The key to becoming a better international business leaderNov 09, 2018 09:36AM ● By Kathleen Maris
By Dr. Daniel Ostergaard
International Business Professor, Darla Moore School of Business, University of South Carolina
South Carolina has spent years developing its reputation as an international business destination, both as a launching pad for American firms that want to expand their operations and sales overseas as well as for foreign firms seeking an American location from whence to bolster their U.S. presence. For all the right reasons, this state has become a hub for international business.
As the importance of international business to the state’s economy has grown, so too has the need for both public and private sector leadership who not only understand the complexities inherent in our modern trading system but who can navigate and lead the state into tomorrow.
So, just what does it take to be a successful international business leader in the 21st century?
The first step is realizing that international business is not simply an extension of domestic business. If we lived in a world where culture, politics, and myriad other variables were negligible, we should be able to take our firm’s strategy and extend it across borders. In this scenario, we would be doing the same thing we do at home but on a larger scale. However, we know that this is not the case.
Borders do matter. Culture, politics, and social influences all change the nature of business as we travel between countries and sometimes even between regions of the same country. Our ability to understand these differences and then capitalize on them to our firm’s advantage is inherent in the next aspect of successful international business leadership: a transnational mindset.
At its most basic, a successful international business leader must possess a transnational mindset. This mindset is more than a simple affinity for all things international.
Business leaders exhibiting this mindset find themselves balancing an array of often conflicting information. Successful international business strategy requires us to analyze the world as a global market (and thus exhibit a global mindset) while at the same time understanding national differences (and thus possessing a local mindset as well). This juxtaposition and tension between global and local are critical to understanding when to adapt business strategy to local conditions and when a more global strategy is more appropriate.
The international business leader’s job is inherently complex. Distilling this complexity into actionable strategy is made more difficult under conditions of uncertainty and incomplete information. The marginal cost of “complete” information is often too costly in terms of money and/or time. Thus, these leaders must analyze the information available and then make calculated decisions.
And on what are these decisions based? Inevitably, the greatest tool in the international business person’s proverbial tool box is the development of a transnational mindset.
When we speak about transnational mindsets as essential to international business leadership, the question arises, “How do we acquire this transnational mindset? Is it nature or nurture?” That is, are you born with it or is it something that can be taught? I would suggest that it is a combination of the two.
The nature component of this acquisition is based on purely cognitive processes that you are wired to perform. In other words, if your mind were a computer chip, do you have the processing speed and memory necessary to perform calculations and comparative analysis? Do you have some innate ability to understand differences and the patience to become a life-long learner? Given some basic adaptability and willingness to learn, the nurture component becomes the primary driver toward a transnational mindset.
With practice, the international business leader learns to seek and then process multiple streams of information from contradictory sources. This leader is hungry for opposing viewpoints and interpretations of events and data. This same leader is aware of their own cultural biases when interpreting those of others. The transnational mindset sheds light into decision-making that may otherwise be obscured by insufficient information or conflicting reports.
While not foolproof, development of the ability to view situations through the lenses of all concerned parties becomes a powerful tool. This is not necessarily an acceptance of these alternative worldviews, but it is an inherent contextualization and awareness that they exist.
In the classroom, we often speak in terms of globalization versus localization. Rather than a fully globalized world where there are no political borders or cultural differences or in a balkanized world of conflict and strife, we find ourselves doing business under fluid conditions.
Fifteen years ago, Harvard economist Pankaj Ghemawat called this a state of semi-globalization. The push and pull of various forces are on the one side always pulling us closer together (think ever faster transportation, proliferation of communication devices) while at the same time pushing us further apart (e.g., extremism, fear). Successful international business leaders must learn to navigate these opposing forces and understand where we are at any given time in order to develop a firm strategy that is also dynamic and capable of evolving over time.