In March of 2010, MetLife Inc. announced a $15.5 billion deal to acquire American Life Insurance Co., also known as Alico, from beleaguered American International Group Inc., or AIG.
But this wasn’t just any deal by two insurance behemoths commonly at the center of billion-dollar transactions.
The purchase, a fire-sale effort by AIG to repay government bailout funds it received as a result of its involvement at the center of the 2008 financial crisis, instantly propelled MetLife, then the largest life insurer in the United States and Mexico, into elite territory.
By acquiring Alico, New York-based MetLife’s global presence grew to 64 countries from 17, putting it among the biggest insurance firms in the world (it now has roughly 68,000 employees). Its non-American revenue, which before the deal accounted for 15 percent of its total, jumped to 40 percent, reported The Economist the week of the deal’s announcement.
This considerable expansion came with a subtle reality: most of MetLife’s senior executives lacked global experience.
“While we had a global company, we really didn’t have global leaders within the business,” said David Henderson, MetLife’s chief talent officer and executive vice president of human resources for its global functions.
“In fact, when you looked at MetLife as a company, and you looked at our senior-management-and-uppopulation, we were somewhere in the range of less than 20 percent of our leaders having significant out-of-home-country experience,” Henderson said.
With the acquisition closing within several months, this needed to change — and fast.
‘We don’t move packages like UPS and we don’t move people. We move talent. That’s a big mind shift. And that changes the game for everyone that is involved in mobility.’
—Jan Eckert, vice president of International Assignment Office, MetLife Inc.
To diversify the experience of its would-be global leaders, MetLife in late 2012 created a plan — in tandem with management consulting firm McKinsey & Co. — to start a global mobility program to place its high-potential executives in new markets, such as Brazil, Nepal and Singapore.
“We needed our more-senior leaders to have international experience as they moved through the management hierarchy,” Henderson said, “so they could really understand the complexity of operating in a global business context.”
Not only would the effort increase the number of senior executives in these markets, but also it would help MetLife expand its overall talent development proficiency by providing it an on-the-job grooming environment for leaders to build global skills.
Planning for such a shift in talent strategy, however, was complex and comprehensive. Executives say they’re still working through some of the nuances that come with orchestrating executive-level global assignments — including calculating an international assignment’s return on investment from both a talent development perspective and for its business value.
Results are coming into focus after the program’s launch. Some 210 MetLife employees have been dispatched or were pending 2015 placement in foreign markets. About 45 are senior executives, Henderson said.
The emergence of a truly globalized business environment in recent decades has been challenging for many previously North American-based companies. And the area many of these firms are struggling to adapt is leadership.
According to calculations cited in a May 2014 issue of The Economist by Pankaj Ghemawat, a global professor of management at the New York University Stern School of Business, only 12 percent of the world’s global Fortune 500 CEOs come from a country other than the one in which the company is headquartered.
Moreover, the same article cited a separate study showing that the proportion of expatriates in senior management roles in global firms in the biggest emerging markets dropped to 12 percent in 2008 from 56 percent in 1998.
In recent years, the strategy of sending leaders to foreign markets has bounced back, according to Steve Nurney, a partner and North American global mobility leader at human resources consulting and research firm Mercer. But instead of using global assignments on a project-by-project basis, or to shore up business problems in troubled markets, companies are using them as talent development tools.
“If you have a potential future leader or current leader who needs to be groomed for maybe a broader role within a global organization,” Nurney said, “it really makes sense for that individual to really want to develop that global perspective.”
In MetLife’s case, moving global mobility into the talent management sphere began in December 2012, when the company hired Jan Eckert away from multinational conglomerate Honeywell International Inc. to lead its global mobility push.
Among the first things needed to transform mobility at MetLife, Eckert said, was to change the company’s mindset around what it meant to move talent globally.
“We don’t move packages like UPS, and we don’t move people,” said Eckert, MetLife’s vice president of its International Assignment Office. “We move talent. That’s a big mind shift. And that changes the game for everyone that is involved in mobility.”
For MetLife to successfully design aglobal mobility strategy, Eckert said the International Assignment Office had to first fully align its principles with that of the company’s new business strategy following its Alico acquisition.
That strategy came in the form of “One MetLife,” a credo to grow the business in emerging markets. At its core, this meant MetLife’s talent management team had to coordinate international opportunities to enable select senior leaders to develop global mindset and cultural awareness.
With One MetLife in mind, Eckert and the rest of the company’s talent managementteam framed its global mobilityselection process in three stages: “Pick and Plan,” “Develop and Deploy” and “Measure and Manage.”
With Pick and Plan, MetLife’s talent mobility leaders aim to plan global talent investments to meet its business needs and increase its global capabilities. For Develop and Deploy, they aim to set objectives for international deployments and match individual development needs to those of the business. And in Measure and Manage, they aim to measure the value produced throughout the course of an international assignment.
“It’s a coordinated effort across our matrix,” said Arnold Dhanesar, MetLife’s senior vice president and head of global talent management, describing the process in which executives are selected for global assignments. “We call it the global talent brokerage council.”
To more deliberately facilitate the selection process for global leadership assignments, MetLife established a dual talent evaluation process. In addition to what the company terms its “on-cycle” quarterly talent reviews — which evaluates the current state of talent, including succession candidates and development opportunities — MetLife conducts “off-cycle” monthly talent brokerage council sessions.
This council, chaired by Dhanesar, includes functional and regional leaders across MetLife’s matrix structure. Its aim, Dhanesar said, is to match enterprise-level talent to important officer openings. It also is meant to serve as a forum to plan accelerated career development moves of high-potential leaders as well as discuss external leadership searches, including planning the placement of leaders in global assignments.
“Talent brokerage is a concept that we implemented to manage the supply chain” of talent, Dhanesar said, “and it ensures that the best talent is considered for our officer-level jobs. … That is regardless of where the talent currently resides geographically or functionally.”
Henderson said this talent-brokerage approach is different from MetLife’s prior global assignment framework, which would send subject-matter experts to less-developed markets to “transplant capability.”
“Most of our expatriates at that point I would call seasoned technical experts,” Henderson said. “And that’s good and we need some of that, but what we also need is to deploy high-potential talent into marketplaces where they could develop a global experience and competencies, and ideally we want to export high-potential talent that can also build out strategy.”
MetLife’s next step in reframing its global mobility strategy came with the realization that not every international assignment needed to be created equal. That is, different leaders in different businesses could be placed in foreign markets for different reasons.
Around the same time the company came up with the idea of an off-cycle talent brokerage, MetLife developed a segmentation model that would serve as a guide to determine both the business and individual development value in placing senior leaders in international assignments (Figure 1).
“We said, ‘Let’s do a two-by-two here that seeks to delineate the development value and the business value,” Henderson said, “and once we have ascertained the value to the business, let’s flex our offering accordingly based on the value of the assignment both to the business and the individual.”
Within the segmentation model is a three-tier strategy for placing executives in international assignments.
According to Eckert, Tier One is the most significant of the three. It is for those leaders that are in the most critical global roles likely to have the biggest influence on MetLife’s long-term business goals. These leaders will not only enhance the company’s long-term business value by taking on the assignment but also will find high personal developmental value as well.
Tier Two is for needed technical expertise in a given market, with low personaldevelopment value. Tier Three is for individuals whose experience is in need of international exposure but whose presence in that market isn’t necessarily of high long-term business value.
With the framework for placing executives in foreign markets complete, MetLife’s talent management team needed to determine a duration and transition plan for assignments. Henderson said the goal with most of its executive-level global assignments is to eventually have that executive replaced by local talent.
The primary reason for this is cost. Transferring executives to global assignments can cost anywhere from two to three times as much as employing someone locally. “There has to be a return strategy for any individual going on assignment,” Henderson said. “That’s why there’s strong alignment between the host business and the home business.”
Once an executive is selected for an international opportunity, there is a brief assessment period for the individual to commit. Because many senior executives being considered for global moves have families and other personal obligations, Henderson said these decisions require careful planning and coordination with the individual.
In addition to weighing the prospect of moving in light of personal reasons, international assignment candidates may prefer some markets to others. “Before we get to the stage of making an offer, there’s a whole screening process,” Henderson said. “They would meet local management [in the foreign market] and, more recently, we put more orientation tools in place so the individuals can get a sense of what they’re likely to encounter in the market.”
A final component to the assessment stage is what Dhanesar termed a “future-back career plan.”
In this arrangement, MetLife’s executives work with its senior-level talent to identify the critical experiences a given assignment — say, New York to Japan — is likely to bring an individual, as well as what current skills the individual is likely to bring to the assignment.
Dhanesar said this process also aims to evaluate how the international assignment will help the leader for, not just their next role at MetLife but other roles down the line.
“While working backwards, we can actually determine what experiences this individual needs vs. putting them in an assignment that doesn’t necessarily build critical experiences for the next role,” Dhanesar said.
The time between when an executive is offered an international assignment and actually makes the move varies, Henderson said, but typically the window is about three months.
Most executive-level global assignments are planned for about three years, Henderson said, because once it goes beyond that duration, the cost dramatically increases because of higher benefits costs.
The talent executive team then starts planning an international assignee’s return plan about six to nine months in advance of the targeted return date. Henderson said this includes identifying either a new permanent position in the home market or a temporary job until one becomes available.
“It’s a very dynamic process,” Henderson said. “But we’ve anchored it in a number of our talent processes over the course of the year.”
MetLife’s first executive global assignment occurred in July 2013, Eckert said. And while MetLife executives say the program provides measurable value, mobility experts say calculating the return on investment of such arrangements remains a challenge.
“The investment part of the calculation is known; most companies are able to track the costs of their assignments,” said Mercer’s Nurney. “But it’s often difficult to quantify the return on that investment, because oftentimes the return is intangible or might take some time to really show itself.”
As a result, more companies are beginning to track the return value of global assignments initially in terms of the talent development value, Nurney said, as oftentimes the value brought to the business isn’t known for years. Metrics such as attrition and the career progression rate of high-potential employees are areas Nurney said firms are scrutinizing to evaluate global mobility efforts.
Although MetLife is still in the early stages of its program, Eckert said she’s confident the company will be able to generate return on investment on both the talent development and business fronts. She said initially the quantifiable assignment value is measured via the company’s standard performance management process for overseas workers.
“What we’re doing now is working with our vendors to create reports that happen when the person comes home,” Eckert said. “Where do they go [from there] in terms of their career? What happens after year one, year two? That’s really to me where there’s tremendous ROI in the value of an international assignment.”
Because most of MetLife’s first international assignees at this article’s publication are still on their first global assignment, Eckert said much of the evaluation to this point has been qualitative, with the monthly talent brokerage sessions the primary forum for assessment.
“We’re able to look at people in our international assignments per what I’ve implemented here,” she said. “We look at them nine months out, six months out and say, ‘This one looks like he’s ready. Where can we place them?’ ”
“So that establishes somewhat of an ROI that we can see value-gain,” Eckert said. “We see that they’ve been able to complete an international assignment successfully. Where else can that person fall into the organization? Because that helps create that leadership pipeline.”
Expanding the Pipeline
As MetLife continues to build global capability for its most senior leaders, the company is also working to extend its leadership bench by providing fresh business school hires the opportunity to gain emerging-market experience.
To date, this has come primarily in the form of the company’s global leadership development program,” which takes 10 to 15 MBA recruits from the world’s top business schools and provides them at least one international assignment, in addition to other business rotations.
“What is unique about the global leadership development program is it basically guarantees these individuals at least one international assignment outside of their home country in three rotations that they go through,” Dhanesar said.
“Over five years and three rotations,” he continued, “we expect them to move into feeder-level general management roles, but the unique piece of this program is they complete at least one to two of these rotations for at least two years at a time in a country that they’ve not had experience in before.”
Whether it’s new business school graduates or seasoned executives, MetLife’s mobility executives say the initiative appears poised to generate valuable returns.
Dhanesar said success is already apparent. In 2012, MetLife had a 60 percent succession gap in its top roles. In 2014, he said the company reached 80 percent succession bench strength.
“And the key reason for that is we have focused on global mobility as a driver of success,” Dhanesar said, “and we are beginning to give individuals who we believe are our enterprise talent a more robust experience and career opportunities in countries that we never operated in before.”