Cultural Capital in the C-Suite By Frank Brown
The corporate world is in an extreme state of flux. The sub-prime crisis, the incredible rise of parts of the developing world, developments in forgotten places like Africa and other factors are changing the game.
At the same time, the markets continuously scrutinize the short-term performance of companies and CEOs. Can we make any suggestions about the future from all this? What emerging trends will be critical for lasting leadership in the coming years?
Global experience and a worldly perspective will become increasingly important for corporate leaders as the marketplace evolves. Consider Carlos Ghosn, CEO of Renault and Nissan. He successfully operated a French and Japanese company in parallel over the last several years—a feat due, in no small part, to his understanding of the people in the organization and what it takes to effect change in their cultures. He also has a great appreciation for talent and makes a genuine effort to really get to know his team.
Another good example is Sam Palmisano at IBM. He once ran IBM Japan, speaks Japanese and is highly credentialed in the Asian community. His global perspective and ability to operate across geographies helped build IBM’s business in Asia.
American companies are slowly starting to appoint more non- U.S. leaders and those with a more worldly perspective. NYSE CEO John Thain, for example, is an American and veteran of U.S. capital markets, but his role in bringing together NYSE Euronext is a great global credential. Citi CEO Vikram Pandit is of Indian descent and, while spending the bulk of his career in U.S. capital markets roles, has a worldly perspective due to his background. However, there is still a pressing need to infuse more cultural capital into the C-Suite.
CEOs will continue to be challenged and expected to operate with a deep understanding of other cultures and business environments. An example is the recent opportunity Citi had to get a much-needed investment from Abu Dhabi. The two executives reportedly most involved in this transaction were leaders who had spent time in the Gulf and knew the people and the environment very well.
As Dean of INSEAD, the international business school, I constantly emphasize the importance of developing transcultural leaders with acute insight into their global marketplace who are as comfortable doing business in Mumbai or Tokyo as in London or New York. It will also be essential for U.S. companies—which tend to have boards comprised predominantly of U.S. nationals—to begin populating their boards with more culturally diverse members.
The issue of succession needs to be addressed, as well. Obviously this wasn’t a priority at Merrill and Citi, and it hurt those organizations during their crises. It is incumbent on boards of directors, analysts, auditors and others involved in the corporate sector to challenge management to plan for succession and to advance diverse leaders to the upper ranks to create options for eventual succession. Any leader who surrounds him or herself solely with white Anglo males going forward will have some pretty difficult questions to answer.
As our economy becomes more global, the need for corporations to develop leaders who can navigate risk, expand into new markets and operate with an international perspective has never been more apparent. Corner offices will increasingly be filled with leaders from all over the world, and the DNA of management will change to reflect the type of transcultural leadership that has proven to drive lasting results for corporations.
Frank Brown is the dean of INSEAD, a leading international business school with campuses in Europe and Asia.
Issue Date: April/May 2008, Posted On: 4/22/2008 :Fromhttp://www.chiefexecutive.net/ME2/Audiences/dirmod.asp?sid=&nm=&type=Publishing&mod=Publications%3A%3AArticle&mid=8F3A7027421841978F18BE895F87F791&AudID=35BDBBC785BB48B3AA51BD3622DBD145&tier=4&id=BB0CDFE7917A42E69B8E3E5B07F4A384
2008-10-01
2008-09-05
Leadership That Gets Results
Key ideas from the Harvard Business Review article by Daniel Goleman
The Idea
Many managers mistakenly assume that leadership style is a function of personality rather than strategic choice. Instead of choosing the one style that suits their temperament, they should ask which style best addresses the demands of a particular situation.
Research has shown that the most successful leaders have strengths in the following emotional intelligence competencies: self-awareness, self-regulation, motivation, empathy, and social skill. There are six basic styles of leadership; each makes use of the key components of emotional intelligence in different combinations. The best leaders don’t know just one style of leadership—they’re skilled at several, and have the flexibility to switch between styles as the circumstances dictate.
The Idea in Practice
Managers often fail to appreciate how profoundly the organizational climate can influence financial results. It can account for nearly a third of financial performance. Organizational climate, in turn, is influenced by leadership style—by the way that managers motivate direct reports, gather and use information, make decisions, manage change initiatives, and handle crises. There are six basic leadership styles. Each derives from different emotional intelligence competencies, works best in particular situations, and affects the organizational climate in different ways.
1. The coercive style. This “Do what I say” approach can be very effective in a turnaround situation, a natural disaster, or when working with problem employees. But in most situations, coercive leadership inhibits the organization’s flexibility and dampens employees’ motivation.
2. The authoritative style. An authoritative leader takes a “Come with me” approach: she states the overall goal but gives people the freedom to choose their own means of achieving it. This style works especially well when a business is adrift. It is less effective when the leader is working with a team of experts who are more experienced than he is.
3. The affiliative style. The hallmark of the affiliative leader is a “People come first” attitude. This style is particularly useful for building team harmony or increasing morale. But its exclusive focus on praise can allow poor performance to go uncorrected. Also, affiliative leaders rarely offer advice, which often leaves employees in a quandary.
4. The democratic style. This style’s impact on organizational climate is not as high as you might imagine. By giving workers a voice in decisions, democratic leaders build organizational flexibility and responsibility and help generate fresh ideas. But sometimes the price is endless meetings and confused employees who feel leaderless.
5. The pacesetting style. A leader who sets high performance standards and exemplifies them himself has a very positive impact on employees who are self-motivated and highly competent. But other employees tend to feel overwhelmed by such a leader’s demands for excellence—and to resent his tendency to take over a situation.
6. The coaching style. This style focuses more on personal development than on immediate work-related tasks. It works well when employees are already aware of their weaknesses and want to improve, but not when they are resistant to changing their ways.
The more styles a leader has mastered, the better. In particular, being able to switch among the authoritative, affiliative, democratic, and coaching styles as conditions dictate creates the best organizational climate and optimizes business performance.
From:http://harvardbusinessonline.hbsp.harvard.edu/hbsp/hbo/articles/article.jsp?ml_subscriber=true&ml_action=get-article&ml_issueid=BR0806&articleID=R00204&pageNumber=1?cm_mmc=npv-_-MGMT_TIP-_-SEPT_2008-_-MTOD0904
The Idea
Many managers mistakenly assume that leadership style is a function of personality rather than strategic choice. Instead of choosing the one style that suits their temperament, they should ask which style best addresses the demands of a particular situation.
Research has shown that the most successful leaders have strengths in the following emotional intelligence competencies: self-awareness, self-regulation, motivation, empathy, and social skill. There are six basic styles of leadership; each makes use of the key components of emotional intelligence in different combinations. The best leaders don’t know just one style of leadership—they’re skilled at several, and have the flexibility to switch between styles as the circumstances dictate.
The Idea in Practice
Managers often fail to appreciate how profoundly the organizational climate can influence financial results. It can account for nearly a third of financial performance. Organizational climate, in turn, is influenced by leadership style—by the way that managers motivate direct reports, gather and use information, make decisions, manage change initiatives, and handle crises. There are six basic leadership styles. Each derives from different emotional intelligence competencies, works best in particular situations, and affects the organizational climate in different ways.
1. The coercive style. This “Do what I say” approach can be very effective in a turnaround situation, a natural disaster, or when working with problem employees. But in most situations, coercive leadership inhibits the organization’s flexibility and dampens employees’ motivation.
2. The authoritative style. An authoritative leader takes a “Come with me” approach: she states the overall goal but gives people the freedom to choose their own means of achieving it. This style works especially well when a business is adrift. It is less effective when the leader is working with a team of experts who are more experienced than he is.
3. The affiliative style. The hallmark of the affiliative leader is a “People come first” attitude. This style is particularly useful for building team harmony or increasing morale. But its exclusive focus on praise can allow poor performance to go uncorrected. Also, affiliative leaders rarely offer advice, which often leaves employees in a quandary.
4. The democratic style. This style’s impact on organizational climate is not as high as you might imagine. By giving workers a voice in decisions, democratic leaders build organizational flexibility and responsibility and help generate fresh ideas. But sometimes the price is endless meetings and confused employees who feel leaderless.
5. The pacesetting style. A leader who sets high performance standards and exemplifies them himself has a very positive impact on employees who are self-motivated and highly competent. But other employees tend to feel overwhelmed by such a leader’s demands for excellence—and to resent his tendency to take over a situation.
6. The coaching style. This style focuses more on personal development than on immediate work-related tasks. It works well when employees are already aware of their weaknesses and want to improve, but not when they are resistant to changing their ways.
The more styles a leader has mastered, the better. In particular, being able to switch among the authoritative, affiliative, democratic, and coaching styles as conditions dictate creates the best organizational climate and optimizes business performance.
From:http://harvardbusinessonline.hbsp.harvard.edu/hbsp/hbo/articles/article.jsp?ml_subscriber=true&ml_action=get-article&ml_issueid=BR0806&articleID=R00204&pageNumber=1?cm_mmc=npv-_-MGMT_TIP-_-SEPT_2008-_-MTOD0904
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