Cultural challenges
Taking charge of a company in an emerging market can present executives and CEO's with a jarring cultural shift. It is nigh on impossible that the business will be entirely self-contained, so any need to deal with local employees and other businesses means that leaders will have to adapt to how the country does business. Given that even in developed markets there are businesses that are far from streamlined, it is less likely that this streamlined approach will be present in emerging markets.
Different styles of management and different values may motivate employees, while external dealings may require different formalities. To succeed, leaders cannot look at these practices and dismiss them with an 'I know better' attitude. To the contrary, it is necessary to understand the background of the local practices and see what can be adopted and what can be adapted. Too drastic a change may alienate employees and other local businesses; too little change and you may find yourself bogged down with problems that have hindered other companies in the past.
While moving from one emerging economy to another may be relatively straightforward, moving from a developed market to a frontier or emerging market requires cross-cultural adaptability. To simply apply a leadership-style that has proven successful in a developed market can overlook (to the company's detriment) issues that the company is facing. It is almost like trying to finish a puzzle with a piece of a different puzzle altogether – it has little chance of working, and will likely cause more harm than good.
However, an open-minded, ready-for-change approach will take the business further. It may be possible to solve a long-standing problem in a business or even sector with a creative mindset and real understanding of the local business culture. Furthermore, the ability to nurture talent and develop employees who may have been in the wrong role or had their skills underutilised could help take a business to new heights.
Identifying talent
Speaking of talent, it is particularly important in emerging markets (especially in the case of small to medium businesses) to be able to identify and nurture talent. The uncontrollable aspect of this is, of course, the education system in the country, which can vary hugely. Countries that have had time to improve their education system as their population and workforce has sought out and required better quality education will certainly make it easier to find quality talent to drive a business forward.
While countries that make it easy for businesses to import talent from abroad in sectors where there is a skills-gap may be appealing, it deprives companies of the kind of local knowledge that can help prevent a leader from making rookie mistakes in an emerging market. Relying too much on the ability to bring in talent, rather than looking at the country's ability to develop its own, may create a challenge all of its own when it comes to cultural adaptability.
Nonetheless, even in emerging markets where the education system is not up to scratch, talented employees can benefit from effective training. A talented and motivated employee will be keen to learn new skills with the support of the company to progress. Additionally, larger companies can work with universities, to ensure they are shepherding skilled graduates into their doors straight out of the gate. Young, technology-savvy, motivated employees that are local to the country can take a business far, with the benefit of effective leadership.
