Too little — or too much — attention from head office executives can cause problems in a company’s global operations.
How much of their attention should a company’s executives give to its international operations? To study the question of executives’ global attention, we interviewed and surveyed senior executives in 135 multinational companies over a five-year period. While subsidiary managers can and often do pay much attention to international events, our research focused on the attention of head office managers — such as CEOs, COOs, senior vice presidents and general managers — who control the levers of global strategy. The companies we studied were all publicly listed, had extensive international operations and were all based in one of six countries that, collectively, account for approximately half of the world’s foreign direct investment expenditures: the United States, Canada, France, Germany, the United Kingdom and Japan.
At an aggregate level, global attention consists of the time and mental effort that a group of senior executives directs to a company’s international activities or its global environment. We measured executives’ global attention by looking at three areas:
- executives’ efforts to scan the global environment for opportunities and threats;
- the degree to which the executive group immersed themselves in global issues — as measured by communications with overseas managers, CEO travel and the extent to which senior management meetings were held in other countries;
- the degree to which the company executives discussed major globalization issues together.
More details about this research can be found in an article we published with Julian Birkinshaw of London Business School in the Journal of International Business Studies, as well as in Cyril Bouquet’s book Building Global Mindsets.
C. Bouquet, A. Morrison and J. Birkinshaw, “International Attention and Multinational Enterprise Performance,” Journal of International Business Studies 40, no. 1 (2009): 108-131.
C. Bouquet, Building Global Mindsets: An Attention-Based Perspective (New York: Palgrave Macmillan, 2005).
Through our research, it became clear that the management of executive attention can have a significant impact on the performance of global companies. However, relatively few companies seemed to optimize global attention. Most seemed to either spend too little or too much time and mental effort on global issues. And both too little and too much attention to global issues were correlated with lower company performance — a phenomenon we call the “Goldilocks problem.”
The Problem of Too Little Global Attention.