As companies in emerging markets grow in number and in strength, they become tougher competitors for multinational companies, for which a dearth of intimate local knowledge is increasingly costly. Furthermore, the war for managerial talent is heating up in the developing world. Companies with reputations for developing local leaders are far more likely to attract the talent they need to pursue attractive growth opportunities. These opportunities, in turn, will increasingly be found outside of major cities, further heightening the talent challenge, since the practice of attracting expats to—and sourcing local talent from—the hinterlands is uncharted territory for many multinationals.
There is a better way, one which I call pursuing a “reverse expat” strategy. A reverse expat is a local manager who is placed at the helm of a Western-based company’s emerging-market business and then rotated through some of the company’s more mature operations outside of that market. Reverse expats spend a pre-determined amount of time (often a month, though it could be more, depending on their experience level and the complexity of the business challenges involved) immersed in the company’s established operations.
Typically, this involves exposure to major functional areas such as finance, HR, and marketing, as well as experience with different business units that together can provide a robust understanding of diverse customer needs. The reverse expat shadows and role-plays with the local leaders there intensely; observes and absorbs protocols, processes, and practices; and develops a plan for quickly adapting any relevant developed-market practices to the developing country. When executed effectively, this approach dramatically accelerates the development of local managers and ultimately creates a more competitive and sustainable organization.
Source: “Beyond expats: Better managers for emerging markets”
Original Publication: The McKinsey Quarterly
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