Does your model support sustainability?

x This post was originally written for the December 2013 issue of Leadership Excellence Essentials by Annmarie Neal. Read it there.

Business continues to be marked by turbulence, complexity, ambiguity, and speed. Never before has the world been so networked and transparent. The rules of the global game are different as new competitors from developing economies emerge and challenge traditional business models. And the rules are changing for leaders as well.

Over the years, serving as a management consultant in charge of executive development, I have assessed and developed thousands of leaders, most of whom were preparing for or already serving in global assignments. I’ve learned that certain traits distinguish those who hold global positions from those who are truly global leaders. The differences have little to do with age, gender, where they were raised or schooled, and the kind of on-the-job training they received or the number of countries stamped in their passports. Such factors contribute to the ability to do global work and to learn and grow, but they do not make a global leader. I find is that differentiating qualities are more psychographic than demographic in nature.

An unusually astute sense of self translates into an ability to understand the world and the people around you on many levels and in many contexts. A purpose to change the world, coupled with a powerful strength of conviction, keeps leaders pushing forward in the face of obstacles or pressures by others to do something else, while not forgetting their responsibility to satisfy the needs of the board, shareholders, customers, or employees. Recall how N.R. Narayana Murthy, a co-founder of Infosys Ltd., the Indian-based business consulting, technology, engineering, and outsourcing services company, resisted political corruption in his country to change the way business is done in India.

Many exceptional leaders possess a rare capacity to rapidly absorb, synthesize, and organize information that helps them understand the world around them, even when that world is radically different from what they have experienced before. They can then use this new worldview to determine how best to lead themselves and their enterprises, enabling them to respond more quickly and effectively to market changes and opportunities. The ability to make connections and interconnections across industries, technologies, markets, and geographies is a key skill for global leaders—essential to developing strategies and collaborative relationships that sustain a company over time.

Another vital trait is in knowing when what worked in the past is destined for failure going forward. When they find a good model, say Dell’s Build it to Order, many leaders have a hard time letting go. For global leaders, this dilemma is amplified, given the need to operate multiple business models simultaneously worldwide. Truly global leaders need the intellectual acuity to know what to keep, what to destroy, and what to recreate across their organizations to remain relevant to markets and constituents.

And, they need the emotional intelligence and the mettle to take action, especially when what must be destroyed is exactly what made them successful in the past. Consider how LEGO dramatically undertook an aggressive diversification plan (changed its business model) expanding its business beyond the traditional interconnecting building blocks to include a new line of clothing, theme parks and video games to improve revenue and capture greater market value.

While more of an operations focus and engineering mentality may have been successful in the past, today’s leader needs to be more of an inventor and an experimenter, willing to try out a new idea (a hypothesis) and recognize that failure (disproving the hypothesis) can be just as valuable, if not more so, than when the hypothesis turns out to be correct. Experimentation is a critical component of the reinvention process—whether you are reinventing a product, a
solution, your business model or organizational structure, and even an industry platform or standard.

Man on RockFailure is a necessary ingredient to success. Leaders need to learn how to fail: How to understand it, learn from it, and importantly, how to recover from it. Learning how to fail is essential if you want to know how to be successful. As Winston Churchill said, “Success is the ability to go from one failure to another with no loss of enthusiasm.” Failure is not the opposite of success but rather an integral part of the invention, reinvention, and innovation process. Within each failure are lessons that develop experienced judgment to apply to subsequent reinvention or innovative projects.

Today leaders need to see their corporations as if they are part of living systems, in which the success of the individual is dependent upon the success of the larger whole. In the business world, they understand that the success of the corporation is dependent upon the success of the broader ecosystems. For Jim Whitehurst, CEO of Red Hat, improvement of his company’s core product, Linux software, depends on cooperation among software developers around the world far beyond 33 leadership excellence essentials presented by | 12.2013 those on Red Hat’s payroll. This approach is in sharp contrast to the
more common economics of scarcity in which something of value is protected by copyrights and is only available to those willing to pay for it. In Whitehurst’s world, value is actually created by maximizing access, which increases the size of the brain trust working on a given problem. This approach, long lauded by the free software movement, can yield unprecedented results.

Today’s leaders also need to not only learn to appreciate messiness on the outer edge of their organizations. This requires co-existing in two worlds—one that is more reminiscent of the past, where a certain level of control and oversight is important to drive today’s performance expectations, and another where the leader sets the vision and then gives permission to those working on the edge to self-organize and find solutions—often to problems that have not even been considered or created. By understanding and balancing the needs of both worlds, leaders can stay profitable today, which can help financially support innovation for the future. To do so, leaders need to be comfortable with the messiness inherent in a knowledge (versus industrial) economy.

Leadership at a global level has the capacity to change the world, for good or for bad. Leaders need to be much more aware of the impact their operations have (environmental and social responsibility) and adjust processes and policies to promote sustainability. Growth going forward must depend upon business models that support sustainability: of communities, of workforces, of the environment.

For many businesspeople, a word like empathy seems too soft. But empathy can yield very tangible business results on many fronts, from employee engagement to product design to identifying new market opportunities.

Authenticity is even more critical in a world of social networking, where anything you do or say can be captured and shared in minutes, if not seconds. For Frits van Paasschen, CEO of Starwood Properties transparency is a fact of life. In his manifesto on leadership, written in early 2012 for the employees of his worldwide hotel and resort network, Frits says, “It’s not enough to have a strong brand or a great product. People expect to know about the company behind the brand and the people behind the product. Thanks to Facebook, Wikileaks, and LinkedIn—there are few degrees of separation anymore. All the world’s a digital stage. LE

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