Global leadership is a ubiquitous term and concept used to describe the process of leading teams and companies involved in businesses that aren’t bound by national borders.
Those who lead globally are tasked with navigating the complexities of doing business across the international landscape. They are the ones fostering the teams working in and serving foreign markets, greasing the wheels of global commerce, trade, and relations.
Global leadership is an all-encompassing focus on creating and sustaining cross-culture relationships, leveraging cross-cultural business practices, and leading people and teams in intercultural environments. It’s a highly dynamic business environment where constant change is the rule, and where new and different challenges and opportunities emerge at every turn.
Global Leadership is a Standard Part of Doing Business
The ripple effects of the global pandemic that were felt in supply chains and labor shortages … the conflict in Ukraine… rising commodity prices… foreign and domestic trade regulations… changing tax laws—they’re but just a small example of the innumerable factors that impact global business operations and the people who lead them.
As a result, a global leadership skillset has moved from being a mere consideration for leaders to a drop-dead requirement. Many of today’s businesses are either firmly intrenched in global business or making serious inroads to enter or expand their operations on a global scale. And for good reason – global business has never been bigger, stronger, or more influential than it is today.
And it’s going nowhere but up – at break-neck speeds. According to the United Nations Conference on Trade and Development, the value of global trade increased to $7.7 trillion in the first quarter of 2022 – a whopping $1 trillion more than the same time just a year before.
It comes as no surprise that leaders equipped to handle whatever the international landscape throws at them are valued and in-demand. Their leadership, after all, can mean the difference between sinking or swimming in international waters. You’ll often hear them referred to as “bridge-builders,” and for good reason. They’re the pros who are connecting resources and talent on an international scale while navigating cultural, language, and geographic barriers.
It’s a ambitious endeavor and one that’s not without its challenges. If you want to lead on a global scale, you better be prepared.
Why Every Leader Isn’t Necessarily a Global Leader
Myth: Successful domestic leaders naturally make successful global leaders.
Reality: Global leadership is an altogether different animal, so those experiencing success domestically aren’t necessarily destined to succeed at the global level.
Shocked? You’re not alone.
There’s long been a general consensus that if you’re a successful leader, your skills will naturally translate into a global leadership role and you’ll become, by extension, a successful global leader. But this just isn’t the case. Instead, the evolution from domestic leader to global leader requires carefully implemented strategies that take into account differences in foreign markets and cultures and a thoughtful examination of what it means to lead at the global level.
Sure, those skills you’ve amassed as a leader will certainly be of value, but there’s a whole new skillset you’ll need to master before you can begin leading with confidence on a global scale. And here’s why:
Not All Domestic Business Models Have Universal International Value
Many global companies started as domestic companies that expanded over time to snag a share of foreign markets. Because of this, there’s been countless companies who have ventured into global operations with their domestic leadership team at the helm. Armed with the notion that their leadership skills would naturally transfer and that their business models would have universal value, these leaders soon discovered that leading in a global market requires an additional set of considerations.
Expanding to a global market requires more than a “copy and paste” business plan approach, and business leaders must be prepared to pivot their strategies when setting up shop in new international markets. Otherwise, they’re destined to collapse under the weight of the unforgiving global marketplace.
A prime example is Airbnb’s foray into the Chinese market – largely considered one of the most epic examples of international expansion fails in recent years. For their part, they switched things up to accommodate this foreign market by developing a China-specific interface and map. They even eventually changed the name to Aibiying. But they failed to consider the cultural differences, many of which just couldn’t be overcome. For example, most Chinese were simply not comfortable sharing their homes with strangers. And guests weren’t used to being asked to tidy up and take out the garbage upon leaving. (Chinese competitor Tujia didn’t forget this detail and offered cleaning services for all guests.) And while Airbnb offered 24/7customer support, many complained about a lack of Chinese-speaking customer support specialists. Airbnb attempted to right these glaring faux paus, but it was a case of too little, too late. Their Chinese expansion was shuttered in late 2022.
Starbucks was another company that fell victim to an American business model that didn’t always translate overseas. Turns out Australians did not take to our affinity for sugary drinks and weren’t all that impressed with Starbucks’ to-go focused cafes. Australia has a unique coffee culture that includes their own distinctive coffee drinks and a custom of socializing at coffee houses, neither of which were considered by Starbucks. By failing to adapt their business model, Starbucks suffered $105 million in losses in its first seven years in Australia, and by 2008, had closed nearly two-thirds of its Australian locations.
Cultural, political, and ethical issues take on a whole new meaning when conducting global business.
Despite the many articles that encourage leaders to simply “think globally” or business consultants who use wishy-washy, abstract terms like “adaptable” and “resilient” to describe the set of qualities global leaders must have, today’s global business leaders didn’t achieve success by simply waking up one day and declaring that they now had a “global mindset.”
Instead, success in global leadership involves possessing a very specific skillset that includes understanding and appreciating the complexities associated with conducting business on a global scale.
Today’s successful global leaders are prepared to skillfully and confidently:
- Connect resources and talent across cultural and political borders
- Discover innovative ways to create value in foreign markets
- Create and lead inclusive, dynamic, and diverse teams that transcend boundaries, cultures, markets, and philosophies
- Acknowledge and respect religious, cultural, and political differences
- Consider ethical issues
- Understand the impact of world markets and trends
- Consider how events and issues taking place on the other side of the world affect talent, resources, and the flow of business
- Adhere to, and comply with, domestic and international laws, federal and state regulations, environmental laws, civil rights laws, and more
Today’s global leaders must be able to shift their focus, their style, and their strategies to find solutions in the complex, considerable, and constantly changing global marketplace. Despite what many Americans may think, our way of life and of doing business don’t often translate to foreign markets.
Consider cultural differences, for starters. Do a quick Google search and you’re sure to find a bevy of embarrassing corporate blunders by American executives who didn’t take cultural differences into account when conducting business internationally. A good example was a case of an American businessman who met with a Saudi company to conduct negotiations for a business deal. Upon greeting him, the Saudi executive offered the American executive a cup of coffee, to which the American declined. The American was unaware that doing so is considered rude in the Saudi culture, and his actions led to a complete breakdown of relations between the two companies and the death of a business partnership.
Global leaders must take into account history, customs, traditions, religion, and codes of ethics when conducting international business and leading international teams. Even issues such as gender must be considered because women in many parts of the world don’t have the same rights as men.
Ethics in international business must also be on the forefront of a global leader’s mind at all times. Working standards and conditions, environmental concerns, child labor, human rights, corruption – they’re just the tip of the proverbial iceberg when considering the ethical implications of doing business with other countries.
For example, in recent years, a slew of American companies, including Yahoo, LinkedIn, and Uber, have chosen to pull out of China due to security concerns, geopolitical tensions, and human rights issues. And a number of U.S. retailers, including H&M and Nike, were forced to address allegations that they sourced their cotton from Xinjiang, known for its forced labor practices.
Global leadership means considering any and all issues that may affect how business is done and how teams are led at an international level.
How to Prepare to Lead On a Global Scale
A one-day conference on global leadership isn’t going to make you the kind of expert who can handle the rigors and the challenges associated with leading on a global scale.
A master’s degree in organizational leadership with a focus in global leadership or the perennial MBA in international leadership have become standard among business pros who want to expand upon their skillset and elevate their global leadership skills.
It’s typical for global leadership programs at the graduate level to be taught by seasoned business professionals who bring extensive insight into the classroom. And many of these programs allow students to complete both domestic and international practical learning experiences to gain in-depth, first-hand knowledge about leading and managing across borders.
There are many other ways to build your credentials as a global leader. Work overseas, of course, learn another language, and find opportunities to keep learning. Each year, the Global Leadership Summit draws emerging and seasoned leaders from all over the world who want to learn about new and existing issues, challenges, and opportunities associated with global leadership. It’s broadcasted to 725 locations across the U.S. and Canada and to more than 130 countries and is translated into 60 languages.