Leadership Muscles For The New Multi-Polar World
June 10, 2015
"Globalization until very recently meant Western companies exporting their products, leaders and ways of doing business around the world. That is now changing and today executives face a bewildering level of uncertainty in the multi-polar world that is fast emerging. If you are doing business in Africa, you are now likely to face significant competition from local players, as well as from Indian or Chinese companies that have emerged onto the global stage. The leadership teams of many multi-nationals were often literally a pale reflection of the international community, but slowly increasing diversity is evident in boardrooms and senior teams. But how do you deepen this diversity and make it work productively? ... A range of convergent evidence from neuroscience, behavioral genetics, values surveys, as well as our own research with thousands of leaders globally, identifies certain Cultural DNA themes for each of the world's main societies and their associated leadership implications."
Globalization until very recently
meant Western companies exporting
their products, leaders and ways
of doing business around the world.
That is now changing and today
executives face a bewildering level
of uncertainty in the multi-polar
world that is fast emerging.
If you are doing business in Africa, you are now likely to face significant competition from local players, as well as from Indian or Chinese companies that have emerged onto the global stage. The leadership teams of many multi-nationals were often literally a pale reflection of the international community, but slowly increasing diversity is evident in boardrooms and senior teams. But how do you deepen this diversity and make it work productively? If you are operating outside of your home territory, there is both increasing pressure to have—as well as advantage to be derived from—having locals in your most senior positions, but achieving this for most multinationals is not a straightforward or easy process. Last but not least, geopolitical uncertainty— such as the future of the Euro-Zone, what Putin might do in Russia, or the impact of events in the Middle East on energy prices—is now one of the most important destabilizing factors buffeting the performance of global companies.
All these and many other challenges require executives developing new leadership muscles. The starting point is to get under the skin of key global cultures and understand their deepest instincts, as well as your own leadership strengths and weaknesses. A range of convergent evidence from neuroscience, behavioral genetics, values surveys, as well as my own research with thousands of leaders globally, identifies the following cultural DNA themes for each of the world’s main societies and their associated leadership implications.
America | The Change Makers
American leaders are positive, action oriented, goal focused and more prepared to embrace disjunctive change than people from just about any other part of the world. In part, this arises from the fact that American cultural DNA has been distinctively shaped by legions of people making a radical and bold decision to change the paths of their lives through migration. Many early founders were also driven by a desire to hold on to certain radical religious and
However, American positivity can land as inauthenticity and naïve optimism in other cultures.
For deep-seated cultural reasons, Americans can also engage the world very much on their own
terms. Only 16% of American leaders had a strength around “intellectual flexibility” and 8% in
“empathy and listening skills”—some of the lowest ratings globally. Learning to flex one’s mental
models in the new multi-polar world will be essential for American leaders.
India | Beyond this World
Indian culture developed early on in its history a preoccupation for intellectual and spiritual exploration; tolerance of diversity and a concern for matters to do with the inner workings of the mind and body. Indian strength in IT, pharmaceuticals, finance and strategy, as well as the country’s pluralistic instincts, all stem from this tradition. These same factors, however, also lead to a blithe neglect of practical matters, a tendency towards ritualistic thinking and
a rigid hierarchical organization of people’s roles in society. Bureaucracy, corruption and a lack of critical thinking are evident in many Indian organizations. There is also a tendency for people to follow individual paths and to be defensive in the face of feedback. 24% of Indian leaders had a development need around “teamwork” and 34% around “self-awareness”— some of the highest figures globally.
China | The Seekers of Harmony
Chinese culture has been distinctively shaped by the fact that the country has the longest history of continuous civilizational settlement of all global societies. This has lead to a strong focus on relationships (Guanxi), how to live in harmony with each other, and a preference for the middle way in all walks of life.
There is also a tendency to be suspicious of outsiders who might disrupt this harmony. Historically, the population has also traded freedom for security. This leads to a high level of conformity when leaders are respected but a constant underlying watchfulness and propensity for rebellion if they break their compact with those they lead. The need to survive in a forbidding and challenging environment has also created a concrete and pragmatic intellectual orientation at the expense of more abstract enquiry. China’s strengths in global manufacturing and fast execution, as well as tendency to copy, all stem from this inherent pragmatism. However, Chinese leaders face challenges in forming relationships outside of their own society, expressing opinions openly and being intellectually confident with conceptual exploration.
Europe | The Equal Society
A number of factors make equality a much stronger theme in European culture than other societies. Power has to be exercised carefully and individual decision making rights respected. Leaders have to invest more time into achieving alignment before moving into action. However, there is also a sense of social elitism—which leads many leaders to be somewhat distant from their organizations.
Whilst open minded and creative intellectually, Europeans can tend to be relatively structured and careful, leading to a slowness in embracing and driving change. European leaders also score the lowest globally with respect to ambition and drive and risk being overtaken by those who are more achievement oriented or who embrace change more quickly.
Sub-Saharan Africa | Under Nature’s Shadow
Sub-Saharan cultural DNA has been driven by the ferocious power of nature, high levels of genetic diversity/geographical segmentation and the fact that the continent is our natural home. This has driven an “in the moment” mindset, and African leaders score amongst the highest globally on “intellectual flexibility”. There is a high level of openness and “naturalness” in familiar circles which flips into wariness and suspicion when engaging those outside one’s community. Power is highly respected and leaders typically exhibit their status openly. African leaders are strong with respect to story telling, use of metaphor and have a strong orientation towards team development. However, they have some of the highest scores globally with respect to needing to develop “analytical thinking” and “strategic thinking” skills. African leaders also require help in navigating the widespread relationship networks in modern global multi-nationals.
Latin America | The Ever Changing Melting Pot
Latin American societies represent the most diverse melting pot of global cultures to be seen anywhere—a consequence of the intermingling of Indigenous, European, and African influences in many societies. Patriarchal elite domination, coupled with an almost uninterrupted history of insurrection, rebellion, and violence is evident across much of the continent. There is also a strong emphasis on relationships and teamwork. Latin American leaders score the highest in the world with respect to being “engaging, likeable, and building relationships easily,” as well as in “teamwork and collaboration”. There is also a deeply ingrained sense of resourcefulness, creativity, and flexibility.
Middle East | Ambivalence and Uncertainty in the Modern Age
Middle Eastern cultural DNA has been driven by two fundamental factors: desert survival and the fact that the world’s first urban civilizations arose in the region. The latter has driven a high level of commerciality in the region and Middle Eastern executives scored the highest globally with respect to “commercial thinking”. It also drives a strong interest in new ideas and best practice. However, other aspects of Middle Eastern culture lead to a strong
emphasis on personal honor, trusted close relationships and tribal identities, as well as a need for clear and unambiguous rules in life. There is an ever-present tension in individuals and societies in the region between the forces of conservatism/order versus openness to change, which creates unpredictable currents. Middle Eastern leaders also have strong development needs with respect to “strategic thinking” and an “inclusive approach to leadership.” In order to thrive in the new multi-polar world, the following points are helpful.
Understand Your Own Cultural Default Settings
There is no such thing as a true multi-national. The cultures of all firms operating globally are firmly rooted in the place where they originated. You need to consciously understand the strengths and weaknesses that these implicit cultural settings lead to in the ecology of the new global business environment. This requires looking honestly at your culture from the outside in—as others might see you and looking at other cultures from the inside out—
trying to empathize, understand and respect different outlooks rather than judging.
Build Skills in Flexible Strategic Thinking
Our research indicates that over 35% of global leaders have a development need in strategic thinking skills. While Western leaders are less challenged in this area than those from emerging markets, their approach can be somewhat rigid and lacking in the flexibility and intuitive creativity required in a dynamic and unpredictable world. Leaders need to be both long term and agile in their approach—building their muscle at developing strategic intent, pursued flexibly rather than through rigid or cumbersome plans.
Develop Deep Relationship Skills
Working across boundaries and engaging different cultures requires leaders taking their relationship skills to new levels. In our research, we found the biggest development need for global executives was in the area of “ broader influencing and networking ”—with over 40% having a development need in this area. Leaders from emerging markets were especially challenged in this area as they typically come from cultures where relationships are built
slowly over time and in familiar circles.
Improve Self-Awareness and Insight
Over 25% of global executives had a development need with respect to honest self-insight. Such self-understanding is crucial to understanding your impact in other environments and how you need to adjust your approach. This was a much bigger issue for leaders from emerging markets where people typically have a less individualistic focus.
Build More Diverse Leadership Teams
There is no substitute for working to ensure that the balance of senior leadership teams reflects the weight of the places where you make your money as a company. Unconscious bias and subtle barriers to people with different outlooks blocks this happening to the degree it should. Leaders need to actively value approaches that are radically different from their deepest instincts and build their skills at leveraging difference.
Release Potential By Building On Latent Strengths
Most companies complain of severe talent shortages when operating outside of their domestic environment. In part, this arises from wanting to impose their own reflexes in different parts of the world. It is much more productive to understand and build on local strengths and go with the grain rather than trying to fight cultural DNA that has been embedded for millennia. This requires giving much more autonomy to local markets, whilst being clear about your core, non-negotiable values.
Think Deeply About How You Win Hearts In Different Places
What drives and motivates people varies subtly from place to place. We found that one of the most significant development needs for global executives was around “inclusive 2 way leadership/working through others”, with over a third of executives having a development need in this area. “Winning hearts and minds” was also a significant area of development. These issues were particularly acute with leaders from emerging markets.
Lead With a Clear Sense of Societal Purpose
The compact between business and society has broken down in many parts of the world. Government intervention to punish wrong doers, tax avoiders, or exploitative practices is a major issue for many global companies. Framing a clear societal purpose and a set of operating values that one sticks to even if there are costs is necessary to negotiate these risks. This requires a long-term mindset on the part of leaders and Boards. For far too long cultural intelligence has been underestimated, but it is now harder to ignore its economic value or importance for creating a harmonious international order. To do so in your own right and your own company, it is important you address the issues that need to be managed to anticipate and solve problems as each culture engages a globalized world.
And, before you do you must understand the cultural DNA of those places.