The Decline of GE – What Can Leaders Learn?

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Some years ago, I brought an internal corporate team I was leading to visit GE’s famous Crotonville Learning Center, where we spent a day with the legendary Steve Kerr, then GE’s Chief Learning Officer. I don’t think any of us will never forget the awesomeness of that experience; not only was Steve a gracious host, but he was very persuasive in explaining GE’s culture of boundarylessness and information sharing.

Our team took those lessons to heart. In subsequent years, I regularly turned to GE in my MBA classes as an example of many of the things that great companies do right – emphasizing the importance of behavior and values and not only results, carefully identifying and developing potential leaders, and, through its Workout and Six Sigma processes, reinforcing accountability and continuous improvement. These were all wonderful practices that would warm every business professor’s heart.

So what if Jack Welch was perceived as ruthless and the architect of the rank-and-yank system? He was widely revered both inside and outside GE, and who could argue with the results? In the past several years, however, the cracks in GE’s vaunted armor began to show. Reports started to surface about GE’s over-reliance on its financial arm GE Capital and on former CEO Jeff Immelt’s obsession with getting the share price up while seeking mega deals, such as the acquisition of Alstom, that did not turn out to be such a success.

I found many parallels between his work and Jim Collins’ earlier work, in which he wrote about what happens to those organizations that fail over a period of time. Collins wrote about five stages that such organizations go through on their way to failure; here are some details on each of these stages, with some examples from my own experience and knowledge.

As many of you know, John Flannery succeeded Immelt, but only lasted 14 months. GE is on its third CEO in five years. A book about these years at GE called Lights Out by Thomas Gryta and Ted Mann, writers for the Wall Street Journal, recently came out, and I highly recommend it. It gives a lot of insights that many leaders could learn from. Here are six of my take-aways, based on the book and my own knowledge of GE from interviews with both former employees as well as consultants who have worked with GE over the years.

Having a bold vision is not enough. Jeff Immelt inherited a problem that was clearly not of his making. His goal to become less dependent on GE Capital and his vision of “ecoimagination,” (of GE transforming itself to a very different organization) was admired by many. Immelt himself looked up to founders like Jeff Bezos and Fred Smith, but at the end of the day, he was not able to execute against this vision quickly enough. Why not? The authors don’t give a good explanation, but as I have learned from my own consulting work and interviews with dozens of executives, a vision has to be aligned with the firm’s capabilities. If these capabilities are not there, then they need to be developed so they can execute on the vision.

Optimism will only take you so far, especially if it blends into hubris. Immelt was ever the salesman, a powerful presenter, always exuding confidence. Yet this blinded him to the realities of the business. For example, the authors mentioned that early on in his tenure, Immelt wanted to form a group of his fellow high-profile CEOs to discuss the pitfalls of the CEO job:

Frank Langone, the entrepreneur who cofounded Home Depot and a Board member, pulled Immelt aside and said, “I see what you are doing,” he told Immelt. “With all due respect, I think the time you spend on this would be better spent with some of the high-potential leaders in the company or with customers.” Immelt fixed him with a stern look. “I know exactly what I’m doing,” Immelt said. Oh shit, Langone thought to himself. Two months in and he has senioritis.”

Never underestimate the power of a strong company culture. We are all too familiar with the dysfunctional cultures that founders can create with their behaviors (such as the recent cases of Uber and WeWork). Yet, as the authors point out (p. 315):

“There is also plenty to blame to put on GE’s top-down culture, which Welch and any number of midlevel managers used to their advantage as readily as Immelt did. They instilled a by-any-means possible mentality and a lax attitude toward costs in an organization so gargantuan that mistakes were easily hidden. Unleashed on a grand scale year after year, these practices are inevitably crippling.”

Of course, there have been successful cultural transformations; both Satya Nadella of Microsoft and of Dara Khosrowshahi of Uber are examples of CEOs who, in a short span of time, have managed to instill different cultural norms in their respective organizations. But this takes leadership, consistent messaging, walking the talk, and changing reward systems.

Don’t Give In to Upheavals

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Jared Diamond, a historian, anthropologist and self-described polymath, is one of my favorite writers. After I read his groundbreaking Guns, Germs and Steel, I was hooked. Although he writes about societies and nations, I found his latest book Upheaval of particular relevance to organizations, especially with the parallels between the themes in this book and Jim Collins’ earlier book How the Mighty Fall.

In Upheaval, Diamond first discusses the twelve factors that make it more or less likely that an individual will succeed in resolving a personal crisis (this is based on research on crisis therapy): 1) acknowledgment that one is in crisis, 2) acceptance of one’s personal responsibility to do something, 3) building a fence to delineate one’s individual problems needing to be solved, 4) getting material and emotional help from other individuals and groups, 5) using other individuals as models of how to solve problems, 6) ego strength, 7) honest self-appraisal, 8) experience of previous personal crises, 9) patience, 10) flexible personality, 11) individual core values, and 12) freedom from personal constraints.

He then suggests that many of these factors also apply to examining how nations deal with national crises. That is, the outcomes of national crises may depend on how they address these factors; for example, national consensus that one’s nation is in crisis (Factor #1), acceptance of national responsibility to do something (Factor #2), and building a fence to delineate the national problems needing to be solved (Factor #3).

I found many parallels between his work and Jim Collins’ earlier work, in which he wrote about what happens to those organizations that fail over a period of time. Collins wrote about five stages that such organizations go through on their way to failure; here are some details on each of these stages, with some examples from my own experience and knowledge.

The first stage he calls hubris born of success. Stage 1 kicks in when

“people become arrogant, regarding success virtually as an entitlement, and they lose sight of the true underlying factors that created success in the first place. When the rhetoric of success (‘We’re successful because we do these specific things’) replaces penetrating understanding and insight (‘We’re successful because we understand why we do these specific things and under what conditions they would no longer work’), decline will very likely follow.”

Here’s an example. In 1876, Alexander Graham Bell went to Western Union and offered to sell them the patent for the telephone. No thanks, Western Union said. They could not imagine the telephone being anything more than a niche product while the telegram business had been so successful for them.

The second stage is the undisciplined pursuit of more, and organizations overreach. These firms jump “into areas into areas where they cannot be great or grow faster than they can achieve with excellence, or both.” Not many may remember this, but when a GE veteran (Hicks Waldron) from the Jack Welch era became CEO of Avon Products in the eighties, he proceeded to transform the company into a GE-like conglomerate – purchasing companies as diverse as Tiffany and Mallinckrodt (a specialty pharmaceutical company). This did not work, and fortunately, he let the company after a short and rocky tenure.

The third stage is the denial of risk and peril. At this point, there are internal warning signs but

“external results remain strong enough to ‘explain away’ disturbing data or to suggest that the difficulties are ‘temporary’ or “cyclic’ or ‘not that bad,’ and ‘nothing is fundamentally wrong,’ so leaders discount negative data, amplify positive data, and put a positive spin on ambiguous data. Those in power start to blame external factors for setbacks rather than accept responsibility. The vigorous, fact-based dialogue that characterizes high-performance teams dwindles or disappears altogether.”

Through the eighties, General Motors built nine out every 20 new cars in America. When its sales started to decline, it blamed the unions and cheap Japanese imports, while it continued to push its high-profit-margin trucks. GM did not believe that the Japanese cars would ever be successful in its own home market.

The fourth stage is grasping for salvation:

“Common ‘saviors’ include a charismatic visionary leader, a bold but untested strategy, a radical transformation, a dramatic cultural revolution, a hoped-for blockbuster product, a ‘game-changing’ acquisition, or any number of other silver-bullet solutions. Initial results from taking dramatic action may appear positive, but they do not last.”

Sometimes, these charismatic CEOs are brought in from the outside, like Bob Nardelli to Home Depot and Marissa Mayer to Yahoo; other times, they are promoted from within, like Steve Ballmer at Microsoft. But their flashiness and charisma did not help their firms to succeed.

The fifth stage is capitulation to irrelevance or death. Here,

“accumulated setbacks and expensive false starts erode financial strength and individual spirit to such an extent that leaders abandon all hope of building a great future. In some cases, their leaders just sell out; in other cases, the institution atrophies into utter insignificance, and in the most extreme cases, the enterprise simply dies outright.”

It seems to me that of the twelve factors that Diamond lists, there are several that apply to organizations in crisis, and if not heeded, will lead to the various outcomes that Collins describes. So in these times when the pandemic is uprooting much of our lives and those of many businesses, here are six key lessons for leaders, as filtered through Diamond’s and Collins’ lenses.

  1. Acknowledge that the organization is really in crisis. Of course, it is virtually impossible these days to deny the fact that many organizations – including yours, I am sure – are indeed facing tremendous challenges. These include firms from industries such as the airline, hospitality and consumer retail sectors. However, even if an organization happens to be fortunate because of the current demand for its products or services (such as P&G, Peloton and companies selling casual wear), you can never be complacent. I love Jeff Bezos’ mindset and mantra, “It’s always Day 1.” The business environment is so unpredictable these days that you always have to be prepared and have contingency plans.
  2. Accept that it is your personal responsibility – not just the CEO’s – to do something. This parallels Collins’ Stage 2, the denial of risk and peril, and it happens especially in organizations where leaders are afraid of raising uncomfortable issues with their CEO, and/or when the CEO has such a strong hold on the firm that he refuses to even consider an alternate business scenario.
  3. Identify the organizational problem that needs to be solved. I have seen too many CEOs, especially those from the outside, stir things up and start introducing changes that run counter to the firm’s core advantages, or perhaps simply do this for the sake of disruption. Look what Ron Johnson did when he became CEO of J. C. Penney and wanted it to become like a J. Crew. That didn’t work, and Johnson was out a year later.
  4. Do an honest appraisal of your organization’s strengths and weaknesses. I’ve led a number of sessions with executive teams on doing deep-dive SWOT analyses, and if everyone does their homework and are willing to speak up, this exercise can really be eye-opening. A few years ago, Howard Schultz had expanded Starbucks with a strategy of growing hyper-fast and cannibalizing its own stores’ sales. But sales could not keep up with the openings and after acknowledging his mistakes, Schultz and his company had to close over 150 stores. Now Starbucks is instead concentrating on expanding its delivery and increasing its advertising.
  5. Be patient and flexible. In 2012, Best Buy was struggling, and some were predicting its demise, similar to Circuit City a few years earlier. But when Hubert Joly took over, he realized that the company had to adapt and patiently started to build a strong customer experience as well as a strong employee experience (while at the same time cutting costs). Best Buy is one of business’s best success stories of the past decade. As another example, Brian Chesky, a co-founder of Airbnb, saw revenues at his company plunge after the pandemic hit. But then he realized that people were looking for vacation places closer to their homes. He adjusted his firm’s strategy quickly and “… redesigned its website and app so its algorithm would show prospective travelers everything from cabins to lavish beach houses near where they lived.” By July 8, guests had booked stays at the rate they were just before the pandemic. In August, more than half of bookings made were for stays within 300 miles of the guest’s location (October 12 of the Wall Street Journal).
  6. Don’t lose sight of the organization’s core values. When I advise executives who are engaged in transformational change, I always recommend that they communicate, in addition to why the changes are necessary, what will NOT change in the organization. Often, this means reinforcing the organizations’s core values, especially around X, Y and Z (substitute the letters here for the organization’s values).

References:

Collins, J. (2009). How the Mighty Fall, and Why Some Companies Never Give In. New York: HarperCollins.

Diamond, J. (2019). Upheaval: Turning Points for Nations in Crisis. New York: Little. Brown.

Pivot, Prepare and Care: Advice for Small Business Owners

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We all know that small business owners have been hit hard by the current COVID-19 crisis. In a recent survey by the National Bureau of Economic Research, less than 40% of small business survey respondents expect their businesses to be opened by the end of 2020. Earlier surveys by FEMA have found that 40% of businesses failed to reopen after a disaster and another 90% failed after two years.

Recently I spoke with small business owners via Zoom in my role as a mentor for an organization called SCORE (Service Corps of Retired Executives). After outlining these sobering statistics, in which very clearly the odds are stacked against them, I nonetheless suggested there’s no reason to despair; although there are a lot of things beyond their control at the moment, how small business owners respond is very much within their control. The following is a shortened and slightly updated version of my talk.

What do you think these companies have in common other than they are all household names: GE, IBM, FedEx, IHOP, Trader Joe’s, Hyatt, Burger King, and HP? They all started during depressions and recessions. Despite what’s going on these days, I really believe there are still opportunities for entrepreneurs to succeed, and even thrive. After 9-11, there were a lot of businesses in Manhattan that failed but some others, especially those who adopted, were able to succeed.

Here are three tips that are important especially for small business owners to remember: pivot, repair, and care. I believe that these are close to the secret sauce that you need from a Human Resources perspective in order to restart your businesses successfully.

The first tip is to pivot by reexamining your business model. Now may actually be a great time for you to step back and reexamine all aspects of your business, especially since you have a little bit of breathing room and time. Don’t assume your customers are all going to come back and expect everything to be the same as before. It certainly will not be business as usual for a while. Yes, it’s been said that there will be a new normal; that’s a fact. So, begin by asking yourself: if you were starting over again, which in a sense is what you are doing, what will you do differently?

I suspect that many of you are already thinking about your business differently and some have started to adapt. But you need to step back even further and take a hard look at these three aspects of your business: what you’re selling, to whom you’re selling, and how you deliver. How can you adjust and adapt to each of these? Can you diversify your product or service? Can you expand your customer base? Can you change your distribution method? Remember what Warren Buffett once said: “The most important thing to do if you find yourself in a hole is to stop digging.” At the same time, keep in mind that your two top business priorities ought to be conserving cash and maintaining your current customers.

Many small businesses have taken to Zoom to expand their services and attract new customers. Even funeral parlors are offering memorial services through Zoom. Personal trainers have been offering Zoom classes for some time now, but a few are also offering classes not just to their customers but also to their customers’ children. Some small businesses are partnering with other businesses. For example, there is a restaurant in Connecticut that has partnered with grocery stores in the area to sell them prepared meals which these grocery stores then sell to the customers. A local florist has partnered with the home decor business in her town so that when customers order from this home decor store and receive their order, there is a surprise bouquet from the florist that comes with the delivery (with a coupon included).

Some of you are familiar with a business tool called SWOT, in which you examine the strengths, weaknesses, opportunities, and threats of your business. While this can be done by yourself, use this opportunity to involve your staff in doing this SWOT analysis as a team; this can even be done through Zoom.

The second tip is to prepare by making your employees’ health and well-being a priority. Remember that your employees are worried and that you cannot run your business without them, so make sure you show them that they are your priority too. This means, first of all, educating yourself about applicable federal, state, and local requirements for preventing the spread of COVID-19 and for getting funding. These guidelines and requirements are constantly evolving so you’ll need to check the latest updates from the CDC regularly.

Have a preparedness plan and procedures in place for employees; for example, make sure you have adequate face masks, sneeze guards, plexiglass dividers, social distance markers, hand sanitizers and disposable wipes. If you are shipping or receiving products, make sure your employees have the right cleaning supplies for wiping down and disinfecting. Enhance your regular housekeeping practices by deep cleaning regularly.

And if you offer teleworking and/or flexible hours, make sure you set clear expectations for employees working remotely, for example, when you expect them to be at their desks and how frequently they should be communicating with you. You also need to protect your business by making sure that their homes are safe (e.g., adequate electrical equipment and lighting, smoke detectors, etc.) and that their homeowners’ policies are up to date. Check with your insurance provider on your own coverage and do a cybersecurity audit (e.g., two factor authentication, anti-malware software).

The third and perhaps most important tip is for you as a business owner to care by rebuilding morale. Your employees need a boost right now, and I suspect that most of them want to go back to work. The key here is to engage with your employees. Are you in regular contact with them? Are you communicating with them and are you aware of their concerns about pay, safety, and their well-being? Research suggests that what your employees want most from you during these times is trust, compassion, and hope. The best bosses today are more like coaches; they make their employees feel that they are working with you and not that they are just working for you.

Your employees are looking for signals from you. Of course you need to strike a balance between honesty and hope. It’s important not to sugarcoat what’s going on with your business, but at the same time you need to give them some hope, especially with your outstanding performers who might start looking for other opportunities.

If you need to lay off or furlough, do this as a last resort and do it with compassion. Have a script so you don’t “wing it” and don’t make it about you. Be supportive, for example, by offering to write them letters of recommendation.

Make resilience your friend. Focus on what you can control. Remember that resilience gives you the flexibility to try out new things and get out of your comfort zone. Consider some of these “successful failures.” Walt Disney was fired from the local paper because he was told he lacked imagination. Stephen King’s book Carrie was rejected by over 30 publishers, while Colonel Sanders’ chicken recipe was rejected by over 1000 restaurants.

Finally, managing yourself and self-care are important in these times as well. You might remember those announcements on airplanes when in an emergency they suggest that you put on your oxygen mask first before helping others. When we are under a lot of stress, as research as pointed out (Hogan, 2020), the dark side of your personality starts showing up. Findings from neuroscience also tell us that sustained stress activates the amygdala and decreases activation of the prefrontal cortex (which is the part of the brain that we use in thinking rationally). Undue stress might also cause you to get very upset and take your stress out on others. It also causes distorts your judgment and causes you to make some decisions you might regret later. The stress effects on the frontal function make us spin our wheels, doing the same things over and over again even though they are not working, and tend to make us much more risk-taking – all because our executive function is no longer working for us (Sapolsky, 2017).

So it’s important to take care of yourself by first doing the basics: eating healthy, getting a good night’s sleep, and exercising. Just as important is to stay positive. You can do this by some positive self-talk; for example instead of saying “this sucks,” tell yourself, “I am looking forward to opening up again and trying new things.” You can also do this by keeping some kind of a gratitude journal, for example, by writing down three things every day that you’re grateful for that day.

References:

Hogan, R, (May 13, 2020). Leadership Matters. https://www.hoganassessments.com/leadership-matters/#more-10466

Sapolsky, D. (2017). Behave: The Biology of Humans at Our Best and Worst. New York: Penguin Press.

Building on Your Strengths or Working on Your Weaknesses: Are They Mutually Exclusive?

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If you are like many other managers who have received 360-degree feedback results, this is most likely the sequence you followed in analyzing your data. First, you looked at the overall averages for each dimension or category. Second, you read – and re-read – the comments made. For many managers, these comments are often the most insightful aspects of the process. Third, you went back to the averages and focused on the ones where you scored the lowest, examining each of the specific statements in these categories. If you wanted to improve and get better, you told yourself, you needed to focus on those behaviors where you were perceived to be relatively weaker.

Youngme Moon, a Marketing professor at Harvard Business School, makes a similar point about the way companies look at their brands in her book Different. For example, if a brand manager looks at market research data showing one brand attribute among many falling significantly below the industry average, his typical reaction might be to address the vulnerabilities in that brand and focus on improving on that weak brand attribute. Very rarely, if ever, would that brand manager double down on the brand’s strengths “further extending the distance between you and your competitors.” Yet, Professor Moon argues, “true differentiation – sustainable differentiation – is rarely a function of well-roundedness; it is typically a function of lopsidedness.”

Marcus Buckingham and Ashley Goodall, in a recent Harvard Business Review article, would agree. They maintain that we learn best when we focus on building on what we are already doing well, and that, if we get out of our comfort zone, “our brains stop paying attention to anything other than surviving the experience.” Therefore, build on your strengths and ignore your weaknesses. He does argue elsewhere (Buckingham and Clifton, 2001) not to ignore your weaknesses but to find ways to manage around them. The examples he gives, however, are of individuals who got others to help them complement their weak points as opposed to working on these weaknesses on their own. For managers, this might mean hiring people on their team who complement skills and attributes they lack that are important to the success of the group. For analytical individuals, this might mean working with someone who is intuitive and creative.

For example, Buckingham and Clifton cite Cole Porter, a very talented songwriter who, according to them, unfortunately wrote very weak plots for his musicals. Still, for these researchers, his words and melodies were so outstanding that it almost did not matter who was singing them or why. It is true that Porter wrote some flops, but he also wrote quite a number of hit musicals such as Kiss Me Kate and Can-Can.

Back to Professor Moon and her marketing analogy. She further argues that brands trying to be “well-rounded” by being above average in all of their brand attributes lead to less rather than greater differentiation – which diminishes the uniqueness of a brand. Buckingham would probably agree; he would argue that individuals who seek to be well-rounded will end up not having any distinguishing qualities that make them stand out.

What seems to be missing in both Professor Moon’s and Buckingham’s arguments is that there is a minimum threshold, a floor if you will, below which having a weakness on a particular brand attribute or individual characteristic could be a deal-breaker. In other words, what if the weakness cannot be compensated for by one’s strengths, and the characteristics in which that individual is weak are critical to achieving success, e.g., moving to a more visible role or an executive position?

In his recent podcast (When Strength Becomes Weakness episode of April 17, 2019), the author and professor Adam Grant interviewed Buckingham about his theory of developing your strengths and ignoring your weaknesses. Grant was arguing two points with Buckingham. First, he asked, why not improve something you are not good at? For example, Shaquille O’Neal was a terrible free-throw shooter (as are some other professional basketball players), and he worked hard to improve his free-throw shooting, but with arguably modest results. Buckingham countered that this was a poor investment since the results would be marginally incremental. Second, Grant argued that having too much of a strength could be a flaw. Buckingham countered that what you need to do is temper it a bit, but not stop using it. So if a self-confident leader starts to become arrogant, he or she should recognize that and dial it back a bit.

I once coached a manager who I will call Steve. Steve had an MBA from an Ivy League school and had a background in Finance. He was very talented in his field and was considered a high potential in the company where he was working. He had one major flaw: he was afraid of speaking in public and was not at all a polished speaker. I advised Steve not to ignore this weakness if he wanted to eventually become CFO of a major corporation. Regardless of how good his other strengths were, being a C-suite player today requires very good communication skills. You don’t have to be a master orator, but you have to be good enough to communicate with your team, people within your company, with investors, and with the public. And you cannot rely on others on your staff to complement this weakness; you have to overcome it yourself. Winston Churchill, Tiger Woods and Jack Welchi were stutterers, and yet somehow, they overcame this deficiency to become more than decent public speakers.

Steve realized that he could not just compensate for his lack of public speaking skills by become a world-class finance person. He had to work on this weakness so he could become at least adequate as a public speaker. The lesson here is to build on your strengths but at the same time, not ignore those weaknesses that may prevent you from reaching your career or professional goals. You don’t have to be world-class in overcoming those weaknesses but be “good enough” so these do not undermine you.

In his ground-breaking research on disruptive innovation, Clay Christensen argues that companies stick too long to improving product attributes that are no longer important differentiators for most customers. He calls this “overshooting the market”; these companies ignore the upstart firms that might be offering cheaper products, although not as sophisticated. Similarly, individuals who focus on simply building on their strengths may overshoot and neglect those qualities that others have that may become increasingly important in their organizations.

There are two assumptions in the Buckingham arguments that I would question. First, the assumption that working on weaknesses is a waste of time would not be good advice for executives like Steve who will need to reach this minimal threshold to even be considered for potential senior management roles. I would argue that incremental improvements so you can become “good enough” would be worth making. This is NOT about spending time trying to turn yourself into somebody else (which Buckingham argued in the podcast would be a “dubious waste of time”).

Second, the assumption that working on weaknesses is uncomfortable and a royal pain and therefore should be avoided also is questionable when coaching executives who want to address a critical flaw. Why work on it if it does not invigorate you, Buckingham might argue? Well, one of my clients described working on something he was not good at as follows: “Embrace the pain; make it your friend. It’s necessary to feel pain in order to get better.” He said that friends of his who run marathons know that at some point the pain will start but when they simply embrace the pain, they will find the joy that happens when they cross the finish line. Anyone who has ever tried to master a skill or a sport will know that practicing is not always fun but ultimately is extremely helpful in building the desired skills. Remember that a fundamental principle of adult learning is that adults learn best when they are stretched outside their comfort zones.

My suggestions to those of you want to improve on your 360-degree feedback results is to focus on the following:

  1. Of the various dimensions or leadership qualities assessed in your 360-degree feedback, which are the most important for success in your job today (or alternatively, for success in your career goals)?
  2. Of these important qualities: which play to your strengths, and how can you build on these strengths so you get “invigorated”? Here, I am in complete agreement with Buckingham.
  3. And of these important qualities: which do not play to your strengths, and how can you bring those up to a “good enough” level? In Steve’s case, he realized he needed to improve his public speaking, so he hired a coach who helped him with his communication skills. Remember what my executive client said about making pain your friend. Embrace the discomfort, and you will appreciate the end results more when you achieve them.

References:

Buckingham, M. and Goodall, (March-April, 2019). Why Feedback Fails. Harvard Business Review.

Christensen, C. (2011). The Innovator’s Dilemma. New York: Harper Business.

Moon, Y. (2010). Different: Escaping the Competitive Herd. New York: Crown Business.

Learning to Be a Leader in B-School

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Prior to taking my executive MBA course in Global Leadership in Singapore, the students (many of whom are middle or senior managers working for global firms) are required to complete a brief assignment and answer several questions. One of these questions is why it is important for them to want to be a leader. Over the years, I have compiled hundreds of these responses, and they tend to cluster in three different categories. About a third refers to students’ ambitions to be promoted and move up to senior management positions and to have a successful professional career. Another third are about their strong drive to achieve challenging goals. And about a third are about their motivation to help or to be part of a larger mission (they are the “givers” rather than “takers,” in Adam Grant’s terminology). The following is a sample of answers from this third group of students:


I enjoy the challenge of helping others to succeed and take pride in my ability to develop and empower people. I also like building high performing teams that have a common goal with each member understanding their vital role in achieving that goal – “the golden thread.”
I believe that I want to be a leader so that I can help others and improve the well-being of others.
Yes, it would give me immense satisfaction to look back and recognize that my leadership has developed a set of capable individuals and has contributed towards the growth of the company.


I enjoy seeing my contributions producing greater impact to a wider audience and seeing results. Being a leader is about being a knowledgeable servant, a change initiator, an adaptable learner, a good communicator and a person of action.

I enjoy helping people grow, by mutually sharing knowledge and experiences, building on their strengths and developing the areas where they need help. I get a lot of energy from looking at what we have today, and what we need to succeed in the next 3-5 years, and building plans to bring that vision to life.


From my experience having worked for over 30 years in Fortune 500 companies and continuing to coach and consult with executives, I’m not surprised at this distribution of responses. While only a third see their motivation in terms of a larger mission, it is this group of future leaders who are vitally important to the long-term success of their organizations.

Now for those of you who have an MBA, who has gone through any leadership programs or courses, or have read books on leadership, I am sure you are familiar with the many explanations and theories of leadership. Amazon last month alone had over 30,000 book results on this subject. As a professor who teaches leadership in a business school, and as a consultant who coaches managers and executives to become better leaders, I am reasonably acquainted with many of the debates about leadership (e.g., whether leaders are born or made, whether we need management or leadership, whether leadership really makes a difference in organizations). In a new book very critical of the Harvard Business School (and many other business schools, by implication), the writer Duff McDonald resurrects many of these criticisms in a chapter entitled “Can Leaders Be Manufactured?”

What exactly are his arguments against the business school approach to leadership and leadership education? First, he claims that there is no general agreement on a definition of leadership. Perhaps, he argues, this is because leadership cannot be taught in the same way as other business topics (such as accounting) because it is “… more of an emergent quality and context-specific.” In other words, leadership cannot be defined because it is something that a person either has or does not have in a particular situation.

 

Second, by emphasizing the individual qualities of the leader (that is, the leader as a heroic individual), HBS and other business schools are ignoring the collaborative aspects of leadership.  Third, leadership cannot be boiled down into a set of skills or placed in a pedestal as a virtue because it (see earlier argument above) “… severs the whole notion of leadership from its ties to identity, community, and context.” For McDonald’s, leadership cannot be reduced to a number or packaged into some kind of checklist.

And fourth, business schools “conflate” leadership with formal authority and hierarchical supervision. In other words, he claims that business schools teach students that to be a leader, they have to be a boss first. Furthermore, business schools (especially HBS) teach students to be leaders so they can advance their careers and improve corporate financial performance. As evidence that HBS has not produced leaders who have made a difference in making the world better, he points out that their graduates tend to “horde together” in similar industries depending on where they can make the most money.

McDonald’s blistering critique of the business school approach to leadership seems over-the-top (as is much of the book) and he is selective in citing quotations and books that support his arguments. His bias against teaching leadership (and by extension, organizational behavior) is exemplified with his statement that starting in the 1950s, when corporations decided to outsource leadership training to business schools, this was proof positive indicating that they (and human resources) were merely showing “a feigned interest in the human side of corporate life.”

Based on my reading of his book, I doubt that McDonald has reviewed the extensive scientific literature on leadership, sat in on some recent classes on leadership, or interviewed recent business school graduates who have taken courses in organizational behavior. In fact, his view of leadership can be summarized succinctly when he states, in another section of the book: “Most of us can agree that leadership is an emergent quality; it reveals itself in the moment, and you either rise to the challenge or you don’t.” (p. 197) To paraphrase McDonald: Really? Is that all there is? That leadership is all about just stepping up when the situation calls for it? On this one point, I agree that rising to the challenge is certainly part of being a leader. As management guru Marshall Goldsmith likes to point out, courses in leadership and company programs to develop leaders won’t do a bit of good unless the person himself or herself makes a decision to become a better leader. However, to modify an established psychological principle, PL = M x A x E. In other words, your performance as a leader (PF) is a function not only of your Motivation (Do you want to be a leader? Do you have the desire? Do you have the courage?) but also of your Ability (or more generally, your skill set) and the Environment (Does the situation help or hinder the exercise of leadership, e.g., does your organization encourage you to grow as a leader, do you have role models or others who have influenced you?). For McDonald’s, leadership seems to be all about the M. In my experience in coaching leaders, it seems that many individuals don’t necessarily make a conscious decision to become a leader. Leadership for them becomes more of a process and a discovery, where over time (as they form a direction or point of view, try to influence others or get encouragement from role models), they increase their self-awareness and find out they want to do this, and/or they might be good at this.

I also agree with his criticism of what passes for much of leadership education these days in business schools, where such leadership courses seem isolated and unintegrated with courses such as finance and marketing. There is much more that can be done to embed leadership perspectives in these functional courses. The other major criticism that McDonald has about business schools like HBS is what he considers to be an almost total reliance on the case method. This is not quite fair; many business schools have supplemented their lectures and cases with simulations and experiential activities such as role-plays so students can get behavioral feedback. They have taken to heart the research findings (and common sense) indicating that much of adult learning comes from experience and learning from others. Many business schools have designed structured experiences so that students get feedback, reflect on what they have done, and raise their self-awareness. This is especially important for leadership courses, where students need to observe, practice, and get feedback about their leadership mindset and skills.

Rather than addressing his arguments point-by-point, I’d like to offer several observations about leadership and leadership education. First, despite what McDonald claims, there has been emerging consensus over the past two decades on what constitutes leadership and leadership effectiveness. There are several excellent and well-researched books on leadership that summarize these findings, including Leadership in Organizations by social scientist Gary Yukl (2010). Although there are indeed many definitions of leadership, almost all organizational psychologists would agree with Yukl’s conclusion that “most definitions share the assumption that (leadership) involves an influence process concerned with facilitating the performance of a collective task.” (p. 23), and that this influence is for a direction (some would say “vision” or “point of view”) that the leader has in mind. He then summarizes ten behaviors of effective leaders, based on the overwhelming research evidence to date. I’ve included these below, along with the eight behaviors of effective managers that Google identified recently based on the extensive data they collected internally on what differentiates effective from average managers (Garvin, 2013). There is a strong overlap in these two lists (as well as several others that have emerged in the literature). Furthermore, most social scientists agree that leadership can be defined as a set of behaviors that can be learned and practiced (e.g., Kouzes and Posner, 2007) and that effective leadership does lead to better engagement, motivation, and performance. In other words, good leaders do make a difference not only to the individuals but also to their teams, their organizations, and to their communities and societies.

Second, contrary to what McDonald asserts, the great majority of contemporary research and practice on leadership stresses the importance of collaborative versus authoritarian leadership. The Jack Welches of the world are still around but they are a minority among executives today. I remember reading in an interview a few years ago when Jeff Immelt, Welch’s successor and current CEO of GE, commented that if he had to give a direct order more than five times a year, he felt he was not being an effective leader. In fact, there is no respectable social scientist today who would argue that leadership is synonymous with hierarchy, formal authority, or a command-and-control view. Perhaps the best contemporary examples of this collaborative approach to leadership development are coming not from the corporate world but from the military, and specifically West Point. From conversations, I have had with faculty and students there, as well as books by and interviews with West Point graduates (just as one example, former general Stanley McChrystal wrote a book recently on shared power and leadership and has a successful consulting practice helping companies), their approach to leadership as collaborative and as a set of behaviors that can be learned is consistent with the evidence from social science research.

Of course, there are still many executives today who view leadership as a raw grab for power and exercise of authority. These are reflected in the comments from some of my students, and there are many examples of these ego-driven and narcissistic types in organizations today. But for the most part, managers, as well as senior executives in different types of organizations, recognize that they need a different kind of leadership these days to be effective.

In summary: 1) leaders are both born and made; in other words, while some may have traits that help them to become leaders, many of us can build and improve on our leadership skills; 2) leadership can be exercised at many levels of an organization, and is not dependent solely on power or status; 3) those with collaborative skills and concern for others (along with technical skills and the right kinds of experiences) tend to become more effective leaders in the long run, 4) for many, becoming a leader is more of a process rather than a single act or decision that defines them as a leader, with self-awareness being a critical aspect of this journey, and 5) learning from experience and from others (such as role models) can greatly influence one’s growth and development as a leader. Many years ago, Arnold Schwarzenegger, when he was still a bodybuilder, used to tell his fans that they were never going to build up their bodies simply by reading his books and watching his videos (of which he had quite a few). You had to go and actually exercise and practice. The best approaches to leadership education today focus on those critical behaviors constituting leadership and provide students with the knowledge and skills to practice and improve their effectiveness as leaders in the context of their specific situation.

What Effective Leaders Do (Yukl)

  • Help interpret the meaning of events
  • Create alignment on objectives and strategies
  • Build task commitment and optimism
  • Build mutual trust and cooperation
  • Strengthen collective identity
  • Organize and coordinate activities
  • Encourage and facilitate collective learning
  • Obtain necessary resources and support
  • Develop and empower people
  • Promote social justice and morality

What an Effective Leader Does (Google)

  • Is a good coach
  • Empowers the team and does not micromanage
  • Expresses an interest in and concern for the team members’ success and personal well-being
  • Is productive and results-oriented
  • Is a good communicator—listens and shares information
  • Helps with career development
  • Has a clear vision and strategy for the team
  • Has key technical skills that help him or her advise the team

References:

Garvin, D. (2013). How Google Sold Its Engineers on Management. Harvard Business Review, December.

Kouzes, J. and Posner, B. (2007). The Leadership Challenge. New York: Wiley.

McDonald, D. (2017). The Golden Passport. New York: HarperCollins.

Yukl, G. (2010). Leadership in Organizations. Upper Saddle River, NJ: Prentice-Hall.

Are Global Managers Portable?

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I met Jacques Renard in Shanghai a few years ago, where he was CFO of the subsidiary of a global consumer products company.  A French national, Jacques has had a long career as an expatriate for his company; the last time he worked in his native France was fifteen years ago.  He has been assigned to Austria, Warsaw, Caracas, Jakarta, and now Shanghai.  His wife and their two children are used to moving with Jacques every few years.  Jacques is part of a small but enduring breed of managers who spend their careers working outside their home country. 

As I have written elsewhere, cultural sensitivity and global mindset – in addition to having the right set of technical skills and integrity – are important for success as a global manager.  Recently, I came across a study that suggests that these may not be enough, although this was not a study of global leaders.  Let me explain.  Groysberg et al. (2006) examined 20 high-level executives who were leaving one company (GE) to join another company at an even higher level of responsibility (e.g., Chairman, CEO).  In their study, which covered the years 1989 to 2001, they found mixed results for what they called the portability of these executives; some were successful, others less so.  For example, Robert Nardelli went to Home Depot and failed there; James McMerney went to 3M and thrived.  Both were at some point considered to be potential successors to Jack Welch at GE.

Why GE?  For many years, especially during Jack Welch’s time, GE was well known as a breeding ground for leadership.  I know several executive recruiters who used to keep close tabs on up-and-coming GE managers because of the company’s reputation for identifying and developing leadership talent.

What Groysberg and his colleagues found was that portability depended on a match between the executives’ skills and the requirements of the new position in terms of four areas: strategy, industry, relationships and culture/systems/processes. For example, companies’ subsequent performance was better when those executives had strategic skills that were a good match with their new company’s strategic requirements.  If an executive’s strengths were in cost cutting but the new environment required skills in growing the business, the chances were that the executives’ new company would not perform as well.  In other words, the portability of an executive (at least in the limited sample they studied) was a function of the match between the executives’ strengths and the company’s situation in these four areas:  “The more closely the new environment matches the old, the greater the likelihood of success in the new position.”  Subsequent research by Araoz supports this idea that “origin and destination matter.” 

What about managers like Jacques?  Despite the moves from country to country, he and other global managers for the most part remain in the same company.  Will similar cautions apply to the portability of global managers who are assigned to different country subsidiaries?  Or does having cultural sensitivity and a global mindset trump any potential mismatches in portability?

Many years ago, the company I was working for acquired a small business in an African country that was founded by a very successful entrepreneur.  To help integrate this business with the company, we sent a British manager who I shall call Philip.  He had been with the company for over twenty years, had been assigned to several overseas subsidiaries during that time, was highly experienced in operations, and was very familiar with the company’s culture and processes.  Unfortunately, Philip did not do well in his assignment.  His constant clashes with the local founder and his attempts to run a command-and-control operation did not fit with the loose, free-wheeling culture of the local company.  Using the Groysberg framework, there were mismatches in all of the four areas:

·      Strategy.  This was a situation that called for an executive with skills in blending together an entrepreneurial company with a massive global enterprise; Philip had never faced this kind of challenge before.

·      Industry.  As an emerging market, this country’s regulatory environment was not sophisticated, consumers had little awareness of the brand that the global company represented, and the competition was mainly other local companies.  These were unfamiliar challenges for Philip, and very different from what he had faced in the past.

·      Relationships.  Philip flew in “solo;” he had met the founder briefly but had no friends or allies in the company whom he could trust.  As a result, he had blinders on and was not able to get feedback or advice that could have helped him adjust his behavior and style.

·      Company culture/systems/processes.  Philip was used to working in a bureaucratic environment where processes were defined and well established.  Nothing in his past experience prepared him for this situation.

While Groysberg’s framework certainly fits, a certain level of cultural sensitivity and global mindset on Phil’s part could have helped mitigate these risks.  For example, being willing to learn about other cultures and building connections (two critical elements of global mindset) would have helped him understand the local company’s industry and processes, as well as establish productive relationships.  Therefore, the first screen in selecting potential global managers is still their global mindset orientation.  Assuming that companies have vetted their global managers on global mindset, what if it is apparent that there will not be a good match?  A company has three alternatives:

1.   Find someone else in the company with a better match for the situation, while sending the manager to another country where there is a better match for him or her.  This presupposes that the company has a pool of such managers and the capability to match them to the most appropriate situations.  If not, at least find the closest matches.

2.   Fix the manager by providing her with some counseling and coaching.  A global manager who may not be familiar with the regulatory environment in the country she has been assigned to can prepare by learning from more experienced colleagues about what to watch out for, consulting with country experts, or doing a lot of homework. 

3.   Fix the situation to enhance a better match, for example, by sending the global manager to a subsidiary where he already has a network.  Angela was a global manager for a technology company who had led a global team whose members were primarily in India.  When there was an opening for a manager to be assigned to the company’s Indian subsidiary, she was the logical choice, and Angela was able to take advantage of the alliances that she had already built in the subsidiary to have a successful assignment there.

Araoz, C.  (2014).  It’s Not the How or the What but the Who.  Boston:  Harvard Business Review Press.

Grosberg, B., McLean, A. and Nohria, N.  (2006).  Are Leaders Portable?  Harvard Business Review.

Practicing Mindfulness as a Global Leader

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A recent New York Times Sunday magazine article featured the work of Ellen Langer, Psychology professor at Harvard and one of the pioneers of the concept of mindfulness.  This term is almost a buzzword these days, and is used often by those who lean towards meditation and Zen philosophy.  For example, Chade-Meng Tan has developed a meditation course that he offers to Google employees (Mr. Tan himself works at Google) and has written a book about his approach called Search Inside Yourself.  According to the New York Times (April 28, 2012) more than 1,000 Google employees have taken his class, which is offered four times a year.  Each class has 60 people and runs seven weeks.

Professor Langer’s approach is different, and in her book Mindfulness, she herself writes that “My work on mindfulness has been conducted almost entirely within the Western scientific perspective.”  In the Times magazine article, she states clearly that her approach is different from the popular mindfulness meditation techniques in vogue today.  According to the article:

“Her emphasis is on noticing moment-to-moment changes around you, from the differences in the face of your spouse across the breakfast table to the variability of your asthma symptoms.  When we are ‘actively making new distinctions rather than relying on habitual’ categorizations, we’re alive; and when we’re alive, we can improve.”

Nonetheless, Langer admits that there are some parallels between her approach and the more mystical approach advocated by Tan and others.  What makes Langer’s work so important is that it provides a way to counteract the powerful unconscious biases we have that Daniel Kahneman, the Nobel-prize-winning behavioral economist, recently summarized in his book, Thinking Fast and Slow. 

So what is mindfulness and why does it matter for a leader working across cultures?  In re-reading parts of Professor Langer’s book, these are four take-away’s on how global leaders can improve their mindfulness.  I’ve summarized her suggestions and re-phrased them in ways that can be applied to the work of global leaders.

First, “re-categorize” as you are interacting with business colleagues from different cultures.  As Langer explains this, what I think she means is that when we are actively taking in new information about others, we should pay attention to the situation and the context.  For example, say that you are meeting a female Argentinian executive on your first visit to Buenos Aires for a possible joint venture.  You have taken some Spanish lessons although you may not be that comfortable in speaking Rioplatense Spanish, which is the kind of Spanish spoken in the part of Argentina where your host is from.  You have an initial expectation of her based on what you know about her company and about her status in the company.  When you meet her, you might notice some other characteristics that might cause you to “re-categorize” your impression of her.  She might, in fact, be speaking excellent English since she went to university in England, you learn.  More surprisingly, you learn that her parents are actually from Spain, and that she goes to Spain quite regularly to visit relatives.  So by being mindful of these different “categories,” you get to shift and adjust your impressions.

In their book Blindspot, Banaji and Greenwald provide research that shows that we have a category-forming capacity that enables us to think about four to six “identifiers” at any one time (pp. 82-83).  For example, they show that by considering six person categories simultaneously – race, religion, age, nationality, gender, and occupation – we can quickly form a mental image or a description of a person, e.g., white Catholic Polish male factory worker in his sixties.    

Second, be open to new information.  As Langer puts it, “Mindfully engaged individuals will actively attend to changed signals.  Behavior generated from mindful listening or watching, from an expanding, increasingly differentiated information base, is, of course, likely to be more effective.”

In psychology, such individuals are said to be “high self-monitors.”  They are aware of cues in the environment, and will not only pay attention to these cues, but alter their behavior accordingly.  In one of my first presentations to a Japanese audience several years ago, I noticed that not even halfway into my talk, about 70% of the managers in the audience had their eyes closed.  What was going on, I wondered.  Was my presentation that boring and uninteresting?  Perhaps they did not have enough sleep last night?  On the fly, I adjusted my presentation and began to ask questions to make my presentation more interactive.  Only later did I find out that closing their eyes is common for Japanese audiences, who want to concentrate on what the speaker is saying, especially if he or she is speaking in English.

In high context cultures, as well as in cultures where direct confrontation is avoided, it is especially important to “read between the lines.”  This means paying attention to the tone of what individuals are saying, and their body language.  As a global manager, you may be receiving nods from your team but that may not necessarily mean that they agree with you, or that they will follow through on what you have asked them to do. 

Third, adopt a “multiple perspectives” attitude.  This means trying to understand the situation from others’ points of view.  As a manager going into a subsidiary from headquarters, for example, you might think of yourself as someone who is there to make sure that the local employees understand what is expected from them by “corporate.”  You might think that you should be welcome because you are coming from the mountaintop to “enlighten” the local population.  Well, consider the situation from their point of view.  They might see you first of all as a corporate “spy” who has been sent to check up on them.  They might also see you as an ivory tower, naive manager who has very little idea of what goes on in the country and who is trying to impose corporate-wide solutions that will not work locally.  As Langer suggests (p. 69): “If we cling to our own point of view, we may be blind to our impact on others; if we are too vulnerable to other people’s definitions of our behavior, we may feel undermined, for observers are typically less flattering of us than we are of ourselves.”

Nonetheless, this ability for perspective-taking is critical for global leaders.  There is evidence that this is one of the characteristics that distinguish effective negotiators from average or ineffective negotiators.

Fourth, pay attention to process and not just outcomes.  As a global leader, especially if you are sent overseas, you will no doubt be focused on producing results and on achieving the goals set out for you.  Being mindful means understanding that different processes may lead to the same outcome.  Langer says (p. 34):  “Throughout our lives, an outcome orientation in social situations can induce mindlessness.  If we think we know how to handle a situation, we don’t feel a need to pay attention.” 

An American expatriate I was speaking with recently mentioned to me that in his first trips to Asia, he was very concerned about getting things accomplished in the short time that he was visiting a few Asian countries that he became impatient with his hosts, who wanted to take him out to dinners and have him meet with various managers in the country.  He was especially annoyed during meetings, when it seemed so difficult to reach decisions and move forward on the actions that he wanted them to take.  Only later did he realize that by focusing so exclusively on “getting things done” in the most efficient way, he was ignoring, and in fact, violating, some processes very important in these cultures.

Banaji, M. and Greenwald, A.  (2014). Blindspot.  New York:  Delacorte Press.

Grierson, D.  (2014).  What If Age Is Nothing But a Mind-Set?  New York Times Sunday Magazine, October 22.

Kahneman, D.  (2011).  Thinking Fast and Slow.  New York:  Farrar, Straus and Giroux.

Kelly, C.  (2012).  O.K., Google, Take a Deep Breath.  New York Times, April 28.

Langer, E.  (1989).  Mindfulness.  Cambridge, MA:  De Capo Books Press.

Tan, C.  (2014).  Search Inside Yourself.  New York:  HarperOne.

Leading Authentically in the Global Workplace

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Between our coaching calls, Naveen, an Indian vice president of a technology company based in Bangalore, diligently read the handful of articles I had asked him to look over.  In our next call, he seemed perplexed by the term “authentic leadership” that he had seen in a couple of the readings.  What does it mean to be an authentic leader, he asked me.  He had looked up the dictionary definition of authentic and its synonyms, which included genuine, real, not a fake.  Well and good, he agreed.  But he seemed a bit confused.  To be genuine and real with your team, how much do you have to “self-disclose” by letting them know about your strengths and weaknesses, your likes and dislikes?  And does being genuine and real imply behaving and only using a leadership style that comes naturally to you?

Take a recent article by Goffee and Jones in Harvard Business Review.   In that piece, they write that one of the qualities of inspirational leaders is that they reveal their weaknesses.  “When leaders reveal their weaknesses, they show us who they are – warts and all.  This may mean they’re irritable on Monday mornings, that they are somewhat disorganized, or even rather shy.  Such admissions work because people need to see leaders own up to some flaw before they participate willingly in an endeavor.  Exposing a weakness establishes trust and thus helps get folks on board.”  

Part of Naveen’s discomfort was a particular concern about the cultural appropriateness of such self-disclosure, especially in countries where the expectations of what an effective leader is may not tolerate such complete transparency, at least initially.  In fact, a couple of more recent articles in Harvard Business Review suggest such caution in this regard.  For example, Rosh and Offerman urge leaders to understand the organizational and cultural context before they self-disclose.  Similarly, Ibarra writes that many models of authentic leadership are particularly American, especially in the advice to tell a personal story about a hardship they have overcome.  He points out that these are based on Western ideals of individualistic triumph over adversity.

In a recent study, two researchers examined how different cultures perceive “authenticity” in others based on their self-expression.  The countries representing these cultures, Germany and China, are on different ends of the spectrum in terms of their individualistic and collectivistic orientation.  An important facet of collectivism is contextualism, the extent to which the context is crucial in understanding other people.  Easterners more than Westerners tend to consider the context when explaining behavior.  On the other hand, in individualistic cultures such as Germany, dispositional information, such as the person’s personal preferences, is more important.  Therefore, according to these researchers, a person expressing both his likes and dislikes will be perceived to be more authentic by Westerners. They predicted that Germans learning about a person who expresses only his likes (culture-incongruent) would seek more dispositional information (culture-congruent), whereas Chinese learning about a person expressing both likes and likes (culture-incongruent) would seek more contextual information (culture-congruent) to better understand this person.  Their sample consisted of 73 German students and 87 Chinese students in universities in Germany and China who were randomly assigned to two scenarios.  In one scenario, they read about the likes and dislikes of a certain person named George (in Germany) or Yong (in China).  In the other scenario, they read about his likes only.

The participants were then asked how much each of 12 statements described George (or Yong).  These statements were based on a scale of authenticity developed by other researchers. 

A sample item was the following:  George is true to himself in most situations.  Finally, participants were asked how useful they would find each one of six additional pieces of information to get to know George better. 

What did they find?  In brief, the Germans found the person expressing both likes and dislikes to be more authentic than the person expressing only likes, whereas the opposite was true for the Chinese.  They also validated their prediction: that Germans reading about a person expressing only his likes (culture-incongruent) would seek more dispositional information (culture-congruent), whereas Chinese reading about a person expressing both likes and likes (culture-incongruent) would seek more contextual information (culture-congruent) to better understand this person.  The Chinese rated contextual information as more helpful to better understand a person expressing likes and dislikes than a person expressing only likes  

So in answer to the first of Naveen’s questions, the choice for a leader is not necessarily whether or not to self-disclose, but how much.  Authentic leadership, as one of its pioneers Bill George has stated, is about practicing your values and principles.  It’s also about being honest.  In their surveys of over 75,000 leaders globally, Kouzes and Posner have pointed out that honesty is one of the four characteristics of admired leaders selected by their respondents in over 50 countries: “We simply don’t trust people who can’t or won’t disclose a clear set of values, ethics and standards and live by them.”

I propose the following principles for leader self-disclosure.  The first principle is to inform honestly.  Whether you are talking about your accomplishments or your failures, embellishing them with exaggerations or half-truths will not work in the long term.  We have all read about leaders who have padded their resumes or told stories about their past that, with a bit of fact-checking, turned out to be distorted.  This does not mean that you cannot tell a good story about your past or frame your experience in a way that helps you send a clear message to your team.  Just don’t play fast and loose with your facts.

A second principle is to consider organizational and cultural norms in selecting what to disclose.  Pay attention to these norms and make sure you do not violate them for they can quickly undermine your effectiveness as a leader.  The research study cited above is simply one example of how different cultures react to what they perceive to be authentic behavior.   I know of several organizations with very formal cultures – where employees dress very conservatively, managers and executives are addressed with their last names, and where meetings are run following strict guidelines.  As a new leader coming into such an organization, you may think that behaving this way is not being authentic, but behaving counter-culturally, at least initially, will not make you an effective leader.

A third principle is to consider your audience and, specifically, the relationship you have with your team and colleagues.  Imagine calling a meeting with your new team, most of whom have been with the company for a while, and confessing to them your skepticism at the extent to which people who have been in their jobs for a long time can adapt to change.  This is what happened to Marty, an executive from outside the company who was brought from the outside to head a business unit that had seen its profits and market share shrink.  He had a hard time recovering from his misguided attempt at being authentic. 

These principles should address Naveen’s two questions above.  Fundamentally, authentic leadership starts with having a deep understanding of yourself and how people perceive you.  Bill George and others written about the importance of self-awareness, and the challenges of arriving at this self-knowledge.  However, knowing your reputation, what others think about you, is also important.  You may believe that you are being genuine, that you are acting as an authentic leader, but if others do not perceive you that way, then there is a gap that you will need to address, and not simply dismiss it by saying, “I don’t care what others think of me.”

George, B. et al. (2007).  Discovering your authentic leadership.  Harvard Business Review, February.

Goffee, and Jones, G.  (2000).  Why should anyone be led by you?  Harvard Business Review, September-October.

Ibarra, H.  (2015).  The authenticity paradox.  Harvard Business Review, 93, 52-59.

Kokkoris, M. and Khunen, U.  (2014).  “Express the real you”:  cultural differences in the perception of self-expression as authenticity.  Journal of Cross-Cultural Psychology, 45(8), 1221-1228.

Kouzes, J. and Posner, B.  (2007).  The leadership challenge (4th edition).  New York:  Wiley.

Rosh, L. and Offermann, L.  (2013).  Be yourself, but carefully.  Harvard Business Review, 91, 135-139.

Mind the Social Distance Gap

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Johan de Nysschen (previously the successful head of Audi of America) was appointed to lead the Cadillac division of General Motors in 2014. When he joined GM, one of his first decisions was to place physical and psychological distance between Cadillac and Detroit, moving Cadillac’s headquarters from Motown to Manhattan in 2015. In New York, Mr. de Nysschen felt that Cadillac could attract top talent, follow consumer trends more closely, and gain new buyers.

Unfortunately, Cadillac, a brand that had begun to transform its outdated image, continues to struggle. Its sales plunged to 156,000 in 2017 (from 180,000 in 2013) while other competitors have become more successful. There are many reasons for his lack of success. Robert Lutz, a former Chrysler and BMW executive, has suggested that de Nysschen’s physical separation from Detroit made it harder to influence others (Ulrich, 2018). During his tenure at GM, Lutz recalled being able to march into a finance executive’s office if he had removed $200 worth of chrome that Mr. Lutz viewed as critical. “I’d say, ‘Where did the chrome go?” Mr. Lutz said. “You stare him in the eye, argue with him and get it fixed. Even in this day of electronic connectedness, distance matters.”

Based on my own experience as a global manager for many years as well as the hundreds of interviews I have conducted with global managers, social distance –the gap in the degree of emotional connection between individuals as well as among team members – is a key variable in the success of global managers and global teams. For example, quite a few expats I have met over the years have suffered from the “out of sight, out of mind” syndrome when they start to lose touch with their mentors or senior executives back in the home office.

Overcoming the disadvantages of distance in general is one of the key challenges facing global companies today. Multinationals expand overseas for compelling business reasons

  1. To seek new markets for their products and services.
  2. To take advantage of countries’ resources (what the economists call factor endowments) as well as its human capital, such as an educated workforce or particular skill sets in that country.
  3. To seek efficiencies.

At the same time, there is no doubt that distance makes it more difficult for multinationals to manage their subsidiaries and overseas locations. Youssef and Luthans (2012) have pointed out that global leaders these days experience three types of distance:

  • physical distance (due to geographical dispersion),
  • structural distance (due to organizational factors like decentralization and span of control),
  • psychological or social distance (due to status or power differentials).

Specifically, social distance reduces global managers’ ability to network, their effectiveness in building trust, and their efficiency in getting the work done. Communication gets misconstrued, and it is much harder to influence others when you cannot see your counterparts’ non-verbals. It is also harder to get feedback and to learn from the other party. To reduce the social distance gap, it is important to recognize and address what I consider to be its five major barriers.

First,

Barrier is geography or physical distance.

As Epley (2014) has pointed out, physical distance is an important aspect of our engagement with others. He cites evidence from war and battles that soldiers who are fighting are more reluctant to use their weapons when the enemy is close to them physically. MIT professor Thomas Allen created his Allen curve, which shows the relationship between frequency of interaction and physical distance:

Second,

Strive for face-to-face interactions with your team and with other stakeholders, when feasible.

“The most successful leaders make sure they establish personal connections.” As Betsy Myers (2011) has pointed out in her book, making connections is one of the qualities of effective leaders. Managing by walking around (or MBWA), popularized by Tom Peters, is still a fundamentally sound practice. When Apple was designing its new headquarters (a circular structure with 12,000 employees), its executives made it a point to make sure that the physical layout of the building maximized face-to-face contacts among employees across functions. This design was heavily influenced by the late Steve Jobs, who believed firmly in manipulating space to influence behavior. Zappos founder Tony Hsieh has talked about encouraging “collisions;” in fact, in its headquarters office, he has closed all side entrances so that all associates have to go through one main door.

Third,

Barrier is national culture.

Even though globalization and the popularity of branded products universally may seem like national cultures are becoming less important, virtually all the successful global managers I have interviewed recognize how important it is to be aware of national cultural values and norms when managing workers in different countries.

My suggestion for global managers: Develop your cultural competency by learning the cultural norms of the countries where your team members and other stakeholders are from.

Carlos Ghosn, who led a successful turnaround of Nissan in Japan, has suggested that it was important for him to like the Japanese culture and show genuine curiosity about it. 

Fourth,

Barrier is language.

Yes, English seems to be the language of business these days, with 1.75 billion people on the planet speaking English at a useful level, and for many organizations (including organizations with roots in non-English-speaking countries such as Unilever and BMW), English is commonly spoken in their offices. In fact, when bringing together stakeholders such as customers, vendors, or managers from different parts of the world, English seems to be the default language used by these corporations. Many companies in Japan require candidates for manager positions to achieve a certain level of proficiency in an English exam before they are even considered.

However, not being able to speak the local language can be a barrier to reducing social distance. There are still many parts of the world where English is not spoken in the work place, or where employees, not feeling confident in their ability to speak English, may hesitate to express their opinions. Quite a few global managers hire a local translator, or rely on their local administrative assistant, for help in translation and interpretation. But these only go so far and certainly require quite a bit of effort.

My suggestion for global managers:

  • Take language lessons, or at least learn a few words in the local language.
  • In parallel, be aware of assuming that a lack of fluency in English among your local staff means a low level of competency.
  • Not only will learning a few words in the local language help you communicate better with your local team, but will also send a signal that you are interested in their culture, and that you are going out of your way to show that you want to connect with them on more than just a business level.

Fifth,

Barrier is around structure, status and hierarchy.

Research studies have documented how upward communication is easily squelched by high-power and high-status individuals in organizations. A recent example (one among many) is the emissions scandal at Volkswagen, in which “… experts and company insiders draw a direct connection between the scandal and Volkswagen’s rigid culture, in which mid-level managers and low-level workers were reluctant to question their superiors’ decisions, including the decision to cheat on emission tests.” (This is from a story about the VW scandal by Vivienne Walt published in the August 2018 issue of Fortune magazine). Hierarchy will always be present in large global companies and as much as some organizations have tried to flatten their structures, it will never go away.

Furthermore, there are some cultures where “power distance” is valued, and where undue respect and deference is given to those in authority.

In your interactions, make sure you do more of the following:

  • Ask for input and feedback, actively listen, acknowledge your ignorance.
  • Be accessible and visible.
  • Make sure you do less of the following: punish employees for speaking up especially when it is about bad news, give orders unilaterally,
  • Refuse to admit when you have made a mistake.  

Sixth,

Barrier is identity.

Many research studies have shown that individuals categorize themselves into different group memberships (e.g., race, gender, profession, function, nationality) and once they define themselves into these memberships, two things happen: they will tend to like those who they feel are “like” them in some way; and they will start to define those who are in their “out-group” and like them less. The stronger their identification with these categories or memberships, the more intense these things happen. However, even when categories seem trivial, such as a shared birthday – what psychologists term as “mere belonging” – a sense of connectedness begins to form quickly. This is because we are hard-wired to form and maintain social bonds. Neuroscience has shown that the medial prefrontal cortex (MPFC) is a spot on each side of our brain that helps our memory and decision-making; different parts of it get activated when we are making judgments about ourselves versus others. When others are those we consider to be distant from us, those parts of our MPFC do not get activated as much, and so we don’t think of others as compassionately as we might otherwise think of those who are closer to us.

Global managers who deal with virtual teams sometimes struggle with finding a sense of identity and cohesiveness for their teams.

Establish a sense of community and shared purpose with your teams and other stakeholders by:

  • Aligning the team’s goals with the larger organizational goals,
  • Inspiring your team to have meaningful and challenging goals,
  • Finding bases for team membership that reinforce a shared sense of similarity and identity.
  • In addition, global managers should not neglect the basics of managing virtual teams effectively, for example:
  • Scheduling regular one-on-one conversations with team members, establishing regular times and routines for your meetings;
  • Regularly sending updates and communicating information and interesting pieces of news (e.g., executives who may need a bit more convincing about the value of the work that the team is doing, or even rumors on changes in the home office) so that the team feels connected.

Even though your team might be virtual, there are ways you can get members to get to know each other a little bit better and find some commonalities among them by, for example, setting up a virtual happy hour via Google Hangouts or a shared hashtag for Twitter (as suggested by PJ Camp Malik), or even build some time at the end of virtual meetings for non-work-related conversations (e.g., sports, music).

Epley, N. (2014). Mindwise: How We Understand What Others Think, Believe, Feel, and Want. New York: Knopf Books.

Myers, B. (2011). Take the Lead: Motivate, Inspire, and Bring Out the Best in Yourself and Everyone Around You. New York: Atria Books.

Ulrich, L. Cadillac Makes Great Cars. Too Bad Americans Want SUVs. New York Times, May 17, 2018.

Youseff, C. and Luthans, F. (2012). Positive Global Leadership. Journal of World Business, 47 (4): 539-547.

A Checklist for Global Managers

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In his book, The Checklist Manifesto, Dr. Atul Gawande writes about what Wal-Mart did in the wake of Hurricane Katrina.  As you may recall, this was a major disaster in New Orleans, where 80 percent of the city was flooded and 20,000 refugees were stranded at the New Orleans Superdome.  Another 20,000 were at the Convention Center. There was no power in the city hospitals. Wal-Mart closed its 126 stores, but within 48 hours, more than half of them were up and running again.  Wal-Mart employees and managers somehow mobilized, with the use of simple checklists:

“They set up temporary mobile pharmacies in the city and adopted a plan to provide medications for free at all of their stores … They set up free check cashing for payroll and other checks in disaster-area stores.  They opened temporary clinics to provide emergency personnel with inoculations … within two days of Katrina’s landfall, the company’s logistics teams managed to contrive ways to get tractor trailers with food, water, and emergency equipment past roadblocks and into the dying city.  They were able to supply water and food to refugees and even to the National Guard a day before the government appeared on the scene.” (pp. 77-78)

Gawande’s point is not to praise Wal-Mart, nor to point to the superiority of the private sector over the public sector (i.e., FEMA).  This situation is where he started to understand the power of having a checklist.

As another example, Gawande writes about the Chairman of Surgery at the University of Toronto, who has been using a 21-item surgery checklist to catch potential errors in surgical care.  What is interesting is that the checklist also includes a team briefing. “The team members were supposed to stop and take a moment simply to talk with one another before proceeding – about how long the surgeon expected the operation to take, how much blood loss everyone should be prepared for, whether the patient had any risks or concerns the team should know about.”  (pp. 100-101)

In surgery, according to Gawande, you can have checklists for three of the four big killers:  infection, bleeding, and unsafe anesthesia. The fourth killer in surgery is the unexpected. So how do you prevent this?  The value of having a checklist is that it facilitates a dialogue, and people have to stop and talk through the case together before surgery. Unfortunately, according to Gawande, this kind of teamwork is not common in surgical teams.  Some research that he cites shows that team members that regularly used checklists showed great improvements in their ratings of their own teamwork.

According to Gawande, “ … under conditions of complexity, not only are checklists a help, they are required for success.  There must always be room for judgment, but judgment aided – and even enhanced – by procedure.” (p. 79)

What kinds of management situations might a checklist be used for?  Actually, Professor Michael Useem has come up with his own checklist for leaders, consisting of 15 principles.  Like Gawande, he argues that “ … when uncertainty becomes the norm and turbulence more commonplace … a Leader’s Checklist becomes more consequential.”  (p. 41)

Many of the items in Useem’s leader checklist can apply to managers leading globally.  They include articulating a vision, communicating persuasively, and building leadership in others.  However, as many of you know, global leaders face different circumstances and need to take into consideration other cultural variables.  

So I have come up a checklist for global managers.  The “targets” referred to in this checklist are those individuals, groups, or organizations from another culture that you will be interacting with.

  1. Understand your cultural assumptions.  
    • Are you aware which of your management style preferences and behaviors are influenced by your culture?
    • Are there aspects of your management style or behavior that works in your culture that might not work in other cultures?
  2. Map your targets’ cultural values.
    • What are the most important cultural values of the people or group you will be dealing with?
    • How do these values show up in how they do business with others?
  3. Establish cultural baseline behaviors with your targets.
    • Are there specific behaviors that you should be avoiding when dealing with them?
    • Are there specific behaviors that you should be sure to demonstrate when dealing with them?
  4. Clarify your managerial goals and your core values.
    • What do you hope to accomplish – not so much in terms of the task or work, but in terms of your management of your targets?
    • What are the most important values you hold, especially around management?
  5. Identify culturally appropriate options to achieving these goals.
    • Are there alternative ways to achieve your goals that might be more culturally appropriate?
    • Which of these may require your getting out of your comfort zone?
  6. Seek feedback and mentoring from others.
    • Are there people from the cultures you are dealing with, that you can approach to ask questions and get feedback?
    • Do you have a plan on building relationships with these individuals so you can gain their trust?
  7. Adjust, experiment and continuously improve.
    • Are you reflecting on what you are learning about others’ reactions to you and the feedback you are getting?
    • How are you applying what you have learned to improve yourself in your cultural interactions?
  8. Preserve your character and integrity.
    • Are people clear – not so much by your words but by your actions – on what you stand for?
    • Are you clear on what you stand for?

 

Gawande, A.  (2011). The Checklist Manifesto.  New York:  Picador.
Useem, M.  (2011). The Leader’s Checklist.  Philadelphia:  Wharton Digital Press.