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Todays Leaders Should Be Global

Global leadership competencies are necessary to do business in a dynamic, complex global marketplace.

February 24, 2011
Related Topics: Leadership Development, Leadership Development
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While leadership development always has been at the core of most learning professionals’ charter, the importance of developing global leadership competencies recently has risen to new levels of criticality. It has been identified as a priority and significant hot-button issue by CEOs and CLOs alike, while also receiving heightened attention from academic authorities and consulting firms.

Successfully doing business today almost requires that an organization operate in the global marketplace, no matter where it is headquartered. As a result, a great deal of attention is being paid to cracking the code on how to perfect global leadership, irrespective of industry or company size. Top management is pressed to find ways to improve performance and to do so with greater consistency and effectiveness. Upcoming leaders need to have a broader skill set, one that equips them to think and act globally.

In March 2010, American Management Association (AMA) conducted a study, “Developing Successful Global Leaders,” with nearly 1,000 companies on six continents to confirm and inform what high-performance organizations are doing differently in the area of leadership development. The study was conducted in partnership with the Institute for Corporate Productivity (i4cp).

In a clear sign that corporate management is striving to compete successfully in today’s worldwide marketplace, a majority of large organizations have implemented or plan to implement global leadership development initiatives. Organizations with 10,000 employees or more were most likely to have global leadership programs in place, with about 74 percent either having implemented programs or in the process of implementing programs.

Nearly one-third of the companies surveyed are years ahead of this particular curve and have been actively working to develop global leadership competencies in their curricula. However, more than an eyebrow raise is warranted for the 38 percent of organizations that do not have a global leadership program and are not planning to develop one. One might question their breadth of future opportunities given customer and stakeholder demands and expectations.

The study reported the top reason for developing these programs is the need to compete in a global environment. Given the shift from multinational to global organizations, leading in a global environment can be daunting. Understanding cultural differences is important in leadership as well as in the design and delivery of effective development programs. Global business often requires making decisions in complex or ambiguous environments, understanding cultural nuances and adapting the organization’s style accordingly. Leaders also must be able to handle ambiguity and complexity and be financially astute, strategically agile and authentic in all they do and say.

For one-third of respondents, a growing portion of their customers now come from outside of their home countries. However, this may create a narrow view of the marketplace. These leaders likely should consider the entire global marketplace as the platform for the greatest growth potential. Similarly, with the finding that 54 percent of respondents strive for greater consistency, shouldn’t greater global leadership consistency be a fundamental requisite to lead in a global marketplace? After all, quality stems from consistency, as do efficiency and productivity.

Most Popular Is Not Always Most Effective

The most widely taught competencies included in global leadership programs were critical thinking and problem solving, change management, building and leading cross-cultural teams, the ability to influence and build coalitions, and execution of global strategies. But the study found these were not necessarily the competencies that correlated best with market performance or global leadership effectiveness. Among the most highly correlated competencies were agility and adaptability to manage global shifts, expansion of the organization’s brand in local and global commerce and innovation management.

Research found companies that develop people with these three critically important competencies had a significant correlation to two important business outcomes. They showed enhanced market performance — stronger market share, revenue growth, profitability and customer focus — and there was a noticeable difference in improved leadership skills inside their organizations. Leaders acted differently and produced more powerful, relevant results.

CLOs should consider how to integrate these competencies with global leadership curriculums, either as core components in formal training programs or embedded into more fluid developmental opportunities, such as temporary stretch assignments and coaching. Innovation management, which involves creating an environment and business processes that empower the organization’s talent to use creative efforts to introduce new approaches, products and solutions, is of prime importance to leadership and business success.

Be Practical With Program Participant Selection

According to the study, the most common participants in global leadership training were vice presidents, directors and targeted high-potential executives. The great majority of organizations focus their development resources on high-potential managers presumed to be headed for positions of greater responsibility. However, nearly 1 in 10 employers open leadership programs to all employees. Organizations that open programs across the board may feel the policy addresses the growing demand to give individuals opportunities to learn and grow, which also boosts their commitment and bolsters overall organizational performance.

However, given the reality of business today, it is not so important that everyone has access to leadership development. Instead, leaders need to have the ability to tap into employees at all levels and locations to garner the best ideas available. Teaching leaders how to do this strategically should be a component of development curriculums.

While directors, vice presidents and those identified as high potentials dominate development programs of this type, there is a drop-off at the most senior level. Presumably, these senior executives are already members of the top management team. Most organizations believe it is practical and effective to be selective. Not only does it leverage limited development dollars, but it also may serve as an incentive for midlevel people who want to be on the fast track to expanded roles.

Although most leadership programs are relatively exclusive, there are almost always other kinds of development opportunities widely available. Individuals who distinguish themselves in such programs may then be targeted for leadership programs. Everyone cannot be on the all-star team, but everyone can strive to get there.

Leadership programs benefit from senior-level executive involvement. Management’s most significant contribution is leaders’ commitment, their skill in building the business rationale for the program and their communications in support of it. When senior leaders are involved, regardless of the specific role, both program success and market performance are higher.

The good news is that simply having senior leaders communicate about the global leadership development program — a relatively easy practice to implement — is associated with success. If an organization does not already engage in any of these practices, getting improved communication from senior leaders is a good place to start.

Senior executive teams need to communicate regularly and consistently to demonstrate their commitment to program success. This means endorsing the program and its relevance to the firm’s future, as well as communicating at significant moments, such as at the program’s launch and when key milestones are achieved.

The ability to have an enhanced global leadership perspective and the skills to operate across continents and diverse markets is fundamental to the success of business today and the realization of growth potential in the future. Global leadership competencies are no longer just nice to talk about or considered nice to have. They are a rite of passage to do business in a dynamic, complex global marketplace.

Sandi Edwards is senior vice president for AMA Corporate Learning Solutions. She can be reached at editor@clomedia.com.

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