American business leaders are very parochial in an increasingly global world. They prefer to keep young executives close to home, rarely encouraging them to seek global experience. I see some very adventurous Americans joining our M.B.A. program at INSEAD, but they are the exception. So are the big American companies like IBM that are moving top staff to the largest developing nations like Brazil, Russia, India and China. These four countries will soon make up nearly 40 percent of the world's population, with a combined GDP of $15.435 trillion, yet many senior U.S. executives still don't seem to get it. Their successors will need to understand how to exploit these new markets.
This is increasingly risky because corporations from other nations already do put global markets first. The big emerging markets are starting to create world-beating companies of their own and are already exporting top-quality managers to divisions throughout the world. Europe is full of companies like Schlumberger, the energy-services firm with joint headquarters in the United States and France, where the path to the top includes a trip around the world. At Schlumberger, rising executives move to a new country every two or three years, and after multiple moves they are ready to become truly global leaders.
An American's career path is still more likely to move from one office to another within a headquarters outside Chicago. But gaining international experience is critical for long-term success. Andrew Gould started in Schlumberger's internal audit department in Paris and ultimately, following other moves that allowed him to work in various global locations and learn about the company, he became CEO in 2003.
Many U.S. firms still operate at the regional level, encouraging their talent to stay close to home and avoid damage to their career path. While there are a few exceptions like P&G and United Technologies, the trend toward grounding talent has prevailed. Overall, there is widespread failure to manage people and their careers by strategically moving top performers to where they can learn the most and have the greatest impact.
International "tours of duty" allow executives to gain valuable experience working abroad. However, most U.S. executives use them to get rid of complainers or reward top performers. Neither approach is strategic. In order to encourage and further develop global-leadership talent, U.S. companies should consider the following:
• Look to systematically identify talented young employees and strategically move a certain percentage of them each year.
• Place more emphasis on cultural diversity and make it clear that global experience is required for top jobs.
• Create a leadership-development institute at a central global location for "rising star" executives. PricewaterhouseCoopers, for example, selects aspiring leaders to go through a five-month leadership-development program known as the Genesis Park Initiative. The program convenes outside the United States, allowing executives to develop a more global perspective. Accenture selects 400 of its most promising managers to participate in a leadership program that develops multicultural teams to work on projects over a 10-month period.
• Build a "talent exchange" between the United States and the rest of the world. The U.S. arms of multinational corporations should consider identifying groups of up-and-coming executives in their 20s and 30s and arrange for an exchange with the same pool of executives from the European, South American and Asian divisions of the company.
Of course, companies can't do this alone. U.S. schools from kindergarten through college need to encourage students to study languages and spend semesters abroad. Guidance counselors should steer kids away from the usual semester-long Anglo pub crawls and toward China or India, or some other major emerging market. That is where the future lies for talented youths on the executive track—or any track.