Here is an excerpt from an article written by Stephen Greer for the Harvard Business Review blog (February 18, 2011). To read the complete article, check out other articles and resources, and/or sign up for a free subscription to Harvard Business Review’s Daily Alerts, please click here.
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In today’s economy, where the fast growth of emerging markets outpaces America and the developed world, if you haven’t gone global yet, it’s time to get moving. But going global is easier said than done — especially for smaller companies. One of the biggest challenges they face is how to manage a diverse group of people across a broad geographic scope.
At Hartwell Pacific, the global metal recycling company I founded in 1993 and exited in 2008, I was operating factories in six different cities in four countries, so developing an effective global management system was critical. We came up with a system that shared the travel burden but, most important, made “local” management a part of the global corporation.
The answer was not to just have executives from headquarters constantly on the road, parachuting in to grill local management, but rather to have a mobile management team that meets at regular intervals at different locations around the world. The team consisted of an executive committee from Headquarters (comprised of the CEO, CFO, Head of Operations, Head of Business Analysis, and our Group Head of Sales), and then the General Manager of each subsidiary.
These monthly “Group Exec” meetings took place at a different factory each month. These meetings required a lot of travel time — and a lot of airfare — but they always provided a return on investment. By breaking down the geographic and psychological borders between subsidiaries and involving all of our senior managers in a regular, rigorous business analysis of each operation, we created a team that felt a sense of ownership not just of their P&L, but of the entire company.
The agenda was always the same, and it was a marathon day. Starting at 8:00 am, each attendee would deliver a presentation on his or her area of expertise or influence. Each presentation was followed by a tough but collegial Q&A session, and then a lunch of local fare. After lunch we would take a tour of that country’s operations. The day would usually end with presentations from two or three key local employees, followed again by open Q&A. I did the wrap-up, listing any unaddressed issues or opportunities that we were facing. At the subsequent Group Exec meeting, a status check on these issues became an important part of the various presentations. In this way, problems never lingered and opportunities were addressed.
The end of this long day was a dinner at a nearby restaurant. Local managers usually came, but so did others — perhaps also a crane operator who had just achieved his five-year loyalty award. We tried to be as inclusive as possible. The idea was that the more people we could touch and listen to, the better we could be at running our business and the more a part of the global team and mission our people would be.
The next morning everyone jumped on planes and headed home.
The most important aspect of these meetings is that they weren’t blaming sessions. We shared successes and best practices — and learned from challenges. The meetings also helped management to root out fraud and gross negligence, which was a chronic problem at a company growing as quickly as ours. The meetings also provided a positive competitiveness as managers competed to see who could achieve the best performance, and each division seemed to leapfrog each other month after month. Market share expanded, cost controls tightened, safety improved, operational efficiency peaked, and so did profits.
Over time, once personalities gelled and relationships bonded, we were able to scale back the frequent flyer miles by making it a quarterly face-to-face meeting, with monthly conference calls in between. Today a videoconference would be the preferable alternative, as technology is definitely bringing distant operations closer together.
Big multinationals hold meetings like this as a matter of course, but in many ways I think they’re even more valuable for small companies — even if they stretch managers’ time and put demands on limited cash flow. Small companies tend to lack the infrastructure and controls of large companies, and our monthly in-person meetings helped overcome that.
These meetings were the most important tool in our management system at Hartwell Pacific — and when I get back in the driver’s seat of a global company, meetings like this will be the first thing I institute.
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Stephen Greer is a senior advisor at Oaktree Capital and author of Starting from Scrap.