For decades multi-national companies have expanded their businesses abroad. They have had plenty of time to practice international organisation. On the other side we see global organisations created instantly on the back of a technology platform, but with a very small physical geographical foot print. The country manager discussion should therefore be obsolete, outdated and no longer relevant.
But is that really true?
The value at stake is high. A country manager who is perceived as poor performing can inhibit performance in the entire country organisation, cause key talent to leave, or even worse, work directly against global business objectives in pursue of his/her own aspirations. So it is really important to get this one right.
Several events can trigger the country manager fire to ignite. Often, a company needs to enter a new country and put in place a CEO on the ground. Alternatively, the country manager is already in place but the surrounding global organisation changes around him. Or, the country manager himself has a desire to change his role to better fit with his ambition or skill set.
For example, a global service company wanted to enter Turkey and hired a high profile and country manager to spearhead the local business. After a few months executive search a top candidate was hand-picked from one of the large companies in the country, a substantial sign-on & exit bonus was agreed and after three months the country manager started in his new role. However, after just one year on the post the country manager left his position as he felt there was nothing to do in global matrix organization. The so-called industry verticals drove the sales and the horisontal delivery organisations handled the delivery. He was not hired to be just a “figurehead” for the company. What happened?
In our work with international clients we have come across nine different models that are used (see exhibit 1). The key differentiators seem to be the country manager’s financial accountability and the people responsibility. Below we will outline six of those typical models.
Exhibit 1: The country manager roles
The Ambassador & Administrator is responsible for decisions for administrative personnel only and administration personnel and facilities cost only.
The Country People Manager is solely responsible for all people decisions regarding administration personnel. The manager takes people decisions in coordination with global heads (but not responsible for their cost) and covers administration personnel and facilities cost only.
The Country Organisation Manager is the globally integrated managing director of the company in the country. The manger is solely responsible for all people decisions regarding admininistration personnel and he/she can take people decisions in coordination with global heads. The manager has full accountability for all personnel and facilities cost in the country, but not revenue responsibility.
The Country Sales Manager is solely responsible for top line in the country. He/she can take people decisions regarding personnel. The model is common if the subsidiary’s main role is sales.
The General Business Manager. He/she is solely responsible for all people decisions in the country and takes people decisions in coordination with global heads. He is fully accountable for the country P&L. Probably the most used models for global firms with a substantial local presence, despite its inherent conflicts.
Finally the King of Country/Subsidiary Manager model. In this model the country manager acts as the CEO of a country based organisation. He/she takes all people decisions for the country organisation, mo coordination needed with functional heads and there is full accountability for the financial results. This model is often seen when a global firm enters a new country. It was often used by pharma companies before they started the globalization of their organisations.
Each of these country manager models is right in a particular setting: The right leader, the right time, the right strategic and organizational context. However, companies need to be more informed and deliberate about their choices, including the benefits and conflicts of each role. They should make sure organisations and expectations are aligned on an ongoing basis and that appropriate escalation paths are available to resolve the conflicts built into so many of the models.
About the authors: This article was written by a team of consultants from Oleto Associates, a strategy consulting firm based in Denmark. For more information please visit www.oleto.com.