Some things about leadership never change. Leaders decide what an organization does and doesn’t do. They figure out ways to create value and spot new opportunities. They find new ways of managing. They select and grow leaders who will build the future, and so forth. The tilt has raised the bar with something new and different. Now you are going to have to be “multicontextual,” a word that only recently moved out of academia and into the mainstream. Here I refer to the strategic and cultural contexts that frame your business activities in different regions and countries. These contexts include all the variables unique to each country, everything from how the government operates and who’s who in the informal social networks to how distribution systems work and what gives local competitors an edge. Learning the local language, being empathetic, and respecting local mores only scratch the surface of what you must do. You will need to master multiple local contexts quickly and accurately, distilling the key factors and new rules of thumb for each place.
Your insights about the local context are crucial inputs to judgments on business issues. Selecting and assigning people, deciding what markets to enter in what sequence at what pace, allocation of resources—these and other crucial decisions rest on accurate depiction of the most important factors in each geography. If you’re not multicontextual, you’re likely to miss specific local needs and opportunities—and the trade-offs you make or advocate will be misinformed.
Leadership that is not multicontextual is a common problem for Northern companies. Almost all businesses are organized around functions (such as finance or human resources), headquarters, and geographies. Some also have reporting hierarchies for business units or product lines. Tension arises among these organizational silos as each tries to influence priorities and resource allocation. Making trade-offs between headquarters, business units, product lines, and business functions is familiar ground that leaders generally traverse well. But information from geographic units is often subject to mental filters. Unless the leader is multicontextual, perceptions and even facts become distorted. It doesn’t help that smaller geographies often report through regional leaders, who rarely are truly multicontextual.
Global leadership means discerning the fundamentals in each context and bringing them into the broader context of the company as a whole, and then mobilizing people to accomplish the business goals. Almost every country has a local vocabulary for the concepts used to measure and run a business—things like cash, margins, capital invested, and debt. In India, for example, even large industrialists tend to speak in Urdu, the language used by street vendors. Cash is nakad, capital is zama, debt is kurtz, and profit is nafa. (The inflections, too, are often those of the street vendor: if the nafa is less than desired, the tone may be faintly dismissive, and accompanied by an outward rolling of the hand.) But whatever the language, the underlying concepts are universal.
Global leaders, those who succeed in the South as well as the North, are fast and proficient in cutting through the local context. They are keen to detect what is different from what they’ve known or seen before, and don’t allow their perceptual lenses to filter out differences that conflict with their existing rules of thumb. To the contrary, they catch themselves when they subconsciously revert to their old assumptions. They connect with a range of people from substantially different cultural, social, and governmental contexts. They learn to work in the less structured, less predictable environment of the South, where governments can change policies overnight or competitors with cozy ties to customers, suppliers, and regulators can sabotage plans. They’re humble and contain their egos. They win trust and confidence from headquarters by providing high-frequency information flows about the local context and by delivering on commitments, and they energize their teams and organizations.
That’s how a leader like Manoj Kohli of Bharti Airtel (see this page) can manage seventeen different countries despite the unique social, economic, and governmental characteristics of each. When Kohli led the India operations, Bharti Airtel was successful using the rule of thumb that if you greatly lower the price of telecom service, you will create huge demand—more usage per customer and enormous numbers of new customers—and thus total revenues will increase. It was successful against competitors, most of which achieved higher revenues through higher prices extracted from a smaller customer base. As Kohli went to each of the seventeen African countries and learned the local context, he saw that the old rule of thumb—raising revenues by offering new services and dropping prices to expand the customer base—did not apply to some of them. The demographics made it harder to get more usage per customer and to bring in large numbers of new customers. The company couldn’t just blindly push the old approach. It had to devise a new way to build the business in Africa.
Kohli also recognized the importance of working with a host of unfamiliar regulatory frameworks, local financial and infrastructure institutions, and distribution channels. Actions and priorities—the pace and timing of price changes and introduction of new services, for example—were tailored to the situation and needs of each context. The company was able to recruit almost all its high-level leadership locally, and persuade its ecosystem partners in India to venture into unknown territory to join it in Africa.
The short list for improving your global leadership capability quickly is to focus on and practice the following, each of which I’ll discuss in more detail later in this chapter:
• Rapidly master the local context.
• Create a tangible vision.
• Challenge your rules of thumb.
• Build your team.
• Mobilize your social organization.
Of course the usual long lists of generic leadership traits come into play. All are important, but integrity is crucial. I use the word to go beyond ethics and morality to include delivering what you commit to, saying what you mean, and being skillful when communicating with people in your social networks so you don’t make promises you can’t keep. There are social networks behind the scenes that you might never know about, where people will verify your statements or discover contradictions. They’ll figure out if you’re telling the truth or saying one thing to one person and a different thing to someone else. They’ll see if you’re delivering what you said you would, and whether you’re dodging conflicts with headquarters rather than confronting them. Repetition and consistency build trust, and that’s what you’ll need in order to learn what’s really happening. So establishing integrity is a huge positive for your success.
I will start the journey by showing these “soft skills” in action. Consider how leaders in three different positions apply them as they move from North to South: a manager moving into a broader opportunity in the South; a leader at headquarters managing a line of business on a worldwide basis; and the CEO of a business.
As a rising leader working in the home market of your business, you succeeded because you developed a way to find the right balance, the right focus, and the right priorities. You delivered results while growing accustomed to being accountable without having the total authority or necessary resources under your command. You not only succeeded but helped others do so as well, specifically by learning how to work cross-functionally—getting people to collaborate with you and at times exchanging resources, sometimes without a quid pro quo. You’re comfortable in this company and this industry, even if growth has only been in the 2 percent to 3 percent range. But you are looking for a challenge and opportunity for personal growth, and one day you get it in spades: Your boss calls you in to tell you he would like you to run the company’s India unit, the company’s fastest-growing geographic market. It means relocating to Delhi for up to four years.
It’s a huge opportunity, but one also fraught with complications. There are career concerns, especially the “out of sight, out of mind” syndrome: Will you be forgotten by key people if you move eight thousand miles from headquarters? You remember the going-away party several years ago for your close friend Elizabeth, who took a position at her company as product development manager in Pune, India. At the party and before, she was teased that she was crazy to go there. People reminded her that the United States was still the largest market, where new ideas were initiated and cutting-edge technological innovation was being developed, and where the depth of technological talent resides. “Besides, Elizabeth,” her colleagues said, “you’ve never lived outside the U.S. It’s tough over there. You’d be much better off staying put.”
Then there are the personal issues. What will your husband think? He’s a success in his own right as a mechanical engineer. Even if he agrees to go, will he be able to continue his career? What about schooling for your kids?
But since you pride yourself on always looking at the facts, you put these concerns momentarily aside. You see a world that is tilting from North to South, specifically the reality that as of 2012, 46 percent of the earnings of S&P 500 companies now originate outside of the United States, a number that will only increase in the future. Moreover, looking further out, the United States, now the dominant market, will be a smaller part of a larger pie, and some positions at so-called headquarters will have shifted from North to South. In fact, it’s already happened at companies like P&G, which has shifted the headquarters for its personal-care line of business from Cincinnati to Singapore. You recall the old line from hockey great Wayne Gretzky: “I skate to where the puck is going to be, not where it has been.” Over the long run, every business goes where the markets are, to those places where it can create shareholder value and where it can find the resources it needs—human talent as well as natural resources it can depend on. You suspect the time to make the leap is now, before it is too late.
The logic and the facts are there, and you’ve seen how prescient Elizabeth was. Her colleagues didn’t see what was coming—a reduced number of senior-level posts like vice president at the home base and promotions going to those who had significant global experience. By going to a market where the growth was, Elizabeth developed herself and thereby was better positioned for future opportunities—both inside her company and outside it if she ever decides to leave.
You realize that both the local and the national context of this new job in Delhi will be completely different from your job leading a single product line based in the United States. While you’re now the global leader of a $200 million product line that’s part of a $1 billion global business unit, your job is narrow in its business scope but geographically broad. Now you will be going to a critical country to head the total business unit there. You’ll be focused on only one geographic market with sales half what you’re in charge of now—just $100 million—but you’ll be responsible for all three product lines. You’ll have to carry out the core of your leadership work—dissecting and reformulating the moneymaking recipe, deciding what to do, and then getting it done—without relying on old rules of thumb. The work content will be different. The competition is different, resource allocation is different, and the number of variables you’ll have to deal with is different, perhaps greatly so.
You wonder whether you have what it takes to succeed, so you take a personal inventory. Do I have the motivation and drive to actively search for, listen to, and comprehend what is different from what I have known and has made me successful? Can I make the changes I will need to make? Do I have the temperament to deal with multiple unreliable governments and poor infrastructure?
You’ve heard some of your friends talk about moving to another country as students or volunteers. They found it exciting and mentally challenging to learn about the community and build the trust of the people, who were both intelligent and eager to work for a better life. You’ve always envied their sense of adventure. And now, as you think about having to master the ins and outs of the people, the sources of information, the formal and informal power structures, the “way things are done around here” in a new, unique place, you think, What could be more exciting?
You recognize that you will have to override many of your familiar rules of thumb, but that’s fine. You’re one of those people who enjoy breaking through mental barriers to sharpen their perceptual ability. You’ve always tried to “look around corners” to see what was coming without any preconceived expectations. You’re prepared to develop new ways of acting, thinking, and making decisions.
You realize that you may get off balance at first as you grapple with cultural differences. It won’t be as easy to get the kind of information you rely on to make managerial decisions in the North. You’ll have to learn the social norms that affect information sharing, both vertically and horizontally, especially among your direct reports and one level below. Connecting with people will be important to engendering trust and getting into the information flow—something executives from New York, Munich, or Tokyo typically struggle with.
Loyalty is a much bigger deal in the South. People are loyal to those in power—sometimes overly so—and vice versa. Fidelity to the person rather than the organization is a centuries-old cultural phenomenon. Promotions are often made on the basis of seniority, loyalty to a higher-level person, or invisible social networks. As a result, it’s hard to tell if a subordinate is being candid or just aiming to please. While it’s natural to gravitate to those who can communicate quickly and clearly and who think like you, you’d have to guard against the tendency to go with those who seem simpatico because they speak your language. You’ll have to gauge whether a person truly agrees with you or is saying yes merely out of politeness and a desire to please you. You’ll search for competent people who are willing to give you the real information and have the courage to tell you unwelcome facts and truths. That will mean linking with the local social networks and building trust and personal credibility within them.
Many local CEOs, entrepreneurs, and industrialists have deeply ingrained business acumen. Many who have had no formal professional education are extremely bright and are fast thinkers who developed their business savvy early through work experience in their family shops, a trait common in most countries of Asia. They may not have your wide worldview, but their understanding of the business may be broader. They typically understand the total anatomy of moneymaking in a business—the relationships between variables such as cost, turnover, profit, and cash flow, for example—better than functionally trained leaders in the North. You would want to figure out a way to motivate and retain them. On the other hand, some of the local university-trained managers—who are also bright, fast thinkers—rely on basic theories they have learned and speak in generalities. It would be smart to distinguish those who can deliver from those who just talk in theory and generalities.
Working out of company headquarters, you have P&L responsibility for a sizable global business unit. The company’s goal is to achieve higher growth in revenues, margins, and market share in key countries of the South. At the same time, the slow-growing but larger markets of the North still produce most of the earnings, resulting in a tension of resource allocation: Short-term investments in the South—whose payoff is far away—could reduce total worldwide earnings.
Long-standing habits may have conditioned you to tilt toward the existing markets, since getting the best bang for the buck right now is the norm in corporate America. (And quite possibly, unless your CEO is on the ball and sees the need for change, your key performance indicators, KPIs, will be geared to this outcome.) But the company’s future, and yours, depends on your willingness to take risks in long-term strategic locations, which are highly uncertain and subject to the vagaries of local governments.
One reason you have this job is the CEO’s confidence that you have the cognitive bandwidth to comprehend the worldwide factors of the business through lenses other than your own and the ability to crystallize what matters and when it matters. You both realize that shifting the center of gravity from North to South represents a major change in the psyche of the people in the business. So you start thinking through the difference between managing a worldwide business in a traditional way and managing on a global basis.
You will need to deal with the ingrained feeling—among your colleagues and possibly in yourself—that “you’ve been there” and therefore know it all because you’ve taken several trips a year to key countries in the South. Those short visits are superficial, yet people at global headquarters overrely on them. People in the North have all the power in approving decisions about investments, processes, and procedures in critical areas such as pricing and advertising; they discount the insights of executives living on the scene.
In the new markets of the South, people with local information and knowledge are critical to your decision making. You need to motivate them; you need to pay attention to their judgments; you need to trust them and build their trust in you; and you need to be sensitive to the huge cultural distance between headquarters and the local context of these countries. It’s not a challenge to be underestimated. Your headquarters people will need to know that when they visit a country of critical importance, they will have to invest about nine days—two weekends and five working days—to be able to get into the local social circuits. Most executives who are experienced in the global game have already learned this.
While the ingredients of business (margin, cash flow, cost structure, revenue and revenue growth, market share, return on capital, capital intensity, and brand share) are the same in all countries, how they combine and get prioritized is conditioned by the local context. Conflicts between the global and the local goals, especially in the areas of pricing and product development, often arise in operationalizing a worldwide strategy for a line of business. For example, when the same product is intended to be used in several geographies, will you need to change the specifications to produce a lower-priced version for some markets?
In other cases, localizing a global strategy comes down to organizational decisions. Say a company that makes high-quality laminated-wood furniture for Northern markets is heading south. It uses a specialized sales force in the North, which it built over many years. Creating a new sales force in the South will take too long, so the company decides to line up local distributors. That means putting those distributors through an intensive education program before they can effectively market the furniture.
Or, to take on a real mind-bender, say you’re a pharmaceuticals company that wants to introduce one of your drugs to a part of Africa. It’s priced high in America and somewhat lower in Europe, and those margins are important to paying a return on many years of research and development. The drug is needed in Africa, but you would have to price it much lower. In today’s transparent world, there’d be no hiding that discrepancy. How do you ensure your company’s financial health while satisfying customers in vastly different economies?
Other tensions are apt to arise when you’re adding high-level talent overseas—for example, when you’re recruiting a vice chairman of an $80 billion Indian company to join you as the chief executive for Asia and Africa for the most promising category of the business. Compensation and status for such an appointment in the South are usually at the level of a vice president of a North-based business unit. You’ll have to fight with headquarters to get this executive into the circle of corporate officers, distinctly above the level of a vice president in a North-based business unit. It will require your best skills of persuasion to quiet the grumbling at headquarters, but that’s just part of your new game.
How do you balance the money and people resources you invest to meet worldwide goals with the need to nurture markets and geographic subsegments to position them for the long term? Deciding on the right balance requires savvy resource allocation and goal setting. Procter & Gamble found that it had to rebalance when it tried to expand too widely and too fast in emerging markets. It pulled back to forty product markets that account for 70 percent of its profits.
You have to be able to look beyond the numbers in evaluating and rewarding people to take into account how the numbers are being achieved and what is being built for the future. That means judging how well people are collaborating and how tough the external conditions are. But people need to know that the judgments are not arbitrary, so you have to communicate the basis of your thinking.
As the CEO of a company expanding into the South, your challenge is vast. The issues are considerably more numerous and complex than those you faced when the business was narrowly focused on a core competency and a relatively small number of well-understood markets. Determining the content of your strategy starts with your view of the big picture—looking from the outside in, future back. You have to be incisive in cutting through the clutter, complexity, and unknowns to see the unstoppable trends. You have to imagine the chess game, then find a path in it, and do so with enough specificity that you can move forward confidently and maybe even make a strategic bet.
Your strategy has to answer questions about where to focus in the South and what changes to make in the North. Part of this strategy-making process is determining which mix of businesses to keep, which to emphasize more, which to shed, and which new ones to add—in line with your outside-in, future-back viewpoint and suppressing the contemporary practice of looking inside out. You have to have a clear fix on your present and future competition, from budding but ambitious local competitors to well-established multinationals and perhaps some players that are backed by their governments. You have to find the right balance between the North and the South, between the short and long term, and shift that balance as the tilt evolves. This will challenge your attitude toward risk taking.
Imagine that you’re making a presentation to the board of directors to get their approval to invest half a billion dollars in China over the next five years. The board is not enthusiastic. The nonexecutive chairman of the board asks you and your management team who in your industry makes money in China and which global competitors are moving in quickly. “When does management see meeting the cost of capital in China’s high-wage-inflation environment and under uncertain government behavior?” he adds. Another director chimes in: “Isn’t the basic question whether we should even go into China? It will be well into the future before it’s the world’s largest market, and we know that we won’t make money for a long time. Are we better off staying in the geographies we know, making money and creating shareholder value?”
A third director notes that because of the industry you’re in, you’ll be in competition with the Chinese government. The Chinese government wants the latest technology now and in the future and expects you to be a minority partner, running your total global business from China. It’s a thorny dilemma: the choice between becoming number one in a larger market with all the headaches of a minority shareholder and allowing someone else to take that spot and become a bigger competitor than you in the future. Are you willing to make a strategic bet? If the board resists, is it because they don’t see what you see?
Unfortunately, the above is real dialogue from a board meeting I attended; the board was the biggest impediment to the company’s taking advantage of the global tilt. As CEO, you need to provide a clear view of the global tilt landscape and its unstoppable trends (see Chapter 2) to help the board understand what’s at stake. You need to work closely with them to bring them up to speed on the nature of the South, because most boards are not well versed in its nuances and vagaries. The impression they get from their peers in the North is that it’s hard to make money in the South. You might want to arrange trips for them to spend some time in the South—more time than the typical short, highly packed visits that leave very little informal time to soak up the local conditions and get engaged in the social system. You might even want to do what some boards do: Schedule a meeting in the South. Have directors stay for a week along with their spouses and create opportunities for them to connect socially with influential local people. That will give them a personal, up-close understanding of how things work there.
There is no way around the fact that as a CEO, many fate-changing decisions lie before you. You have no choice but to tackle them head-on. GE CEO Jeff Immelt created a list of ten key decisions he had to make. I borrowed that concept to create a set of questions that any CEO should consider before embarking on a quest to go south.
Take a clean sheet of paper and answer these questions:
1. Which executives and teams will participate in shaping the strategy, deciding how to operationalize it, and leading the change in its execution?
2. What is your new strategy and its road map? What will the company not do, what shifts are intended to be made from the present, and which parts of your existing strategy will be jettisoned or deemphasized?
3. What shift will you make in capital allocation? What will be its timing? What financial and people resources need to be shifted—extracted from the North and redeployed in the South—to keep overhead and other costs from bloating?
4. What new capabilities will be required? For example, will the company need a different approach to logistics? What capabilities are no longer relevant?
5. How will you redesign the content, location, and outcomes of operating mechanisms—specifically the financial and talent reviews? For example, should reviews of a worldwide line of business take place in China?
6. How does the content of information and its architecture have to change?
7. What decisions need to be made where? What shifts need to take place? Which people from the South need to be a critical part of corporate decision making?
8. Should you change the organizational structure? If so, when, and how?
9. What KPIs, quantitative and qualitative, will drive the new game, and which old ones need to go? Can they be changed midstream?
10. What will be the content, frequency, and media to create excitement about this change internally and externally? Positive external communications often influence the psychology of the workforce.
A savvy CEO thinks through the sequencing of such decisions and evaluates their second-, third-, and fourth-order consequences. Decisiveness matters. Analysis paralysis can kill you.
The sea change in attitude, behavior, and skills required in a tilted world is important not only for those making the transition to a posting in a totally new environment but also for those who remain in the home market. Understanding the particular issues of moving from North to South will help any leader perform better, whether a CEO, a business-unit or profit-and-loss manager, the leader of a business function such as HR, finance, or compliance, or an operating manager of the supply chain or global branding. It will also help leaders in the South as they move from one Southern country to another or from the South to the North.
No matter what your level of responsibility, there are certain behavioral basics that you need to understand and master when you go south, because your soft skills will greatly affect your ability to make good decisions. Let me explain.
A person from the South—from, say, India, China, Brazil, Indonesia, or Nigeria—coming to America has an easier time understanding the market than vice versa. America has more reliable sources of information and top-notch consultants, so knowledge, information, and expert judgment are readily available. It is relatively easy for newcomers to move. It also helps that a significant portion of leaders from the South (or their associates) have been educated in or worked in the North. They know what is available and whom to rely on. Those factors, combined with experience in the South, make a potent combination.
Going from America or Europe to, say, China is much tougher. Being a good listener and valuing local people is crucial. In India, for example, local CEOs know that each of the thirty states is like a country unto itself in terms of consumer behavior, segmentation, infrastructure, and logistics. Often the most crucial part is understanding how decisions get made and how information flows among the various participants. You have to build social networks and learn how multiple government agencies and levels of government interact with one another and what the connections are to your industry.
Avoid the trap that many leaders going from the United States, Europe, and Japan fall into by mixing largely in social networks of their own kind. In most countries of the South, where information can be elusive and unreliable, you will need to connect with people who can interpret it knowledgeably and provide accurate qualitative judgments. Build a social network by finding mentors or creating an advisory group of people who can educate you about the anatomy, reality, and context of decision making by local authorities. Don’t try to rush it; in many cases, you may have to be less efficient to be more effective. The “let’s hurry up and get on with the job” mentality is not conducive to building the cohesion and trust that inform a social network.
As you listen to local people, you need to have your mental computer running to become conscious of the person’s frame of reference. Social norms around sharing information may differ from those inside your company. Unless you spend enough time to build social cohesion, you might not get to the truth. You need to fish out what the person has in mind and repeat and reconfirm before you finish the conversation. Be patient and work at it. In many of these cultures, follow-through is lacking. You need to have follow-through. As you practice this, you will learn the culture and social norms of the players.
Drilling to the specifics of a particular country should complement, not substitute for, your outside-in, future-back view of the external landscape. You should continually practice sorting through the complexity of external change, selecting what matters, and identifying business opportunities. Test your courage to make strategic bets and investments where some factors are unknowable. Create your own daily, weekly, or monthly routine to detect global forces that will change the game.
If your people, your partners, and your customers in the South are going to take you seriously, you must make your vision tangible and communicable. It must be shaped with the participation of your key people, since the process of shaping builds commitment and buy-in. To be credible it must have clear milestones; lofty visions will be seen as hallucinations. You should communicate your vision relentlessly and repetitively, ensuring that the recipients get the content the way it was intended and that they are committed to it.
For example, when Bharti Airtel took charge of Zain’s operations in fifteen African countries, the business had had five different owners over the previous decade and its people were (understandably) skeptical about how long the new owner would stick around. Within the first week, the company got its top one hundred African leaders together to create a common vision. It took a week of working together to iron it out. Manoj Kohli, with his HR background, is a master of facilitation, and the week provided ample time to get to know each person. There was plenty of dialogue, and he is a listener par excellence, a precise thinker, and a great communicator with an ability to connect with people from all kinds of cultures.
The vision they created is that “Bharti will be the most loved brand in the daily lives of African people by 2015.” This vision is tangible, measurable, and time based. It is consumer focused and subliminal, planting the notion of “love” rather than “like,” and it is in contrast with other brands. The word “loved” implies continuity with the consumer in delivering desirable services, and at the same time focuses the one hundred people on doing everything they can and must do to get consumers to love the brand. They in turn will get their organizations pointing toward the same goal.
Kohli returned after two weeks to talk with people and ensure that they understood the content of the vision and the direction the company would take. He learned how the hundred people were shaping specific plans to pursue the direction and execute.
A vision that is tangible and measurable and linked to business priorities helps execution by pointing employees and partners in the same direction. Meeting specific benchmarks creates energy. To convert Bharti Airtel’s vision into reality, employees and partners focus on two business imperatives: affordable prices and a compelling service offering. Management focuses on decisions such as what services are to be offered and at what pace in each country, what infrastructure will be built and at what pace, what investments will be made and executed on time and on budget, and finally, what will be the criteria for selection and promotion of talent to bring extraordinary managerial intensity to accomplish the vision by 2015.
In almost all cases, leaders going into a new territory will have to tweak if not radically change their intuitive, well-tested rules of thumb. These can be especially damaging if you try to use them with people in the South who can’t relate to the specifics of your previous context. You will need resilience and psychological flexibility to learn new ones, modify some old ones, and kill others. Take just two examples:
• Consumers: In the North you know where your consumers shop, what information they get beforehand, and what price they’ll pay. They go to large retail stores or buy online, they get discount coupons or notices of sales, and they use digital media to comparison shop. By contrast, most consumers in the South buy in small shops with low margins, which are served by more than one layer of intermediate distributors. You need to study the system to understand how it differs from your rules of thumb.
• Competitors: Most rules of thumb for understanding competitive behavior will be dead wrong in the South. Competitors in the South manage for cash, not for profit, and work on very thin margins, high velocity of assets, and skimpy overhead. They are generally not publicly held, so they don’t hire accounting firms and internal auditors and aren’t bound by SEC-type rules. They are driven by market share, not market value. As a result they are decisive, fast, and entrepreneurial.
A common challenge for leaders is to leverage the organization’s global scale and scope and worldwide talent pool to carry out key initiatives that either create new value or create differentiation against competitors, be they local or multinational. Such projects as development of software, integrating intellectual capital from research and development sites spread across the globe, and redesigning global supply chains are often designed and executed by teams of people working across functions and countries and business units. Successfully building these teams is a critical weapon for winning in the changing landscape of the tilt.
Leaders who do this well are what I call global integrators—a new term for a new kind of leader. An integrator’s skill is to build trust among people from very different cultures and disciplines. What helps is to work at ensuring that they know the end goal very precisely and have the same understanding of the information, data, facts, and external context. A global integrator works with people individually and collectively, tapping their knowledge and expertise in searching out the right solutions and getting each of them to modify their view to get to the common end point. This is repetitive work for a leader. A one-time iteration will not get you there.
Execution of any vision, change, or initiative requires that you energize the people in your organization and point them toward the specific actions they need to take.
Here’s your checklist:
• Ensure that communication—top down and bottom up—is filter free. It should be like blood flowing freely through the arteries of the organization.
• Simplify decision making and accountability. If decisions are not being executed and goals not being achieved, get to the root cause to see if the factors are controllable.
• Get to know the natural talent, experiences, and judgments of key players as well and rapidly as you can, and put them in the right places. Evaluate how well people and their jobs are matched. Is there a deficiency of skills needed to achieve the vision? Deal with the issues that arise in melding different cultures. Differences in information sharing are common: When Mark Fields, now the executive at Ford in charge of North and South America, went to Ford’s Japanese partner in 1997–98, he quickly pinpointed the need for a major shift in a culture where information was compartmentalized. The managers were functional experts who didn’t understand the business as a whole. As Fields explains, “If the manufacturing person produced the number of units that he was supposed to produce, then the company should have profits. Or if the head of purchasing achieved his objectives for the year, his assumption was that the business was in good shape. The business was never put together for them so that they could see how each of their pieces added up to a corporate whole.” After making clear his expectation that people should be more open, Fields took them to an off-site meeting to learn about one another’s functions and form a common view of the business as a whole. He stipulated that they would speak only Japanese, with interpreters when necessary. Speaking in their native language would make them more comfortable and allow the nuances and feelings to come through, so the exchange of information and views would be more accurate. After two days during which Fields continually asked questions to draw them out, the individuals began to see things from a broader perspective and came to appreciate why they should be more forward about sharing information.
• Build credibility and trust by doing what you say, sharing both good and bad news, explaining clearly the rationale for your decisions.
• Resolve any tension with headquarters. This is not a one-shot deal; tension will always be there. Say you’re a local business-unit manager and you see a huge opportunity to make strategic bets. You know the local context much better than your global manager several thousand miles away. He has never lived or worked in the South and gets his information from industry experts, occasional assignments he has given to consultants, and you. Your ability to make your bets depends on whether you can get him to accept your judgment. Prepare yourself with rigorous analysis and explicit delineation of the risks under a range of conditions to persuade him that your assessment of the local context justifies the required investment. Be sure the proposed return justifies those risks. Also, be prepared to work your way through the layers of decision making and to correct distortions in information. Build trust and confidence in yourself by communicating vigorously with the decision makers, creating a high frequency of information flow about your plan and its implications for the business, so that over time they come to see that your finger is on the pulse and you have good judgment.
Reorienting an entire business to succeed in the tilt is akin to performing a heart transplant: the surgeon has to keep her patient alive while cutting and splicing. For a business, the challenge is keeping the company smoothly functional and delivering the numbers amid the trauma. Next I’ll take you into the corporate operating theater, where you will see how to do it.