Entries in IMD (4)
Being There Even When You Are Not
Report from a Leadership Dinner of the European Leadership Platform held in Amsterdam in the first week of May 2008, and addressed by IMD Professor of Organisational Behaviour Robert Hooijberg, leader of the Orchestrating Winning Performance and Low Cost Competition executive education programs at IMD.
How does a CEO based at a company headquarters influence an organization in which its offices are spread across the world? A CEO can put in countless 120-hour weeks, but it is simply impossible that he/she will be able to have direct contact with thousands of employees located in numerous different time zones.
This question and dilemma was posed by Professor of Organizational Behavior Robert Hooijberg during a Leadership Dinner of the European Leadership Platform held last week in Amsterdam, The Netherlands and attended by some 20 business leaders from companies like Shell, Bain & Co and Unibail-Rodamco. Hooijberg emphasized the importance of structural procedures in creating this influence.
“In order to engage people to deliver results beyond expectations, leaders at the top of organizations need to seriously consider how they exercise both their leadership IN organizations as well as their leadership OF organizations,” said Hooijberg. “While most understand the importance of the interpersonal side of leadership, we encourage them to pay equal if not more attention to their leadership OF organizations. The focus on the leadership OF organizations forces executives to ask themselves how they can ensure that their leadership philosophy about engagement of employees, clients, suppliers, distributors and other stakeholders truly takes hold in all parts of their organization. This means that executives need to start asking themselves two basic questions: 1) What do our strategies, systems and structures motivate people to do? and 2) What should our strategies, systems and structures motivate people to do?”
Hooijberg talked about areas such as gender diversity in the company, a culturally diverse vs. a homogenous organization and promotion procedures as a way of impacting the organizational culture, among other topics. For example, Hooijberg described how when an organization includes significant female representation on the management team, it will influence the motivation and interest level of all females throughout the entire organization. Meanwhile, culturally diverse teams are more prone to conflict yet have the potential for greater opportunities than a homogenous organization which is more stable and comfortable. Communication patterns, such as a CEO’s weekly state of the organization e-mail to the entire company, also play a role in the mix.
Participant views varied, but it is safe to say that there is no clear recipe on how leading is accomplished when the leader can’t be physically present.
Herman H.J. Bol, Executive Board, University Medical Center Utrecht, probably best summarized the overall view by stating: “I don’t think there is a 100 percent answer to the question of how to lead when you are not there. If there was, there would be many more successful companies. I understand the importance and need for Professor Hooijberg’s book Being There Even When You Are Not.”
The New Realities of Strategic Leadership
We reproduce here an article from this month's IMD Knowledge newsletter by Professor Thomas Malnight, IMD Professor of Strategy and General Management and Program Manager Tracey Keys, author of "Mastering Executive Education" highlighted in the right hand column of this page.
As a leader should you be measured on the results achieved by your unit today or on the strength of the institution you leave behind? That’s an unfair question you might say – of course it is the leader’s role to build an organization that can be successful today and tomorrow. But, in truth, are we doing both? Many executives report pressures to focus on short-term metrics at the expense of the future. When pushed, some also respond “How can I be held accountable for the future when I am no longer there?"
It’s not only a problem for the individual. Many leadership teams report spending too much time deciding what they can or cannot do in the face of intense short-term pressures. They don’t take the time—or effort—to make sense of what they have to do to build a strong institution that will continue to succeed in the next two, three, five, 10 years or more. They plan rigorously, but within incremental, outdated processes. The operational demands to deliver short-term results far outweigh the strategic demands to build their organizations for the future. “Unfair!” you cry again, but how much do you really disagree?
What it takes to succeed today and in the future is the ability to continuously change, pro-actively addressing the fundamental shifts occurring in the world around us. The challenge for leaders is: How can you keep the pace of change within your organizations as fast as – or faster than – the pace of change happening around you? This cannot happen if leaders concentrate only on short term results. It takes a new level of strategic leadership which also focuses on building the strength of the institution.
Let us highlight just two of today’s many realities which require a new approach to strategic leadership. First, Ohmae’s[1] triad markets (US, Europe, Japan), the epicentres of competition in terms of markets and world-beating firms in the 1980s, are no longer the focus of power and competition. The markets – and global competitors – of the 21st century will increasingly be based in rapidly developing economies including Brazil, Russia, India, China, and others. This is where the critical focus of competition will reside. Ask yourself how many companies are aggressively investing in R&D and operations in China and India alone. Ask how many BRIC competitors are aggressively expanding outside their home markets.
Second, many developed markets such as Europe have slow or declining growth, even as EU borders expand. But how many companies respond to this challenge by one round of restructuring after another, never addressing the real issues of what it will take to succeed in a low growth, integrated market? Europe can and must play a major role in the long term success of companies, but not through hiding from reality.
The list could go on. So how must we change our mindset to embrace the new realities of strategic leadership? To be successful, executives must rise to three linked challenges:
- Take the time to make sense of the changes underway: Leaders often feel overworked and that they lack time to make sense of the future. Others report feeling constricted to their own silo, with no mechanisms to have conversations across the organization to develop a common perspective on the future. Often, a “high level perspective” is reserved for just a few people at the top of a company (or the strategy department or even outsourced consultants). So the thousands of decisions being made every day in the company are made in a vacuum, with no clear understanding of the direction for success. Without taking the time to make sense of the future, to build insights into changes around you and their implications for your businesses or markets, daily decision-making can only focus on short-term results or on maintaining the status quo.
- View strategy as a path requiring continuous choices and aligned actions: The need for continual change is a reality and leaders must focus attention and resources on learning to stay ahead. The challenge is how to help their organizations become comfortable with constant, widespread, and interdependent change – to become companies that create options for the future, build fundamentally new capabilities and experiment to learn. What it will certainly mean is a different type of strategic thinking: forget purely intellectual analytical planning exercises that move forward in linear, incremental steps. Get teams out into the field to experience the changes around them, to look outside-in not just inside-out. Strategic thinking is about looking back from where we have to be in future and then working out how we get there from today. It is about picking the right path, not the right solution. It requires constantly defining options to move the organization forward and create new opportunities, not just better results. It means making tough choices and aligning commitment and ownership of these choices across the organization, so that they result in consistent actions that together allow the organization to create the future, not protect the past.
- Understanding your role: These new strategic realities demand a two-fold role for the leader: being both strategic and operational. Strategic leadership focuses on strengthening the institution so it can lead in future, while delivering on your objectives over time. If you just focus on short-term operational demands, then you are perpetuating the present and managing your institution, not leading it. Again the challenge is a mindset shift. We need to strike the balance between long-term strategic dilemma management and operational management and know in which situation each approach applies – one without the other is not sufficient.
Take this as a wake-up call. What do you want your legacy as a leader to be? As Lewis Carroll said: If you don’t know where you are going, any road will take you there.
You can find out more about IMD at its website www.imd.ch
Rod Millar
in human capital, Leadership, strategy, IMD
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Exec-ed Rankings
The Financial Times Executive Education rankings were published this week. They do not have quite the clout that the MBA rankings have for the simple reason that they are measuring overall provision rather than a single program. School X's Supply Chain management program and/or its professor may be the best in the business but it does not necessarily mean that someone going on a finance program at the same school will have a world class experience.
As exec-ed programs are far more dependent on the quality of the fellow participants it is also not such a useful indicator - one session's participant group may be much more stimulating than the next time the program is run. This applies to MBA's as well of course, but MBA's tend to be more leader-oriented than short programs.
This year's FT Exec-ed rankings see both Wharton and Harvard fully back on board. They boycotted the process a couple of years ago on the basis that school rankings were not a useful way of distinguishing exec-ed programs; partly for the reasons I outline above. I suspect that they didn't like to have to compete with perceived "lesser" schools in the process either. MBA departments often have one (or more) staff dedicated to providing the leading ranking organisers with the data they demand - under-funded exec-ed departments rarely will be able to do this, so their marketing departments end-up spending half the year putting their brochures together and mailing them out and the other 50% of the time chasing the rankings data - which may not actually be the best use of their resources.
That said, the rankings still have a special place in all business schools marketing plans. I doubt there was a single exec-ed school that appeared in the top 10 of last week's FT Ranking that didn't stop the presses and get a special press release out to mark the occasion. I have spoken to more than one well-known school that has admitted they only run open enrolment programs to keep themselves in the rankings. If it were not for the marketing leverage that gives they would shut down the OE programs and just do the more lucrative custom programs.
As regards last week's rankings there was a fair degree of change in the OE ranks. Harvard cruised back in at poll position (while Wharton will be less happy in number 18 slot) while Stanford, Darden and CCL all retained their positions more or less. IESE, last year's surprise at No 2, fell to what many may consider a more realistic 8th. IMD, one of Europe's three self-appointed premier schools, pulled itself up from 10th to 5th - but the other two, INSEAD and London Business School found themselves rather ignominiously down at 14th (from 7th) and 20th (from 13th) respectively.
Some of the smaller schools showed that they have what participants like: Spain's Instituto de Empresa held its place 7th and Babson took a creditable 10th (one place up on 2006).
Business Week should be publishing their two yearly exec-ed rankings later in the year - we can see how they differ.
Rod Millar
in Executive Education, exec-ed, MBA, business media, London Business School (LBS), IMD, INSEAD, IESE, Harvard, Wharton, CCL, Financial Times FT
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DIFC Networks Europe's Top Schools
Not content with announcing an EMBA and some Executive Education programs with London Business School in December 2006 the Dubai International Financial Centre (DIFC) then announced in February it was to host a further EMBA this time with London's Cass Business School. Last week it hosted a Business Forum on "Must-Win Battles" in partnership with IMD, Switzerland.
Surely INSEAD and IESE must be looking for a DIFC link-up soon as well?
Rod Millar
in Executive Education, London Business School (LBS), IMD, Cass Business School, INSEAD, IESE, Dubai International Financial Centre (DIFC)
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