The only constant about modern business is change. Whilst change may be inevitable, it is not easy. In the past several years, the entire way that companies operate has been transformed. Things that used to be core competencies like manufacturing, design and sales have been outsourced. One major computer manufacturer notes that more than 75% of the computers that they sell are never touched by any of their employees: manufacturing is outsourced while sales and maintenance are provided by partners. A long, long time ago help desks were staffed locally; now they usually located (in a galaxy) far, far away.

Making this all work requires people. Traditionally, many of these people, especially in emerging markets, were expatriate managers. In a recent posting of McKinsey Quartely, called “Beyond expats: Better managers for emerging markets”,  Jeffrey A. Joerres, CEO of Manpower, introduced the concept of ‘reverse expatriation’ – and the coming end of the traditional western expatriate manager because:

• It’s not scalable.

Increasingly different parts of almost every company’s value chain are done in different places. Simply speaking, there are not enough skilled people to sustain the expatriate tradition.

• It’s not effective

High Growth market contributions are expanding so quickly that the knowledge and expertise necessary to productively manage the effort is more likely to be locally grown than externally injected.

• It’s not smart

Limiting opportunity for local staff is a sure way to create an employee retention challenge. Many companies in emerging markets face employee turnover rates in the high double digits. Continuous replacement of trained and experienced employees with brilliant, but naive newcomers is not a recipe for success.

Joerres proposes formal mechanisms to bring the skills of the emerging market manager into the larger corporation.  The basic approach is to rotate local managers through corporate offices and functions.

I believe that it is equally important to rotate people from traditional offices through high growth market locations because people must be in a position to learn from each other. Companies will want to institutionalize their core values throughout their organizational domain whilst simultaneously discovering and embedding new approaches to, for example, improve execution.