GLOBALMINDSETDEFINEDExpat Success Strategy

GLOBALMINDSETDEFINEDExpat Success Strategy

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Research from the Worldwide ERC® Foundation

for Workforce Mobilityand Thunderbird School of

Global Management

Research from the Worldwide ERC® Foundation

for Workforce Mobilityand Thunderbird School of

Global Management

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Global reporter and author John Pomfret once

observed that “the difference… in an overseas

assignment [is that] there is an emphasis on the

facts, but there’s also a much greater emphasis

on interpretation.”

It takes a special blend of characteristics—a special kind of

“interpreter,” if you will—to add up to an outstanding expat

who can be productive and accepted in an unfamiliar setting.

This combination of characteristics—the global mindset—is

more crucial than ever, and can provide insight to companies

that wish to hone their selection and assessment processes.

In early 2005, a group of professors at Thunderbird School of

Global Management (which consistently has been ranked

number one in the United States and the world for its expertise

in international business) embarked on a project: a rigorous and

scientific study of the drivers of expat success. There were many

aspects to this issue—for example, the role of the employer or

the role of the family—however,

B Y M A N S O U R J A V I D A N

C O N T R I B U T I N G W R I T E R S : M A R Y T E A G A R D E N ,

F E M I B A B R I N D E , K A R E N W A L C H ,

N A N D A N I LY N T O N , C H R I S T I N E P E A R S O N ,

D A V I D B O W E N ,

A N D A N G E L C A B R E R A

Global Mindset DefinedExpat Success Strategy

Based on research conducted by theWorldwide ERC®Foundation forWorkforce Mobility andThunderbird School ofGlobal Management,Javidan offers a comprehensive analysis of the global mindset as an expatriate successstrategy.

we quickly recognized the importance of focusing exclusivelyon the individual expat and the attributes that led to an individual either underperformingor succeeding.

In designing our researchprogram, our research team firstreviewed all the literature on thetopic to develop a basic founda-tion, and then interviewed almost50 Thunderbird professors fromdifferent disciplines to understandtheir views on this subject.Hundreds of hours of individualand focus group interviews gavethe project further shape, and ledto our next step: interviews withmore than 200 Thunderbirdalumni in international positionsin the United States, Asia, andEurope. These individuals, whohave significant experience andresponsibility in various globalcorporations, also are nationalsfrom many countries of the world.Their perspectives on theelements of a global mindset gaveus additional insight for our study.

The next phase of our researchinvolved organizing our findingsinto a framework to define andexplain the drivers of expatsuccess. An invitation-only“global mindset” conference at Thunderbird allowed us tobring together nearly four dozenof the most distinguished scholarsin global business from all overthe world. At this conference, we revealed our findings to ourguests. We also recorded theoutcome of discussions thatfocused on factors leading tosuccess in global assignments; an exercise that was integral to the development of our under-standing of the unique actionsand thought processes of -successful expats.

In early 2006, we joined forces with the Worldwide ERC®

Foundation for WorkforceMobility to expand our globalmindset project to the workforcemobility industry. The partnershipforged between Thunderbird andthe Worldwide ERC® Foundationleveraged both organizations’strengths and focus. Thunder-bird’s work to develop globalbusiness leaders in the educationalarena dovetails with the workforcemobility industry’s need toeducate and network globalhuman capital professionals. Andthe Foundation’s ability toconnect us with senior interna-tional executives worldwide forin-depth interviews in such majorcities as Hong Kong, China;Bangalore, India; Brussels,Belgium; and San Francisco, CA,broadened our research andextended our reach to individualswho actually manage internationalassignments. In some cases, theseinterviewees also participated in

the selection of candidates foroverseas assignments.

International Assignments:Competition and Strategy

International assignments arehitting the mainstream as an inte-gral part of a company’s businessstrategy, and continue to repre-sent a significant investment, aswell. To make matters morecomplex, the assignment thatbrings the employee to work inanother culture and country oftenbrings family members, too… sowhen an assignment is unsuccess-ful, the scale of the “defaulted”assignment is much deeper andmore costly than with a home-country assignment.

Selecting the right individuals forinternational assignments, thosewith a higher-than-average likeli-hood of outstanding performance,

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The partnershipforged between

Thunderbird andthe Worldwide

ERC® Foundationleveraged both

organizations’strengths and focus.

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will provide a competitive advan-tage for the company that buildsthe competency to identify“success potential” in their newhires and/or current employees.With an already evident shortageof skilled labor, the competitionfor talent will grow even tighter incoming years.

Indeed, recent Worldwide ERC®

benchmarking reports citeexpected increases in nearly alltypes of international assign-ments. And most companiesanticipate some difficulty in find-ing the talent to fill those assign-ments. In addition, the increasingdifficulty in recruiting globaltalent in labor-depleted regionsdrives an increasing need forworkers to be mobile.

Worldwide ERC® statistics revealthat approximately 80 percent ofcompanies said the available posi-tions in their organizationsrequire new hires to be moremobile now than three years ago.And with short-term internationalassignments on the rise in anumber of companies and loca-tions, the time frame for assimilat-ing into a new culture is tighterand the demand for productivityin the host country more chal-lenging.

The success of every expat is due,to a large extent, to the ability toinfluence individuals, groups, andorganizations with a differentcultural perspective in the hostcountry to achieve the company’sgoals. Whether communicatingwith his or her employees,colleagues, supply chain partners,or customers; or different types oforganizations in the host country,such as government agencies,regulators, or client organizations;the successful expat has a primaryresponsibility: to influence key

stakeholders in the host countryto help achieve company goals.

Understanding Global Mindset

If we recognize that a globalmindset is a mix of individualattributes that enable an expat tosuccessfully influence those whoare different from him/her, it isclear that without it, it is most

difficult, if not impossible, for anexpat to succeed in the interna-tional assignment. Experts havedescribed global mindset with arange of language. One globalmobility expert said it means “theability to avoid the simplicity ofassuming all cultures are thesame, and at the same time, notbeing paralyzed by the complexityof the differences.” Anothernoted that “someone with aglobal mindset enters a new anddifferent situation, with manymore questions rather thananswers, assumptions, andpresumptions.” Still another saidthat “rather than being frustratedand intimidated by the differ-

ences,” an expat with a globalmindset ends up “enjoying themand seeking them out because[they] find them fascinating.”

Thunderbird professors,Thunderbird alumni, distin-guished scholars, and the seniorglobal executives we interviewedthrough our relationship with theWorldwide ERC® Foundation all

pointed out some commonalities,and as we distilled their views, weconcluded that global mindsetconsists of three major compo-nents (Figure 1): intellectual capi-tal, psychological capital, andsocial capital.

Intellectual Capital

Intellectual capital refers toknowledge, skills, understanding,and cognitive complexity. Fromour interviews, we know thatthere is an important body ofknowledge—the employee’ssubject matter expertise thatexpats must have to be successfulin their tasks. We also learned thatsuccessful expats think differently

than their less successful counter-parts—they have a bigger capacityto take differing viewpoints intoconsideration to understand andaddress complex issues.

In our Worldwide ERC® Found-ation interview group, we askedsenior executives to rate theimportance of a range of individ-ual attributes that were identifiedduring our earlier interviews.Table 1 shows their ratings on aseven-point scale for the itemsrelated to intellectual capital (Arating of 7 was “ExtremelyImportant.”).

It is clear that successful expatshave a high stock of intellectualcapital; with a strong set of cogni-tive skills and a solid base ofknowledge. Intellectual capitaltranslates into understanding theglobal business and industry;knowing how competition worksin the global industry and what itmeans to the expat’s company. Asone executive put it: “Expats arechosen because they are supposedto bring knowledge and experi-ence to the company that theydon’t have locally… that providesa level of respect.”

Intellectual capital also involvesthe ability to build globalnetworks, and being cognizant ofthe role that interdependenciesplay in global success. Today’sglobal corporations are highlyintegrated global networks ofsupply chain partners who are

working together to satisfy theneeds of their global customers.Expats must understand theimportance of such networks andhow they work; what actions andprocesses create success or lead tomalfunctions in global networks.

Every expat faces conflictingdemands from their local stake-holders and from their corporateheadquarters, so managing thenatural tensions between corpo-rate and local priorities andrequirements is also a part of theintellectual capital. The corporateheadquarters is, obviously, goingto be most interested ineconomies of scale and scope, inmaximizing efficiencies, and stan-dardizing everything across theglobal enterprise. In contrast,regional responsiveness requiresunderstanding and adapting tounique local needs and demands.The balancing act required inmanaging these two forces is adecisive success factor for expats.

Finally, and perhaps most impor-tantly, intellectual capital requiresthe ability to manage complexcultural issues and understandcultural histories and similarities.By the nature of their jobs, expatsare very likely to face such issuesas they try to influence otherstoward their company’s goals. Itis essential that the individualcreating the bridge between thecorporate culture and the localhost country culture is one who

can intuit the cultural underpin-nings of his or her host society,learn about how things are donein different cultures and why, andmanage the potential tensionbetween his or her culture andthe host culture in an effectiveand sustainable manner. As oneexecutive put it: “We have tounderstand the culture and theway of the people in the countrywe are in. Sometimes, theWestern way of doing things will not work at all.”

Psychological Capital

Having a solid base of knowledgeand a good understanding ofglobal issues is just one of thefactors necessary for expatsuccess. The second componentof global mindset is psychologicalcapital. Psychological capital is aset of psychological attributes thatenable the expat to functionsuccessfully in the host countryand leads to the expat having astrong willingness and motivationto have the experience in, and tosucceed in, international settings.

In our Worldwide ERC® Found-ation-sponsored interviews, weasked senior executives to rate theimportance of several psychologi-cal attributes that we had uncov-ered in our earlier interviews.Two sets of attributes receivedvery high ratings: cultural sensi-tivity and psychological fortitude.Table 2 shows the executives’

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Table 1. Intellectual Capital

1. Understanding of how to build and manage global alliances, partnerships, and value networks 6.15

2. Ability to manage the tension between corporate requirements and local challenge 5.93

3. Ability to handle complex cross-cultural issue 5.87

4. Understanding of global business and industry 5.73

5. Understanding cultural similarities 5.67

6. Understanding other cultures and histories 5.60

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ratings of the significance ofcultural sensitivity—nearly allitems received a rating above sixon a seven-point scale reflectingtheir extreme importance.

Respecting cultural differencesreceived the highest score of allthe items in the global mindsetsurvey, at 6.73 out of 7—in fact,the interviewed executives wereunanimous on the importance ofthis attribute. As one intervieweestated, “One thing that allsuccessful global executives shareis a genuine respect for othercultures… that is the beginning,the middle, and the end.”

Another executive noted “… themost successful people are thosewho put in their mind that theyare actually the guests in the[host] country. They accept thatpeople are different and havedifferent values.”

Openness to cultural diversity—having a non-judgmental attitudetoward those from othercultures—also was rated veryhighly, at 6.27 out of 7. Thisrating was confirmed when weasked the interviewees specificallyabout the ability to suspend judg-ment. As shown in the table, thiswas rated nearly as high in impor-tance as our “openness” factor.

The Worldwide ERC® Found-

ation-sponsored interviews withsenior executives also provided uswith this information: settingopenness to cultural diversity intoaction through the willingness toactually adapt and cope withdiffering cultures was of extremeimportance, 6.43 out of 7. Saidone executive: “A successful expatacts with humility, is an excellentlistener, is patient, and iscognizant of how he is perceived.”

Another interviewee summed itup this way: “A successful expat isopen, listens a lot, is interested inhow people in different countriesapproach problems, and isprepared to learn.”

Yet another aspect of psychologi-cal capital is psychological forti-tude—such qualities asadaptability and flexibility—summarized in Table 3.According to one senior execu-tive: “Expats who fail tend to beemotionally very tight. They can’tlet go of the things they know

and don’t try to absorb the thingsthey don’t know. They don’t havethat flexibility and adaptability.They want everything to be like it was at home.”

Another executive pointed out:“Adaptability and willingness tochange, and not being set in your own ways, is a criticalrequirement. If you’re very structured and expect things togo 1-2-3, you’re going to have alot of difficulty in an overseasenvironment.”

Self-confidence is another impor-tant feature of psychological forti-tude. One senior executive madethis observation: “Self-confidencehelps you walk the talk. It ener-gizes other people.” Still anothersaid: “Expats are expected tooperate on their own and need tohandle unknown circumstances.That is very hard to do withoutself-confidence.”

The other important elements of psychological fortitude are

Table 2. Psychological Capital—Cultural Sensitivity1. Respect for cultural differences 6.73

2. Willingness to adapt, learn, and cope with other cultures 6.43

3. Willingness to accept good ideas no matter where they come from 6.33

4. Acknowledgement of the validity of different views 6.29

5. Openness to cultural diversity 6.27

6. Ability to suspend judgment about those from other cultures 6.20

7. Positive attitude toward those from other cultures and regions 6.20

8. Ability to adjust behavior in a different cultural setting 6.13

9. Willingness to work across time and distance 5.87

10. Desire to learn about other cultures and other parts of the world 5.67

Table 3. Psychological Capital—Psychological Fortitude

1. Adaptability 6.36

2. Self-confidence 6.14

3. Resiliency 5.86

4. Optimism 5.71

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optimism and resiliency. One ofour senior executivesexpressed it this way:“You need a very posi-tive attitude. [Theexpat gets] into situa-tions that may looklike they will neverresolve. Without opti-mism and resiliency, youcan’t survive. You need tolook at every challenge as alearning opportunity.”

Social Capital

Social capital is the third and finalpiece of the global mindset, andrefers to the expat’s ability tobuild trusting relationships withlocal stakeholders, whether theyare his/her employees, supplychain partners, or customers.

In our various interviews, trustemerged as a significant issue.Many interviewees told us thatbuilding trusting relationshipswith those who are different fromthem is essential to the expat’ssustainable success. As shown inTable 4, the senior executivesfrom the Worldwide ERC®

Foundation-sponsored interviewsrated this particular dimensionvery highly—the average score oneach item is more than 6 on a 7-point scale.

Referring back to the need toeffectively influence those aroundthem, senior executives pointedout that the expat cannot influ-ence unless he or she builds trust-ing relationships. Successful

expats generate positiveenergy and excite-

ment among theirlocal stakehold-ers and connectwith them on apersonal level.Stated oneexecutive: “It is

about bringingthe best out of

everyone… the abilityto draw out each indi-

vidual and build on their strengthto move the process forward.”

Collaborativeness is also animportant part of social capital—having the flexibility to addressneeds not only for yourself, butfor other people. It was notedthat the ability to be collaborativeleads to a team environment inwhich trust flourishes.

Expats who generate positiveenergy, collaborate, and connectwith other people are more likelyto build sustainable trusting relationships.

Global Mindset as a Business Tool

A global mindset and its threecrucial components—intellectualcapital, psychological capital, andsocial capital—is critical informa-tion for both expats and theircompanies. The Worldwide ERC®

Foundation-sponsored interviewswith senior executives revealedthat in the compressed “climate”of a short-term assignment,expats have less of a chance tolearn as they go and need to be

prepared before they arrive.Therefore, it is essential to ensurethat the screening process forexpats includes an assessment of their global mindset.Traditionally, companies haverelied on technical skills as themain criteria for choosing expatassignments, but we now knowthat assessing global mindset is at least as important.

Such an assessment will help toselect and assign the right individ-uals to international assignments.Or, in the case of a company thatmust assign an employee with alow “global mindset stock,” therewill be more awareness of theneed to develop and prepare himor her for the assignment.

Cognizance of the significance of the elements of global mindsetwill continue to shape an organi-zation’s leadership pipeline—from hiring profiles to incentivestructures. As Worldwide ERC®

Foundation Chairman Jill Silvas,SCRP, notes, “This research is acompelling and significant busi-ness tool for our global workforceindustry as the world’s talent basecontinues to diminish. Companiesthat are armed with the tools toidentify the best candidates forglobal positions will be mostsuccessful in an increasingly open workplace.”

Table 4. Social Capital

1. Ability to generate positive energy in people from a different part of the world 6.50

2. Ability to excite people from a different part of the world 6.30

3. Ability to connect with people from other parts of the world 6.13

4. Collaborativeness 6.00

Mansour Javidan is professor and directorfor the Garvin Center for Cultures andLanguages of International Management for Thunderbird School of GlobalManagement, Glendale, AZ. He can be reached at +1 602 978 7013 or e-mail javidanm@t-bird.edu.

Publications:

Javidan, M., Hitt, M.A., and Steers, R.M. (eds) 2007. The Global Mindset. Elsevier. In press.

Hitt, M.A., Javidan, M., and Steers, R.M. 2007. Global Mindset: An Introduction. In Javidan, M., Hitt, M.A., andSteers, R.M. (eds) 2007. The Global Mindset. Elsevier. In press.

Beechler, S. and Javidan, M. 2007. Leading with a global Mindset. In Javidan, M., Hitt, M.A., and Steers, R.M.(eds) 2007. The Global Mindset. Elsevier. In press.

Javidan, M., Hitt, M.A., and Steers, R.M. 2007. So What is Global Mindset and why is it Important? In Javidan,M., Hitt, M.A., and Steers, R.M. (eds) 2007. The Global Mindset. Elsevier. In press.

Javidan, M., Mary Teagarden, Femi Babrinde, Karen Walch, Nandani Lynton, Christine Pearson, David Bowen,and Angel Cabrera, 2007, June. Global Mindset Defined: Expat Success Strategy, MOBILITY.

Presentations:

Global Mindset: What is it and why is it important? A Professional Development Workshop At the 2007 Academyof Management annual conference, Philadelphia, Aug. 4–6.

Global Mindset: What is it and why is it important to your company? Presentation to Wal Mart executive group,Dec. 19, 2006.

Cross cultural Understanding: the need for a global mindset: Presentation to the senior management group atNational Business Travel Association, Washington, D.C., Dec. 14, 2006.

Global Mindset: What is it and why is it important to your company? Presentation to EDS management group,Detroit, Dec. 12, 2006.

Global Mindset: What is it and why is it important? Presentation at the University of Victoria, British Columbia,Canada, Nov. 16, 2006.

Global Mindset and Expatriate Success. Worldwide ERC Conference, Dallas, Oct. 11–13, 2006.

Global Mindset: What is it and why is it important to your company? Presentation to EDS senior HR group, Dallas,Oct.10. 2006.

Global Mindset: What is it and why is it important to your company? Presentation to EDS management group,Dallas, Oct.9. 2006.

What is Global Mindset and Why is it Important? The Second Biennial Gallup Leadership Institute Summit,Washington D.C., Oct. 7–9, 2006.

Javidan, M., P. Dorfman, and M. sully de Luque, “Culture and Leadership: An Overview of the Findings of theGLOBE Project.” Showcase Symposium, 2006 Academy of Management annual Meeting, Atlanta, August 14–16.

Javidan, M., P. Dorfman, and P. Hanges, “Understanding the link between culture and leadership: Findings fromthe GLOBE Project.” Symposium, 2006 meeting of the International congress of Applied Psychology (ICAP),Athens, Greece, July 16–21.

The Global Mindset Project research, conducted jointly by the Worldwide ERC® Foundation for Workforce Mobility and Thunderbird

School of Global Management, has appeared or is scheduled to appear in these publications and presentations.

The Global Mindset Project research, conducted jointly by the Worldwide ERC® Foundation for Workforce Mobility and Thunderbird

School of Global Management, has appeared or is scheduled to appear in these publications and presentations.

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Thunderbird School of Global Management

Since its founding in 1946, Thunderbird School of GlobalManagement has been synonymous with global leadership in businesseducation, and was the first graduate management school focusedexclusively on global business. Regarded as the world’s leading institution in the education of global managers, Thunderbird offers a unique educational experience that teaches real-world skills for adynamic global marketplace. Thunderbird produces graduates who aredistinguished by a global mindset that allows them to work successfullywith individuals from diverse cultures and to manage effectively indifferent social, economic, and political environments. Thunderbird isconsistently named among the top MBA programs by newspapers andmagazines around the world in their rankings of the best graduateprograms, and not only is sought out by students worldwide, but alsoby companies seeking to gain the management skills they need tosucceed in today’s global economy.

Worldwide ERC®

Founded in 1964, Worldwide ERC® is a membership association that networks and educates workforce mobility professionals and HR innovators. Worldwide ERC® addresses issues, trends, and bestpractices for the movement of employees within the United States and around the globe, and is the recognized authority for workforcemobility issues.

Worldwide ERC® Foundation for Workforce Mobility

The Foundation for Workforce Mobility was established in 2004 to study, educate, and report on issues of interest to business leaderswho must maintain a mobile workforce to thrive in today’s worldmarkets. It widens the outreach from the relocation and workforcemobility industry to a broader business community, both in the United States and around the world. Through its research partnershipswith institutions like Thunderbird School of Global Management, theFoundation develops information to help business leaders strategicallyand knowledgably address global workforce mobility issues.

Worldwide ERC®

1717 Pennsylvania Avenue NW, Suite 800Washington, DC 20006

+1 202 857 0857www.erc.org