A Head for the Business

BOSTON (06/15/2000) - Filippo Passerini is an IT executive who's worked in five countries on three continents. But what really proves this Procter & Gamble Co. vice president is a global leader is that he wants to know what shampoo you use.

Although the Rome native, now vice president for information technology at P&G's Global Beauty Care business in Cincinnati, may be a citizen of the world and a great communicator, he also has what CIOs at major international companies identify as the most important quality in leaders who can implement global technology strategies: a good head for business. And in his business, that means Passerini sees your head as one that should be lathering up with Physique shampoo, one of P&G Beauty Care's newest products. He's dreaming up technology such as in-store computer makeovers to help bond with consumers wherever in the world the company decides there's a market for this brand.

The current wave of globalization in business has pushed the corporate world past the point where CIOs with international responsibilities can simply carve the world up into territories and put managers in charge who are primarily technologists with a second language and a flair for regional etiquette. Today, CIOs aiming to partner with business management at the highest level say they need IT leaders like Passerini who understand the global strategies of the company and can partner with business at the regional level to consummate those strategies.

Senior managers at multinational organizations are employing a variety of strategies to ensure that they have the star leaders-and the understudies-that they need. They're keeping a sharp eye out for talent at company locations all around the world, not just evaluating the up-and-comers who blend in with the company culture at headquarters, but learning to identify leadership styles that don't necessarily fit the U.S. mold. They're taking long-term views of their staffs' career development, rotating them through assignments in different regions and different parts of the business. And finally, they're employing formal programs that ensure managers will identify people who are a good match for IT leadership positions as they open.

While a head for business seems to top the list of characteristics CIOs are now looking for in people to lead and execute their strategies around the world, great communication skills and an ear for cultural subtleties are still absolute musts for IT executives who want to succeed in an international milieu. And that includes CIOs.

BUILD YOUR OWN CULTURAL UNDERSTANDING Technical astuteness. Business understanding. Cultural sensitivity. The ability to communicate well. That's what Pat Zilvitis, CIO of The Gillette Co., needs in IT leaders in order to carry out implementation of the corporation's ongoing global business process integration project.

"That's hard to find," Zilvitis confesses in an interview at Gillette's Boston headquarters, where a panoramic view of the city from his perch in the Prudential skyscraper reminds him that it must be Friday because he's home.

Zilvitis just returned from Germany the night before and heads out to Singapore in a week to sell Gillette's business management in Asia on the global project, which will use SAP AG's R/3 package to present customers in the company's larger markets with a consistent face.

The kind of behavior that's seen as leadership does vary from region to region, he says. "What you need to do is the same; it's how you get it done that's different." Zilvitis and other well-traveled executives are wary of delving too far into cultural stereotypes, although they'll acknowledge that there is a grain of truth to some-the action-oriented North American, the analytical Brit.

For example, Zilvitis says, "In Germany you order it done; in Japan you have a meeting and build consensus."

At grow-by-acquisition conglomerate Imperial Chemical Industries PLC (ICI), Global CIO Anthony Foster finds that culture at the organization's many operating units extends across borders. "Yes, there are regional differences, but it's as big an issue-sometimes bigger-moving between [units] as between countries," the London-based executive says. But it's clear that an effective global manager must recognize and play to cultural traits to some extent.

Erran Carmel, an associate professor at American University's Kogod School of Business in Washington, D.C., and whose book, Global Software Teams:

Collaborating Across Borders and Time Zones (Prentice Hall, 1999) looks at the challenges of managing software development across borders, tells the story of an American software executive heading up a company's Moscow office. The manager, who has been there a number of years and speaks Russian, makes a point to occasionally "holler" at his staff, even though it's not behavior that comes to him naturally. "That's the Russian style of management; you have to do that," says Carmel. "In the United States you couldn't do that; you'd be considered a jerk. But in Russia it makes him recognized as a leader."

Different cultures may also view some fundamental processes, such as coming up with a vision or strategy, through very different lenses, according to consultant Hunter Muller, principal of the Hunter Group in Westport, Conn., who works with multinational companies on IT leadership and human capital development. "There's a huge difference between running an IT operation in North America and globally," says Muller. A client once suggested that an important difference between the United States and Europe can be seen in approaches to project management. Europeans look to a starting point and build to the logical conclusion, while Americans start with an end in mind and work backward.

While this generalization may not always hold true, it's a telling example of the variances in how people of different cultures exhibit the traits that are considered hallmarks of leadership. If North American CIOs are looking across a multinational workforce for individuals who have vision, for example, that quality may show itself differently in potential leaders who aren't from the United States. And given the short supply of people with the right stuff, CIOs can't afford to have their cultural blinders on when searching the globe for the next crop of leaders. Rather, they must broaden their own cultural understanding so that they can recognize leadership in many contexts.

Otherwise, they may overlook those who lead in ways that are appropriate for their own cultures but not typical of U.S. style.

FIND THE LEADERS WITHIN One organization that seems to have the search for leaders down to a science is Philip Morris Companies, where for the past two years Vice President and CIO Ken Michaelchuck has been building a global IT organization at a conglomerate that previously had no such centralized function. Until about three years ago, the only corporatewide IT function serving all five operating companies-Philip Morris U.S.A. and Philip Morris International tobacco businesses, Kraft Foods, Kraft Foods International and Miller Brewing Co.-was a director-level position with an advisory role in global projects but no charter to execute them. This individual was responsible for negotiating global contracts with vendors, such as Oracle, if the vendor did business with at least two operating companies or the business amounted to more than $1 million.

Michaelchuck says CFO Louis Camilleri changed all that when he decided to look at what the five operating companies had in common around the world, such as infrastructure, common applications and data centers, with an eye to eliminating redundancy, improving service levels and reducing costs. He also created the job of CIO at the parent company. Two years ago, Michaelchuck moved from Miller Brewing into this position, to which the CIOs of each of the operating companies are dotted-line reports.

"When I took this job, I didn't have a staff. I had to create the organization," recounts Michaelchuck. He says he looked within Philip Morris to do it and made a point to travel and meet both IT and business leaders at the company's locations around the world. And he used the company's formal leadership profile as a way to evaluate potential key players for his staff.

"We actually use this stuff," Michaelchuck says of such management tools. The Philip Morris leadership profile lists seven major attributes: smarts, trustworthy, passion to win, fires up people, does what it takes, dynamic people manager and world-class business manager.

The CIO says he found a world-class business manager when he tapped Hedy Foreman, a woman with 25 years of technology experience, to serve as CTO at Philip Morris International. She not only complements his own lack of IT background-Michaelchuck is an engineer by training and spent much of his career at Miller in operations, including plant manager positions-but she also proved her global leadership mettle moving the entire worldwide organization to a single e-mail system (Microsoft Exchange). She also shows passion and the ability to do what it takes. "Hedy really pushes the envelope and tries things that have never been done before," Michaelchuck says.

The IT group at Philip Morris is now engaged in a massive data center consolidation effort, and the rsum of the individual Michaelchuck drafted to lead that project could serve as a case study on how to groom a global IT leader. "I needed someone who had experience in data centers, and I found the fellow, Darwin Stanley, in Tokyo," says Michaelchuck. Stanley, who is now director of the company's IT Service Center, had been working for Philip Morris U.S.A., then had moved to Lausanne, Switzerland, managing Philip Morris International's data center there and coordinating the consolidation of all the company's data centers in Europe. He was subsequently sent to Tokyo to run the IS office "to round him out a bit," his CIO says. "So he had worked for domestic and international companies, worked in data center consolidation, all three areas of the globe-and now he's running the whole project," Michaelchuck says proudly.

CREATE A BLUEPRINT FOR SUCCESSION Stanley was also ready to be singled out for a key role because he was on Michaelchuck's list: a very important list called the advancement plan. At Philip Morris, this formal process is taken extremely seriously and is used at all operating companies. The method simultaneously develops succession plans for all key positions and growth plans for all individuals. Michaelchuck bears overall responsibility for coordinating advancement planning for about 3,800 IT people worldwide.

The IT advancement plan requires management to identify successors for each position from top managers down to just below midlevel managers. Meanwhile, as part of every person's annual performance appraisal, they do a self-assessment commenting on where they see themselves going within the company, how they hope to get there and how geographically mobile they consider themselves to be.

Within IT, all of this information is rolled up to the CIO of each operating company, who can expect a visit between May and July from Michaelchuck and his HR representative to discuss that unit's advancement plan. Finally, in September, Michaelchuck will present the advancement plan for the entire IT organization to the CFO.

Up-and-comers are identified in a section of the plan for "high potentials"-these are people who are probably junior but might have what it takes to be CIOs, Michaelchuck says.

Sounds like a lot of paperwork-but it works, says Michaelchuck. "After the CIO for Kraft Foods International left two and a half years ago, I went to the advancement plan and saw that Kraft Foods North America had identified the vice president of operations as a potential person to add value to the IS side, although he didn't have IS experience. It worked out beautifully. For any opening, I can usually come up with four or five names from the bunch," he says.

Such formalized HR techniques have also helped DHL Airways in Redwood City, Calif., find people with the skills to be global leaders. Global projects are usually managed regionally, with a project manager for Asia/Pacific, Europe and Africa, and the United States, each ensuring that the technologies are in sync, tying together globally and working locally. Historically, however, the shipping company hadn't been as successful in managing global IT projects as it would have liked, says former Senior Vice President and CIO Jeff Lucchesi.

"What it takes is people who are politically savvy, who know how to negotiate, who are very detailed, focused and driven. We worked closely with HR over a three-month period and came up with a profile and specific types of questions to ask [to help identify the best candidates]," he says.

Send Them Abroad for International Experience Turning a "high potential" into a global IT leader almost always involves an overseas posting along the way at companies that take their global mandate seriously. P&G's Mike Power, vice president for global business services, believes in giving people international exposure through assignments overseas where it's appropriate, although he maintains, "We're not a travel agency," and overseas postings aren't made for their own sake. He acknowledges, however, "Most senior managers at some point in their career have been assigned on at least one other continent. It gives huge breadth to individuals." Indeed, Power's own career with P&G has taken him to Europe and Asia with time in the States as well, while his vice president in charge of global infrastructure, Wayne Matthai, did a four-year stint in Asia.

Sometimes the most appropriate overseas assignment along the way to a regional CIO position is a few years spent in the corporation's home office, soaking up corporate culture and values. That's what works for Jean Claude Dispaux, Nestl SA's senior vice president for IS and logistics at the company's global headquarters in Vevey, Switzerland. Jeri Dunn, CIO and vice president of Nestl USA, headed various technology and standardization efforts in Vevey for five years before moving to the company's Glendale, Calif., offices three years ago; Olivier Gouin, CIO for Nestl France, first spent eight years at headquarters; and Nestl Italy's Nick Emmanouilidis ran an SAP project in the home office before moving to Italy last year. "I always try to keep a 25 percent expat mix in the headquarters and to lend my staff to affiliates for long-term assignments," says Dispaux.

Sending people on overseas assignments is common at Gillette too, where Zilvitis's senior IT team--which includes a representative from each region and operating company--meets quarterly and always takes time to discuss leadership development. For example, he characterizes Europe right now as a "real hotbed" of activity for Gillette as the company combines some businesses. The fellow who managed the company's Y2K rollover at the Boston headquarters has now been moved to head up the European IT organization. That experience will give him both greater leadership skills and a broader international perspective, says Zilvitis.

One danger of the overseas posting is a botched homecoming. "Integrating people back in is a very big challenge," says Allen Morrison, associate dean for executive development at the Ivey Business School of the University of Western Ontario and coauthor of Global Explorers: The Next Generation of Leaders (Routledge, 1999). "When they go overseas, they often wind up in significant positions of responsibility...then they come back home and it's 'Geez, what have you been doing?' Sometimes they come back with no specific job assignment, and the perks (cars, housing allowances) of living overseas are gone." The biggest frustration for returning expats, according to Morrison, is that they have learned so much and nobody cares--and the result is that as many as 25 percent quit in their first year back. It's a sorry loss for companies to squander these staffers who have just added valuable international perspective to their leadership arsenal.

. . . AND SEND THEM NEXT DOOR FOR BUSINESS EXPERIENCE It's not just international experience that can help to season an IT professional for leadership. Sometimes it's getting out of IT altogether for a while that provides the finishing touch--the necessary business acumen that so many CIOs are seeking in their global leaders.

IT executives must be able to step outside the technical point of view and understand the company's business objectives, says Norman McEachron, vice president of Gartner Consulting in San Jose, Calif. And the kinds of people who make good leaders in the new global economy may not be the same as those who used to succeed in IT, he says.

Globalization means that "people who focus on internal things might not have the necessary understanding of stakeholders and customers," McEachron says.

"We've got a whole generation of people used to administration and systems upkeep, and acquisition of infrastructure. Now we have to look at IT as deployment of competitive tools."

Gillette's Zilvitis agrees. "The people it'll take to drive IT the next 20 years are very different from the people it took for the last 20 years. Now you need balanced skills." To develop those skills in its own managers, Gillette not only assigns individuals to overseas posts but also moves them among IT, marketing, manufacturing and finance--in the process creating tech-savvy business managers and business-savvy tech managers.

Back at P&G, Passerini values the "keep-'em-moving" approach to leadership development that, during his 19 years with the company, has taken him to five countries and immersed him in many facets of the business. "Moving people around gives them the opportunity to get exposure to different cultures and different businesses," he says.

But in the end it all comes down to one thing when you're looking for the next person to lead a global team, according to Passerini. "What makes a leader? In my experience the one common characteristic is business understanding. It's the only thing that really matters."

Elizabeth Heichler herds talented cats in Tokyo, Hong Kong, Singapore, Paris, London, Brussels, Boston, New York and San Francisco in her day job as editor in chief of IDG's international technology newswire. Share your thoughts on leadership with her at elizabeth_heichler@idg.com.

SWISS SEASON A stint at global headquarters tempers IT executives for leadership Nestl's Jeri Dunn is the quintessential global IT leader, someone who's learned how to balance the Swiss conglomerate's worldwide technology objectives with the demands of a regional operating company. Now CIO and vice president of Nestl USA, she has spent 11 years with the company known internationally for its food, beverage and seasoning brands. Like many individuals identified within the company as showing growth potential, Dunn was groomed for leadership through a variety of international assignments, the most important of which may have been time spent at corporate headquarters in Vevey working on global projects.

Dunn sums up the key to Nestl's global leadership development method like this:

"You bring them to the corporate office for two or three years, have them work on a corporate project. They gain skills, then go back to the home market, and both sides benefit."

Dunn is ready whenever she gets a call for resources from Jean Claude Dispaux, senior vice president for IS and logistics at Nestl SA's global headquarters.

She keeps a list of "high potentials" to which she refers when headquarters asks for people to work on a global project. "I'm sending him the cream of the crop," she says.

Dunn doesn't mind sending her top performers to Vevey because the human capital transfer works both ways: Dunn currently has seven people from Vevey or other international operating companies working for her in the United States. It's a good deal. "We need to get the global perspective; they need to leave the ivory tower," she says.

Dunn built her career at Nestl entirely in IS. She was associate director of development at the company's Stouffer's unit when she was tapped by headquarters to work on a global project to roll out a software development methodology and CASE (computer-aided software engineering) tools. That project took three years, and she then spent another three years in Vevey as assistant vice president for all technology and standards decisions for Nestl globally before being promoted to the CIO slot at Nestl USA.

"I'm probably a classic example of the way Nestl as a global company uses people from the independent operating companies, brings them to the center and educates them," says Dunn.

That experience has given Dunn the broader view needed to carry out Nestl's global technology strategies back in the States. For example, when she took the reins as CIO, the operating company was a Bay Networks shop, and she pushed it to migrate to the corporate standard for networking equipment, Cisco Systems.

It was not a popular decision, but one that had to be made for the good of the group as a whole, she says.

"One of the beauties of taking an international assignment is that you gain an appreciation for why decisions are made," says Dunn. -E. Heichler MERITOCRACY The traits of global leaders, in a word In studying how software companies have succeeded and struggled in using international teams to collaborate across borders and time zones, Erran Carmel, an associate professor at American University's Kogod School of Business, has made an acronym out of the word merit to define the qualities that make successful global leaders.

M ulticulturalist--someone who can switch behavior from culture to culture, depending on what is appropriate.

E lectronic facilitator--someone who is skilled at managing and leading via electronic tools such as e-mail, telephone conferences and collaboration tools such as Lotus Notes.

R ecognition promoter--a manager who knows he or she has to go to headquarters, ensure that the work the team is doing is being recognized and get resources needed to keep the team rolling.

I nternationalist--this is different from being a multiculturalist; it's having a breadth of knowledge relevant to the country or region in which one is working, knowing about its history, politics--even following the local cricket games.

T raveler--someone who can endure a lot of travel and do a lot of effective communicating not only in formal business settings but also between meetings and over meals.

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