We seem to have reached a point where virtually every CIO is a global CIO—a leader whose sphere of influence (and headaches) spans continents. The global CIO's most common challenge, according to CIO Executive Council members, is managing global virtual teams. The council's European members, representing Royal Dutch Shell, Galderma, Olympus and others, commissioned a globalization playbook that collects and codifies best practices in this and other globalization challenges. Some of its findings are presented here.
In an ideal world, HR policies across the global IT team should be consistent, fair and responsive. Titles and reporting structures (if not compensation) should be equalized. But as Jay Crotts, CIO of Royal Dutch Shell Lubricants, points out, "The world may be flat but HR terms and conditions are not." Global consistency must allow for and align with local laws and cultural norms. Not an easy task. In addition, the cost of living varies considerably by region. So from an HR standpoint, a one-size-fits-all model is unworkable. Besides the struggle for consistency, CIOs must find ways for remote teams to stay connected to the heart of the business.
Best Practices for Remote Management
Obtain local HR expertise. Companies must have a local HR person in each country to deal with local laws. "Hiring, firing and training obligations must be managed very differently in each location; you need someone with local expertise on the laws and processes," says Michael Pilkington, former CIO of Euroclear, the Brussels-based provider of domestic and cross-border settlement for bond, equity and fund transactions.
Create job grade consistency across regions. Euroclear is moving toward a job evaluation methodology from The Hay Group, an HR consulting organization, that organizes job types into vertical categories, such as managing people/process, product development, business support and project management. This provides a basis for comparing and managing roles and people across locations. For instance, someone managing 100 people may appear more important to an organization than a single contributor. But if that single contributor's horizontal grade (in terms of impact on the company) is very high because of some special expertise, he or she may be equally valuable. Grade level is not the same thing as a title; people's titles are much more subject to local conventions.
Manage dispersed staff as portfolio teams. ON Semiconductor has IT staff that support sales in Slovakia, where ON has a factory; in Hong Kong, where ON has a major sales office; in Shenzhen, China, where a customer service center is located and in Kuala Lumpur, Malaysia, at its regional development center. ON overcomes potential disconnects by having a single sales IT portfolio owner, based at headquarters in Phoenix, who sets objectives and distributes work to the members of that team no matter where they reside, explains CIO David Wagner. The same portfolio technique can work with IT staff dedicated to any global corporate function.
Make the work meaningful. To keep morale high and turnover low, be sure that each remote location contributes to important projects. Don't send remote workers a steady diet of maintenance. Pilkington suggests building a center of excellence in each remote location. "By making each location a service provider for the enterprise, you mitigate the risk of that location feeling disconnected and unappreciated," he says. "Having a senior management presence in each location is a critical success factor."
Clearly defining the roles of remote groups can also help knit them together. For example, global company leaders can hold meetings at all levels to discuss the distinct purposes of corporate headquarters, the regions and the local units. Knowing what their roles are in the larger picture and what they can expect from others "creates a sense of identity and purpose," says Nariman Karimi, senior VP and CIO of DHL Asia Pacific.
Where's My Boss?
Question: Should remote staff have local managers or is it viable to have their direct managers located in another country or even another continent?
Answer: Look at where your employees are on their maturity curve as to whether they need local management. If you're developing a new organization, you should use a decentralized staff management model because you must have a very active and engaged local leadership that can manage the growth and development of the new employees. Alternatively, if you have a lot of senior folks at a site, it's OK to let them have a remote leader. To keep morale high and turnover low, be sure that each remote location contributes to important projects.
Cathie Kozik, corporate VP of supply chain IT, Motorola
In Kuala Lumpur, ON Semiconductor's application maintenance staff asked for more responsibility beyond the support they were providing. So ON shifted more application development work to that location. Since then, "there has been very little turnover in Kuala Lumpur, and our project cycle times have improved in many cases," Wagner notes.
Bring remote staff to headquarters. ON Semiconductor brings its foreign-based employees to the U.S. to work on key initiatives and interact with other business units at corporate headquarters. "This may not be a monetary reward, but in many cultures it represents an endorsement and source of pride," says Wagner.
Foster communication across regional boundaries. Video conferencing is an obvious tool to enhance global team communication. But it's important to have in-person meetings as well. At DHL, Karimi, together with the regional board members, visits one of the top 10 sites around the Asia Pacific region each month; each gets at least one personal visit a year. The visits include time for the local unit to showcase itself and there is also unstructured time for informal and personal interaction.
CIO Executive Council members were asked to rate various globalization challenges in terms of their relative importance and scope. This ranking is based on the percentage of respondents rating the challenge as very important and of worldwide scope.
|Challenge||Very Important||Worldwide Scope|
|1. Managing virtual teams||70%||70%|
|3. Centralized/decentralized system decisions||61%||65%|
|4. Organizational structure||43%||70%|
|5. Leadership/ownership/ governance||48%||61%|
|6. Global vendor partner selection||35%||65%|
|7. Privacy regulations||35%||48%|
|8. Outsourcing versus insourcing||35%||48%|
|9. Intellectual property and knowledge management||30%||52%|
|10. Cultural issues and appropriate behavior||30%||43%|
Source: CIO Executive Council poll, May 2007
Richard Pastore is managing director, content development, for the CIO Executive Council.