Today, both SMEs and MNCs have equal potential to grow their operations into foreign markets, either to offshore sections of their corporate structure, or expand their customer base to new markets.
Such expansion more often than not requires top leadership that can navigate operating in an international environment where local customs and foreign stakeholders can greatly impact business outcomes.
So how important is it today for leaders, particularly CEOs, to have prior international experience?
At the very top of Australia’s business world, it would seem the case. Robert Half’s CEO Tracker (which profiles the background of ASX 200-listed CEOs) found that 59% of ASX 200-listed CEOs have worked internationally.
The responsibility of positions such as the chief executive is changing in a highly globalised business environment where it is not only expected of senior leaders to have operated in an international capacity, but more importantly be able to utilize that experience to deliver on company goals.
If you’re looking to hire your next business leader, here are some examples that showcase the return on global tenure.
The role of chief executive calls for a global outlook
Commercial activity in international markets is critical for many Australian businesses – not just through import and export activity, but also through licensing, and research and development.
A 2017 Austrade survey of 1,068 Australian businesses, found that 88% were engaged in international activities across 90 different markets . One in three of these companies trade across multiple countries, adding additional layers of complexity to their operations.
Exploring, developing and maintaining a stake in overseas markets demands leadership with experience that extends well beyond Australia. Being able to recognise the opportunities that lie offshore is just part of the picture. When a business leader has first-hand experience of different working cultures they are better equipped to guide the company to success in unfamiliar markets.
Understanding global markets
In a globalised business world, international experience adds a dimension to the chief executive role – the ability to either assimilate into or understand international working environments.
Even small nuances such as awareness of local laws, regulations and even customs, can give a business leader valuable insights when a company is preparing to move into new markets. Having a network of overseas contacts can smooth the path as a company explores fresh opportunities.
An understanding of the business practices, and in particular, the differing levels of emphasis placed on various aspects of doing business – be it customer relations or access to discounting, can all carry weight when it comes to successfully trading beyond Australia’s borders.
The ability to see through a variety of lenses
An overseas posting can bring with it a degree of culture shock, especially for those who may only have spent limited time living outside Australia.
Working overseas means dealing with new and unfamiliar people, regulations and experiences every day. This can help build resilience and increase problem-solving skills. The need to navigate a different environment also encourages quick thinking and adaptability, qualities that would be essential to look for in an effective chief executive.
Working with people from diverse backgrounds also brings diverse perspectives. This can be invaluable preparation for the chief executive role as it allows a business leader to see the company and its trading partners through a variety of lenses.
Candidates who have taken up opportunities to work internationally can offer companies a vast array of skills and experiences, all of which are particularly favourable in the position of chief executive. Working abroad often calls for the need to step outside of one’s comfort zone, especially if assignments are based in markets where the social culture is distinctly different from Australia. But the business intelligence that can be gained from the experience is tremendous.
In a highly competitive business environment, finding candidates who have the ability to learn best practice from a variety of markets – and implement them here in Australia, can be highly beneficial when trying to fill the top job in a company.