Frits van Paasschen, CEO of Starwood Hotels & Resorts, once tried a bold experiment: he moved himself and his entire senior leadership team to Shanghai, China for one month. He explains what was behind the move and why he’s done it again, this time relocating to Dubai.intelligentHQ
In an interview with Sarah Green of Harvard Business Review Blog Network, van Paasschen delved into the reasoning behind his out-of-the-box thinking. “I thought it would be a great way to get closer to the market, but also to show our team, internally, the importance of markets outside of our home office.” says Paasschen. “And in fact, if we’re a global company and we have a global mindset, then there’s no such thing as “international”. There’s only different markets around the world where we operate.”
He says that during his previous experiences operating businesses overseas, he would try to immerse visitors from the head office as much as possible into the local culture during their brief stays. However, it left him wishing that he could move his own management team to China for an entire year.
According to van Paasschen, it was his wife who encouraged him to devise a way to put his experiment into motion, suggesting one month as a practical time frame. He says the 2011 relocation to China was meant to encourage a new type of mindset and style of leadership, to being that of both a “global and a “multi-local” company,” says van Paasschen.
“[The] reality is that China today represents almost one third of our total growth,” says Paasschen. “It’s a very important piece of our business and we wanted to get closer and make sure we were continuing to lead in the market as we were.”
Paasschen says the month-long stint in Shanghai taught his team to “stretch their thinking,” as well as the importance of making good decisions with a diverse group of individuals who have different points of view, but who share the same business goals. And if anything, it also produced a surprise or two.Frits van Paasschen CEO Starwood Hotels & Resorts on HBR Blog Network
“[The] one extra benefit that, candidly, I hadn’t expected, was the ownership community in China,” he says. “By virtue of our going there and doing what we did, [they] saw how important we as a global company saw that market. And if anything, that’s accelerated their interest in us and it’s sped up our pipeline growth in China.”
Going off the success of his first experiment, van Paasschen recently followed up with a second, relocating his team to Dubai for the entire month of March. Van Paasschen explains in Why We’re Relocating Our HQ to Dubai for One Month, his senior Leadership team have learned three principles about working as a global company “more seamlessly across functions and across borders” through their experiences: To let local teams shine, to continue running the global business “no matter where the senior management team is sitting,” and to engage the entire organization.
He told HBR Blog Network, that although Starwood Hotels & Resorts is more at the “extreme end” in terms of a global company, there are bold actions that global businesses can take to be “more agile in extreme-growth markets” and encourage the emergence of a new style of leadership, spurred on by globalization.
“Anything you can do as a symbolic and a substantive act to change mindset, to change the way people think about things, I think, is beneficial,” says Paasschen. “Whether other companies should actually do what we are doing here … up to them. But I do think there is something to the way work is different today and an approach like this to address those challenges makes sense.”
He says that the relocations have helped to “re-level” the company, opening them up to more candid conversations, smarter decisions and ultimately, better results, having gotten to listen to the feedback their leaders and associates were providing.
“In a “flat” world, we no longer think about being centralized or decentralized,” says Paasschen. “… To change the global mindset of any company, you have to brave the world beyond the boardroom.”
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