Mistakes that Companies Make in Recruiting for their U.S. and Canadian Business Units

In this multi-part series about mistakes that companies make when they imagine the world, I'm starting with a discussion of how businesses view North American geography and how they arrange their business strategies accordingly. Our firm, ART, is based in North America, and although we were founded as a region-neutral executive search firm recruiting in the top 1,500 world metropolitan areas on six continents for decades, we've got to start somewhere, right?

First off, I have yet to find any person residing in North America who normally speaks of being a "North American." When Americans and Canadians are speaking together, one might say things like "here in North America" or "the revenue for North America is X." Perhaps if there is a US-CAN gathering, folks will be collegial and speak of "North Americans" doing this or that. But outside of such events, Americans normally will identify as Americans and Canadians will usually consider themselves Canadians. I say "usually," not only because there is an active pro-independence party in Québec, but also because I have memories of driving through Newfoundland and seeing some houses flying the Maple Leaf national flag, more the Newfoundland & Labrador flag, and most flying the Union Jack, recalling the time "before Newfoundland was forced into Canada."

This contrasts quite noticeably with Europe, where large swathes of people across the continent might describe themselves as Europeans, and where many companies describe themselves as European firms, rather than German, Dutch, French, etc., even if most all of their staff and business activity is based in their HQ country. And in many cases, legal, employment, and financial frameworks are increasingly being harmonized on a European continental level. This distinction in N.A. is important to note,, particularly for European employers, when recruiting an "Americas Region General Manager" or "North America Sales Director," because as far as most legal and practical reasons are concerned, business practices and legal processes in any N.A. country could be quite different from the next N.A. country.

"North America" is sort of a convenient fiction whose frontiers are defined by the speaker. Businesses might speak of "North America" as being the U.S. and Canada only, because there are indeed many economic and cultural similarities between these large and prosperous, largely English-speaking countries; but Mexico is in North America, as is Central America, as are the countries of the Caribbean. And Mexico, Canada and the U.S. even share membership in a free trade bloc that 99% of North Americans could not name offhand called USMCA. USMCA is a re-engineered NAFTA (the North American Free Trade Area).

Regarding NAFTA/USMCA, some Europeans erroneously believe that employment visas between Canada, U.S. and Mexico businesses work somewhat as they would within the European Union. The legal situation in this region is very different, especially in the U.S., where the paperwork involved in moving a Canadian or Mexican to a U.S. business unit can be costly and time consuming to an employer. Also, hiring an American, Mexican or Canadian to be a "North America Regional Director" would not automatically mean that such an employee could easily and legally work or conduct much business in any of the other USMCA countries.

Businesses might be tempted to circle on their maps the U.S. and Canada as "North America," because honestly, these are easy choices. But the reality is actually quite different. In the province of Québec, where francophone kids might play baseball in summer like a lot of other "North American" kids, they and their families nowadays consume a lot of France-originated media, so many of their cultural, political and business conceptions are now at least partially informed by European models. In turn, a lot of French businesses find a comfortable home in Québec, thereby creating more intercontinental bonds between those two societies. But if, for example, a French firm sets their N.A. HQ in Montréal, by no means would that office location automatically guarantee them the best launching pad for business across anglophone N.A.

Particularly in the U.S. Southwest and northern Mexico, there are strong business and cultural links blurring borders between those two countries, while legal differences remain. In fact, because of significant immigration from Mexico, Central America, the Caribbean - as well as the rest of the world - to both the U.S. and Canada, there are substantial communities from all those countries across the U.S. and Canada, thereby enriching and making more complex the strategies of marketers who only thought of North America as just a large, easily known market.

So what is North America really and where should a non-N.A. firm base its N.A. location? For the moment, I am going to only discuss North America as the U.S. and Canada, because this is how a large number of businesses conceptualize their business maps of the world today, but that is an admittedly simplistic map.

A N.A. location that might seem comforting to a foreign employer might be the wrong place to staff and manage their North American business.

In my experience, it is amazing how many companies' ruinous business assumptions started with their incorrect assumptions about geography and local business cultures. One of our firm's strengths is that we work with everyone everywhere, and by so doing, we have learned the important unique distinctions of one person or one location versus another. When we do candidate-company matches, we look for candidates who can serve as human bridges between HQ and the target customers. But amazingly, many employers often have upside-down or out-of-date notions informing them.

*** A UK company that wanted to hire a "North American Sales Director" in either Toronto or Boston. Nothing immediately wrong here, but that firm sold products to the petrochemical sector, which in North America would be based in places like Houston, Tulsa, Calgary or Edmonton. Why did they require candidates to be in Toronto or Boston? We were told that the company's executives liked that Toronto or Boston were short flights from London. "Yes, but, there are no suitable candidates in those cities." (Can you guess why that firm is no longer in business?)

Hiring candidates located in places that are more convenient to HQ managers than to customers is a frequent and very under-reported problem in world business, and it is not by any means limited to North America. This is a problem of fearful or lazy management that doesn't want to travel a few more hours to meet their customers. It's also a misunderstanding of the physical vastness and multi-polarity of business in North America.

We have seen European firms in the CPG or food sector wanting to base their US office in New York, when most of their fiercest competitors and most suitable candidates were in Chicago. We have seen Asian firms wanting to base their US office in Los Angeles, when Texas, Ohio or Georgia offered far better choices of more relevant candidates to build their U.S. businesses. We have seen a Canadian firm trying to recruit only in nearby Buffalo when they should have also considered the larger U.S. for top candidates to build their business. Even Cleveland or Detroit were too far away from their comfort zone.

Chief lesson: the business should be prepared to hire knowledgeable people who know their target customers well, not simply people who happen to be in a place convenient for HQ people to visit. Typically, the ideal place to recruit is where one's competitors and customers are most active.

***A medium sized American consumer products company with a limited budget that needs a Canada Country Manager and disregards the fact that a substantial percentage of the customer base largely needs to be reached in French. It's easy for an American hiring manager to hire a unilingual English-speaking Canadian, but if they had also considered additionally recruiting fully bilingual managers, they might have had greater and faster reach into the whole target market.

Chief lesson: Hiring your twin can be a risky move. Do not surrender any potential market simply because it is different from your own. Hire someone whom you can trust to guide your firm to that larger customer base. "North America" is a much more culturally diverse and complicated market than it might seem. The opportunities are great if the right person is chosen. Who is the "right person?" It is a person who knows what you do not know already! It's a person who has a long track record at your competitors selling successfully to your target customers in the region. If you could do this yourself now, then you don't need to hire anyone else.

***U.S. sales territories, as defined by American companies, often disregard important local or regional or sub-regional distinctions. For many companies, the urgent mandate is to just hire someone in that territory and if the person fails or under-performs, HQ's misunderstanding of such geographic realities is never to be blamed. The blame will fall on the employee, not on the decision makers who chose the wrong definition of the territory.

--- A "Regional Sales Manager" who is indeed in the right region of the U.S., but is based in the wrong location in that region.

Chief lesson: When considering regional territories, a company must take into account realistic differences of compensation, along with customer and competitor location. Too often employers feel hurried to "just fill the vacancy." Neither the candidate nor the employer would appreciate that the job is burning out the employee due to unreasonable travel or that the learning curve for breaking into unknown markets is too long to be profitable.

***One final thought. Many companies based outside of the U.S. erroneously believe that the cost of establishing a U.S. office for sales would be too involved or too expensive. As a result, many companies needlessly avoid this huge continent-sized market. Solution: hire a person for the start-up office who would be legally self-employed. Unlike many countries, in most states of the U.S., it is relatively easy and inexpensive for a sales person to register as a business. This option, although not ideal, and not attractive to many candidates, could be a way that a foreign firm could start their U.S. presence.

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BizGeography101: How Businesses Mis-imagine the World