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Executive leaders with intimate knowledge of their market are pivotal to commercial success. But what happens when a business expands overseas? Fabrice Coudray, Managing Director at Robert Half’s Executive Search Practice, explores why multicultural leadership and local knowledge matters, and how teams can be set up to boost international success and innovation.

In 2023, the market for business is global, and the only barrier for executive leadership teams is their ability to service demand. It’s an approach that requires a deep understanding of foreign markets, including the nuances of language, communication, and customs of each business community.

Directors can often spend years abroad, setting up new ventures, building relationships and reporting back to their headquarters. But the international model is steadily evolving, with many executive teams now recruiting native experts with local knowledge. Someone born and brought up in a country will understand more than a well-meaning expatriate, and they can join the board, too.

Following the Covid-19 pandemic, the potential for diverse leadership teams has also increased. Businesses don’t need executives to sit in one country anymore; they can benefit from people being anywhere in the world, connected by technology and coming together four times a year. Multicultural leadership teams are certainly in demand, and now they are easier to build.

How to develop a multicultural leadership team

Let’s say a business wants to expand beyond their home country and into new markets. They need to get out of the mindset they’ve had for years – trading locally – and the best way to do that is to recruit executive leaders from other countries. The diversity of cultures, brains and mindsets will certainly help them to perform better, kick-start their international ambitions and boost innovation.

But it would be a mistake for them to say: ‘Tomorrow, we will recruit some foreign people onto the board because it’s a good thing to do.’ At the beginning of the process, when the chief executive is considering the right approach, it’s important to address the right questions and recruit new leaders in alignment with the strategy:

  • What are your plans for the next five years?
  • Where do you do business and where are you looking to expand?
  • How are you planning to do this?
  • Does it make sense to have different nationalities on the leadership team?
  • Would you be open to this approach?

If the business is in France and its market is local, for example, no problem: the CEO could recruit a French national to join the board. But if they want to expand further into European markets, or move into Africa, Asia, or America, it will be good to bring in new expertise, knowledge and spirit. This is especially true when looking for specialist skills.

A European company exporting and importing food might need to understand the sourcing of fruit from South America, for example. Yes, they could do it from a desk in London, Paris or Frankfurt, but would they fully understand growing seasons, farming challenges, and local commercial realities? Much of that experience will sit with people in the country of origin; people who could also become part of a mobile, or distributed, executive team.

Diversity is the difference

A multicultural and diverse leadership team should certainly follow the strategy and ambitions of a business, not the other way around. But if the plan is to expand overseas and grow in different markets, then specialist knowledge, combined with flexible ways of running a business, will make all the difference to its fortunes. If two companies with the same turnover, and the same international goals, started this journey today: one with an executive team from the same country, and the other with a combination of nationalities, I believe the second business would develop market share more quickly. In the quest for global expansion, local knowledge really does matter and is vital to boost innovation.

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