Responsible leadership

1. Responsible leadership • Prof. Dr. Björn Bloching • Budapest, November 26th, 2008 Document number

2. The importance of Leadership has undoubtedly increased over the last years • Globalization: • Information/Communication: • Speed: • Individualization: • and • The current crisis: • The global landscape changes dramatically, both on a political and economical level • The amount of accessible information is overwhelming • The pace in the economies has significantly increased over the last years. Example: automobile life cycles • Most global societies show a clear trend towards the individual – the collective loses importance • Nobody knows what we have to expect • COMPLEXITY AND UNCERTAINTY CALL FOR LEADERSHIP

3. Unfortunately, trust in today's leaders is at an all-time-low Only 15% of the Germans trust the heads of large corporations – and the level of trust towards politicians is even lower

4. But what is leadership? Leaders have always had a variety of thoughts on how their role can actually be defined • "Leadership is the art of getting someone else to do something you want done because he wants to do it." • (Dwight Eisenhower, former US President) • "A leader is a dealer in hope." • (Napoleon Bonaparte) • "The art of leadership is saying no, not yes. It is very easy to say yes." • (Tony Blair, British politician) • "It is better to lead from behind and to put others in front, especially when you celebrate victory when nice things occur. You take the front line when there is danger. Then people will appreciate your leadership." • (Nelson Mandela, former South African President) Source: World Economic Forum, Roland Berger Strategy Consultants

5. Leadership is obviously a pretty complex topic,… Key aspects of leadership Create vision Work style Autocratic Confidence/ determination Reconsider vision Democratic qualities styles Implement vision Laissez faire Vision Paternalistic Direct Communication Quiet Indirect Responsibility Servant Passion For followers Role-modeling Charismatic Leadership For environment Self-sacrifice For community Trait-related Transformational Young vs. established Behavioral Leadership difference Geographic regions DRIVERS theories Great man Men vs. women Power Transactional Stakeholder groups Change Conversational Management Contingency, situational Heroism Source: World Economic Forum, Roland Berger Strategy Consultants

6. …which at first sight seems to differ across the globe,… • Consensual • Need long tomake decisions • High individualism • Strong belief in social values • Action oriented, pragmatic • Direct, aggressive • Less hierarchical ASIA NORTH AMERICA EUROPE • Non-confrontational /indirect • Respect of authority • Still collectivism AFRICA SOUTH AMERICA AUSTRALIA • Proud and patriotic • Passionate • Hierarchical • Autocratic • Seniority important • Proud of tradition Source: World Economic Forum, Roland Berger Strategy Consultants

7. …and is often mixed up with management due to their partly overlapping characteristics • LEADERSHIP • Inspiration • Transformation • Direction • Trust • Empowerment • Creativity • Innovation • Motivation • COMMON • Communication • Development • Decision-making • Integrity • Teamwork and teambuilding • Professional competence • Role model • Negotiation • Knowledge • Setting standards • Flexibility & focus • MANAGEMENT • Delegation • Performance • Planning • Accountability • Finance • Monitoring & evaluating • Formal suspension • Control Source: World Economic Forum, Roland Berger Strategy Consultants

8. However, leadership can – and has to – be made quite clear • YES, WE CAN

9. Political leaders are more action, corporate leaders are more result oriented – Power is the key motivator for both CORPORATE LEADERSHIP POLITICAL LEADERSHIP • The ability to think, act, and influence in ways that promote the sustainable competitiveadvantage • The power exercised by individuals to direct members of the nation towards positiveactions ESSENCE TYPICAL GOALS • Improve business results • Develop products & services and markets • Inspire and accomplish a shared vision • Enable others to act professionally • Attract and retain talent • Represent a constituency / interest group • Findanswers to pressingproblems of the people • Distribute power and money • Establishsupport for political goals (build coalitions) • Remain in power KEY QUALITIES • Look beyond daily business and make strategic decisions • Takes responsibility for employees • Is knowledgeable and competent in the industry • Communicates professionally • Sets goals and monitors progress • Clear ideas and beliefs • Strong willpower • Has pertinacity (determination to see cause through) • Communicates and represents well • Has politicalintuition APPROACH • Primarily strategic, merit-based organization for • tactical and operational responsibilities • Tactical and strategic, operational responsibilities • usually fulfilled by bureaucrats FOCUS • Result oriented • More action, less result oriented DRIVE • Mainly power and money • Mainly power and legacy Source: World Economic Forum, Roland Berger Strategy Consultants

10. In today's crisis the key responsibility of public governance is to set the framework for economies Political leader SET THE FRAMEWORK FOR STABLE ENVIRONMENT Incorporate measures in order to build a transparent system of regulations Corporate leader EXECUTE VALUES-BASED MANAGEMENT Show responsibility of a welfare state combining economic, social and political aspects ENSURE EFFICIENCY Go for the best options in public administration and decision making - Reaction time can be crucial RELY ON COOPERATION Create value by elaborating on win-win situations in front of corporate leaders Source: Roland Berger

11. On the corporate side leaders should focus on responsible, sustainable business models AREAS OF CORPORATE RESPONSIBILITY (CR) GENERATING BUSINESS Corporate Responsibility (CR) as one cornerstone of the corporate strategy MEASURING CR Sustainable products and services (e.g. Greentech) Internal values/ employer branding ENHANCING BUSINESS Corporate education Corporate citizenship Work and family Occupational health mgmt. Diversity&inclusion Mastering demographics MANAGING RISK Compliance, transparency, sourcing, … Source: Roland Berger

12. An example: Clear internal leadership values and a strong employer brand pay off Values Benefit • 60-80% of customer satisfaction can be related to a high level of identification with the company values • Average attrition rate of Top-100 employers in the USA is 13 percent below general average (12,6% vs. 26%) • Companies with strong employee commitment achieved in a 3-year period in comparison to other companies • 36% higher Shareholder returns (112% vs. 76% ) • an increase of earnings Ø 3,74% (other companies had a decrease of Ø 2,06%) • Consistent implementation of value proposition in company • Clear positioning of employer towards (potential) employees Source: Roland Berger, several empirical studies HAM-97007-428-04-01-G.ppt

13. No matter in which sphere you are working, some basic rules apply The elements of successful leadership A cool head Complexity needs analytic skills Change needs motivation, trust and empathy A warm heart Success needs cooperation and good examples Working hands Source: Martin Hilb

14. Prof. Dr. Björn Bloching HEAD OF THE GLOBAL COMPETENCE CENTER MARKETING & SALES Am Sandtorkai 41 D-20457 Hamburg Phone: +49-40-376314-446 bjoern_bloching@de.rolandberger.com