of a long-term plan for success in the worldwide market.

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