LEADERSHIP, MANAGERSHIP AND THE NEW GLOBAL NORMAL

Transcription

1 LEADERSHIP, MANAGERSHIP AND THE NEW GLOBAL NORMAL By Dr. Kevin G. Lynch Vice-Chair BMO Financial Group Ottawa

2 Leadership is much more than managership, and especially at times of change and times of uncertainty Underperforming organizations are usually over-managed and under led. Warren Bennis, President, University of Cincinnati Times of stability, constancy Leadership Leadership Management Times of change, uncertainty Management PETER DRUCKER on Leadership: So much of what we call management consists of making it difficult for people to do work. 1

3 What are the unique attributes of a leader? How do these differ from managerial competencies? Some thoughts: CREATIVITY ability to inspire, to create and to mobilize AWARENESS ETHICS SKILLS COMMUNICATIONS the situational awareness to connect the dots, see the big picture ; and to take informed risks clarity between what is right and wrong setting the moral compass for the organization instinct for decision-making; confidence; enthusiasm; and stamina to persevere innate feel for communications; understanding the power of messaging 2

4 Leaders need the capacity to conceptualize the need for change, to create a sense of urgency to change, and to mobilize for change in the global context facing Canada, the status quo may be our riskiest choice. The Change Steps Sense of Urgency Guiding team, strategy for change Communicating like crazy Expanding the change team On-going, visible wins Not letting up, new culture 3

5 Leaders must be risk managers, not risk avoiders without risk, no return; without risk management, no balance. RISK (and crisis) MANAGEMENT LEADERSHIP ESSENTIALS First, leadership communications matter. Successful crisis management relies on strong leaders who can effectively frame events and manage expectations. Second, delegation and networking matters. Few crises are respectful of jurisdiction. Achieving distributed authority and capacity to act rapidly typically requires extensive networks, which have to be built up over time. Third, reputation matters. In a crisis, an institution s reputation moves to macro perceptions. Transparency, expertise, commitment and empathy are key to maintaining credibility and minimizing reputational damage. Fourth, information matters. The more complex and global the crisis, the more there are conflicting reports ( the fog of crisis ), and the greater value of information. Fifth, perspective matters. Taking a broader and longer term view in the heat of crisis is a variant of the precautionary principle: over-invest to ensure the crisis is properly contained. 4

6 And both public and private sector leaders need to understand the complex risk profile in today s challenging and changing landscape the World Economic Forum s perspective on global risks: economic risks, geopolitical risks, environmental risks, societal risks, and technological risks. Higher Likelihood Risks Identified by WEF Fiscal crisis Income disparities Climate change Global governance failure Demographic aging 5

7 Ethics are at the core of a trusted institution and a fundamental public service value is fearless advice and loyal implementation... leaders need to continually instil this value in their employees, and practice what they preach. 6

8 Leadership, accountability and oversight go hand-in-hand clear accountabilities and effective oversight are the essence of corporate governance but, public sector leaders face uniquely complex, and often conflicting, layers of oversight. Oversight: Officers of Parliament Oversight: Parliamentary and Executive Processes Auditor General Sustainable Development Commissioner Official Languages Commissioner Privacy Commissioner Human Rights Commissioner Public Integrity Commissioner Ethics Commissioner Lobbyist Registration Commissioner Public Service Commissioner Parliamentary Budget Officer Chief Electoral Officer ATIP (Access-to-Information) + Parliamentary Committees Ombudsmen Treasury Board External Audit Committees Whistle-blower legislation 15+ mandated annual reports including Performance; Staffing; Language; Sustainable Development; MAP, etc. Media 7

9 We are entering a new global normal with China soaring, India poised, Asia reemerging where many advanced economies going through difficult economic, financial and fiscal restructurings and all countries need to adapt to succeed Country GDP $US (B) Country GDP $US (B) 1. U.S.A 2. Japan 3. Germany 4. France 5. Italy 6. U.K. 7. Canada 8. Spain 9. Brazil 10. China 11. India 12. Mexico 5, , , , , , U.S.A 2. China 3. Japan 4. Germany 5. France 6. Brazil 7. U.K 8. Italy 9. Russia 10. India 11. Canada 12. Spain 15, , Source: IMF, May

10 Leaders need to understand the broader context of the new global normal structural trends and pivotal events are reshaping economies, societies, politics, expectations and the drivers of success are changing for all countries. Pervasive globalization, re-emergence of Asia Information Revolution, from the ipad to Facebook to Tahrir Square Demographics of aging, but not everywhere Drivers of Change Decline of trust in leaders, institutions Hang-over from the Great Global Financial Crisis 9

11 Leaders need to embrace the universal growth reality that productivity is core to a nation s competitiveness, and the standard of living of its citizens and recognize that Canadian productivity is lagging. Annual % Labour Productivity Growth in the Canadian Business Sector: Productivity isn t everything, but in the long run, it is almost everything. Paul Krugman (Nobel Prize Winner) Relative Labour Productivity in the Business Sector: Canada as % of US US= % Paradox: Canada has a larger productivity problem than the U.S. --- indeed, our Can-U.S. productivity gap costs us $300B annually --- but U.S. has greater urgency in improving productivity 10

12 Leaders need to understand that fiscal risks are high and rising, led by Greece and the Eurozone, and followed by U.S. inaction in the new global normal, balance sheets really matter, for governments as well as households and businesses with pervasive globalization, no government with market bonds is immune from fiscal risk and economies benefit from the national insurance of fiscal virtue. TOTAL Government Fiscal Balance: % of GDP (2011) TOTAL Government Net Debt: % of GDP (2011) 153.1% -1.7% 130.6% 100.4% -4.3% -4.0% 81.0% 72.9% 72.6% -5.9% 57.2% -8.5% -8.0% 34.9% -10.3% -9.6% Canada France Germany Italy Japan UK USA Greece Canada France Germany Italy Japan UK USA Greece Source: IMF WEO, September

13 Branding matters: particularly in a transforming and volatile world, brands reduce uncertainty help business sell abroad, attract investment, entice immigrants, facilitate education/research alliances, and open markets. The Canadian Branding Opportunity Nice + Canadian brand strengths in:? Solid economic fundamentals, including lower debt and corporate taxes than the U.S. Robust resources; both natural resources and human resources A sound financial system, with strong financial institutions Research excellence 12

14 In the new global normal, Canada has the OPPORTUNITY to prosper provided it builds on its core strengths, not rests on them embraces the new global marketplace strategically and tackles our weaknesses, particularly productivity and innovation. For Canada, a risk of complacency and attachment to the status quo in a profoundly changing world. For Canadian businesses, a need to plan strategically for: A low interest rate, low growth, high volatility recovery in industrial countries; A two speed global economy, with the dynamic emerging economies in the fast lane; A shifting of economic gravity to Asia and other dynamic emerging economies like Brazil For Canadian policy makers, a divergence of time-frames Challenges: multi-year Markets: quarterly Politics: daily Press: hourly For Canadians, a unique opportunity to exploit our relative Advantage Canada, provided we break out of short-termism and seize the new global possibilities more nimbly and more quickly than our competitors. Innovation is the oxygen that fuels the star runner 13