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The art of management in emerging markets, Part 1

by Alan Royal

Management is not a science

In the late 80s and early 90s many large companies hired MBAs directly from top management schools to executive fast track programs. The underlying premise: these individuals were at the top of the intellectual ladder, and had obtained a unique set of management skills that would enhance a company's performance over time.

This initiative failed for most companies and was quickly abandoned because, while these individuals might have had a strategic value proposition, they clashed with existing culture-based management practices. These individuals might have brought a unique set of management processes, but they were unable to drive them into the existing corporate culture.

The art of adapting

How often, in the screening process for a managerial job, does a company perform behavioural testing of candidates to determine if they are a good "cultural fit"? This reflects an assumption that both company and managerial candidate bring a fixed set of management skills. The testing is to determine if the candidate's management style conforms to that of the company. The ability of a potential hire to adapt to a new management environment is largely ignored.

Nowhere is this more relevant than in expatriate managers taking up assignments in emerging markets. These markets are, for the manager, new and strange, which brings their learned, fixed set of management practices sharply into focus.

Martin Heidegger, in his book Being and Time, argues that a "factual situation always surrounds a manager. Thus a manager is thrown into a situation that is already there. And this means that the manager is not the cause of the situation - in fact, the situation becomes the ground upon which a manager 'finds himself'".

A manager either relies on his taught set of management practices or chooses to adapt his management to become relevant and effective to the environment in which he is put.

Failure does not need to be an option

A Christ University study found expatriate manager failure rates in emerging markets as high as 70%. More commonly, studies suggest the failure rate to be 50%. This is ridiculous. Firstly because the average annual cost for an expatriate to a company is often in excess of US$500,000. Secondly because every expatriate failure results in an incremental loss of trust from the locals: 50% of the foreign company expatriate executives they work for fail to become relevant.

This series focuses on how an expatriate can enter an emerging market and embrace the process of reinvention of their management practices to become relevant and effective. It is a step-by-step process based on first person accounts, where the true art of management is applied to some of the most unfamiliar and complex management situations.

This shift of mind-set - from management as a fixed set of skills, to management as an elastic set of skills - will not only prove to be an asset in an emerging market context, but also in taking on a managerial position in complex corporate environments. In both situations there is an encounter with the strange and unfamiliar!