The initial words in the above title is the subject of 3sixtyglobal’s modest contribution to a Cross Cultural Management Summit held at the Florida Institute of Technology in February. The poster demonstrated that some leadership practices in other parts of the world are significantly different from those in the US. The data was generated by the Management Research Group and generously shared with me as one of their certified practitioners. It is a real eye-opener to see what the US considers desirable competencies on the part of its corporate leadership can extensively differ from those in other countries.
Below is the poster itself, although it may be difficult to read the text on this blog. The data charts, however, are visible and present a graphic demonstration of these differences.
There were others at the conference, the major presenters, including the cross cultural guru himself, Fons Trompenaars, who were emphatically putting forward the view that companies need to re-think who will lead them, how they do business, and how they will position emerging leaders in an age of disruption to the global economy. One thing was clear at the end of the 2 days, however. Because of the mega trends in the global economy, there is a critical need for cultural competencies on the part of organizational leaders.
What follows in this blog are some of the highlights of the business case which needs to be made for re-thinking developing global leadership. We will explore this in more depth (including citations in a forthcoming white paper, which will appear on our new website (www.3sixtyglobal.com) at the end of this month. For now, however, let’s look at the data and conclusions we took away from the conference and why this points to the necessity of including cultural intelligence for developing global level leaders.
- The focus of business growth is shifting from the developing countries in the West to the emerging economies, led by China and India. We, in the West, are in the slower growth markets, which has implications for competition and cooperation. Instead of Ford, think Hyundai, instead of Hewlett-Packard, think Lenovo.
- From now until 2050, 80% of the world’s GDP growth will occur outside of Europe, the US, and Canada. By 2050, the number one economy in the world will be China, and the US will move to second place.
- Population and urbanization: Were you aware that 90% of the world’s children under the age of 15 now live in the emerging economies? Our populations in the West are aging. Despite this trend, only a minority of leadership positions in major, global companies are held by men and women coming from the emerging economies.
The Business Imperative
The buzzword seems to be innovation and, concurrently, creativity. Neither result when the leaders look to tried and true solutions to problems. Instead of worrying about more efficient gasoline-driven engines on cars, entertain the disruptive notion of electric motors, shared transportation in urban areas (think Uber or Zipcar here), or technologically driven transportation. How do we make urban transportation more efficient, economical and convenient in such old systems that exist in cities like Boston or London?
Innovation and creativity require a diversity of thinking. Many cultures and ways of thinking are keys to both. This requires leaders and teams who are capable of influencing those who are different from themselves. Influencing others is a key leadership skill. A leader can have vision and be outstanding in communicating that vision to his or her followers, but without influence, execution fails. A team that cannot tolerate diverging opinions soon falls into groupthink.
Cultural Competence is a New Leadership Development Imperative
A 2012 report from the Corporate Leadership Council went so far as to cite statistics that demonstrated the likelihood of being a good or great global leader depended upon the mastery of intercultural skills. Other presenters at the conference cited a survey of HR leaders, 93% of whom claimed that leaders lost revenue for their companies due to the lack of intercultural skills and the words of Ernst and Young’s CEO who felt that success in new markets depended upon the ability of leaders to move across different cultures.
Very simply put, if current and future economic growth is occurring outside the comfort zones of Western cultures, are we as a society developing populations and leaders who know how to adapt to diverse ways of thinking and doing? Perhaps because we, in the West, have dominated the global economy for so long, it hasn’t been necessary to train leaders in cross cultural competencies or encourage them to become more cosmopolitan in outlook (which is expressed in the Thunderbird Global Mindset Inventory). This is no longer true today. The challenge to do so is before us.