Strengthen your skilled talent

Skilled executives have an enormous impact on international business success. Leaders articulate a company’s vision. They set the course to follow. They define corporate culture. They have international networks to form key partnerships. They have the influence to make decisions about a company’s growth strategy.

One of our recent EDC surveys of Canadian exporters found executive influence was the top factor for business success outside of Canada:

• 79% of successful international companies we surveyed say their executives are highly-effective at selling outside of Canada.
• 75% say their executives are willing to take risks to grow.
• 73% of companies say they have executives committed to international growth.

Smaller, more technologically-advanced, globally competitive companies demand an executive profile that is just as complex. Consider some of the following skills required by today’s business leaders:

• Communication skills – Executives are the ambassadors of their companies and must articulate from the top down a very clear vision to employees.
• Cultural knowledge – From leading diverse organizations to understanding international buyers and sellers, leaders must be sensitive to cultural nuances to do business.
• Digital literacy – To best harness technology available to them, executives must have a clear understanding of the capabilities, opportunities and risks around technology adoption.

In a 2017 global survey, executives listed communication, transparency and role modeling at the top of the list of skills they needed to spearhead complex organizations.²⁷ Others have added story-telling, persuasion, problem-solving and decisiveness to a long list of ideal executive attributes.

Leadership is also essential to international growth. A 2016 report conducted by The Conference Board of Canada identified executive talent as one of four essential elements of successful global companies. This study also highlights three key characteristics successful international executives share:

4.3.1 Entrepreneurial skills

Entrepreneurs are risk-taking, innovative and decisive. They constantly keep their eyes open for new opportunities.

An entrepreneurial leader is someone who is able to take risks and make bold decisions, even in periods of uncertainty. These creative individuals are able to role-model and show technical leadership to spur the creation of new products and processes.

“They are proactive,” says author Kristelle Audet. “This means they can identify opportunities – especially internationally – and act on them.”

4.3.2 A total commitment to growth, including a vision to go global

“International expansion is about leading a company to execute on a strategy that will involve growing rapidly,” says Audet. “The leaders have to be very clear about what they want so they can lead others to global success.”

The desire, alone, may not be enough to achieve success, Audet adds. But the combination of the global vision and risk-taking characteristics of executives are frequently the catalyst for international growth.

4.3.3 International experience

Executives who bring international experience to the table are much better equipped to deal with the challenges and uncertainties of doing business in foreign markets.

“Not only that, but they can also bring their networks of key contacts that can help identify business abroad,” says Audet.

However, Audet explains there is a caveat here. Not all executives need prior international business experience for a company to be successful in new markets. They must, however, have the self-knowledge to know when they require back-up.

“It’s about surrounding yourself with a team that will complement your skills,” says Audet.

To be able to attract and retain skilled executives and benefit from the value they bring, it helps to first understand why they are in short supply. This trend was predicted nearly two decades ago when business researchers said a shortage of executives would hit a critical point in 2015. The Death of Executive Talent, which appeared in the July-August 1999 issue of the American Management Association’s journal, was aptly titled. The authors may not have had a crystal ball, but they were able to identify the impending executive talent shortage as “the single most critical issue that will harry business in the new century.”²⁸

The authors recognized the demographic, technological and organizational forces at play that would contribute to a shortage of executive talent. A younger workforce meant there would be a lack of mid-career professionals to fuel the executive pipeline. Leaders of today need a certain savvy around technology. Finally, organizations are smaller, on average, than they were many decades ago. In the past, people could work their way up in a company, developing their skills in cross-functional roles in large firms. There was more freedom to move between industries, sectors and even professions. “Smaller companies means people no longer have roles (like deputy or assistants) to develop them into leadership positions,” lamented the authors.

4.4.1 The over-specialization of the workforce

As the executive profile has become more complex, it has vastly narrowed the field of qualified candidates.

Since the 1960s, there has been a big push toward job specialization. This has included requirements for ever-higher levels of post-secondary education in a specific field and the professionalization of job functions. The result is that many employees are specialists in a particular area, but they may lack the breadth of training to lead today’s multi-faceted, global organizations.

Promoting specialists into management or leadership functions can be a hindrance, rather than an asset, to growth.

“That person’s technically good at networks, so let’s put them in charge of security,” says Tim Truman, a cyber security systems architect to Canadian oil and gas firms. “It doesn’t work that way, and it’s no guarantee of success. They may be great technologists side, but they also need to effectively communicate, problem-solve, ask questions, make decisions and build, lead and inspire a team.”

4.4.2 Canadian reluctance to get experience abroad

Canada also faces unique executive talent challenges related to our geography. International experience has been identified as a key attribute for executives that take business into foreign markets. But many Canadians prefer to stay home.

A 2016 report by the Canadian Chamber of Commerce noted just 3% of Canadian university students go abroad annually, despite 97% of universities offering international experiences. The following are some of the skills developed through international education:

• Greater risk taking
• Adaptability
• Flexibility
• Language and intercultural skills
• Knowledge of global markets²⁹

4.4.3 Few Canadian international companies move beyond start-up status

Research out of the Lazaridis Institute for Management of Technology Enterprises has identified a chicken-and-egg scenario. Kim Morouney, managing director of the institute, who oversees their scale-up program for tech start-ups,notes that Canada has an exceptional track record of innovation and entrepreneurship, but suffers a shortage of experienced executives, leaders who have developed the executive skills and vision required to grow internationally.

“We don’t have Canadian companies that are global in size because we don’t have enough experienced executives to get them there,” says Morouney. The companies that do succeed, says Morouney, are often acquired by larger international firms, which take the entrepreneurial Canadian executives with them as part of the buy-out.

“The problem is that we don’t have the number of executives with global experience that we need, so we don’t have mentors to help other companies grow globally,” she says.