Hiring Americans does not work!

Interview with an Israel based CEO who has given up hiring American business leaders for their US subsidiary

American executives aren’t always a good fit

?

We have worked with many Israeli and other non-US companies that operate US subsidiaries – some are sales and support offices; others have US production facilities as well.

Hiring the right person to run American subsidiaries for Israeli (or other non-US) companies is challenging for the decision maker – and often mistakes are made, resulting in a high rate of turnover.?

We interviewed a CEO who has “seen it all”

?

We recently had the opportunity to interview an Israel based CEO of an industrial B2B products manufacturer who has given up hiring Americans to run their US Company.?

His “trial and error” hiring with different executive profiles to run their American subsidiary may interest other non-US based managers with a US business, as well as American executives interested in working at such companies.

Here is a summary of our interview:

?

Chuck asked:

?

So what’s the problem? You initially established a US subsidiary to sell and service your products. I would think the obvious choice was to find an American with experience in your industry to run such an operation.

?

CEO Response:

?

That’s what I thought at the time.? We assumed if we could find a well-connected manager who had worked at one of the industry leaders, they could manage and grow our US business.

?

Chuck

So what actually happened?

?

CEO

?

When we first opened a US company, it was a sales, marketing and support operation. We hired an industry insider as US President - someone who had the “perfect” profile.? He knew our industry, products and customers and he is well connected with key opinion leaders.? Unfortunately, he could not operate well in our environment.

?

Chuck

?

What problems did you have?

?

CEO

?

Our first US President had been a VP at a mid-size US company in our field, so our role as US President with full P&L responsibility attracted him. Once on board, expenses went out of control and we didn’t see any growth.? At this stage, we didn’t yet have a US production facility.

He hired too many people and the bottom line suffered.?

He was used to having a large support staff around him, even though we told him in advance that this is a very “hands-on” role.? I’m not sure he understood that he would need to be involved extensively in meeting new customers and generating interest in the market. He lasted a year and we had to let him go.

?I’m not sure he understood that he would need to be involved extensively in meeting new customers and generating interest in the market. He lasted a year and we had to let him go.

Chuck

Then what happened?

?

CEO

?

Due to our realization that we needed to supply US customers faster, we decided to build a US production facility.

We hired an American with relevant industry experience to establish a greenfield factory and then manage and grow the US business.?

He did a good job in getting the facility up and running (although it was 20% more expensive than the budget).? But once it was operating, our management team in Israel wanted to be involved in overseeing the facility as well as in US business development.

We invested a lot of money in this operation and we really wanted to succeed.

However, our approach created conflict. He got upset when he heard we spoke to US customers or to some of the 2nd level managers under him.? Israeli companies work this way – people get involved and everyone speaks to everyone.? He wanted full control – even though there were issues we could easily resolve.?

He decided we were “micro managing” and felt we didn’t trust him – and after 18 months he found another job and left.

He decided we were “micro managing” and felt we didn’t trust him – and after 18 months he found another job and left.

Chuck

After the 2nd President left, did you recruit another American?

?

CEO

We started a recruitment process to find another American – we thought that someone who had worked with non-American companies in the past would work better.? But we found the compensation expectations of the candidates to be extremely high so we decided to take a new approach.

?

Chuck

What was the new approach?

?

CEO

?

We relocated one of our senior Israeli managers to the US to take over.

Our idea was that if we send over “one of our own” the communications and interface would be much better. And in fact it was – the communications between him and HQ in Israel was great.? He spoke our language, listened to us and welcomed our involvement as we had already worked together for several years. ?

But a new problem surfaced.?

He is Israeli and had never lived in the US previously – he didn’t absorb American business culture. US employees were turned off by him and several key people resigned.? So we realized we had solved one problem and created a new one.

?he didn’t absorb American business culture. US employees were turned off by him and several key people resigned.?

Chuck

So you fired this President too??

?

CEO

Not exactly, but we tried another approach.

Working with an experienced recruiter, we hired a US based Israeli - an Israeli living in the US for 10 years who knew how to work with Americans as an American but could also work with us as Israelis.??

The previous president remained on staff in the US as a “project manager” for another 2 years to help us develop a new business which worked out well. He was based in a home office, not at our US facility which he previously ran.

Hiring a US based Israeli worked very well. ??The problem with this approach was that he did not have experience in our industry.? It’s not so difficult to find US based Israelis with management experience – but it’s close to impossible to find one who knows your specific products and market.?

Hiring a US based Israeli worked very well. ?

So there was a learning curve until he got up to speed.? But in retrospect, that was a good thing. The new manager recognized his need for training so he welcomed our involvement in running the US Company – it was more of a partnership.

We now have greater involvement in the day to day management of the US Company which fits our business culture and the US president works with us hand-in-hand – there is no resentment.

Most important, we are experiencing business growth and we have a happy work force in the US.

Chuck

?

Do you think your situation is unique?

?

CEO

I have spoken to other Israeli CEO’s who had challenges with Americans they hired to head up their US Company. ?However, I also know many Israeli and other non-US companies with Americans running their US Company and it has worked out well.? So I supposed you can’t generalize.?

But in our company,? ?we will continue to employ US based Israelis to run our US subsidiary and we even added a few more into key positions there (CFO and VP Operations).?

?

Chuck

Any final suggestions or comments for non-American managers seeking a US business leader?

?

CEO

I think the most important issue is to clearly define expectations.?

We might have succeeded with one of the American managers had we spent more time with them prior to starting the role.? If they had absorbed our business culture, it may have worked better – or maybe they would have rejected the job offer.? It’s hard to know.? But at least for our company where most of the HQ staff do not have extensive US business experience, having US based Israelis has been a successful approach.

?I think the most important issue is to clearly define expectations.?

Chuck

?

Thanks for your time and insights which I hope will help other managers in evaluating recruiting options in the USA.

=============================================================

Chuck Klein is President of Amcon Recruitment Ltd., a boutique executive recruitment firm assisting non-US and US companies find exceptional employees in America. He is the author of the book Marketing to America: How non-US companies can profit by selling in the USA (Prentice Hall / Financial Times).

For information on recruitment services or workshops, please reach out via Linkedin https://www.dhirubhai.net/in/amcon/ or telephone:? 312-924-0809.

?* If you can relate to this article, please leave a comment, Thanks!?

Connect with me on Linkedin https://www.dhirubhai.net/in/amcon

?

?

?