A recent survey of CEOs of leading US consumer companies highlights the gap between the international goals that top managers espouse and the organizational approaches they choose in pursuing them. While success in global markets is an aspiration many share, creating the conditions for success cannot be reduced to a simple formula. In fact, some of the factors conventionally associated with success are found with equal frequency in both successful and less successful companies. These findings shed light on organizational features that do distinguish internationally successful companies—and others that simply fail to make the vital difference.

Top managers say international is important

Many overseas consumer markets have offered better growth in the past than the flat US domestic market. See Exhibit 1

Therefore, CEOs of US consumer companies believe that growth in international markets is increasingly the key to their companies' success. See Exhibit 2

Looking forward, US consumer companies expect international sales to grow at twice the rate of US sales over the next five years. See Exhibit 3

CEOs are committed to change

Many CEOs, however, question whether their organization in its current form is suited to the challenge of achieving their strategic objectives in overseas markets. See Exhibit 4

The trend in organizational structures seems to be shifting away from a traditional "United States plus international" structure and toward more global alignments, for example, matrix structures. See Exhibit 5

There is broad agreement among CEOs about the way they define international success; almost all rate profit and sales growth as the most important measures. See Exhibit 6

But they need to know where they stand

Some CEOs lack a clear and objective view of their company's international standing. Most companies in our survey—77 percent—rated themselves as successful in global markets, and over half reckoned they were superior to their rivals. See Exhibit 7

But comparisons with industry averages reveal a perception gap. About one in three of these companies is overestimating its international performance. See Exhibit 8

Changes planned are questionable

Many companies are planning specific organizational initiatives aimed at strengthening their international base. Evidence suggests, however, that many of these initiatives are not linked to the factors that distinguish internationally successful companies. See Exhibit 9

Though CEOs recognize the need for change, many are pursuing activities that seem to augur well for global competitiveness, but in fact have little correlation with demonstrable success. Almost 40 percent of companies are planning structural change, though there is no clear link between organizational structure and international success. See Exhibit 10

Cross-border taskforces and international business units, for instance, are organizational features that most companies are planning, or have already implemented—yet they are not associated with success. The message is that judicious CEOs should pause for review before committing their companies to such steps. See Exhibit 11

But some things do make a difference

Fortunately, though, it seems there are positive things a CEO can do that enhance a company's prospects of international success. From the survey, we have identified eleven distinctive traits that are correlated with high performance in international markets. See Exhibit 12

In general, successful companies coordinate their international decision making globally, with more central direction than less successful competitors. This difference is most marked in brand positioning, designing packages, and setting prices. There is, however, one notable exception: a more decentralized approach to new product development. See Exhibit 13

Though many multinationals are taking power away from country general managers, most successful companies have the product managers in their subsidiaries reporting to country general managers. See Exhibit 14

Successful companies are also more likely to have a worldwide manager development program. See Exhibit 15

Half the successful companies in our survey, compared with 29 percent of the less successful, require international experience as a condition for promotion to top management. See Exhibit 16

Looking to the future

Successful companies are unanimous that their success over the next five years will depend on international growth. Their international effectiveness goes hand in hand with an undivided focus on overseas markets. This raises the question: Does the mere focus on international lead to success? See Exhibit 17

Finally, internationally successful companies don't stand still, or rest on past achievements. They are more likely to embrace further organizational change and continuous self-renewal. See Exhibit 18