November 23, 2009 10:06 pm

The corporate diplomats

Nani Beccalli calls himself the 'foreign minister of GE'

Nani Beccalli calls himself the “foreign minister of GE”. In his role as chief executive of General Electric International, the Italian is in charge of the entire world outside the US for the conglomerate.

Asked if his worldwide domain makes him a potential rival for Jeff Immelt, GE’s chief executive, Mr Beccalli extends the diplomat metaphor further. “I don’t run any operations. I am the Hillary Clinton of the situation,” he says. “I don’t think Hillary Clinton is a threat to [Barack] Obama. It is like in the Iraq war: I am Colin Powell, the people running the war – running our operations – are [Donald] Rumsfeld.”

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Mr Beccalli is one of a select but growing group of executives who run their companies’ activities in the world outside North America. Jean-Philippe Courtois is another. The Frenchman looks after “230 countries outside two tiny countries, the US and Canada”, he says, in his role as president of Microsoft International.

Goldman Sachs has an international arm run out of London by co-chief executives Richard Gnodde and Michael Sherwood, but its geographical remit is more complicated than Microsoft’s and GE’s and does not cover the whole word.

General Motors is another US business with an international head – in this case, Nick Reilly, who has just added Opel, its German arm, to his responsibilities.

Their roles all vary. Mr Reilly, for example, is involved in operations – unlike Mr Beccalli and Mr Courtois.

The position is created mostly by US rather than European companies. At heart, the various versions share the idea of connecting the company to the rest of the world outside the US and providing an advocate for international growth among senior executives. However, the roles, with their immense geographical spread, also bring big challenges, from internal politics to dealing with a bewildering range of governments and cultures.

Some people, such as Klaus Kleinfeld, the German-born head of Alcoa, the US aluminium company, are sceptical about the very idea of an international head. “It is a very odd, American concept. If you really want to be international it has to be in your culture,” he says, rather than being imposed by having a set role for it.

However, it hardly seems surprising that Microsoft and GE have ap­pointed such executives – both based in Europe – given that each company ran into problems with European regulators earlier this decade.

Mr Courtois cites the European Union’s investigation of Microsoft when asked about challenges in the job: “There was clearly a time to really get the company to invest in a responsible way in Europe,” he says. Relations have improved to the point where Mr Courtois was named by the European Commission as an amb­assador for its year of innovation and creativity this year, which means he shared a podium with politicians who had previously bashed the company.

GE also reacted to pressure from the EU after the debacle of its blocked bid for Honeywell. When Mr Beccalli took the job in 2001, he moved the international headquarters from London to Brussels. He is not involved directly in any of GE’s operations but focuses instead on the US group’s worldwide strategy and on engaging with any grouping that has influence over the company.

Increasingly, that means being close to governments and regulators. “The government is going to be the major player in this economic cycle,” Mr Beccalli says. In the past year, GE has started an initiative to work more closely with governments, a move that grew out of looking at how it could get business from stimulus pack­ages. But the interest in governments is not limited to just selling to them. Mr Beccalli also says it is about helping shape policies, and public advocacy for GE.

He adds: “Who is spending the money? Guess what? The central government has no money. The things are procured at the regional and city level. So Boris [Johnson, London mayor], not just Gordon [Brown, UK prime minister].”

That implies a lot of travelling. Mr Courtois reckons he spends 60 per cent of his time travelling and visits up to 40 countries a year. Mr Beccalli says he is on the road 70-80 per cent of the time: “It is important bec­ause I could not talk to my colleagues about Kaz­akh­stan if I hadn’t been there and smelled the air.”

When he spoke to the Financial Times, he was preparing to fly to Athens to meet Mr Immelt so they could travel tog­ether to Kuala Lumpur, Singapore, Jakarta and New Delhi to meet prime ministers and other politicians.

How do they monitor all the countries reporting to them? At Microsoft, the world is divided into 13 areas, 11 of which report to Mr Courtois. Every quarter he spends three hours per area going through problems and opportunities.

Every five weeks, Mr Beccalli conducts a two-day operational review, covering Asia and the Middle East on the first day, and Europe and the Americas on the second. That enables him to be a bridge between headquarters and the countries.

“I am selling the company in the regions and I am selling the regions in the company,” he says, before adding: “Sometimes the internal sell is more difficult than the external one.”

As an example, Mr Beccalli points to a Scandinavian executive who had to make the case repeatedly for being in offshore wind until, finally, GE two months ago sealed the takeover of Scan Wind of Norway.

Likewise, Mr Beccalli identifies as one of his biggest challenges his first trip to the Middle East soon after starting the job in 2002. He returned convinced that business opportunities existed, including for healthcare manufacturing in Saudi Arabia.

But so soon after the September 11 2001 attacks on New York and Washington, many at GE were sceptical. “It took me a lot of time to convince the corporation it was an opportunity,” he adds.

To an outsider, the possibility of conflict with the group chief executive seems big given that the two executives essentially run the world. However, both Mr Beccalli and Mr Courtois say their status as company veterans who have had a number of roles helps them avoid problems.

Mr Courtois was Microsoft’s 11th employee in France and only the 400th in the world; now, there are 92,000. “When you have been around for 25 years you know a lot of people ... When Steve [Ballmer, chief executive] visits some countries, such as the UK and France, I would be with him,” says Paris-based Mr Courtois.

Mr Beccalli points to the fact that, of 42 people on the executive committee at one stage, 17 had come through the relatively small plastics unit.

The comments of both suggest that outsiders would struggle in such jobs.

Their nationalities may help too. When asked if he must perform the role of diplomat inside GE, Mr Beccalli says immodestly: “I’m Italian. All the greatest diplomats are Italian.”

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