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The Challenges of Global Leadership Stephen H. Rhinesmith, Ph.D. ASAE & The Center for Association Leadership 2010 Association International Conference Washington, DC Objectives Examine the challenges of leading in a complex, diverse, and uncertain world.

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The challenges of global leadership l.jpg

The Challenges ofGlobal Leadership

Stephen H. Rhinesmith, Ph.D.

ASAE & The Center for Association Leadership

2010 Association International Conference

Washington, DC


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Objectives

  • Examine the challenges of leading in a complex, diverse, and uncertain world.

  • Understand the mindsets and skills you need to be an effective global executive in this world.


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Research

© 2010 Stephen Rhinesmith, Inc. All rights reserved.


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Leadership Capacity

  • A recent survey of 400 Fortune 1,000 companies conducted by the Conference Board in the United States revealed that:

  • only 8% of the respondents rated their company's leadership as excellent

  • nearly 50% rated their leadership capacity as fair to poor


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Global Mindsets and the World

It is estimated that

substantially less than

1%

of the adult population of the world

have reached a level of personal development

wherein they have

a genuinely global outlook.

Globally Responsible Leadership, 2005


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A View of Tomorrow’sLeadership Requirements

Source: Laura Tyson, London School of Business, September 2004


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The leadership challenge

“The trouble with our times is that the future is not what it used to be.”

Paul Valery, French poet


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We live in a world that is more complex, more diverse, andmore uncertain…


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And we facethe perfect storm


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Exploding technologymakes choices about organizational and personal life more complex.


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Four power tools of innovation in the 21st century

  • Information technologies and networks:the impact of computing, microchips, and the Internet on careers, communications, work, creativity, and entertainment.

  • Biotechnology:the uncloaking of DNA, life sciences, and the impact of genomics on health care, life extension, and medicine.

  • Nanotechnology:the manipulation of matter at the atomic scale, producing new drugs, fuels, materials, and machines.

  • Neurotechnology: the use of devices, drugs, and materials to heal, manage, and enhance mental performance and functioning.

James Canton, The Extreme Future, 2006


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Headlines from the future

  • 2010: 70 Percent of Companies Say Workforce Not Skilled for Today’s Tech Jobs

  • 2015: Women Hold 80 Percent of Management and Professional Jobs

  • 2015: Oil Hits $500 a Barrel: World Markets Shatter

  • 2015: Neuromarket Up 200 Percent on Sales of Created Memories

  • 2020: Neurotech Device Cuts Depression 80 Percent

  • 2020: Mobile Virus Infects Cybernetic-Enhanced Brain Devices and Ten Million People Lose Their Memories

  • 2030: Flood Victims Saved by Rescue Workers with Fish Gills

  • 2040: Humans With Less then 80% DNA Lose Citizens’ Rights


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Diverse cultural values, preferences, and mindsets require re-examination of global business strategies, structures, and processes.


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The world is flat: 10 major flattening forces

Govern from the ground up, by the interests, demands, and aspirations of the people, rather than from the top down; See the world as more of a seamless whole—a single market, ecosystem, and community;People tapped into the knowledge pools of others.

Fall of the Berlin Wall


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The world is flat: 10 major flattening forces

Fall of the Berlin Wall

People tapped into the knowledge pools of others.

PC-based to internet-based

Internet-based platformtruly connected and flattened the world.


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The world is flat: 10 major flattening forces

Fall of the Berlin Wall

People tapped into the knowledge pools of others.

PC-based to internet-based

Truly connected and flattened the world.

Work flow software

New applications software and transmission protocols enabledeveryone to do anything with anyone at any time, beyond any barriers.


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The world is flat: 10 major flattening forces

Fall of the Berlin Wall

People tapped into the knowledge pools of others.

PC-based to internet-based

Truly connected and flattened the world.

Work flow software

Enabled everyone to do anything with anyone at any time.

Open-sourcing

Thousands of people, worldwide, cancome together online to collaboratein writing everything from their own software and operating systems to dictionaries and recipes.


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The world is flat: 10 major flattening forces

Fall of the Berlin Wall

People tapped into the knowledge pools of others.

PC-based to internet-based

Truly connected and flattened the world.

Work flow software

Enabled everyone to do anything with anyone at any time.

Open-sourcing

People come together online to collaborate.

Using fiber-optic-connected workstations, any service, call center, business support operation, or knowledge work, which could be digitized, could also be outsourced globally to the cheapest, smartest, or most efficient provider.

Outsourcing


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The world is flat: 10 major flattening forces

Fall of the Berlin Wall

People tapped into the knowledge pools of others.

PC-based to internet-based

Truly connected and flattened the world.

Work flow software

Enabled everyone to do anything with anyone at any time.

Open-sourcing

People come together online to collaborate.

Outsourcing

Globally to the cheapest, smartest, or most efficient provider.

Offshoring

Use China’s (or other developing countries’) labor pool to make things cheap and sell them abroad.


The world is flat 10 major flattening forces20 l.jpg

The world is flat: 10 major flattening forces

Fall of the Berlin Wall

People tapped into the knowledge pools of others.

PC-based to internet-based

Truly connected and flattened the world.

Work flow software

Enabled everyone to do anything with anyone at any time.

Open-sourcing

People come together online to collaborate.

Outsourcing

Globally to the cheapest, smartest, or most efficient provider.

Offshoring

China’s (or other developing countries’) labor pool.

Supply-chaining

Collaboratinghorizontallyamong suppliers, retailers, and customers to create value; Proliferating supply chains can force the adoption of common standards among companies eliminating friction at borders.


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The world is flat: 10 major flattening forces

Fall of the Berlin Wall

People tapped into the knowledge pools of others.

PC-based to internet-based

Truly connected and flattened the world.

Work flow software

Enabled everyone to do anything with anyone at any time.

Open-sourcing

People come together online to collaborate.

Outsourcing

Globally to the cheapest, smartest, or most efficient provider.

Offshoring

China’s (or other developing countries’) labor pool.

Supply-chaining

Collaborating horizontally.

Insourcing

Levels the competitive playing field by using companies like UPS tocome right inside a business. This allows huge conglomerates to act small by delivering or repairing quickly anywhere in the world, and small companies and individuals to act big.


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The world is flat: 10 major flattening forces

Fall of the Berlin Wall

People tapped into the knowledge pools of others.

PC-based to internet-based

Truly connected and flattened the world.

Work flow software

Enabled everyone to do anything with anyone at any time.

Open-sourcing

People come together online to collaborate.

Outsourcing

Globally to the cheapest, smartest, or most efficient provider.

Offshoring

China’s (or other developing countries’) labor pool.

Supply-chaining

Collaborating horizontally.

Insourcing

Come right inside a business.

In-forming

Self-collaboration - “the individual’s personal analog to open-sourcing, outsourcing, insourcing, supply-chaining, and offshoring.”


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The world is flat: 10 major flattening forces

Fall of the Berlin Wall

People tapped into the knowledge pools of others.

PC-based to internet-based

Truly connected and flattened the world.

Work flow software

Enabled everyone to do anything with anyone at any time.

Open-sourcing

People come together online to collaborate.

Outsourcing

Globally to the cheapest, smartest, or most efficient provider.

Offshoring

China’s (or other developing countries’) labor pool.

Supply-chaining

Collaborating horizontally.

Insourcing

Come right inside a business.

In-forming

Self-collaboration.

The steroids

Technologies that amplify and turbocharge all the other flatteners –“digital, mobile, virtual, and personal.”


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The world is flat…and increasingly diverse


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Diverse employees have rising expectations and different needs, and require new mindsets from their leaders.

Millenials

Traditionalist

Boomer

Generation X

  • Collaboration

  • Social activism

  • Tolerance for diversity

  • Family centricity

  • Technology-based

  • Free agency and independence

  • Street-smarts

  • Friendship

  • Cynicism

  • Conformity

  • Stability

  • Upward mobility

  • Security

  • Economic success

  • Personal and social expression

  • Idealism

  • Health and wellness

  • Youth

Born 1965–1980

Born 1946–1964

Born 1928–1945

Born 1980–2000

Four generations are being asked to coexist.

Based in part on “Meeting the Challenges of Tomorrow's Workplace,”CEO Magazine, 2005


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Diversity is a common area of focus acrossmany countries…

India:

Gender

Generational differences

Regional differences

Caste

Work history

Expats / local nationals

Brazil:

Gender

Social Class

Education

Race

Mexico:

Gender

Social class

European vs.

indigenous

Japan:

Aging population

Gender

Work-life integration

Foreigners

UK:

Gender

Social Class

Ethnicity

Age

Disability

France:

Gender

Education

Age

Ethnicity

Religion

South Africa

Race

Affirmative action s

Gender

Tribe

HIV status

Education

Language

China

Generations

Gender

Educational background

Work history

Cultural differences by region

Disability

All who work internationally face cultural differences;

many face cultural differences within their own countries.

Simmons Associates, Inc.


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International cross-cultural differences

Andre Laurent, INSEAD


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Windows on the world

NORTHERN VALUES

EASTERN VALUES

  • Reliability

  • Discipline

  • System

  • Rigor

  • Consistency

  • Caution

  • Harmony

  • Consensus

  • Blending in

  • Predictability

  • Modesty

  • Indirectness

WESTERN VALUES

  • Individuality

  • Empowerment

  • Productivity

  • Speed

  • Efficiency

  • Directness

SOUTHERN VALUES

  • Loyalty

  • Relationships

  • Hierarchy

  • Instinct

  • Spontaneity

  • Adaptability


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Forced decisions with unknown consequences create risk, instability, and uncertainty.


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Conflicting stakeholder demands

Consumer activists

Environmental

groups

Regulatory bodies

Global suppliers

Political constituents

Employee unions

Emerging markets

Community

organizers

Investors


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Learning to live with Paradox


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Difficult questions are often matters of right versus right, not right versus wrong… these decisions are complicated, troubling, and serious. They are too important to ignore. They are defining moments which reveal a leader’s basic values, test the commitment of an organization and cast a shadow onto the future...

The Uncertainty of Right-vs.-Right

Joseph Badaracco, Defining Moments: When Managers Must Choose Between Right and Right, 1997


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Paradoxes

The test of a first-rate mind is the ability to hold two opposing ideas in one’s head at the same time and still retain the ability to function.

F. Scott Fitzgerald


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Paradox management requires a balance of “both/and” thinking

  • For paradox management to work, people must be able to understand various viewpoints and perspectives and understand how they fit together to create a larger whole.

  • In Gestalt psychology, this is called multistability – or the tendency of different perspectives to go back and forth so that each appears to be a legitimate interpretation of the situation.


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=


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Paradox in Eastern and Western Thinking

  • Eastern Taoist thinking involves multivalue fuzzy “shades of gray” and a nonlinear worldview that sees contradiction and paradox as normal, experiential and coherent common sense.

  • Western rationalism is wedded to either-or and black-and-white linear reductionism to solve problems rather than balance opposites.


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Problem vs. paradox

Is the issue or situation a one-shot? Can it be solved once and for all with a specific solution?

If so, it is a problem, not a paradox.

Are there two or more solutions, both of which are “right” in one sense, but have negative consequences if taken too far?

If so, it is a paradox.


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Global

Centralization

Performance

Quantitative

Cost

Standardization

Work

Local

Decentralization

People

Qualitative

Quality

Customization

Family

Examples of organizational paradoxes

Versus


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Example: the “global vs. local” paradox

  • Value

  • Customer responsiveness

  • Local cultural sensitivity

  • Local regulatory requirements

  • Value

  • Economies of scale

  • Brand management

  • Quality control

1

3

historic strength

the new fix

Global

Local

4

failure to adapt

neglect of the core

2

  • Concern

  • Increased cost

  • Lack of best practices

  • Risk to global partners

  • Concern

  • Local alienation

  • Local competitiveness

  • Lack of speed in execution


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The infinity loop of paradox

Value

Value

Concern

Concern

trade-offs that optimize net upside

Force #2

Force #1

trade-offs that minimize net downside


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Summary

  • Paradoxes are constant companions in today’s business.

  • When you encounter them, you need to know how to balance and manage them and hold the tension to produce results.

  • Managing paradoxes is not about compromising. It is about having the right kind of dialogue with your colleagues and making conscious decisions to move in one direction while being aware of warning signals.

  • It is also recognizing in that in true paradox management neither side can always win – balance requires sometimes giving the other side what it needs, even if it is against your interests, because next time you will need them to do the same.

  • Paradox Management is a powerful leadership tool that can increase effectiveness and save time and money from misdirected actions both within a single manager and across group in an organization.


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Leadership key to paradox management

The more complex, diverse, and uncertain the world becomes, and the more leaders are faced with choosing between the right and right of conflicting constituencies. the more leaders must go deep inside themselves to determine

who they are, what they are trying accomplish, and what they will have the courage to be known for.


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The Need for Whole Leaders


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A new breed of leader is needed forthese turbulent times.

“Get me more leaders who are smart,

have good people skills, and

have the courage of their convictions.”

FORTUNE 500 CEO


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The Global Leadership Imperative survey

The Economist Intelligence Unit and Oliver Wyman Leadership Development conducted a global survey of 223 senior executives from large corporations across 17 industrial sectors in the fall of 2005.

Responses by Position

Responses by Region

Responses by Annual Revenue


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Today’s successful business leader must be a whole leader.

Head

Heart

Provide clear purpose, direction, and strategy.

Understand, work with, and develop others.

Guts

Do the right thing based on clear values.


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But most organizations are one-dimensional.

Companies appear to have the greatest supply of leaders who are strategic, analytical, and purposeful.

In shortest supply are leaders who have emotional intelligenceand can develop talent,

and who haveclear valuesand thecourage to do the right thing.


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Head leaders could succeed – in the 20th century world.

Short-term success

Potential risks

They fail to understand the impact of their actions, and undervalue the people side of the business.

Use analytical and logical expertise to dominate a business.


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Common pitfalls of headleaders

  • Intimidating people with their intellect

  • Confusing people by complicating issues

  • Dominating conversations

  • Letting their need to be “the smartest person in the room” lead to content leadership rather than context leadership

  • Driving for performance without inspiring other values

  • Failing to develop leadership bench strength because they are too busy running everything

  • Changing directions without being transparent

  • Failing to connect with people during change


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Heart leaders could succeed – in the 20th century world.

They may lose sight of tough choices that need to be made for success in the marketplace.

Inspirepeople through personal connectivity to obtain loyalty and commitment.

Short-term success

Potential risks


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Common pitfalls of heart leaders

  • Failing to address and manage conflicts

  • Allowing others take advantage of them

  • Failing to stand up for what they believe in

  • Failing to override their desire to be liked by everyone

  • Letting compassion get in the way of the tough decisions

  • Mistaking empathy for agreement

  • Being unable to understand and manage personal derailers

  • Acting too slowly to ease the pain


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Guts leaders could succeed – in the 20th century world.

They become too caught up in the drama of bold moves, or stay the course long after it is relevant.

Make bold moves that excite their people and attract the attention of shareholders.

Potential risks

Short-term success


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Common pitfalls of guts leaders

  • Seeing everything as black or white, and not acknowledging grays

  • Ignoring facts and placing too much emphasis on their own opinions

  • Being unwilling to be challenged

  • Confusing stubbornness with focused persistence

  • Failing to solicit the views of others

  • Acting without anticipating the consequences

  • Unintentionally intimidating others


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Globalization and leadership development

Globalization

requires leaders

to examine their skills and mindsets

to ensure they are

focusing on the right business issues (head)

the right people issues (heart) and

the right value issues (guts).


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Leadership Skills to Navigate Complexity, Diversity and Uncertainty


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Becoming a whole global leader

Lead with your Head

to manage complexity

Lead with your Heart

to manage diversity

Lead with your Guts

to manage uncertainty

Articulate a point a view

Using global insights to constantly reassess strategy and convert learnings into a compelling message to align staff

Lead teams

Providing clear direction, building trust and leveraging the skills of the team so they succeed

Lead change

Creating opportunities

to build capacity that

ensure competitive advantage

Drive for the broader picture

Scanning the environment with a global filter and identifying both local and global issues

that will impact performance

Manage laterally

Building and maintaining

critical relationships in

and outside of the organization

Balance paradoxes

Balancing competing demands and taking risks despite differences and ambiguity for larger gains

Develop a global mindset

Committing to learning and sharing global opportunities, challenges, and best practices across the globe to ensure results

Value diversity

Understanding and respecting cultural difference and the impact they have on team performance

Lead with values

Making value based decisions even in the face of adversity


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New requirements of global leadership

We must respondto new complex forces and constituencies and develop a more global mindset.

We must rethinkwhat leadership of a diverse global workforce, customers, and markets entails.

We must recalibraterisk management and decision-making in an uncertainand paradoxical world.

We must re-examineour head,heart, and guts to deliver competitive excellence in a global world.


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