Building a truly Global HR Organisation

Author: Kevan Hall

Global process and Local Loyalty

As organisations become increasingly more global, both employees and managers are drawn into international projects and initiatives. Yet at the same time their close relationship with the people they work alongside maintains strong local loyalties. The requirements of these local ties can often conflict with central organisational processes.

This is particularly true for HR professionals. Our survey conducted during training sessions over the last 5 years of 2,400 people working in major multinational companies across 17 Countries revealed that in fact HR was the only business function to express a preference for global policies and procedures while at the same time feeling their primary loyalty was to local colleagues. In contrast IT, for example, also had a preference for global policies and procedures, but this was coupled with a primary loyalty towards the central function.

So why does HR suffer most from this sense of divided loyalties?

Many activities within HR are rooted in an understanding of our local client groups. We work within national legislation and the majority of employees, even in global companies, have local roles. Local history, shared culture and personal relationships create strong local loyalty.

Yet, at the same time, we are expected to deliver global projects and to support increasingly international lines of business. Our functional reporting, career development and day to day activities cross distance, cultures and time zones.
It is tempting to create elegant organisation-wide structures and programs to deal with this, but in reality it is more sensible to think in terms of three distinct groups of employees – each with differing needs.

Firstly there is what we call the “global group� – a small group of senior people that have a firm focus on global activities. Within HR this might include senior management succession planning, core management development and compensation & benefits. The question is how to keep their loyalties clearly focussed towards the global organisation.

In my 15 years of working with organisations my best tip on how to do this came from a French HR director in the oil industry. His advice was to recruit people from around the word in proportion to your business. So if 10 per cent of your business is in Spain then 10 per cent of your managers should be Spanish. You should then mix them up and move them around - if they never leave Spain they will never become international managers. He concluded by saying that if you do these two things then “in no more than 50 years you will have a truly international management group�.
There are things we can do to accelerate this process, but it takes effort. As HR professionals one way we can help is to actively support networking and mobility in this group.

Secondly there is what could be termed the “locally loyal�. Recent Chevron Texaco adverts have featured the fact that more than 95 per cent of its people are locally hired. In even the most global companies at least 80 per cent of employees have jobs that are rooted in local operations. While we want these people to feel a sense of identity and pride in their international parent company there is little business advantage in making their lives more complex or constrained. Local solutions to local problems should be encouraged.

Finally there are those people who sit in the middle and have a daily need to balance the local with the global. These people, the “matrixed middle�, often began their careers on single site operations and have developed skills in face-to-face management in their own cultures. Today, however, they are likely to be working in complex organisations with multiple reporting lines, ambiguous objectives and changing priorities. They have to get things done in other cultures through remote and virtual teams - and without traditional line authority.

This group has critical training needs that are often not addressed by their organisation. Many are attempting to apply their old skills in a far more complex environment. Three symptoms of this are too much teamwork, too many meetings and too much communication.

Companies often use teams to solve issues that would be better resolved by empowering individuals or small groups. Teams are a complex and expensive way of building involvement and buy-in. We need to develop simpler structures for making decisions and ultimately this relies on trusting our global colleagues to make decisions without always involving everyone else.

Meetings are another problem. Partly driven by teamwork and partly by regular structures for involvement and coordination, managers are spending up to 50 per cent of their time in meetings – and as many as half of the topics discussed in these meetings are irrelevant to them.

Finally there is communication. While the average manager now receives over 130 incoming messages per day, as few as 10 per cent of these are things we need to know and act on. We need to take the risk of disconnecting from low added-value communication in order to generate time to focus on the issues that really matter.

At the same time the pressures to globalise continue, and this often leads to further centralisation. In our survey HR was the function with the second highest preference for global polices (after IT). Consistent processes often make our jobs easier and allow us to take a clearer overview of the organisation. In addition global projects also tend to be more visible and exciting.
But the risk is that we over globalise. We should always challenge the added value that will come from shared process, because this is often coupled with a loss of local flexibility.

We also need to be careful about compromise. When we compromise we each give up something in order to reach a solution and this is rarely a good strategy for developing truly global processes. I see a lot of HR teams, for example, spending months trying to come up with a mutually acceptable from of words designed to let everyone locally continue doing what they like – a largely pointless exercise.

As globalisation increases, the challenge is to be selective and focussed on how it is achieved; to develop new ways of working rather than just repeating what worked in the past. By balancing the demands of centralisation with the needs of local employees, HR has a major role to play.

Last updated: 12/04/05 05:05pm