About ten years ago, right after NAFTA took effect, I had the idea of locating a Flextronics manufacturing plant in Mexico. I clearly remember people saying to me, "Don't do it. That's a siesta culture," implying that any labor or other cost savings to be gained there would be offset by the workers' laziness. I made a trip anyway and checked out three factories, one making cables for the auto industry, one making toasters, and one doing...
electronic assembly. I came away thinking, "It's not humanly possible to work harder than these people or to produce products faster than this." We built a plant near Guadalajara in 1997, and within five years, its revenues grew to more than $1 billion.
I tell the story because it underscores the corrosive effect of stereotypes and how they undermine good decision making in a business that needs to globalize. To me, the most important criterion for a business leader is that he or she be free of such strong biases. If I heard evidence of that kind of stereotyping in conversations with a job candidate, that would be a big red flag.
Usually, of course, the stereotyping is more subtle. Managers often pick up the impression that the Chinese are good at this, the Germans are good at that, and so on. But I have learned that in every place we operate, in every country, the people want to do a good job. They simply need training. If you show people, for instance, what great manufacturing is, they will work toward it -- and I have found that there is no place where people can't do a world-class job.
This isn't to say that we approach every region with a cookie-cutter uniformity. We may need to train workers differently in different parts of the world. We discovered this early on in Guadalajara because the demographics of Mexico are very young —- a large percentage of the workforce is under the age of 35. The contrast with Japan, a country with a relatively old workforce, is striking. Training becomes a different proposition when you cannot rely on tacit knowledge transfer from seasoned 50 year-olds to greener 35 year-olds. Mexico might require a more intense training regimen or a longer time commitment.
Running a global company also means learning how different countries are governed, and being able to work with their leaders. This is particularly true for a manufacturer like Flextronics, because most countries, whether developing or developed, tend to want the manufacturing jobs we have to offer. As a consequence, we must be in frequent contact with senior government officials, addressing issues like tax holidays and dollars for training. Consider an issue that the head of our European operation is currently dealing with -- a few years back, the Hungarian government agreed to give us a 10-year tax holiday as the result of a $50 million capital investment there. The problem is, Hungary is now trying to gain admittance to the European Union, which won't allow such tax holidays. What will we do about this? It will get worked out, but it's complicated. The head of European operations has to have the skills to deal with such high-level political issues—skills that don't develop in people automatically.
How do we choose leaders with the cultural breadth to conduct such negotiations and to get past the kind of stereotypes I discussed earlier? The most capable executives I've known have traveled extensively, learned other languages and have often been educated abroad. But most of them gained their broad perspectives in the course of their work. Flextronics' top management team orchestrates manufacturing activity in 28 different countries and leads sales operations worldwide. The peer group includes a CFO from New Zealand, a CTO from Grenada, a sales executive from Ireland, and business unit heads from Sweden, Great Britain, India, Singapore, and Hong Kong. It's hard to work in such an environment and remain provincial in your outlook.
Increasingly, though, we are seeing that our more junior executives have this kind of multicultural exposure as part of their upbringing. Today's 30 year-olds grew up in a different world from their parents', with much greater ease of travel, more education abroad, and technologies like the Internet and cell phones affording more lines of global communication. Dream rÉsumÉs that show, say, an upbringing in Paris, a Harvard MBA and summer internships in Japan are becoming more and more common among young job applicants.
As a result, there is much more uniformity among young managers around the world. Imagine pulling together 30 people from 30 different countries, all in their thirties. Chances are, they would all interact quite easily —- and that isn't because young people tend to be fairly open-minded. It's because there's been a major shift in thinking from the last generation. And that shift will make the task of developing global leaders easier with each passing year. In another two decades, an American is not going to stop to consider that he is dealing with someone from Japan. A strong leader will be just that —- a strong leader —- whether Brazilian or Malaysian. The global part of leadership will be a given.
ABOUT THE AUTHOR:
Michael Marks is CEO of Flextronics Corp., a provider of electronics manufacturing services. The company's headquarters are in Singapore with locations in more than two dozen countries.
To read more articles like this one, visit HBS Working Knowledge, an online source for business analysis, information and research.
© 2003 President and Fellows of Harvard College