International experience is of great importance for leadership development as businesses grow anywhere in the world, but some international tasks are more interesting career opportunities than others, research shows. German and Swiss researchers who investigated the career paths of more than 160 CEOs at some of the biggest multinational companies based in Switzerland, Germany, the Netherlands, and the United Kingdom found four circumstances that determined if international experience accelerated career development:
- Period an executive had been on international assignment.
- Distance from company headquarters assignments had been.
- Kind of industry the executive worked in.
- Importance of global expansion for the business.
The study, by Dimitrios Georgakakis, Winfried Ruigrok, and Tobias Dauth, was published in 2016 in the Journal of World Business. According to David Wu, an executive recruiter who is CEO and managing partner at GMPTalent International, Shanghai, leadership development at multinationals follows patterns, and employees trying to establish a proven track record need to plan in advance to maximize international career opportunities. “You have to choose carefully,” Wu says. “You need to go where the company is going.”
Executives who have worked in a foreign country bring with them insights into different and new markets, a better understanding of how multinational companies works, and an international network of contacts. These kinds of executives gain their experience through international assignments coordinated through their company’s international mobility program. Of more than 600 multinationals polled by KPMG in 2015, more than 80% offered employees short-term tasks, typically lasting less than 12 months. Almost all of the people that responded (96%) offered long-term tasks, lasting one to five years, and almost half (47%) offered permanent transfers, defined as tasks of unlimited length.
The findings by Georgakakis, Dauth, and Ruigrok demonstrate that business goals, types of assignment, and selection may be aligned in more distinct ways. The researchers found that executives who gained a moderate level of global experience got a promotion the fastest because they developed the most powerful skills, kept in touch with important decision-makers at corporate headquarters, and established an international network of contacts in the company. Executives who were mostly located abroad were promoted less quickly than those who spent most of their careers in the country where the company was located.
Expats usually spend four to five years away from corporate headquarters, Wu said. If they stay on assignment a lot longer – eight or ten years – it’s not difficult to lose touch because management in the corporate executive suite will likely change over a decade. Other factors influenced this general pattern, the researchers found. Knowledge about markets located far from the company’s home country did not accelerate promotion to the top very much, but experience in markets adjoining the home country did.
The type of business an executive worked for also played a role. The global experience resulted in quicker career advancement for executives working for multinationals that had already invested a lot internationally than for executives who worked for companies with a low degree of globalization. The disadvantage of assignments far from corporate headquarters was less important at companies that strongly depended on global expansion to sustain growth and dominate their industry.
The consumer goods industry, to give an example, is highly international, while in the professional services industry this tends to be less the case, Wu said. One way to maximize the global experience, he said, is to select tasks to markets that are hubs for an area with growth potential. He added, “Go to strategic markets and gather regional and local-country experience,”. To maximize the global experience for leadership development, Wu suggests as well suggested employees:
- Assess their support to deal with the ambivalence and cultural differences that accompany assignments away from corporate headquarters.
- Diagnose the professional growth potential of a global assignment and how this growth potential fits their personal professional goals.
- Give priority to international assignments in markets that either generates a large portion of the company’s revenue or have significant potential to grow.
- Keep close contact with corporate headquarters while on assignment to explain challenges as well as opportunities of the assigned market.