Your #1 Leadership Challenge: Human Capital Maturity

As a new generation of leaders rises through the ranks of large enterprises, their experience will be markedly different from their elders'—especially with respect to how quickly they are asked to lead "globally." Many will find themselves responsible early in their careers for the work of teams in and from places far from home. To be effective, they will have to master a concept that few leaders today are even familiar with: human capital maturity.

The fact is, from one economy to the next, there are substantial differences in labor pools' readiness to work productively in organizational settings. Yet the new generation of global managers will be expected to achieve high performance wherever they go.

To acknowledge great variations in human capital maturity is not to be judgmental; it is not saying that the average worker in some developing economy is "immature" in a psychological sense. As in other areas of running a business, a maturity model only acknowledges that capabilities are built over time, brick by brick. The manager who thinks in terms of maturity doesn't throw a challenge at an organization that has not already processed its prerequisites.

What would constitute "high" human capital maturity? We would say it was a matter of a staff having three attributes: savvy understanding of the business, high emotional intelligence, and strong aptitude for continued learning. These would be evident in the high-potentials any multinational organization would entrust with managerial roles. And for that cohort, they would be attributes they had learned to take for granted in their peers. The problems come when they arrive in distant outposts and make the same assumptions there.

Take, for example, a Western executive we'll call Bill who was sent by his European-based company to manage operations in the Middle East. His new staff all hailed from that region, but Bill knew that most had been educated in the West, some at prestigious business schools. Moreover, in the first meeting he called, they impressed him with their knowledge of the company and the industry. When he assigned them a number of relatively simple tasks, he figured they would execute them easily.

What Bill realized later was that he had made some assumptions about their ability to work together professionally—expectations that were givens in the office setting he'd just left, but far from the norms to which this group was accustomed. Two employees he asked to collaborate on a task had a mutual antagonism that went back to roots in some tribal feud. They could not find a way to support each other's work, and were unwilling to admit as much to Bill. Another employee surprised Bill with his desultory manner; it turned out that, as a member of the land's extended royal family, he found his assigned task demeaning.

As Bill eventually learned, it's easy to mistake educational levels for human capital maturity. More than ever before, business-school educated workers around the world talk the same talk and arrive with similarly impressive resumes. Yet beneath this patina, they are products of very different cultures and experiences.

In fact, it is possible to get a false reading of overall maturity from a strength in any of the three areas—business savvy, emotional intelligence, or learning aptitude. For instance, employees may be unusually empathetic and communicate clearly and even eloquently, but so acculturated to showing esteem for superiors and for traditional methods that they are averse to learning new ways of doing things. Just because a workforce is mature in one category, it doesn't mean it's mature in all three ways.

The bad news is that global leadership training and development programs fail to prepare people to assess human capital maturity. That should change. In the meantime, the good news for leaders working with new global teams is that merely being aware that there are differences can make a difference. We offer two pieces of advice:

Find a translator—not a literal translator of the language, but someone who can help you grasp the cultural subtleties that affect maturity. This worked well for one executive we interviewed for our book after he accepted an assignment in China. The individuals he managed there were at least as smart as his former team in the West, so he was impatient with their seeming inability to come up with creative solutions when obstacles arose. After a key advisor explained that they had always worked in orderly, government-based organizations, with no encouragement to think outside the box, he understood the issue—and realized the same translator could clarify some other mysteries as well.

Watch for expectation/reality gaps. When there is a difference between what employees should be able to do based on their experience and expertise and what they actually do, pause to reflect on it. Often, a leader perceiving such a gap concludes the problem is one of motivation or communication. But the interventions that implies will not close the gap if it is really a matter of immaturity—if, for example, the employees lack strong learning capacity.

Beyond what individual managers can do now, leadership development organizations should make human capital maturity and how to assess it an important component of how they teach rising managers. Global leaders with a more realistic understanding of what to expect from their people in different settings will be far better equipped to improve that performance—and over time, by cultivating business knowledge, emotional intelligence, and continuous learning, to build the maturity of human capital wherever they go.

This post is part of the HBR Insight Center, The Next Generation of Global Leaders.

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