A study conducted at Kühne Logistics University (KLU) in Hamburg shows that two conditions enhance companies’ ability to tap the potential of employees like these:
- Managers must be open for new ideas and create an atmosphere in which having/expressing ideas is considered good business etiquette.
- Companies in the global market have a major advantage when they embrace multinationality and the company’s managers come from a variety of cultures.
Employees are not only there to carry out tasks – they are experts who have special knowledge that is important for their organization. “The employees who have been seconded to a subsidiary of their multinational corporation for a limited stay, for example, are often outstanding sources of innovative ideas. ‘On the outside looking in,’ they have no established routines but come with specific know-how and different cultural backgrounds,” said Christian Tröster, professor for leadership and organizational behavior at KLU. “Unfortunately for companies our research shows that this creative potential often lies fallow because employees are reluctant to speak up with ideas for how to improve the organization."
With colleague Daan van Knippenberg from the Rotterdam School of Management, he studied a company with locations in different countries and mostly local employees. Although all of the locations were successful with regard to their local activities, the company lacked a globally interconnected strategy. To tackle this problem, the company decided to activate the knowledge exchange among employees from different locations and countries. To achieve this goal, the company seconded employees from one location to a different one for up to three years. The temporary transfers, so called expatriates, were asked to use their knowledge to develop ideas for improving the processes at their new locations.
Interviews with over 250 of the company’s managers confirmed that the temporary transfers added value to their new locations. Above all, they indicated that the ideas they had would be useful for improving the company. Paradoxically, these employees preferred to keep their ideas to themselves. There were two main reasons for this: on the one hand, they felt less loyal to their new location and therefore, less motivated to advocate change for it. On the other, every new idea for changing the status quo is implicit criticism, i.e. the company could have done things better right from the beginning. “This means that employees who communicate new ideas are suspected of making unnecessary waves, and temporary transfers are the last people who want to be accused of making waves,” said Tröster.
Social psychology explains the phenomenon: similarities between people are always attractive, because they see themselves in the other and develop positive expectations of any mutual interaction (e.g. “Birds of a feather flock together.”). Seconded employees are often different from most of their colleagues – in both appearance and culture. This is why they may place less trust in the colleagues at their new location and feel less of a connection to them.
Situations like these required a high degree of sensitivity and challenge managers in a very special way. When managers are generally perceived as being open for new ideas, the probability that employees – especially temporary transfers – communicate their ideas for improving the company to them increases. “To achieve this ideal situation, companies must develop a culture of learning and actively support this culture. They must communicate the reasons for implementing or not implementing new ideas clearly,” explained Tröster. In some cultures, it is considered terribly impolite to criticize the boss. “Western-oriented managers must try to overcome the employees from these cultures’ reluctance to criticize. But many bosses simply don’t know how.”
The study also shows that temporary transfers in particular feel more secure when their bosses come from the same cultural and national background as they do. “Companies are on the right track when they provide their international personnel with the same opportunities to obtain management positions,” said Tröster. “Companies who create a climate of innovation and consciously shape and live internationality have clear competitive advantages because they are able to mobilize additional creative potential.”
For more information on the subject, see: Tröster, Christian & Daan van Knippenberg. “Leader openness, nationality dissimilarity, and voice in multinational teams.” In Journal of International Business Studies, (43(6), 2012): 591-613.