THE ROLE OF TRAINING IN DEVELOPING GLOBAL LEADERS: A CASE STUDY AT TRW INC.

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1 The Role of Training in Developing Global Leaders: A Case Study at TRW, Inc. 185 THE ROLE OF TRAINING IN DEVELOPING GLOBAL LEADERS: A CASE STUDY AT TRW INC. D. Bradford Neary and Don A. O Grady One of the first tools human resource managers turn to in meeting the challenge of developing global leaders is formal executive development. TRW, a leading company in automotive, aerospace, and information systems, provides an interesting case study of how a U.S.-based organization has dealt with the challenges of globalizing top managers. In 1996, TRW launched its global leadership program by combining U.S.-based classroom teaching with real life learning experiences from often uncomfortable locations around the world. This article reviews TRW s experience with this program and offers important insights for others contemplating designing and delivering a systematic global leadership development program John Wiley & Sons, Inc. One way to accelerate TRW s progress is by continuing to develop our people globally and working to achieve a seamless culture. GLP I participant Global Leadership Development The Next Generation of Executive Education Founded in 1901 and headquartered in Cleveland, Ohio, TRW Inc. is a $17 billion global company, employing over 110,000 employees in 35 countries, one half of whom are non-u.s. employees. TRW conducts approximately 65% of its business in the automotive field and 35% in space, defense, and information technology; over 40% of its total revenues derive internationally. Between the years 1995 and 2002, TRW expects to double its revenues from $10 billion to $20 billion through both acquisitions and organic growth. Being global is a critical objective for TRW, as is stressed in the company s mission statement: TRW is a global technology, manufacturing and service company, strategically focused on supplying advanced technology products and services to the automotive, space, defense and information systems markets. Despite the fact that TRW has been thriving internationally, in the mid-1990s it was recognized that the company was not leveraging its global presence to its full potential. Though many of its businesses around the world were successful, senior management felt that they were not achieving their full potential. This kind of achievement would require truly global leaders, as opposed to international leaders (those effective in one particular foreign locale), who would be able to manage operations successfully in several Human Resource Management, Summer/Fall 2000, Vol. 39, Nos. 2 & 3, Pp John Wiley & Sons, Inc.

2 186 HUMAN RESOURCE MANAGEMENT, Summer/Fall 2000 TRW s human resources function has made the conscious development of leaders a priority throughout the organization. different countries simultaneously and be better able to oversee and coordinate different international businesses working toward a common goal. Over the past decade, TRW has worked to become what the organization calls a seamless organization, striving to break down functional and hierarchical boundaries within our various businesses. To achieve this organization on a global level, senior line executives and human resource professionals need to develop the leaders who are able to remove the seams between countries. Even as the company has expanded across international borders, these borders are viewed as boundaries within the company. Emphasis on Executive Development TRW s human resources function has made the conscious development of leaders a priority throughout the organization. Our multifaceted approach incorporates formal training with structured assignment management and ongoing management succession and career planning. Senior management regularly conducts a rigorous assessment of the high potential bench strength through a process called the Management Resource Review (MRR), the company s internal succession planning process. This conscious attention to individual career development enables TRW to place executives in assignments where they can acquire skills or experience they need. Has a particular manager been exposed to both the automotive and aerospace businesses? Is a general manager as prepared to lead a start up or greenfield operation as a well-established turnaround operation? How will these managers handle the cultural differences inherent in the various countries in which TRW does business? These are the sorts of questions we ask in assessing individual career paths. The skill sets of successful executives need to be both broad (based on experience in various businesses, unique operating environments, and multicultural settings) and deep (based on experience in both staff and line positions). Formal training programs play a critical role in the development of executive leaders. It is important to stress, however, that formal training alone is not enough to impart the necessary skills to successful leaders. When formal training programs are included in a larger context of executive development, they can be used to augment the skills learned on the job. Rationale for Formal Training Programs At TRW, the rationale for structured corporate learning as opposed to outside training is multifaceted. Structured corporate learning provides the opportunity to link learning and development to the company s specific strategic imperatives. Furthermore, the fact that the learning takes place under the company s auspices makes it possible to develop a systematic and unifying approach to leadership development. With this approach, each participant exposed to these programs receives a common methodology, which in turn strengthens the acculturation process. The intention is to take leaders already steeped in the goals and values of TRW and develop a pool of world-class leaders who will be resources in driving change. During the process of teaching leadership skills, the training programs also serve as mechanisms to instill a shared set of values and behaviors and a common, company-wide mindset. Leadership training programs can provide executives with perspectives that go beyond their current jobs. By establishing diverse cross-business teams, the TRW leadership programs foster network building and, in the process, the sharing of best practices and lessons learned. Executives have the opportunity to see what has worked for others in different businesses within the corporation, to discuss these practices, and to reflect on their applicability in other areas. To leverage the learning process, action learning projects were incorporated into the curriculum, linking classroom learning to actual business issues. Such projects also enable senior executives to assess the developmental needs of the participants, both individually and in teams. Again, by facilitating the programs in house, the participating executives continue to deepen their understanding of the company s vision and strategy.

3 The Role of Training in Developing Global Leaders: A Case Study at TRW, Inc. 187 In itself, this shared vision within the many levels and businesses of a large corporation is a powerful, unifying force. By expanding the scope of the learning of participants beyond the perspectives of their current roles, participants are provided the opportunity to gain insights into the issues that face TRW business units around the world. In their book Action Learning, Dotlich and Noel (Action Learning: How The World s Top Companies Are Re-creating Their Leaders and Themselves, 1998) liken an action learning project to a parallel universe, in which the work situations bear important similarities to those of the company but are also distinct. Time is accelerated so that what might take months or years in the real business world can be accomplished in a fraction of the time. Similarly, the conferences and presentations are more intense, confrontational, and focused, forcing participants not only to think about new ways of working, but also to think differently about themselves as both leaders and individuals. Most action learning projects alternate between workshops and field experience. Projects differ considerably so that participants can tackle the particular business needs that are of pressing concern to their organizations. This is done in the temporary system created by the conferences and coaches within the framework of the actionlearning process, a system that encourages self-discovery hand in hand with solving actual business problems. Dotlich and Noel (1998) go on to outline the 12 elements that hold the parallel universe of action learning projects together. It is important to note especially the first of these elements: the need for high-ranking sponsors within the company. The emphasis on sponsors highlights the particular risks (and the commensurate rewards) of action learning as programs that are less easily controlled or charted than are more traditional development programs, and hence are potentially subject to the undermining forces of criticism and political maneuvering. The presence of significant sponsors can safeguard against these forces. Because of this approach s emotionally charged and intellectually challenging nature, Dotlich and Noel (1998) emphasize that action learning is not for the faint of heart or the undisciplined organization. True insight and true change are often painful does the organization have the discipline to respond? Emphasis on leadership development programs fosters the creation of a learning organization in which the role of learning is stressed at every organizational level and throughout the course of the participant s career. By helping to create a corporate climate instilled with a desire for continuous learning, such corporate learning programs can have an effect far beyond the immediate results of any given course. Particularly, as it applies to the ever-expanding, ever-changing global marketplace, it is this commitment to continuous learning that will bring to the company new opportunities and attain competitive advantage. TRW executives have addressed specific business challenges through the action learning process, enabling them to link theory to the world. Executive Development Programs Executive development programs have been in place at TRW for many years. The Business Leadership Program (BLP), established in the late 1980s, is targeted at the top one percent of the employee population who have been identified as promotable and currently report directly to a division vice president, general manager, or staff vice president. Candidates for this program are nominated by executive vice presidents. The content of this program addresses several key areas: global strategy, leadership style and behavior, culture and organizational capabilities. TRW employs a variety of learning processes that are facilitated by world-class subject matter experts: lectures and discussions, discussions with TRW Management Committee members (the 15 senior executives, including the Chief Executive Office and Chief Operating Officer) on the current state of the business, breakout group assignments, individual reading and project work, 360 degree feedback, case studies, team-building interaction, and action learning projects. The program consists of two weeklong modules, with a five-month period between the sessions, during which the approximately 35 The Business Leadership Program (BLP), established in the late 1980s, is targeted at the top one percent of the employee population who have been identified as promotable and currently report directly to a division vice president, general manager, or staff vice president.

4 188 HUMAN RESOURCE MANAGEMENT, Summer/Fall 2000 It is TRW s conviction that companies that excel in the increasingly global marketplace will be companies that have added the characteristics of a global mindset and skills to their competency models. participants (one-third non-u.s. employees) implement team or individual action learning projects. The intent of these projects is to challenge the participants to think beyond their current jobs and to focus on issues facing their businesses. The first module is held at an off-site conference center to facilitate networking between executives from different areas within TRW. The second module is held at corporate headquarters in Cleveland, giving participants immediate access to senior management. Through a combination of 360 degree feedback, self-assessment, and one-on-one coaching with a trained facilitator, each participant creates a personal development plan during the first session with specific goals for improvement. The plans are revisited in the second week of the programs after the five-month action learning project. Though this program is only one component of a company-wide commitment to developing leaders, its impact has been significant. Over 75 percent of all senior executives at TRW have attended the Business Leadership Program, and virtually every member of management recently appointed to a senior-level position is a graduate. Toward a Global Leadership Program While the Business Leadership Program has a substantial global component, this is not its primary focus. The impetus for a specific global learning program came from several directions simultaneously. As TRW s senior line-management began recognizing that the company s managers did not have the kind of global competencies they needed to be true global players, the corporate leadership and organizational effectiveness function within HR was arriving at the conclusion that an additional executive training program was needed to emphasize global leadership competencies. The Global Leadership Program (GLP) represents TRW s next generation in executive education. The Program was created in response to a formal analysis (through our Management Resource Review process) of the gap between our organization s current collective skill set and the core leadership competencies still generally lacking within the company. This gap analysis enabled TRW to target its development program to the specific needs of TRW senior managers. (It is TRW s conviction that companies that excel in the increasingly global marketplace will be companies that have added the characteristics of a global mindset and skills to their competency models.) By analyzing the gap between required and existing leadership competencies, it is possible to target learning programs for maximum efficiency. In devising the GLP, the corporate leadership and organization effectiveness function at TRW looked to collaborate with an academic institution that had particular skills in global business education. We also sought an academic partner with a strong international alumni base that could be accessed to assist in site visits. We decided to work closely with the institution s executive education faculty to design a program specifically suited for TRW executives. We recognized from the outset that commitment from the most senior levels of management was essential if the GLP was to be successful. In practical terms, this kind of toplevel commitment would be important simply because of the allocation of a considerable amount of the company s resources. Also, in order to expect executives to take substantial time away from their jobs and families, it would be vital to demonstrate that it was a value-added experience. The GLP was launched after a successful presentation to the company s Management Committee. Not only did the Management Committee endorse the project, but several members of this group were incorporated into the training program itself as adjunct faculty. Again, this support demonstrates that the development of global leadership is a company priority, and it provides the opportunity for real change in the company s overall direction. Eighteen vice president-level executives were chosen for the first GLP, an approximately 20-day program divided into three modules. Members of this first GLP class represented operations in five countries within TRW automotive, space and defense, and company staff. The first module, ten days long,

5 The Role of Training in Developing Global Leaders: A Case Study at TRW, Inc. 189 was conducted on the TRW Executive Education Team s academic partner s campus. Participants dissected case studies from other global companies to discover the theoretical background of global leadership and to study the issues through specific examples. As in the earlier executive training programs, outside experts were brought in to facilitate the learning process. Some of the specific goals of this module were to develop an understanding and awareness of global business opportunities and required capabilities; to assess current TRW global strengths, weaknesses, opportunities and threats; and to assess personal implications and plan personal application. During the first module, the TRW executives were also exposed to specific tools and issues they would be likely to encounter as they expanded globally: market-entry strategies, performance measurement, internal human resource issues, market-analysis tools, cultural awareness and regional and country knowledge. All were introduced in a classroom setting, with the opportunity for practical application forthcoming. Several members of TRW s Management Committee participated in module one as adjunct faculty members, providing specific TRW insights on strategy, legal and ethical behavior, and HR issues. To ensure the transfer of training from the classroom to the work setting, the focus of module two was an action learning project. For module two, the 18 vice presidents were divided into three diverse cross-business teams and sent on a week-long global assignment. Each project addressed specific business needs to teach leaders in the GLP global skills in the context of pursuing TRW s unique interests. Each six-person team was given a specific strategy-oriented challenge to address, and the teams were expected to apply what they had learned in module one. Project statements were developed in conjunction with the Management Committee to address real global issues facing TRW today. In TRW s first GLP, the teams were all sent to China and assigned the following projects: team one was to determine best practices for forming a joint venture in China; team two was to determine how Chinese joint ventures could be converted into world-class organizations; team three examined how TRW should be organized to successfully integrate joint ventures into an overall China strategy. These real-life questions drove the research and experience for the three teams. Each team had a faculty advisor and a Chinese business graduate student serving as business intern and translator. Central to the practice of learning by doing is the conviction that global leadership skills are not learned in a vacuum, but as they apply to actual global projects. China was selected as the venue because it represents an increasingly important TRW market. It was anticipated that the skills learned in China, however, would be applicable in most emerging markets, and both modules one and three would focus on generalizing the skills that team members had learned so that they could be adapted to other cultures. In China, team members visited a total of 26 sites in Hong Kong, Shanghai, Shenzen, and Beijing, including government ministries, universities, and the Chinese divisions of multinational companies all with the central question of their particular project in mind. Module three was conducted in Cleveland at the company headquarters. In this module, the three teams of executives had three days to assemble their lessons learned in order to present them to the other two teams and to the management committee. Again, the emphasis on senior commitment was highlighted. TRW and the Executive Education Team made the conscious decision that participants would present lessons learned rather than a list of formal recommendations. The priority was the learning involved, rather than a focus on implementation of the project statements. Ongoing Modifications Since the first Global Leadership Program (GLP I) there has been a series of modifications to the program based on the experiences of the first program s participants. An increased emphasis on the development of market-driven strategies was incorporated. This change stressed a greater appreciation of the complexities found in the global marketplace. The design of GLP II also consisted of three modules a classroom component, an action learning project, and a presentation of Central to the practice of learning by doing is the conviction that global leadership skills are not learned in a vacuum, but as they apply to actual global projects.

6 190 HUMAN RESOURCE MANAGEMENT, Summer/Fall 2000 Because a business leader must relate with individuals rather than cultures as a whole, it is essential that they recognize not only the diversity between cultures, but also the diversity within a culture a task that can often be daunting. lessons learned. In this case, the three action learning teams were sent to three different countries: Poland, Brazil, and China. The Poland project focused on the new potential created by the opening up of Eastern European countries. Using Poland as an example, this team was to present lessons learned on how to best develop a world-class TRW supply base in Eastern European countries. They were asked to identify the critical success factors necessary to ensure such a supply base s success. The Brazil team was asked to address what are the critical success factors and best practices used by worldclass companies to manage their Brazilian operations and how could TRW use these factors to make its businesses globally competitive? The China team was tasked to develop a list of recommendations on how to establish a viable TRW presence in each of the company s core areas automotive, space and defense, and information integration. This team was asked how to support a critical mass before the market justifies significant investment. The three teams were sent to their respective destinations with the following note: To enhance your learning, we have confirmed reservations, arranged transportation, arranged appointments, assured a trouble-free experience; however, some appointments won t be made, some contacts won t show up, some travel arrangements will backfire... It will not be a troublefree experience consider it part of your learning. While this letter may have been presented in a lighthearted way, it made a serious point: The entire experience would be an opportunity for participants to learn about the culture, themselves, and the global interaction that would help managers generalize their experiences to other locales. Toward a Global Leader TRW acknowledges that formal training is only one component of developing global leaders; such training works with people who were already effective leaders in their own locales. In other words, the goal was to enhance the skills of existing, outstanding leaders to help make them outstanding global leaders as well; the GLP was not designed to develop leaders from scratch. Developing Multiple Styles Traditionally, successful upper-level managers who rely on one management style will likely find that single-mindedness, which has been rewarded in a specific local setting, can be a hindrance as they function on a global level. What is necessary in this fairly typical situation is a heightened awareness of both self and environment. Managers should ask themselves the following questions: Are you, as a leader, conscious of your management style? Can you use alternative styles? What are your strengths and weaknesses as a leader? What cultural norms does your management style assume? Global leaders must be equally sensitive to their environment. After all, it is the ability to lead successfully in a number of environments that will ultimately define a global leader. Only by cultivating these complementary competencies awareness of self and awareness of others can a business leader manifest the adaptability that lies at the core of navigating between cultures. Global leaders must be able to develop a range of behaviors and the ability to identify the best alternative for any given situation. Instead of being experts who adhere rigidly to one particular method, global managers must cultivate capability to adapt to any surrounding environment. Like any good leaders, successful global leaders recognize that it is people who make things happen. The difference with global leaders, of course, is that they may not be familiar with the cultural assumptions of the people with whom they are working. Here is where the ability to adapt multiple leadership styles and to adapt oneself to an unfamiliar environment is a necessity. Because a business leader must relate with individuals rather than cultures as a whole, it is essential that they recognize not only the diversity between cultures, but also the diversity within a culture a task that can often be daunting. Being unfamiliar, a foreign culture may at first seem like a monolith that requires decoding.

7 The Role of Training in Developing Global Leaders: A Case Study at TRW, Inc. 191 A sensitive global leader will recognize that once this decoding begins, it will doubtless reveal a range of accepted values, norms, and behaviors rather than a single prescribed set of right and wrong. Because senior leaders are all so immersed in their particular cultures, they often do not see the way culture shapes values and behaviors. The process, then, is to make the invisible visible by encouraging leaders to be sensitive to their own assumptions and the assumptions of those around them. An understanding of the range of issues regarding relationships cannot only be taught and learned, but it can also be brought to bear on actual relationships person to person or person to group as trainees cross cultural boundaries. In formal training, the TRW Executive Education Team can begin to sensitize leaders to some of these issues by providing a vocabulary for the purpose of discussion. Exploiting Diversity More and more, a company s cultural diversity is being recognized as a business strength in its own right and not simply as the result of efforts to equalize the playing field. Diversity within an organization is a source of resilience, simply because it offers the advantage of a variety of strengths. Although differences between people can cause barriers to communication, global leaders understand that a wide range of heritages and experiences also supplies a larger pool of business solutions. By encouraging employees to appreciate their uniqueness, the company as a whole has the potential to tap into a wider range of ideas and gain access to new segments of the marketplace. The authors and the Executive Education Team also recognize that diversity exists among individuals because of the range of their experiences. Because experience is the most valuable teacher, the broader the range of an individual s past global experiences, the greater the likelihood that s/he will adapt to future global challenges. By way of the action learning project, the Executive Education Team can add to the experience, thus increasing the diversity within these individuals, better enabling them to respond to diversity between and within cultures. Action learning within a formal training program does have the added benefit of providing a context for experience and of helping leaders to become conscious of their roles in a changing environment. Tolerating Ambiguity In addition to appreciation for diversity, the ability to tolerate and address ambiguity is another skill that has been identified as being central to global leadership. With the unfamiliar set of assumptions inherent in any new culture, high-level executives are challenged to adapt to unfamiliar or uncomfortable surroundings and circumstances. Does this lack of familiarity elicit a sense of frustration and anxiety or challenge them to adapt appropriately? Increasingly, in the expanding global marketplace, senior-level executives will have responsibility for operations all over the world. How well they lead in each of these diverse settings and how well they coordinate multiple operations in different countries will make all the difference in their ability to leverage a competitive advantage for the company s global presence. Where in the past, the ability to excel at one management style may have reaped rewards within a particular culture, the increasing necessity to move effectively between cultures and countries will require greater flexibility in terms of style. Structured learning programs can provide the opportunity to learn the skills that will make these transitions more successful. Insights The question is not what we, as the architects of the GLP, learned from developing and implementing the program. Instead, the true test of the program s impact lies within the perspective of the participants. As one participant said, The GLP provided a powerful example of the value of team diversity. The program provided a catalyst not only for gaining valuable knowledge about global markets, but also for an insightful self-examination of the participants ability to deal with change and ambiguity and their ability to operate in unfamiliar circumstances. Specifically, the following points are important to the success of any program of this nature: In addition to appreciation for diversity, the ability to tolerate and address ambiguity is another skill that has been identified as being central to global leadership.

8 192 HUMAN RESOURCE MANAGEMENT, Summer/Fall 2000 What is needed, then, are leaders who are able to function across national and cultural boundaries and to manage as effectively in countries with very different beliefs and practices as in their countries of origin. involve senior management in all aspects of the program assign small teams for more focused learning arrange local on-site support avoid catering to the participants (e.g. arranging every meal, accommodations, and mode of transportation) provide specific and focused action learning projects ensure that the projects are real and meaningful develop follow-up plans and link the learning from one GLP to the next While the advantages of the program are numerous, participants felt that the program: broadened the perspective of company leaders and enhanced their flexibility built informal networks among senior leaders reinforced by shared experiences enhanced the cultural awareness of the participants Summary For many senior executives, the move toward globalization will require serving in capacities outside their comfort zone. As one participant noted, Some cultures (and some people) adapt to stress and uncertainty more easily than others. People that cannot adapt can derail the team. Part of the intent of formal training is to provide a safe and relatively controlled setting that provides the support of experts, for executives to extend their comfort zones. Furthermore, the opportunity to discuss their experiences in a team setting enables executives to make sense of these experiences in such ways that the skills learned will translate across cultures and countries. Even as production, marketing, and sales may branch out around the world, there is an increasing need to unify the vision and goals of companies as a whole. What is needed, then, are leaders who are able to function across national and cultural boundaries and to manage as effectively in countries with very different beliefs and practices as in their countries of origin. With the development of such global leaders, a company can achieve a synergy of its parts, rather than being diluted by its many far-reaching limbs. This synergy will be possible, however, only if business leaders are adept at leading not only in one locale, but also have skills that can cross, transcend, and even take advantage of cultural and national differences. In other words, global companies need business managers who are truly global leaders. The competition and, more important, the opportunities created by a global business mean that today s rising managers need a skill set that was not required of the last generation of business leaders. This requirement presents a new challenge to corporate human resources functions. Formal training is one component of what must be a business-wide commitment to developing global leaders; however, no amount of training programs can create a global mindset or climate if it is antithetical to the direction of the company as a whole. Formal training can augment the management s set of experiences even if it cannot substitute for them. A corporation-wide eye toward globalization in such things as assignment management and succession planning will provide the requisite groundwork upon which formal training can be built. Of course it will be years before the full range of synergistic effects brought about by improved global leadership will be visible, but the changed attitudes of some of the company s upper-level management suggest an almost immediate return.

9 The Role of Training in Developing Global Leaders: A Case Study at TRW, Inc. 193 D. BRADFORD NEARY is director of leadership development at TRW. He has responsibility for companywide executive and management development programs, as well as custom designed programs for specific organizations. He consults with senior executives and operating managers on a wide range of organizational issues, such as professional development, MRR/succession planning, 360 degree feedback, team effectiveness, training and development best practices, and other HR initiatives. In addition, he leads the company-wide Executive Development Network. Neary joined TRW in 1987 and has held HR positions of increasing responsibility in TRW s Engine Components, Aftermarket, Company Staff, and Automotive Sector Staff organizations. He earned his bachelor s degree from St. John s University, MN., and his master of arts degree from the University of Minnesota. DON A. O GRADY is Director HR, Body Control Systems, TRW Automotive Electronics, headquartered in Radolfzell, Germany. The organization is a leading producer of electronic safety, security, and convenience systems for the worldwide automotive market. Appointed to the position in January 1999, O Grady has global responsiblilty for ensuring that all HR initiatives are aligned with and in support of Automotive Electronics business strategy and objectives. From 1997 to 1999, O Grady served as director, leadership and organizational effectiveness for TRW Inc. in Cleveland, OH. Before joining TRW in 1995, he served in a variety of leadership positions in HR at Allied Signal, Lockheed Martin, and General Electric. REFERENCES Dotlich, D. & Noel, J. (1998). Action learning: How the world's top companies are re-creating their leaders and themselves.