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How Can Leadership Development Initiatives Support Global Integration?

This article was originally published in Executive Grapevine magazine: (http://www.askgrapevine.com/thegrapevine).

Integration is now a major concern of many global executives. In a 2007 Accenture survey of 900 senior executives, participants were asked to identify their top challenges in building a global organisation. Nearly half of all respondents identified 'maintaining a common corporate culture and identity' as their number one concern ⁽¹⁾. Why is this so important? And how can leadership development initiatives contribute to global integration?

A global enterprise, like any complex system, needs to be adaptive to its environment while also maintaining cohesion. Adaptability has been given a great deal of attention over recent years, and with good reason. As Ad J. Scheepbouwer, CEO of KPN Telecom said in a new IBM Global CEO Study on The Enterprise of the Future, "We have seen more change in the last 10 years than in the previous 90." ⁽²⁾ A key finding of the IBM report is that there is a significant gap between how CEOs rate their ability to manage change effectively versus their expected need for it - a gap of 22 percent versus 8 percent in 2006. Collaboration is an enabler of successful change because it engages those impacted, and creates a higher level of ownership for actions to be taken.

Intensifying the challenge of change is business environment complexity. Professor Pankaj Ghemawat of IESE and Harvard schools of business is surely right when he says that those who use terms like 'the death of distance', 'the disappearance of differences', 'investment without borders', and 'flat world' are oversimplifying reality ⁽³⁾. At most, he says, we can describe our world as 'semi-globalized', perhaps 10 percent of what is actually possible. Geographic, cultural, administrative/political, and economic distances are still potent factors to be taken very seriously. Only by bringing our knowledge, skills, and experiences together can we hope to navigate through complexity.

How can global businesses not only manage change and complexity, but benefit from them? One solution that has gained ground over recent years is collaboration, both across organizations and externally with partners and other stakeholders. Global collaboration entails linking the right people to the right projects at the right time. Competitive advantage is increasingly tied to collaborative advantage.

Collaboration, however, is not feasible, without connectivity. While Web 2.0 technologies and new collaborative tools are enabling greater network connectivity across distributed business organizations, the greater challenge is for leadership to transform hardware connectivity into value-added collaboration. Technology is providing an increasingly sophisticated collaborative infrastructure, and is driving structural and operational changes to help increase leanness, flexibility and responsiveness, but what these technological changes cannot do is to establish the subjective infrastructure - the human connectivity and integration - that is so necessary for deep collaboration. This requires the development of leaders who can develop and sustain collaborative cultures often across great distances. Driven by the economics of global competition, and enabled by broadband connectivity, pervasive computing, and increasingly sophisticated collaborative tools, fixed physical geographies are giving way to fluid cyber-geographies. The node - rather than being a country - is now a collective virtual space in which distributed talent connects - for a time - synchronously and asynchronously.

Given what I have said so far, the best value-added outcome of future leadership development initiatives is leaders who understand, communicate, and model integrative thinking and behaviors. What can you do to support this in your leadership initiatives?

Take a strategic approach to leader development. Rather than create relatively independent leadership initiatives, design them to be closely aligned and mutually supportive. Some companies - like Arcelor-Mittal - have created corporate universities to help ensure that leaders at different levels receive training that promotes consistent messages and models, shared vocabularies, and usage of common tools. Many of the countries in which the company has operations are post-communist, and have little in terms of established business leadership cultures. The Arcelor-Mittal University through its leadership development initiatives is playing a pivotal strategic role in integrating two giant steelmakers, and in building a strong cadre of global leaders.

Ensure that all leadership development initiatives are coupled to a clear vision of how the company needs to operate in the world economy. For many years, the multinational organization with its national hubs, and locally based production and delivery capabilities, reigned in transnational business. Many today are aiming toward what Sam Palmisano, CEO at IBM, calls the global integrated enterprise or GIE ⁽⁴⁾. Leadership development at IBM is unthinkable without strong links to this integrative reference point. Whether the model is the GIE, a 'gateway-hub structure' or another variation of a global business, such concepts provide a focusing lens through which to see the business in the world context ⁽⁵⁾.

Embed corporate values into all leadership initiatives. Shared values are the underpinning of a corporate-wide culture, and provide what Rosabeth Moss-Kantor calls a guidance system ⁽⁶⁾. They help unite employees across the globe, as well as enabling fast, independent decision making consistent with the company's philosophy. With a strong guidance system - as in CEMEX, HP, IBM, and Proctor & Gamble - a global enterprise can be both cohesive and agile. As well as embedding corporate values, be sure to establish the important role of the leader as a global ambassador; one who not only communicates and reinforces corporate values, but who embodies them in everyday behaviors and decisions.

Link the initiative to global strategy and objectives. This might sound obvious to some, but my experience has been that a significant number of companies either don't have strategies and strategic objectives, or they don't want to share them with potential leaders. But how will leaders integrate and align the global business unless there is one-line-of-sight?

Communicate and reinforce a clear vision of an inclusive and collaborative leader. You can and should operationalize this vision by establishing a common set of global leadership competencies and skills, and build them into a shared performance management system. It is not enough, however, to communicate the what and the how; it is also imperative to let people know the why. For a number of years, global leadership development initiatives have often emphasized the importance the managing cultural differences through adaptation. While this is still very important, if we are to operate in a more integrative fashion, leaders also need to be skilled in cultural co-creation. Instead of a focus on your culture and my culture, we focus on 'our' culture. This is particularly important in leading global teams and creating operating agreements to facilitate smooth collaboration.

Create learning and development initiatives that bring participants together (virtually and face-to-face) from across the enterprise to work on global level challenges and opportunities. Leaders who will be the champions of global integration need to be taken out of their restrictive local environments and be allowed to discover the urgency and power of cross-border collaboration in a fast changing and complex environment. My own preference is for those that blend different learning formats and collaborative opportunities. For example, an initiative could begin with every participant completing e-learning modules on key global leadership concepts. Part of this e-learning can be an assessment/diagnostic built on the organization's collaborative global leader competency framework. This phase helps establish a baseline understanding and shared terminology for the integrative learning. After the e-learning modules, a virtual event (e.g., web conference) can be run in which the participants are introduced to the learning and development initiative and get to know one another and build relationships. This can be followed by a face-to-face session focused on individual and group development of leader competencies, and the use of collaborative methodologies and tools. At the end of this session, participants would be divided into virtual teams to work together on strategic global business issues over the following months. Another event (ideally face-to-face, but virtual if necessary) would be held in which teams would present their analyses and recommendations to senior executives. What I have outlined here is, of course, only one option for developing leaders with integrative thinking and behaving.

To summarize, global competition, change and complexity are placing higher and higher demands on global enterprise collaboration. Without establishing and maintaining a culture of global network collaboration, companies will find it impossible to integrate and leverage their capabilities to promote cost efficiency, innovation, and growth. Instead of structural and operational flexibility, resistance and boundary blockage will be the norm. Highly distributed business organizations are vulnerable to fragmentation and diffusion of effort, but a strategic approach to leader development can greatly increase the chances of operating as one company worldwide.

References

1. Corporate Culture Is Chief Concern for Global Execs, Accenture Digital Forum, April 30, 2007
2. The Enterprise of the Future, IBM 2008 Global CEO Study, May 2008
3. Rethinking Global Strategy: Crossing Borders in a World Where Differences Still Matter, Pankaj Ghemawat, Cambridge, MA: Harvard Business School Press, 2007
4. The Globally Integrated Corporation, Sam Palmisano, Foreign Affairs, NY: Council on Foreign Relations, May/June, 2006
5. Twenty Hubs and No HQ, CK Prahalad and Hrishi Bhattacharyya, Strategy & Business (enews), Booz and Company), May 2008
6. Transforming Giants, , Rosabeth Moss-Kanter, Cambridge, MA: Harvard Business Review , January, 2008

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