Leading a Global Enterprise

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Bryce Fleming
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1 Leading a Global Enterprise HBS Alumni Webinar Professor Bill George February 12, 2013

2 Developing as a Global Leader What is the greatest global leadership challenges you are facing right now? What are you doing to develop yourself as a leader of a global enterprise?

3 Globalization Globalization of business is the reality of our time Trade will become increasingly open as nations become interdependent in order to access markets, products, technology and financing Pricing will be transparent across borders, driven by the Internet Drive for cost competitiveness creates cross-border labor arbitrage & supply availability Firms will shift from labor costs to total costs, including logistics, infrastructure and energy costs for comparison

4 Leadership in Era of Globalization Firms run by leaders effective in leading global enterprises will be more competitive, more productive and more profitable This trend will lead to a premium placed on hiring and/or developing global leaders with the skills to optimize comparative advantage and build collaborative global teams that work effectively and flexibly to adapt quickly to changing economics, politics, & opportunities

5 Global Leadership Development Premises: Global leaders need to align all employees around the firm s mission and values, not just rules and policies Diversity of top leaders should reflect diversity of your firm s customers Global firms are shifting from tops-down communications to building collaborative relationships Global firms need to develop a cadre of leaders effective at operating anywhere in the world

6 Leading by Values How do we marshal the collective aspirations of 440,000 people serving customers in 170 countries and work as a unified team? In a world of intense scrutiny, one reaction is to create more management systems, processes, controls, and more bureaucracy. Relying on traditional supervision, process and controls would inhibit serving clients responsively, and stifle employees creative energies. We cannot apply Industrial age management systems to address post-industrial age needs. There is a better alternative, which is to trust employees. Values are the glue, the bond that binds us together in the absence of controls. These must be genuinely shared values; they can t be imposed top-down. Values provide employees a framework to make decisions when management systems and procedures are unclear. It comes down to judgment, based on shared values. - Sam Palmisano, Chairman & CEO, IBM (paraphrased)

7 Developing Global Firms Shift from: Exporter to: Multi- to: Global National Decision- At HQ HQ & Regional Dispersed Making Organization Functional Matrix of SBUs Integrated Global Form & Geographies Network Style Tops down Power struggles Collaborative Measurement Firm-wide Transfer prices Shared credit Geographic HQ nationals HQ nationals & Global cadre from Diversity dominant local nationals multiple cultures

8 Leading in a VUCA World World of 21 st Century will be: Volatile Uncertain Chaotic Ambiguous How must global leaders change to be effective in a VUCA world?

9 Leading in a VUCA World Leaders must adapt their leadership: VUCA World Volatile Uncertain Chaotic Ambiguous Leader s Response Visionary Understanding Clarity Adaptable... and they must be Flexible and Resilient

10 Global Intelligence (GQ). GLOBAL INTELLIGENCE (GQ) EMOTIONAL INTELLIGENCE (EQ) INTELLIGENCE QUOTA (IQ)

11 What is GQ? World View Empathy Self-Awareness Cultural Curiosity Alignment Collaboration Integration

12 World View Empathy Self-Awareness What is GQ? - Adapting to global context - Understanding diverse cultures - Knowing yourself & avoid imposing dominant paradigm on other cultures Cultural Curiosity - Insatiable interest in other cultures Alignment Collaboration Integration - Around mission, values & integrity - Cross-cultural networking/partnering - Understanding local needs while leveraging unique global strengths

13 Ways of Developing Global Leaders Living in emerging countries Line responsibility in overseas business Learning local languages and customs Understanding your culture & cultural biases Non-judgmental understanding of cultural differences Leading cross-cultural task teams Training in cross-cultural communications

14 Leveraging Global Capabilities The Traditional Paradigm: Think Global, Act Local Is shifting to: Think Local, Act Global... By leveraging corporate strengths to gain competitive advantage

15 Example: Global Beverage Companies Coca-Cola Five non-u.s. CEOs over 50 years: - South Africa, Cuba, Australia, Ireland, Turkey Current leadership team: Operations: 3 Turkey, 2 US, 2 UK 1 Russia, 1 Zimbabwe, 1 India Staff: 7 US, 2 UK, 1 Germany Pepsi-Cola Indian CEO Senior leadership team: 12 US, 2 UK, 2 Mexico, 2 Canada Russia, India, Lebanon, Brazil Pakistan, Swiss, New Zeeland

16 Diversity of Global Leadership Consumer Products Companies Nestle Swiss-based Belgian CEO, Austrian Chair (ex-ceo) 3 Swiss, 3 US, 1 Belgium, 1 Germany, 1 India, 1 Spain, 1 France, 1 Philippines, 1 Canada Unilever U.K.-based Dutch CEO 5 UK, 3 Dutch, 2 France, 1 US, 1 Italy, 1 India P&G U.S.-based American CEO 19 US, 3 UK, 1 Tanzania, 1 Greece, 1 Swiss, 1 Pakistan, 1 German, 1 Canada, 1 Russia, 2 Singapore, 1 Venezuela, 1 France

17 Developing Global Leaders The Unilever Leadership Development Programme prepares our future leaders for an increasingly volatile and uncertain world, where the only true differentiation is the quality of leadership of all. - Paul Polman, CEO, Unilever

18 New HBS Executive Course: Leading a Global Enterprise 5-Day Course: July 28 Aug 2, 2013 on HBS campus New HBS course focuses on enabling leaders to increase effectiveness in leading global enterprises Global Executives with global responsibility, region & country heads Faculty co-chairs: Professors Bill George and Krishna Palepu Focuses on: Building Global Companies, Leading with Values, Winning in Emerging Markets, Developing Your Global Leadership Daily Meetings with Your Global Leadership Group (GLG) Creating Your Global Leadership Development Plan (GLDP) To register, go to:

19 Concluding Thoughts Leading global enterprises in 21 st C will require different leadership capabilities than managing 20 th C multi-nationals Effective global leaders must have a high level of GQ: - World view, empathy, self-awareness, cultural curiosity, alignment, collaboration and integration Organizations led by effective global leaders will sustain superior performance over those with multinational focus

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