Building Global Leaders and Multinational Organizations of Resilience by Andy Brough

Los Angeles experienced a 4.4 magnitude earthquake on 17 March 2010. What makes the quake significant is that it was the latest in a long list of earthquakes that occurred in just the first eleven weeks of 2010. The LA earthquake followed the dramatic quake in Haiti, the 8.8 earthquake in Chile (reported to have been strong enough to move the earth of its axis), as well as quakes in Japan, Indonesia, and Turkey. In many cases, devastating aftershocks followed these initial quakes.

Against this backdrop of dramatic tectonic shifts taking place under the earth’s crust, the global business landscape is also undergoing radical changes. In the past ten years, fractures and fault lines have begun to appear in the way companies do business. The economic crisis of the last 18 months has brought many of these underlying challenges to the surface. The drivers of globalization (increasingly stiff competition, rising costs, decreasing and lowering investment hurdles, and free trade agreements) all continue to place increasing strain on multinationals and global organizations to perform. The now public scandals of large multinationals such as Enron and the recent product recalls at Toyota have highlighted something of the intensity of the forces at work on a global scale. These forces have now created a multiple convergence that requires business leaders to reassess how they lead in this new world of horizontal collaboration.[i] It is now generally agreed that one of the key places to begin addressing the drivers of global business and ensuring organizations remain competitive is through developing global managers and leaders.[ii] Multinationals and global companies have also been forced to acknowledge that a responsible company needs to show broader accountability than simply reporting to shareholders. The net effect is that the leaders of global companies and multinationals need to demonstrate a clear set of skills in order to negotiate the complexity and diversity of global leadership. For the purposes of this article, a global leader is regarded as anyone who has global responsibility over a business activity.[iii] In this article, I would like to consider the complexity of global leadership, the diversity required by a global leader, as well as some of the competences that a global leader requires before making some specific recommendations.

 The Complexity

If multinational leadership is about negotiating complexity, then global leadership is even more so. Where leading a multinational requires an ability to invest in other countries and adapt to the requirements of that local market, a global leader must develop a global strategy that will present a coordinated image to a global market. The very nature of leading a business that straddles international boundaries and even continents means that it is never going to be a straightforward job prospect with narrowly defined performance areas.

The global leader, unlike the leader in a local market, must deploy vision with international clients whilst showing that he or she is able to deal with cross-cultural exposure, and adapt and react in an appropriate way. At the same time, the global leader needs to demonstrate both an understanding of local employee needs as well as an intellectual receptiveness for differences in culture. The global leader must also demonstrate leadership competencies that can be used in different country settings.[iv] Straddling the demands of the local, whilst expanding the global market is, in and of itself, one of the great challenges of leading on a global scale. How does the leader negotiate the ever increasing demands of a company playing on the world stage, and still ensure that the organization keeps its focus, stays on track in terms of core business, and ensures that operational and communication processes are simple enough that it does not get bogged down in a bureaucratic quagmire? A global company is often made up of local subsidiaries that are distributed around the planet, often in far-flung and difficult to reach places. The movement of goods, services, and resources between geographic centres can be prolific and, at times, almost impossible to manage from a central location. The modern global company must find ways of achieving global scale efficiencies and competitiveness. In the fiercely competitive world of global leadership, one is required to balance and lead multiple stakeholders and competing priorities. In order to achieve this balance, leaders need to be willing to delegate responsibility at both regional and local level. Even at local, or national level, the company needs to demonstrate responsiveness and flexibility whilst developing a cross-market capacity to build on its international strengths. The only way that a global company can ever hope to get this right is through paying increased attention to how to attract, develop, and retain top talent. Limited human resources are often the biggest constraint when companies globalize.[v] Global leaders must therefore demonstrate greater adaptability and flexibility in the way that they interact with followers. Not only does a global leader need to be able to “sense” where an organization should be heading, he or she also needs to be able to move the focus of attention from the local to the global, and then from whole to the part in a way that focuses on both the immediate and longer term. The old adage for leaders of multinational was always that they should “think global and act local.” The new way of thinking seems to be that, in order to survive, this kind of leader must “think global, act global.”[vi] The global leader is required to be strategist, architect, and coordinator of the organizational activity. The complexity of the leadership task is also reinforced due to its inherent diversity.[vii]

 The Diversity

Global leadership is about leading diversity. Global leadership thinking acknowledges a diverse range of perspectives and shows a willingness to become more open to points of view that may be contrary to a leader’s preconceived approach. Leading a multinational means being willing to embrace a broad range of cultures, working across multiple time zones, and attempting to learn and understanding apparently peculiar customs and/or ways of conducting business. Different geographical regions of the business may be drawn to different business priorities as a result of the uniqueness of their local market. This kind of leader needs to be able to display spontaneity and openness to ambiguity that may not always come naturally. By acting as the lynchpin in the organization, these leaders of diversity are able to effectively co-ordinate activities and link capabilities across a range of psychographic and geographic boundaries.[viii]

 The Competences

The question remains then, what are the critical leadership competences that a global leader needs to demonstrate in order to negotiate this complex and diverse world?

More than 16 years ago, researchers developed a set of competences that showed that a global leader needed, amongst other things, both “doing” skills and “being” skills.[ix]

The “doing” skills include the expected ability to recognize opportunities, take risks, and capture the full advantage of worldwide operations. These are the skills of international strategy and of change agent. What was more interesting though was that the research showed that on the global level, the “being” skills were what separated the average leader from the really effective global leader. These skills were then grouped around cognitive complexity, cultural empathy, and psychological maturity.[x]

Cognitive complexity is concerned with developing cultural empathy, active listening, and a broad sense of humility. In some circles this is referred to as cultural intelligence- a leader’s capability for successful adaptation to new cultural settings.[xi] A leader demonstrates this cultural empathy when he or she is able to embrace a perspective or view of the world that reflects an ability to deal with, and embrace, uncertainty, duality, and organizational tension. This is a leader who can think critically and creatively, communicate clearly and logically and has a high tolerance for everything that is ambiguous. This global leader demonstrates a  “savvy” that represents both business and organizational acumen and the ability to secure and mobilize organizational resources, especially critical information, needed to accomplish the intended mission of the organization. Given that so much of what leaders do is culturally contingent, it is important that leaders are sensitive to what motivates and rewards followers in any particular part of the world. Taking one-size fits all approach to followers in a global company is to run the risk of cultural insensitivity and even possible internal revolt.

Emotional energy is displayed through an emotional self-awareness, resilience, and risk acceptance. A global leader, often required to relocate to and work in a foreign location, needs to be highly aware of his or her own strengths and shortcomings. Resilient leaders build resilient organizations and this mental toughness, this ability to withstand opposition and grit it out during the different phases of the organizational life cycle, is what will make the difference between the organizations that really do achieve global significance and those who do not. Emotional energy is nothing more than the ability to deal with, and successfully work through, highly stressful situations. A study released in 2006 showed that whilst many middle managers showed great resilience, it is often the CEO’s and global leaders who ranked lowest in resiliency.[xii] Combined with this resilience, the successful global leader also demonstrates an innate inquisitiveness and a mindset to face the constant uncertainty of the global environment[xiii]. This is a leader who is comfortable with both crisis management and improvisation.[xiv]

Psychological maturity is demonstrated through a curiosity to learn, an open orientation to time, and a strong personal morality. This personal morality is what much of the leadership literature calls “character.” Character is about the leader’s unmovable personal integrity and ability to connect with others on an ethical and emotional level on the basis of goodwill and trust. Looking at the three broad “being” competences, it becomes apparent that global managers are identified firstly by their state of mind rather than their location or experience.

 Key Recommendations

What does this mean then for leadership development, and specifically global leadership development from a biblical worldview? Firstly, the worldview is the critical point of departure. If it is the mindset of a leader that determines whether he or she “goes global,” then there can be no doubt the Christian faith provides a profound perspective. The Bible calls us to be stewards. We learn that “he who is faithful with little will be given much” (Luke 16:10) and that, “because you have been faithful in a very little thing, you are to be in authority over ten cities” (Luke 19:17).[xv] Although there is no specific suggestion that these cities are transnational, the principle does apply. If we look at this from the basis of the global manager, then the principle does seem to be that the greater the level of stewarding, the more the level of responsibility, and the wider the reach of leadership. These are leaders that need to think globally and act globally as stewards of the resources for which they have been given responsibility.

Secondly, multinational corporations would do well to give themselves to the discovery, selection, and development of key people within the organization who are given to the broader goals of the organization. These are very special people who are prepared to sacrifice their own home comforts, and move to a foreign location to pursue the organizational objectives often at the expense of seeing their own friends and family. That is why an effective global leadership development process also creates opportunity for both recovery and relearning.[xvi] The really effective leaders are those who are able to come back from instances of leadership failure. Part of developing resilience is being able to learn from previous mistakes.

Conclusion

Let’s reflect back once again on the recent spate of earthquakes. It is worth noting that as a result of the earthquake in Haiti, literally hundreds of buildings were almost completely destroyed. Soon afterwards, Chile faced an exponentially bigger earthquake, but many of the buildings had the architectural resilience to withstand the initial quake and the aftershocks. If we continue with our analogy, just as it is impossible to prevent earthquakes and seismic activity, so it is practically impossible for any one organization or multinational to prevent tectonic global economic shifts. Geologists have developed more sophisticated instruments to try and measure seismic activity and predict when earthquakes will occur. Even with the current level of technology, their predictions are at best crude and still relatively haphazard. In business, no one could have predicted the enormity of the recent economic crisis and the subsequent ripple effect it would have around the world. Just as we can attempt to develop better instrumentation to predict the next earthquake, so it’s possible that we might find ways to predict global economic changes at the multinational level. Whether those prediction levels improve or not, one thing is certain, global leadership change is here to stay. What we need to do is to find ways of developing leaders and organizations that are more resilient. What we need are leaders and organizations that will be able to withstand the highest “Richter readings” on the global leader scale and who will come through to tell the story so that they, and the organizations they lead, can be better prepared the next time.

Andy Brough can be contacted on andyb[at]andrewbrough[dot]com

Endnotes


[i] Friedman, T. (2005). The world is flat. A brief history of the 21st Century. NY: Farrar, Strauss & Giroux.

[ii] Pucik, V. (1985). Strategic management of multinational corporations. NY: John Wiley & Sons.

Bartlett, C. A., & Ghosal, S. (1992). What is a global manager? Harvard Business Review, September/October, 124-132.

Tichy, N., & Sherman, S. (1993). Control your destiny or someone else will. NY: Currency Doubleday.

 Evans, P. A. L. (1992). Developing leaders and managing development. European Management Journal, 10 (1), 1-9.

Gates, S. (1994). The changing global role of the human resource function. NY: The Conference Board,

[iii] Jokinen, T. (2004). Global leadership competencies: A review and discussion. Journal of European Industrial Training, 29 (3), 199-216. 

[iv] Vloeberghs, D., & MacFarlane, A. (2007). Global leadership: A working paper presented to the 8th International Conference on HRDresearch & practice across Europe. Retrieved March 31, 2010, from   http://www.psiod.com/.../Conference%20Working%20Paper%20V%20Final.pdf.

[v] Bartlett, C. A., & Ghosal, S. (1992). Ibid.

[vi] Don Lucas in May, A. S. (1997). Think globally-act locally! Competences for global management. Career 

 Development International 2 (6), 308-309.

[vii], Goldsmith, M. &Cathy Walt, C. (1999). The global leader of the future: New competencies for a new era. Jossey-Bass,

[viii] Pucik, V., & Saba, T. (1998). Selecting and developing the global versus the expatriate manager: a review of the  state-of-the-art. Human Resource Planning, 21 (4), 40-52.

[ix] Ali, A. J., & Camp, R. C. (1996). Global managers: qualities for effective competition. International Journal of  Manpower, 17 (6/7), 5-18.

Osbaldeston, M. (n.d.). Developing leaders for a global business environment. Retrieved March 17, 2009, from, http://www.mba.co.za/article.aspx?rootid=6&subdirectoryid=2240

Don Lucas in May, A. S. (1997). Think globally-act locally! Competences for global management. Career  Development International 2 (6), 308-309.

Adler, N. J., Brody, L. W., & Osland, J. S. (2001). Going beyond twentieth century leadership : A CEO develops his company’s global Competitiveness. Cross Cultural Management 8 (3), 11-34.

[x] Wills, S. & Barham, K. (1994). Being an international manager. European Management Journal, 12 (1) 49-58.

[xi] Earley, C., & Ang, S. (2004). Cultural intelligence. Individual interactions across cultures. Paolo Alto, CA:Stanford.

[xii] Haserot, P. W. (2009). Each generation needs more resilience. The Centre for Global Leadership. Retrieved March 18, 2010, from http://centerforgloballeadership.wordpress.com/2009/10/16/each-generation-needs-more-resilience/.

[xiii] Black, J., Morrison, A., & Gregersen, H. (1999). Global explorers: The next generation of leaders. NY:  Routledge.

[xiv] Sinclair, A., & Agyeman, B. (2005). Building global leadership at the Body Shop. Strategies for success in anincreasingly complex marketplace. Human Resource Management International Digest, 13 (4), 5-8.

[xv]  The Holy Bible. New American Standard Version (1995) Lockman Foundation.

[xvi] McCall, M. W., & Hollenbeck, G. P. (2005). Developing global executives- How to train leaders for a globalperspective. Harvard Business School Press. Retrieved March 16, 2010, from http://hbswk.hbs.edu/archive/2732.html