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Emerging multinationals (EMs) are globally active enterprises originating in such emerging economies as Brazil, South Africa, India, the People’s Republic of China, Turkey, Nigeria and others. They are new poles of business excellence achieved via inspiring leadership and innovative approaches to traditional and tough problems.
Brazil’s Embraer, India’s Infosys, China’s Neusoft, Jordan’s Aramex and other such companies carry the potential to catalyse economic growth. They also provide a bridge to the developed world by advancing responsible business practices. Leaders of many of these companies understand the positive role business must play in its societies, and this understanding has built trust with domestic policy-makers and the public.
The Global Agenda Council on Emerging Multinationals operates on the model of multistakeholder interaction, insight and impact. In its fourth year now, the Council exists to explore, build and share insight on private challenges that are relevant to EMs. The challenges include talent, innovation, governance and protectionism, among others. The Council aims for impact by bringing creativity and leadership to address certain key public challenges in society. These include, for example, unemployment, 21st-century education, sustainability and corruption.
The Council on Emerging Multinationals seeks to construct a community of EM-interested thought-, practice- and policy-leaders from academia, business, civil society and government. Accordingly, the Council is composed of academic experts in global business from top business schools, chief executives from leading emerging multinationals and policy advisers in government and intergovernmental organizations. Through collaborative activities, the Global Agenda Council on Emerging Multinationals aspires to inform better practice, policy and theory.
In 2011-2012, the Council chose to focus on three workstreams: practice, policy and research. In this context, the role of emerging multinational enterprises in tackling the challenges of youth unemployment and the broader issue of talent in emerging multinationals received most prominent attention and support.
TEN Youth – Train Employ Nurture 10 Youth: A Campaign for Private-sector Investment in Our Future
At the World Economic Forum Annual Meeting 2012 in Davos-Klosters, the Global Agenda Council on Emerging Multinationals, in collaboration with the Global Agenda Council on Youth Unemployment, launched TEN Youth, a pilot initiative aimed at urgently addressing youth unemployment by creating a new approach to talent development for the private sector. The key objectives of TEN Youth are to assist enterprises in accessing new talent, facilitate career development for youth and build trust between the private sector and youth.
The number of unemployed young people aged between 18 and 24 is increasing with alarming speed. According to the International Labour Organization, over 75 million young men and women were out of job in 2011. Youth unemployment represents not just an economic challenge; it underlines the core issue of young people’s confidence.
The Global Agenda Council on Emerging Multinationals called on all multinational corporations to leverage their vast capabilities and resources to meet the global challenge of youth unemployment, highlighting that if emerging and established multinationals can “lean forward” on this challenge, their supply chain and channel partners might well be inspired to follow.
The pilot’s targeted youth includes unemployed men and women between the ages of 18 and 24 who show promise, demonstrating ability as self-starters who are reliable, hard-working and adaptive, as well as those who are emerging, such as high school or college graduates seeking to develop a commercial skill.
Participating TEN Youth enterprises should be: 1) profitable and growth-oriented (i.e. aiming for high performance); 2) human capital anchored (i.e. investing in and leveraging human capital); 3) brand oriented (i.e. stressing reputation and public relations); 4) sustainability oriented (i.e. thoughtful of the bigger picture and the future).
Enterprises participating in the TEN Youth initiative pledge to: 1) employ youth in a role with a career opportunity for at least two years; 2) mentor a youth employee for at least two years; 3) commit to hiring youth in a full-time role or assisting with placement in another company. The goal of TEN Youth is to reach 80% or greater employment retention after two years.
Selected companies from among the Members of the Global Agenda Council on Emerging Multinationals – including Aramex from Jordan, Educomp Solutions and Infosys from India – became the first enterprises to engage in this pilot. At the Annual Meeting 2012, such multinational corporations as Hilton and DHL also joined the first cohort of change-makers. The Council’s ambitious goal is to engage up to 1,000 emerging and established enterprises in TEN Youth by the end of 2012. The Council calls on all Members of the World Economic Forum to proactively take part in this unique initiative.
Recruiting, Developing and Internationalizing Talent in Emerging Multinationals
In addition to the TEN Youth pilot project, the Global Agenda Council on Emerging Multinationals initiated a practice workstream, with the broad objective of creating a community of leaders from the most dynamic emerging multinationals to meet under the aegis of the Council to share experiences and the latest knowledge on a range of issues of importance.
In 2011-2012, one such issue was talent, a crucial factor in sustaining the growth and performance of emerging multinationals. The Talent for Emerging Multinationals Project is closely linked to certain World Economic Forum initiatives, e.g. Talent Mobility (http://www.weforum.org/s?s=talent+mobility) and Emerging Best Practices of Chinese Globalizers (http://www.weforum.org/s?s=globalizers), as well as to the work undertaken in the context of the Forum’s community of Global Growth Companies.
On 3 March 2012, with strong support from Infosys, the Council organized and hosted a workshop on Talent in Emerging Multinationals. Its goal was to discuss and share practices on how emerging multinationals attract, develop, scale up, internationalize and professionalize talent at home and abroad. Participants were truly global, coming from 16 countries in Africa (Nigeria), Asia (China, India, Korea), Eastern Europe (Armenia, Russia, Ukraine), Western Europe (Britain, France, Spain, Sweden), the Middle East (Lebanon, UAE), South America (Brazil, Chile) and North America (USA).
Attracting and recruiting talent at home and abroad
The workshop’s first area of focus related to how emerging multinationals can attract and recruit top talent, at home but especially abroad. To do so, it was advised that emerging multinationals approach the talent market in the same way they might approach the product market. Top talent looks for differentiation, learning, growth and compensation. To attract top talent, emerging multinational enterprises must have a core value proposition for talent. They need not be “big in the minds” of the target group they want to recruit. Building the brand for the targeted audience is imperative.
To successfully recruit talent, emerging multinationals must articulate their core values well so they recruit for fit, not just for skills and competence. Skills and competence are relatively timely; core values are relatively timeless. To attract the best, top management must be committed and devote time to recruiting top talent. Once the talent is in, the multinationals need to ensure top management is committed to mentoring the talent.
In terms of recruiting abroad, emerging multinational enterprises should be relevant to the local geography and must explain this relevance to target recruits. They are advised to look at first-tier students in second-tier universities (the first-tier at top universities will have many options to consider) and impress upon them the fact that emerging multinationals may provide more dynamic growth and international career experience.
Last but not least, emerging multinationals must bear in mind that human resource directors may create policies, but business leaders must enact practices.
Developing and scaling up talent at home and abroad
The second significant area of focus revolved around the question of how emerging multinationals may develop and scale up talent at home and abroad.
To succeed, emerging multinationals must develop a set of “21st-century skills” – critical thinking, problem solving, communication and teamwork. These skills are increasingly recognized as being critical in an evolving workplace, yet they are not skills that schools and universities have been teaching sufficiently well (especially in emerging economies). Such skills highly influence employees’ productivity and contribution to enterprise performance.
Given the time and expense needed to develop tomorrow’s leaders, emerging multinationals must identify the right subset of people and invest in them more. While training and screening should be inclusive, tailored development and coaching should be more specific.
Emerging multinationals might find it effective and efficient to tap into a talent development ecosystem with outsourced partners such as universities and schools. Global exposure can be key to talent development in an emerging multinational.
It is essential to maintain an emotional component even as an enterprise grows and becomes big. Emerging multinationals wish to grow but one of the biggest challenges in doing so is losing the “heart” of the small company. Today’s graduates are looking precisely for that “heart”. Articulating social purpose, customer relevance and contribution to country should not be underestimated.
In sum, to develop and increase talent at home and abroad, emerging multinationals should: 1) create an enabling platform; 2) define a compelling capability-building strategy (based on client and market needs, the company’s value system and the talent’s aspirations); 3) take risks through employing “unusual hires” (talent with non-standard resumes). Top management must devote a considerable proportion of their time (at least 20%) to developing and mentoring talent.
Internationalizing and professionalizing talent
Based on the premise that talent is the capability and culture carrier, and that global mobility is an important albeit controversial issue, the workshop also focused on the question of how emerging multinationals internationalize and professionalize talent so the firm can learn and succeed in cross-border operations.
The leadership of an enterprise cannot internationalize its talent if it does not intend to internationalize the company. The enterprise must adopt a global, geocentric orientation (e.g. IBM) if its talent is to become “cross-border fluent”.
Emerging multinationals predominantly originate and move people from emerging to established economies, yet internationalizing talent should happen in both directions. An important factor to bear in mind is that the world is ready to move goods, money and technology across borders, but not yet people.
If international rotation does not advance careers and responsibilities within the enterprise, especially at headquarters, then top talent will less likely rotate. Career incentives must be compatible with the firm’s aspiration to internationalize talent.
For emerging multinationals to successfully internationalize their talent both at home and abroad, they must articulate core values and ensure they are not compromised. Otherwise internationalizing might mean localizing and dispersing, rather than forming an integrated network.
Emerging multinationals should take a long-term view and internationalize their pool of talent before they actually need it. This means they should proactively identify and build up the skills they will need in the future, including flexibility and approachability.
Looking ahead to the next term, the Global Agenda Council on Emerging Multinationals aims to deepen and advance its initiative on youth unemployment. It intends to organize a workshop, possibly in China in 2013, on the topic of innovation in emerging multinationals. The Council also hopes via fieldwork to explore factors that explain the success or failure of emerging multinationals in the transfer and integration of capabilities in cross-border expansion (south-south, south-north and north-south).
By 2014, emerging economies will account for 51% of global GDP. Their populations have rising aspirations, confidence and capabilities. Emerging multinationals will thus play an increasingly important role in addressing their regions’ economic, social and related issues. The Council will support them in their inspiring journey.
The opinions expressed here are those of the individual members of the Council and not of the World Economic Forum or any institutions to which they are affiliated.