research foundations
The World Is Flat …And So Are Leadership Competencies By Kenneth P. De Meuse, King Yii Tang, Kevin J. Mlodzik, Guangrong Dai
Key takeaways: • To succeed in today’s economy, organizations must possess global leaders with the right knowledge, experience, and competencies. • Many MNCs resist identifying and developing talent globally largely because of the assumption that global leaders in different regions of the world possess and need significantly different skills. • Our study found that the “world is flat” pertaining to leadership competencies.
In his best selling book, The World is Flat, Thomas Friedman (2005) noted that shifts in technology, transportation, communication, and market conditions are leveling the playing field for organizations around the globe. Once powerful regional advantages (or disadvantages) are becoming increasingly irrelevant as companies exercise their freedom to design, manufacture, and market their products and services from anywhere on the planet. Due to globalization, a new type of corporate leader is emerging – the so-called “global leader.” Jokinen defines such a leader as “anyone having global responsibility over any business activity” (2005, p. 201). Others describe global leaders as individuals who have an extraordinary capacity to unify an international workforce around a vision through demonstration of personal mastery, thinking globally, anticipating opportunities, and using shared leadership networks (see Adler, 2001; Goldsmith, Greenberg, Robertson, & Chan, 2003). This type of leadership is engendered by an ability to develop and implement criteria for business performance, independent from the assumptions of a single country, culture, or context (Barlett & Ghoshal, 1992; Maznevski & Lane, 2004). If multinational companies (MNCs) are to battle the increased shortage of global talent, a comprehensive understanding of what characteristics define a successful global leader is needed.
Once powerful regional advantages (or disadvantages) are becoming increasingly irrelevant as companies exercise their freedom to design, manufacture, and market their products and services from anywhere on the planet.
To succeed in today’s economy, organizations must possess global leaders with the right knowledge, experience, and competencies. Yet, corporate strategy appears to be adjusting to globalization faster than the preparation of global leaders. Approximately 85% of Fortune 500 executives report that their organizations lack a sufficient number of competent global leaders (Muczyk & Holt, 2008). A recent study found that executives in Asia rank their organizations high on project management capabilities but low on global perspectives and abilities (Blackman & Schweyer, 2007). Global staffing has emerged as a critical issue in international management, and the development of global competencies in leaders is acknowledged as a top priority in many organizations today (Suutari, 2002). Although many MNCs recognize that human resources (HR) plays a crucial role in gaining their competitive advantages through the identification and development of high potentials to fill key positions regardless of nationality, there frequently is a great deal of resistance to identify and develop talent globally. Why? It is due largely to the assumption that people are different, laws are different, labor markets are different, and cultures are different (Ryan, Wiechmann, & Hemingway, 2003). Consequently, there is much pressure to attempt to accommodate those “perceived” differences.
Is Leadership that Different across Various Regions of the World? One of the fundamental assumptions in HR and talent management is that global leaders in different regions of the world possess significantly different skills. For example, Bonnstetter (2000) asserted the need for leaders to respond to multiple organizational structures and strategies. In addition, it has been emphasized that leaders In this paper, we explore whether have to understand and react to the multitude of business types the world really is flat pertaining to among global organizations. Hence, there appears to be no such leadership competencies among managerial approach as a “one-size-fits-all,” but rather a “niche different regions of the world. management model.” Dorfman and Ronen (1991) stated that people might be biased toward the intrigue of global differences rather than sameness. These authors argued that people strongly favor cultural differences over similarities. Leadership differences are intriguing; sameness is boring. Over the years, there has been an evolution in the way MNCs staff and manage their foreign locations and subsidiaries. Early on, MNCs filled key leadership positions with parent-country nationals (an “ethnocentric approach;” see Heenan & Perlmutter, 1979). However, companies
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discovered that host-country locals tended to view the new leader with resentment and mistrust. Additionally, companies accrued the high costs of expatriate assignment failure. Shifting to the recruitment of hostcountry nationals (using a “polycentric approach”), MNCs employed leaders who were knowledgeable about local culture, but soon discovered such managers often were detached from the culture of corporate headquarters. The MNCs gradually learned that to truly become a global company, a multicultural frame of reference was needed. Thus, many MNCs are adopting a different paradigm to global staffing called the “geocentric approach.” This approach emphasizes the recruitment of top talent regardless of nationality, and fosters a comprehensive crosscultural understanding. However, despite creating a culturally savvy team of executives, the geocentric approach can come with high recruitment and salary costs and can create tensions when certain individuals are fasttracked via international assignments. As organizations become increasingly global, it is critical for MNCs to identify and select international talent to effectively leverage talent globally. In this paper, we explore whether the world really is flat pertaining to leadership competencies among different regions of the world. Initially, we examine whether leaders have similar strengths and weaknesses around the world. For example, are Asian and European leaders equally good at delegation, planning, or driving for results? Are they equally poor in the soft skills or those related to managing people? We also investigate whether leadership skills are viewed as equally important to organizational success in different regions. In other words, are people’s assumptions regarding what constitutes effective leadership similar across cultures?
In total, 7,575 managers and executives were evaluated by approximately 57,000 different raters in this study. Only competency ratings collected between 2008 and 2009 were analyzed to current talent management trends.
Leadership Competencies around the World: A Research Study Korn/Ferry International has been tracking leadership competencies or skills around the world for the past 10 years. A multirater assessment instrument – referred to as VOICES® – has been used to measure 67 different leadership competencies. Each leadership competency was rated on a five-point scale to indicate how skilled the individual was on the given competency. Responses can range from “a towering strength” (5), “talented” (4), “skilled/ok” (3), “a weakness” (2), to “a serious issue” (1). Each of the managers also was rated on a five-point scale to reflect how important the competency was for success on the job. Responses could range from “mission critical” (5), “very important” (4), “useful/nice to have” (3), “less important” (2), to “not important” (1).
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In total, 7,575 managers and executives were evaluated by approximately 57,000 different raters in this study. Only competency ratings collected between 2008 and 2009 were analyzed to current talent management trends. The rated managers and executives worked in a variety of organizational settings located in the following six regions of the world: (a) North America (n = 3,353), (b) Europe (n = 1,371), (c) New Zealand/Australia (n = 826), (d) Asia (n = 903), (e) South America (n = 224), and (f) Africa (n = 86). There were 812 managers and executives who did not specify their location. Data were obtained from organizations from a number of different industry sectors, including industrial, consumer, communications, healthcare/life sciences, financial services, and technology.
An Analysis of Skill Ratings Table 1 presents the Top 10 skill rankings of leadership competencies for each of the six regions. Perhaps, the most surprising finding is the tremendous similarity – a total of only 15 competencies are required to capture the Top 10 around the globe. Across all regions, all managers and executives were relatively skilled at competencies such as Ethics and Values, Integrity and Trust, Intellectual Horsepower, and Functional/Technical Skills (see Table 1). Table 1. Top 10 Skill Rakings of Competencies by Global Region Competency
NA
EU
NZ/AU Asia
SA
AF
Ethics and Values
1
4
2
2
1
2
Integrity and Trust
2
2
1
1
3
1
Intellectual Horsepower
3
3
4
4
2
6
Functional/Technical Skills
4
1
3
6
5
4
Customer Focus
5
6
10
7
13
11
Managing Diversity
6
13
8
22
14
16
Action Oriented
7
5
7
3
7
3
Perseverance
8
7
9
10
6
5
Approachability
9
8
5
9
18
9
Drive for Results
10
9
14
8
8
7
Comfort Around Higher Management
11
17
12
11
9
8
Standing Alone
12
10
6
13
11
12
Technical Learning
13
11
17
18
4
14
Boss Relationships
15
18
11
5
16
10
Learning on the Fly
18
19
23
12
10
32
Note. The Top 10 rank orders for each region are highlighted in blue. 4
The Bottom 10 leadership competencies by region are displayed in Table 2. Again, there is much similarity. This time a total of 19 competencies are needed to capture the 10 weakest skill areas. All managers, regardless of region, were relatively deficient in competencies such as One of the most striking Developing Direct Reports and Others, Dealing with Paradox, Conflict Management, and Personal Disclosure. One of the most discoveries is that managers striking discoveries is that managers across the globe were rated across the globe were rated weak weak in “people skills” (see asterisked competencies). Not only in “people skills” do managers appear to be having problems with their people skills, their management of direct reports is particularly worrisome. Overall, it appears there is much agreement among raters in the six regions with regard to both the high and low leadership competencies. Table 2. Bottom 10 Skill Rakings of Competencies by Global Region Competency
NA
EU
SA
AF
*Humor
21
12
13
58
36
19
*Caring About Direct Reports
26
33
31
44
58
26
Hiring and Staffing
40
49
46
63
49
48
Work / Life Balance
51
57
48
53
66
65
*Patience
52
41
56
52
64
35
Political Savvy
53
54
41
50
44
61
Creativity
54
66
61
66
56
60
Innovation Management
56
60
58
65
47
59
Total Work Systems
57
46
55
59
61
37
Managing Through Systems
58
53
51
49
62
45
*Understanding Others
59
58
59
64
65
58
*Motivating Others
60
56
62
56
60
62
Managing Vision and Purpose
61
63
64
60
53
63
*Confronting Direct Reports
62
67
57
54
63
50
*Conflict Management
63
65
63
61
59
66
*Personal Disclosure
64
61
60
67
67
57
*Personal Learning
65
59
67
35
51
56
66
62
65
62
55
67
67
64
66
57
54
64
*Developing Direct Reports and Others *Dealing with Paradox
NZ/AU Asia
Note. The Bottom 10 rank orders by region are highlighted in red.
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The results of a correlational analysis of competency rank orders between different regions are reported in Table 3. As can be seen, overall, the relationships are very high. Spearman correlation coefficients ranged from a low of r = 0.80 (between South America and Africa) to a high of r = 0.97 (between North America and Europe). Table 3. Correlation Coefficients of Skill Rankings of Competencies between Global Regions Region
NA
EU
NZ/AU
Asia
SA
NA
–
EU
0.97
–
NZ/AU
0.97
0.96
–
Asia
0.87
0.87
0.87
–
SA
0.86
0.85
0.85
0.85
–
AF
0.91
0.93
0.92
0.85
0.80
AF
–
Note. All the rank-order correlation coefficients are statistically significant at p < .001. Across all regions, the competencies that were deemed as most critical included Integrity and Trust, Customer Focus, Drive for Results, and Ethics and Values
Despite this overall similarity depicted in the correlational analysis, there are some notable differences between certain regions. These differences can be gleaned by closely examining Tables 1 and 2. Asia, in particular, appears to have a number of regional differences. For example, Boss Relationships (#5) and Personal Learning (#35) were ranked substantially higher in Asia relative to other regions. In contrast, Humor (#58), Managing Diversity (#22), and Hiring and Staffing (#63) were ranked much lower. In South America, Caring About Direct Reports (#58) was ranked substantially lower than in the other five regions.
An Analysis of Importance Ratings In addition to rating skill, raters were asked to rate how important each competency was to success on the job. Table 4 presents the Top 10 ranks based on importance ratings for each of the 67 competencies in each of the six global regions investigated. In general, the results are similar to those reported for skill ratings. This time 21 competencies (as opposed to 15) are required to capture the 10 most important competencies. Across all regions, the competencies that were deemed as most critical included Integrity and Trust, Customer Focus, Drive for Results, and Ethics and Values (see Table 4).
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Table 4. Top 10 Importance Rakings of Competencies by Global Region Competency
NA
EU
NZ/AU
Asia
SA
AF
Integrity and Trust
1
6
1
1
2
1
Customer Focus
2
2
3
3
5
6
Ethics and Values
3
12
8
5
1
2
Drive for Results
4
1
5
2
3
3
Decision Quality
5
3
4
4
4
5
Functional/Technical Skills
6
5
2
8
6
4
Priority Setting
7
4
10
9
12
11
Problem Solving
8
8
17
7
17
18
Building Effective Teams
9
9
12
6
11
7
Motivating Others
10
7
14
13
20
16
Business Acumen
12
20
20
10
13
9
Planning
14
16
16
11
18
10
Informing
15
10
19
31
35
19
Timely Decision Making
16
14
11
12
7
12
Intellectual Horsepower
18
22
31
38
8
28
Organizing
21
13
15
22
9
38
Strategic Agility
22
15
26
16
16
8
Composure
23
21
6
23
22
14
Negotiating
29
28
9
18
15
22
Delegation
37
42
30
37
10
44
Written Communications
39
43
7
36
49
27
Note. The Top 10 rank orders for each region are highlighted in blue. The Bottom 10 leadership competencies are displayed in Table 5. Again, there is much similarity. A total of only 16 competencies are needed to capture the 10 least important areas. All raters, regardless of region, perceived the following competencies as relatively unimportant: (a) Humor, (b) Personal Disclosure, (c) Career Ambition, (d) Compassion, (e) Work/Life Balance and (f) Creativity. Thus, it appears there is much agreement among managers in the six regions with regard to the least important leadership competencies.
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Table 5. Bottom 10 Importance Rakings of Competencies by Global Region Competency
NA
EU
NZ/AU
Asia
SA
AF
Political Savvy
48
55
40
60
46
58
Boss Relationships
50
59
47
57
57
51
Patience
52
56
52
53
60
48
Self Knowledge
54
51
54
52
59
56
Innovation Management
56
61
60
58
55
59
Personal Learning
57
50
55
54
58
57
Technical Learning
58
60
61
62
43
61
Dealing with Paradox
59
58
56
56
45
50
Total Work Systems
60
57
58
59
47
53
Creativity
61
64
64
61
62
65
Work/Life Balance
62
62
59
63
63
60
Caring About Direct Reports
63
54
63
50
61
62
Compassion
64
63
62
65
64
64
Career Ambition
65
65
66
64
65
63
Personal Disclosure
66
66
67
66
66
66
Humor
67
67
65
67
67
67
Note. The Bottom 10 rank orders for each region are highlighted in red. The correlational analysis of importance rankings between different regions reaffirms this finding. As can be seen in Table 6, the relationships among all leadership competencies across global regions were extremely high (ranging from a low of r = 0.85 to a high of r = 0.95; all ps < .001). Overall, competencies perceived as important to a managerâ&#x20AC;&#x2122;s success in one region were perceived as important for success in another region.
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Table 6. Correlation Coefficients of Importance Rankings of Competencies between Global Regions Region
NA
EU
NZ/AU
Asia
SA
NA
–
EU
0.95
–
NZ/AU
0.92
0.90
–
Asia
0.94
0.94
0.91
–
SA
0.89
0.89
0.85
0.90
–
AF
0.92
0.92
0.89
0.95
0.88
AF
–
Note. All the rank-order correlation coefficients are statistically significant at p < .001. On the other hand, there were some subtle regional differences on importance rankings. For example, the following competencies were ranked very high in New Zealand/Australia but much lower in other regions: (a) Composure (#6), (b) Written Communication (#7), and (c) Negotiating (#9). In South America, Intellectual Horsepower (#8), Organizing (#9), and Delegation (#10) were ranked substantially higher than in the Across the globe, our findings other regions. Likewise, Strategic Agility (#8) and Patience (#48) suggest that leadership similarities was ranked much higher in Africa than other areas.
far outweigh differences.
Conclusions and Implications Across the globe, our findings suggest that leadership similarities far outweigh differences. The relative strengths and weaknesses of leaders – and the relative importance of these strengths and weaknesses – were very similar across the six regions we analyzed. Leaders everywhere were rated high in integrity, ethics, and values. They also were seen as being intellectually, functionally, and technically sound. On the other hand, they were perceived as needing to improve how they develop themselves and their direct reports, how they deal with paradox, and how they manage the vision and purpose of their organization. The results of our study are consistent with the research literature that reports that to be an effective global leader, high ambiguity tolerance, good people skills, vision and innovation, and strategic skills are needed (e.g., see Beechler & Baltzley, 2008; Gupta & Govindarajan, 2002). In addition, the findings support De Meuse, Tang, Hallenbeck, and Dai (2009) who found managers around the globe were rated in a very similar fashion on learning agility. Therefore, the claim that global leaders in different regions of the
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world possess significantly different skills is highly questionable. Although regions are very similar overall, leaders in each region do appear to possess a relatively few unique strengths and weaknesses. Further, some skills are seen as slightly more critical to leadership roles in some regions. Some such differences can be expected. For instance, organizations should not ignore that national culture differences may impact the behavioral indicators of the competencies. Individualistic cultures may tend to emphasize task performance competencies; whereas, collectivist cultures may focus on those competencies that The results of our study are emphasize interpersonal relationships and teamwork (Hofstede, consistent with the research 1984). Based on our findings, managers in Asia are perceived literature that reports that to be as relatively weaker at managing diversity (Rank 22). However, it an effective global leader, high should be noted that this competency is viewed as less critical ambiguity tolerance, good people in Asia than in other regions (Rank 51). This finding may be skills, vision and innovation, and attributed to Asian cultures tending to emphasize similarities strategic skills are needed and collectivism (Hofstede, 1984). In contrast, North Americans have much higher skill at managing diversity (Rank 6) and rate its importance accordingly (Rank 36). This result is indicative of their emphasis on individualism and competitive spirit. After examining the many similarities and subtle differences in global leadership competencies, the question becomes – “So, what can organizations do to select, identify, and develop global leaders?” Several things, including:
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1. Create an effective global talent management system that integrates and strengthens the identification and development of potential leaders globally.
2. Attract and hire individuals with unique and competitive strengths regardless of region since managers across the globe are generally quite similar in terms of strengths and weaknesses.
3. Assess and develop individuals on emotional intelligence (people skills) and learning agility (adaptability) in order to be cross-culturally intelligent and flexible.
4. Align competency modeling to cross-cultural leadership similarities and differences. A large part of a company’s leadership competency model likely will be constant across global regions. However, a few
select competencies might be regionally unique (even if it is only a small part of the model).
5. Be sensitive to the few cross-cultural differences which appear to be important. For example, when an organization moves a manager of Asian nationality to North America, be cognizant of his/ her competency on managing diversity. It also implies that it may be difficult to develop the comptency Managing Diversity in Asia since it is not considered an important competency there.
Faced with the impending leadership shortage of the future, obviously organizations should staff talent abroad to increase their competitiveness and develop the skills required to work effectively across cultures. On the other hand, our research clearly demonstrates managers across the world are quite similar. Indeed, the world may be flat with regard to technology, transportation, and communication as Thomas Friedman (2005) claims. However, it also should be noted that the world appears to be flat regarding leadership skills. Although popular stereotypes might suggest that American managers are more “action oriented” or European managers have greater “decision quality” or Asian managers are better at “building effective teams,” our data suggest otherwise. People are people. People are people. And managers And managers are mangers. No region of the world appears to are mangers. No region of the be better (or worse for that matter) in developing their leaders’ world appears to be better skills. The organization that successfully learns to more quickly (or worse for that matter) in develop their managers’ leadership skills likely will have a distinct developing their leaders’ skills. advantage. Moreover, the findings here would suggest the most urgent need may be in the so-called “soft skills” or people side of management. As the world becomes flatter, the abilities of a company’s leaders are the differentiating factor that propels it to success. No corner of the globe currently has an edge in this area.
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