BEST OF HBR

1992

What Is aGlobal Manager?by Christopher A. Bartlett and Sumantra Ghoshal

It is hard today to use the vword "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

anytimesince, arguably, World War II. But however deep the polit-

ical divisions, business operations continue to span the globe, and

executives still have to figure out how to run them efficiently and

well. The question that Christopher Bartiett and Sumantra Choshal

pose-"What is a global manager?"-seems therefore even more

pressing than itdid when their article originally appeared in these

pages n years ago. Their answer, too, feels particularly timely. "There is

no such thing,"they write,"as a universal global manager." Multinational

companies instead require three kinds of specialists-business 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. Their

article lays out a model for a management structure that balances the local,

regional, and global demands placed on companies operating across the

world's many borders.

If your operations span the

globe, you need to develop

three very different kinds

of managers and then unite

them in a common purpose.

IN THE EARLY STAGES of its drive ovei-

seas, Coming Glass hired an Americanex-ambassador to head up its inter-national division. He had excellent con-tacts in the governments of many na-tions and could converse in severallanguages, but he was less familiar withComing and its businesses. In contrast,ITT decided to set up a massive educa-tional program to "globalize" all man-agers responsible for its worldwidetelecom business - in essence, to replace

the company's national specialists withglobal generalists.

Corning and ITT eventually realizedthey had taken wrong turns. Like manyother companies organizing for world-wide operations in recent years, theyfound that an elite of jet-setters wasoften difficult to integrate into the cor-porate mainstream; nor did they needan international team of big-pictureoverseers to the exclusion of focusedexperts.

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Success in today's international cli-mate - a far cry from only a decade ago -demands highly specialized yet closelylinked groups of global business manag-ers, country or regional managers, andworldwide functional managers. Thiskind of organization characterizes atransnationai rather than an old-linemultinational, intemational, or globalcompany. Transnationals integrate assets,resources, and diverse people in operat-̂ing units around the world. Through aflexible management process, in whichbusiness, country, and functional man-agers form a triad of different perspec-tives that balance one another, trans-national companies can build threestrategic capabilities: global-scale effi-ciency and competitiveness; national-level responsiveness and flexibility; andcross-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 all three at once. But an emerg-ing group of transnational companieshas begun to transform the classic hier-archy of headquarters-subsidiary rela-tionships into an integrated networkof specialized yet interdependent units.For many, the greatest constraint in cre-ating such an organization is a severeshortage 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 suchthing as a universal global manager.Rather, there are three groups of SF)e-cialists; business managers, countrymanagers, 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 anddevelop the talented executives a suc-cessful transnational requires.

To build such talent, top managementmust understand the strategic impor-tance of each specialist. The careers ofLeif Johansson of Electrolux, HowardGottlieb of NEC, and Wahib Zaki ofProcter & Gamble vividly exemplify thespecialized yet interdependent rolesthe three types of global managers play.

The Business ManagerStrategist + Architect + Coordinator

Global business or product-divisionmanagers 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 risksacross national and functional bound-aries but also the skill to coordinate ac-tivities and link capabilities across thosebarriers. The global business manager'soverall goal is to capture the full bene-fit of integrated worldwide operations.

To be effective, the three roles at thecore of a business manager's job are toserve as the strategist for his or herorganization, the architect of its world-wide asset and resource configuration,and the coordinator of transactionsacross national borders. Leif Johansson,now president of Electrolux, the Sweden-based company, played all three rolessuccessfully in his earlier position ashead of the company's household ap-pliance division.

In 1983, when 32-year-old Johanssonassumed responsibility for the division,he took over a business that had beenbuilt up through more than 100 acqui-sitions over the previous eight years.By the late 1980s, Electrolux's portfolioincluded more than 20 brands sold in

Christopher A. Bartlett is a professor of business administration at Harvard BusinessSchool in Boston. Sumantra Ghoshai is a professor of strategic and internationalmanagement at London Business School. They are the coauthors q/'Managing AcrossBorders: The Transnational Solution (Harvard Business School Press, 1989) andTransnational Management: Text, Cases, and Readings in Cross-Border Manage-ment (McCraw-Hill/Irwin, 1992)-

some 40 countries, with acquisitionscontinuing throughout the decade.Zanussi, for example, the big Italianmanufacturer acquired by Electrolux in1984, had built a strong market presencebased on its reputation for innovationin household and commercial appli-ances. In addition, Arthur Martin inFrance and Zoppas in Norway hadstrong local brand positions but limitedinnovative capability.

As a result of these acquisitions, Elec-trolux had accumulated a patchworkquilt of companies, each with a differentproduct portfolio, market position, andcompetitive situation. Johansson soonrecognized the need for an overall strat-egy to coordinate and integrate his dis-persed operations.

Talks vtfith national marketing man-agers quickly convinced him that drop-ping local brands and standardizingaround a few high-volume regional andglobal products would be unwise. Heagreed with the local managers thattheir national brands were vital to main-taining consumer loyalty, distributionleverage, and competitive fiexibiiity inmarkets that they saw fragmenting intomore and more segments. But Johans-son also understood the views of his di-vision staff members, who pointed tothe many similarities in product char-acteristics and consumer needs in thevarious markets. The division staff wascertain Etectrolux could use this advan-tage to cut across markets and increasecompetitiveness.

Johansson led a strategy review witha task force of product-division staff andnational marketing managers. Whilethe task force confirmed the marketingmanagers' notion of growing segmen-tation, its broader perspective enabledJohansson to see a convergence of seg-ments across national markets. Theircloser analysis also refined manage-ment's understanding of local marketneeds, concluding that consumers per-ceived "localness" mainly in terms ofhow a product was sold (distributionthrough loca! channels, promotion inlocal media, use of local brand names)

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What Is a Global Manager?

instead of how it was designed or whatfeatures it offered.

From this analysis, Johansson fash-ioned a product-market strategy thatidentified two full-line regional brandsto be promoted and supported in allEuropean markets. He positioned theElectrolux 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 thesegment where innovative productswere key (for trendsetters).

The local brands were clustered in theother two market segments pinpointedin the analysis: yuppies ("young and ag-gressive" urban professionals) and envi-ronmentalists ("warm and friendly"peo-ple interested in basic-value products).The new strategy provided Electroluxwith localized brands that respondedto the 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 regionai plants.

So, by tracking product and markettrends across borders, Leif Johanssoncaptured valuable global-scale efficien-cies while reaping the benefits of a flex-ible response to national market frag-mentation. What's more, though he tookon the leadership role as a strategist,Johansson never assumed he alone hadthe understanding or the ability to forma global appliance strategy; he reliedheavily on both corporate and localmanagers. Indeed, Johansson continuedto solicit guidance on strategy througha council of country managers c£illed the1992 Group and through product coun-cils made up of functional managers.

In fact, the global business manager'sresponsibility for the distribution ofcrucial assets and resources is closelytied to shaping an integrated strategy.While he or she often relies on the inputof regional and functional heads, thebusiness manager is still the architectwho usually initiates and leads the de-bate on where major plants, technicalcenters, and sales offices should be lo-

cated - and which facilitiesshould be closed.

The obvious political deli-cacy of these debates is notthe only factor that makessimple economic analysis in-adequate. Within every oper-ating unit there exists a poolof skills and capabilities that

may have taken a lot of time and in-vestment to build up. The global busi-ness manager has to achieve the mostefficient distribution of assets and re-sources while protecting and lever-aging the competence at hand.Electrolux's household appliancedivision had more than 200 plantsand a bewildering array of technicaicenters and development groups inmany countries. It was clear to Jo-hansson that he had to rationalizethis infrastructure.

He began by setting a policy forthe household appliance divisionthat wouid avoid concentration offacilities in one country or region,even in its Scandinavian home base.At the same time, Johansson wantedto specialize the division's develop-ment and manufacturing infrastruc-ture on a "one product, one facility"basis. He was determined to allocateimportant development and manu-facturing tasks to each of the com-pany's major markets. In trying tooptimize robustness and flexibility inthe long term rather than minimizeshort-term costs, Johansson recognizedthat a specialized yet dispersed systemwould be less vulnerable to exchange-rate fluctuations and political uncer-tainties. This setup also tapped localmanagerial and technical resources.

thereby reducing dependence on thesmall pool of skilled labor and manage-ment in Sweden.

Instead of closing old plants, Johans-son insisted on upgrading and tailoringexisting facilities whenever possible.In addition to averting political falloutand organizational trauma, Electroltixwould then retain valuable know-howand bypass the start-up problems ofbuilding from scratch. An outstandingexample of this approach is Zanussi'sPorcia plant in Italy, which Electroluxturned into the world's largest washingmachine plant. After a massive $150 mil-lion investment, the Porcia plant nowproduces 1.5 million units a year.

Although acquisition-fueled growthoften leads to redundancy and over-capacity, it can also bring new resourcesand strengths. Instead of wiping outthe division's diversity through homog-enization or centralization, Johansson

decided to leverage it by matching eachunit's responsibilities with its particu-lar competence. Because ofthe Scandi-navian flair for modular design, he as-signed the integrated kitchen-systembusiness to Electrolux's Swedish and

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Finnish units. He acknowledged Porcia'sexperience in component production byconsolidating design and productionof compressors there. Johansson's re-shaping of assets and resources not onlyenhanced scale economies and opera-tional flexibility but also boosted moraleby giving operating units the opportu-nity to leverage their distinctive compe-tences beyond their local markets.

Newly developed business strategiesobviously need coordination. In prac-tice, the specialization of assets and re-sources swells the flow of products andcomponents among national units, re-quiring a flrm hand to synchronize andcontrol that flow. For organizationswhose operations have become moredispersed and specialized at the sametime that their strategies have becomemore 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 throughformal policies to indirect managementvia informal communication.

Leif Johansson coordinated productfiow-across his 35 national sales unitsand 29 regional sourcing faciiities - byestablishing broad sourcing policies andtransfer-pricing ranges that set limitsbut left negotiations to internal suppli-ers and customers. For instance, eachsales unit could negotiate a transferprice with its internal source for a cer-tain product in a set range that was usu-ally valid for a year. If the negotiationsmoved outside that range, the compa-nies had to check with headquarters.As a coordinator, Johansson led the de-liberations that defined the logic andphilosophy of the parameters; but hestepped back and let individual unitmanagers run their own organizations,except when a matter went beyond pol-icy limits.

fn contrast, coordination of businessstrategy in Johansson's division wasmanaged through teams that cut acrossthe formal hierarchy. Instead of central-izing, he relied on managers to share

the responsibility for monitoring im-plementation and resolving problemsthrough teams. To protect the imageand positioning of his regional brands-Electroiux and Zanussi - he set up abrand-coordination group for each.Group members came from the salescompanies in key countries, and thechairperson was a corporate marketingexecutive. Both groups were responsi-ble for developing a coherent, pan-European strategy for the brand theyrepresented.

To rationalize the various productstrategies across Europe, Johansson cre-ated product-line boards to oversee thesestrategies and to exploit any synergies.Each product line had its own boardmade up ofthe corporate product-linemanager, who was chair, and his or herproduct managers. The Quattro 500 re-frigerator-freezer, which was designedin Italy, built in Finland, and marketedin Sweden, was one example of howthese boards could successfully inte-grate product strategy.

ln addition, the 1992 Group periodi-cally reviewed the division's overall re-sults, kept an eye on its manufacturingand marketing infrastructure, and su-pervised major development programsand investment projects. Capturing thesymbolic value of 1992 in its name, thegroup was chaired by Johansson him-self and included business managersfrom Italy, the United Kingdom, Spain,the United States, France, Switzerland,and Sweden.

Indeed, coordination probably takesup more of the global business man-ager's time than any other aspect ofthejob. This role requires that a managerhave great administrative and interper-sonal skills to ensure that coordinationand integration don't deteriorate intoheavy-handed control.

Many traditional multinational com-panies have made the mistake of auto-matically anointing their home countryproduct-division managers with the titleof giobal business manager. Sophisti-cated transnational companies, how-ever, have long since separated the no-

tions of coordination and centralization,looking for business leadership fromtheir 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 incritical markets by putting its businessmanagers wherever strategic and orga-nizational dimensions coincide. In ABB'spower-transmission business, the man-ager for switch gear is located in Swe-den, the manager for power transform-ers is in Germany, the manager fordistribution transformers is in Norway,and the manager for electric meteringis in the United States.

Even well-established multinationalsvdth a tradition of tight central controlare changing their tack. The head ofIBM's telecommunications businessrecently moved her division headquar-ters to London, not only to situate thecommand center closer to the boomingEuropean market for computer net-working but also "to give us a differentperspective on all our markets."

The Country ManagerSensor + Builder + Contributor

The building blocks for most world-wide companies are their national sub-sidiaries. If the global business man-ager's primary objective is to achieveglobal-scale efficiency and competitive-ness, the national subsidiary manager'sis to be sensitive and responsive to thelocal market. Country managers playthe pivotal role not only in meetinglocal customer needs but also in satisfy-ing the host government's requirementsand defending their company's marketpositions against local and externalcompetitors.

The need for local flexibility oftenputs the country manager in confiictwith the global business manager. Butin a successful transnational like Elec-trolux, negotiation can resolve these dif-ferences. In this era of intense compe-tition around the world, companiescannot afford to permit a subsidiary

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manager to defend parochial inter-ests as "king ofthe country."

Nor should headquarters allownational subsidiaries to become thebattleground for corporate holy warsfought in the name of globalization.In many companies, the nationalsubsidiaries are hothouses of entre-preneurship and innovation- hiimesfor valuable resources and capabili-ties that must be nurtured, not con-strained or cut off. The subsidiariesof Philips, for one, have consistentlyled product development: In tele-vision, the company's first color TVwas developed in Canada, the firststereo model in Australia, and thefirst teletext in the United Kingdom.

Unilever's national subsidiarieshave also been innovative in product-marketing strategy: Germany createdthe campaign for Snuggle (a fabric soft-ener); Finland developed Timotei (anherbal shampoo); and South Africalaunched Impulse (a body perfume).

In fact, effective country managersplay three vital roles: the sensor and in-terpreter of local opportunities andthreats, the builder of local resourcesand capabilities, and the contributorto and active participant in global strat-egy. Howard Gottlieb's experience asgeneral manager of NEC's switching-systems subsidiary in the United Statesillustrates the importance of all threeof these tasks.

As a sensor, the country managermust be good at gathering and siftinginformation, interpreting the implica-tions, and predicting a range of feasibleoutcomes. More important, this man-ager has the difficult task of conveyingthe importance of such intelligence topeople higher up, especially those whoseperceptions may be dimmed by distanceor even ethnocentric bias. Today, wheninformation gathered locally increas-ingly applies to other regions or evenglobally, communicating effectively iscrucial. Consumer trends in one countryoften spread to another; technologiesdeveloped in a leading-edge environ-ment can have global significance; a com-

petitor's local market testing may signala wider strategy; and national legisla-tive initiatives in areas like deregulationand environmental protection tend tospill across borders.

Gottlieb's contribution to NEC's un-derstanding of changes in the telecom-munications market demonstrates howa good sensor can connect local intelli-gence with global strategy. In the late1980s, Gottlieb was assigned to buildthe U.S. market for NEAX 61, a widelyacclaimed digital telecom switch thatwas designed by the parent company inJapan. Although it was technologicallysophisticated, early sales didn't meetexpectations.

His local-market background andcontacts led Gottlieb to a quick di-agnosis ofthe problem. NEC had de-signed the switch to meet the needsof NTT, the Japanese telephone mo-nopoly, and it lacked many featuresthat customers in the United Stateswanted. For one thing, its softwaredidn't incorporate the protocol con-versions necessary for distributing rev-enues among the many U.S. companiesthat might handle a single long-distancephone call. Nor could tbe switch handlerevenue-enhancing features like callwaiting and call forwarding, which werevital high-margin items in tbe competi-tive, deregulated American market.

In translating the needs of his U.S.division to the parent company,Gottlieb had a formidable task. Toconvince his superiors in Japan thatredesigning NEAX 61 was necessary,he had to bridge two cultures andpenetrate the subtleties ofthe parentcompany's Japanese-dominated man-agement processes. He had to instilla sense of urgency in several corpo-rate management groups, varying hispitches to appeal to the interests ofeach. For instance, Gottlieb convincedthe engineering department that theNEAX 61 switch had been under-designed for the U.S. market andthe marketing department that timewas short because the Bell operatingcompanies were calling for quotes.

A transnational's greater access to thescarcest of all corporate resources,human capability, is a definite advan-tage when compared with strictly localcompanies-or old-line multinationals,for that matter. Scores of companies likeIBM, Merck, and Procter & Gamblehave recognizedthe value of harvestingadvanced (and often less expensive)scientific expertise by upgrading localdevelopment labs into global centers oftechnical excellence.

Other companies have built up andleveraged their overseas human re-sources in different ways. Cummins En-gine, for example, has set up its highlyskilled 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 thecorporate clerical work; and BectonDickinson, a large hospital supply com-pany, has given its Belgian subsidiarypan-European responsibility for man-aging distribution and logistics.

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Indeed, the burden of identifying, de-veloping, and leveraging such nationalresources and capabilities falls on coun-try managers. Howard Gottlieb, afterconvincingTokyo that the United Stateswould be an important market forNEC's global digital-switch design, per-suaded headquarters to permit his newengineering group to take part early onin the product development ofthe next-generation switch-the NEAX 61E. Hesent teams of engineers to Japan towork with the original designers; and,to verify his engineers'judgments, Gott-lieb invited the designers to visit hiscustomers in the United States. Theseexchanges not only raised the sensitivityof NEC's Japan-based engineers to U.S.market needs but also significantly in-creased their respect for their Americancolleagues. Equally important, the U.S.unit's morale rose.

As a builder, Gottlieb used this mu-tual confidence as the foundation forcreating 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'sfirst move was to put together a smallsoftware team to support local projects.Though its resources were limited, thegroup turned out a number of irmova-tions, including a remote software-patching capability that later becamepart ofthe 61E switch design. The cred-ibility he won at headquarters allowedGottlieb 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 butalso eventually in Asia.

In many transnationals, access tostrategically important information -and control over strategically importantassets - has catapulted country manag-ers into a much more central role. Aslinks to local markets, they are no longermere implementers of programs andpolicies shaped at headquarters; manyhave gained some influence over theway their organizations make impor-tant strategic and operational decisions.

ln most of today's truly transnationalcompanies, country managers and theirchief local subordinates often partici-pate in product-development commit-tees, product-marketing task forces, andglobal-strategy conferences. Even at theonce impenetrable annual top man-agement meetings, national subsidiarymanagers may present their views anddefend 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 ofmost national units of worldwide com-panies has been that of the imple-menter of strategy from headquarters.Because the parent company's acceptedobjectives are the outcome of discus-sions and negotiations involving nu-merous units, divisions, and nationaisubsidiaries, sometimes a country man-ager must carry out a strategy that di-rectly conflicts with what he or she haslobbied for in vain.

But a diverse and dispersed world-wide organization, with subsidiariesthat control many of the vital develop-ment, production, and marketing re-sources, can no longer allow the time-

honored "king of the country"to decidehow, when, and even whether his or hernational unit will implement a particu-lar strategic initiative. The decisionmade by the North American subsidiaryof Philips to outsource its VCRs from aJapanese competitor rather than theparent company is one of the most no-torious instances of how a local "king"can undermine global strategy.

At NEC, Howard Gottlieb spent about60% of his time on customer relationsand probing the market and about 30%managing the Tokyo interface. Gott-lieb's ability to understand and inter-pret the global sfrategic implications ofU.S. market needs - and the software-development group he built fromscratch-let him take part in NEC's on-going strategy debate. As a result, hechanged his division's role from imple-menter of corporate strategy to activecontributor in designing that strategy.

The Functional ManagerScanner + Cross-Pollinator + Champion

While global business managers andcountry managers have come into theirown, functional specialists have yet togain the recognition due them in manytraditional multinational companies.Relegated to support-staff roles, ex-cluded from important meetings, andeven dismissed as unnecessary over-head, functional managers are often

given little chance to participatein, let alone contribute to, the cor-porate mainstream's global activity.In some cases, top management hasallowed staff functions to becomea warehouse for corporate misfitsor a graveyard for managerial has-beens. Yet at a time when informa-tion, knowledge, and expertise havebecome more specialized, an orga-nization can gain huge benefits bylinking its technical, manufacturing,marketing, human resources, andfinancial experts worldwide.

Given that today's transnationalsface the strategic challenge of re-solving the conflicts implicit inachieving global competitiveness,

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national responsiveness, and worldwidelearning, business and country manag-ers must take primary responsibility forthe tirst two capabilities. But the thirdis the functional manager's province.

Building an organization that can uselearning to create and spread innova-tions requires the skill to transfer spe-cialized knowledge while also connect-ing scarce resources and capabilitiesacross national borders.

To achieve this important objective,functional managers must scan for spe-cialized information worldwide, "cross-pollinate" leading-edge knowledge andbest practice, and champion innovationsthat may offer transnational opportu-nities and applications.

Most innovation starts, of course,when managers perceive a particularopportunity or market threat, such asan emerging consumer trend, a revo-lutionary technological development,a bold competitive move, or a pendinggovernment regulation. When any ofthese tiags pops up around the world,it may seem unimportant to corporateheadquarters if viewed in isolation. Butwhen a functional manager serves asa scanner, with the perspective andexpertise to detect trends and moveknowledge across boundaries, he or shecan transform piecemeal informationinto strategic intelligence.

In sophisticated transnational, seniorfunctional executives serve as linchpins,connecting their areas of specializationthroughout the organization. Using in-formal networks, they create channelsfor communicating specialized infor-mation and repositories for proprietaryknowledge. Through such links, Elec-trolux marketing managers tirst identi-fied the emergence of cross-market seg-ments and NEC's technical managerswere alerted to the shift from analog todigital switching technology.

In the same manner, Wahib Zaki ofProcter & Gamble's European opera-tions disapproved of P&G's high-walledorganizational structures, which iso-lated and insulated the technical devel-opment carried out in each subsidiary's

lab. When Zaki became head of R&D inEurope, he decided to break down somewalls. In his new job, he was ideallyplaced to become a scanner and cross-pollinator. He formed European techni-cal teams and ran a series of conferencesin which like-minded experts from var-ious countries could exchange informa-tion and build informal communicationnetworks.

Still, Zaki needed more ammunitionto 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 staffamong the European technical centerin Brussels and the development groupsof P&G's subsidiaries. He used his staffteams to help clarify the particular roleof each national technical manager andto specialize activities that had been du-plicated on a country-by-country basiswith little transfer of accumulatedknowledge.

In response to competitive threatsfrom rivals Unilever, Henkel, and Colgate-Palmolive-and to a perceived consumertrend - P&G's European headquartersasked the Brussels-based research centerto develop a new liquid laundry deter-gent. By that time, Zaki had on hand atechnical team that had built up rela-tionships among its members so that itformed a close-knit network of intelli-gence and product expertise.

The team drew the product profilenecessary for healthy sales in multiplemarkets with diverse needs. In severalEuropean markets, powdered deter-gents contained enzymes to break downprotein-based stains, and the new liquiddetergent would have to accomplish thesame thing. In some markets, a bleachsubstitute was important; in others,hard water presented the toughest chal-lenge; while in several countries, envi-ronmental concerns limited the use of

phosphates. Moreover, the new deter-gent had to be effective in large-capacity,top-loading machines, as well as in thesmall front-loading machines commonin Europe.

Zaki's team developed a method thatmade enzymes stable iji liquid form (anew technique that was later patented),a bleach substitute efrective at low tem-peratures, a fatty acid that yielded goodwater-softening performance withoutphosphates, and a suds suppressant thatworked in front-loading machines (so

bubbles wouldn't ooze out thedoor). By integrating resources andexpertise, Zaki cross-pollinatedbest 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 brandlaunch. P&G's first European brandteam pooled the knowledge and exper-tise of brand managers from seven sub-sidiaries to draft a launch program andmarketing strategy for the new liquiddetergent Vizir, which ensured its tri-umphant rollout in seven countries insix months. P&G's homework enabledit to come up with a product that re-sponded to European needs, while Col-gate-Palmolive was forced to withdrawits liquid detergent brand, Axion-whichhad been designed in the United Statesand wasn't tailored for Europe-after ani8-month market test.

As a reward for his performance inEurope, Wahib Zaki was transferred toProcter & Gamble's Cincinnati corpo-rate headquarters as a senior vice pres-ident of R&D. He found that research-ers there were working on improvedbuilders (the ingredients that breakdown dirt) for a new liquid laundry de-tergent to be launched in the UnitedStates. In addition, the internationaltechnology-coordination group wasworking with P&G's Japanese sub-sidiary to formulate a liquid detergentsurfactant (the ingredient that removesgreasy stains) that would be effective inthe cold-water washes common in Japa-nese households, where laundry is often

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done in used bathwater. Neither grouphad shared its findings or new ideas withthe other, and neither had incorporatedthe numerous breakthroughs repre-sented by Vizir - despite the evidencethat consumer needs, market trends,competitive challenges, and regulatoryrequirements were all spreading acrossnational borders.

Playing the role of champion, Zakidecided to use this development processto demonstrate the benefits of coordi-nating P&G's sensitivity and respon-siveness to diverse consumer needsaround the world. He formed a teamdrawn from three technical groups (onein Brussels and two in the United States)to turn out a world liquid laundry de-tergent. The team analyzed the trends,generated product specifications, andbrought together dispersed technicalknowledge and expertise, which culmi-nated in one of Procter & Gamble'smost successful product launches ever.Sold as Liquid Tide in the United States,Liquid Cheer in Japan, and Liquid Arielin Europe, the product was P&G's firstrollout on such a global scale.

As Zaki continued to strengthencross-border technology links throughother projects, Procter & Gamble grad-ually converted its far-fiung sensing andresponse resources into an integratedlearning organization. By scanning fornew developments, cross-pollinatingbest practice, and championing innova-tions with transnational applications,Wahib Zaki, a superlative functionalmanager, helped create an organizationthat could both develop demonstrablybetter new products and roll them outat a rapid pace around the world.

The Corporate ManagerLeader + Talent Scout + Developer

Clearly, there is no single model for theglobal manager. Neither the old-lineinternational specialist nor the morerecent global generalist can cope withthe complexities of cross-border strate-gies. Indeed, the dynamism of today'smarketplace calls for managers with di-verse skills. Responsibility for worldwide

operations belongs to senior business,country, and functional executives whofocus on the intense interchanges andsubtle negotiations required. In con-frast, those in middle management andfrontline Jobs need well-defined re-sponsibilities, a clear understanding oftheir organization's transnational mis-sion, and a sense of accountability-butfew of the distractions senior negotia-tors must shoulder.

Meanwhile, corporate managers in-tegrate these many levels of responsi-bility, playing perhaps the most vitalrole in transnational management. Thecorporate manager not only leads in thebroadest sense; he or she also identifiesand 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 likeJohansson, Gottlieb, and Zaki, thoseindividuals who can translate companysfrategy into effective operations aroundthe world.

Successful corporate managers likeFloris Maljers, cochairman of Unilever,have made the recruitment, training,and development of promising exec-utives a top priority. By the 1980s, withMaljers as chairman, Unilever had aclear policy of rotating its managersthrough various jobs and moving themaround the world, especially early intheir careers. Unilever was one of thefirst transnationals to have a strong pcx)lofspecializedyet interdependent seniormanagers, drawn from throughout itsdiverse organization.

But while most companies requireonly a few truly transnational managersto implement cross-border strategies,the particular qualities necessary forsuch positions remain in short supply.According to Maljers, it is this limitationin human resources - not unreliable orinadequate sources of capital-that hasbecome the biggest constraint in mostglobalization efforts.

Locating such individuals is difficultunder any circumstances, but corporatemanagers greatly improve the odds

when their search broadens from afocus on home country managers to in-corporate the worldwide pool of execu-tives in their organization. Becausetransnationals operate in many coun-tries, they have access to a wide range ofmanagerial talent Yet such access-likeinformation on local market trends orconsumer needs that should cross orga-nizational boundaries-is ofl:en an under-exploited asset.

As a first step, senior executives canidentify those in the organization withthe potential for developing the skillsand perspectives demanded of globalmanagers. Such individuals must havea broad, nonparochial view ofthe com-pany and its operations yet a deep un-derstanding of their own business, coun-try, or functional tasks. Obviously, evenmany otherwise talented managers inan organization aren't capable of sucha combination of fiexibiiity and com-mitment to specific interests, especiallywhen it comes to cross-border coordi-nation and integration. Top manage-ment may have to track the careers ofpromising executives over several yearsbefore deciding whether to give themsenior responsibilities. At Unilever, forexample, the company maintains fourdevelopment lists that indicate both thelevel of each manager and his or her po-tential. The progress of managers on the"Al" list is tracked by Unilever's SpecialCommittee, which includes the twochairmen.

Once corporate managers identify thetalent, they have the duty to develop itThey must provide opportunities forachievement that allow business, coun-try, and functional managers to handlenegotiations in a worldwide context. Acompany's abilily to identify individualsvtfith potential, legitimize their diversity,and integrate them into the organiza-tion's corporate decisions is the singleclearest indicator that the corporateleader is a true global manager-and thatthe company is a true transnational. 9

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108 HARVARD BUSINESS REVIEW