Global Leadership: Developing Tomorrow’s Leaders … · Global Leadership: Developing...

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© BERSIN & ASSOCIATES RESEARCH REPORT | V.1.0 Katherine Jones, Ph.D., Principal Analyst Karen O’Leonard, Principal Analyst Josh Bersin, Principal Analyst September 2012 Global Leadership: Developing Tomorrow’s Leaders around the World

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© BERSIN & ASSOCIATES RESEARCH REPORT | V.1.0

Katherine Jones, Ph.D.,

Principal Analyst

Karen O’Leonard,

Principal Analyst

Josh Bersin,

Principal Analyst

September 2012

Global Leadership: Developing Tomorrow’s

Leaders around the World

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The Bersin & Associates Membership ProgramThis document is part of the Bersin & Associates Research Library. Our research

is provided exclusively to organizational members of the Bersin & Associates

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TABLE OF CONTENTS

Introduction 4

Executive Summary 6

Global Leadership: The Challenge for Economic Growth 8

Understanding Differences in Leadership Styles 10

Four Primary Functions of a Leader 11

How Today’s Leaders Differ by Country 14

Developing the Vision 14

Sharing the Goals 17

Gaining Support 19

Delivering Success 22

Learning to Lead 26

Developing Leadership Competencies 27

Understanding the Differences 28

Conclusion: Investing for Global Agility 32

Appendix I: Research Methodology 36

How the Data Was Analyzed 38

Appendix II: Leadership Competencies 40

Appendix III: Table of Figures 41

About Us 42

About This Research 42

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IntroductionWith the recession starting to wane, organizations now cite improving leadership bench strength1 as one of their most pressing issues – and the problem is now global. Companies in all industries (manufacturing, consumer products, technology, business services and others) are rapidly expanding product and service strategies into emerging economies – yet they do not always know how to build the right leadership in these geographies.

An executive at a large Canadian bank explained the issue.

“Our biggest business opportunities are in South America and Europe, yet all our executives are

Canadian. How can we develop the right leaders to grow in these geographies?”

When business and HR leaders address this challenge, they find several daunting problems. Our research set out to help organizations meet these challenges by focusing on the following key questions.

• Dogeneralleadershipstylesvaryfromcountrytocountry?Ifso,inwhatways?

• Ifcorporationsseekleaderswithspecificstrengths,wherearetheylikelytolocatethem?

• Whataretheimplicationsforleadershipdevelopmentprogramsforaglobalworkforce?

Here, we investigate some of the leadership styles that typically reflect the ways in which leaders in different countries approach the world of work.

To answer these questions, we analyzed assessment data from executives, midlevel and first-level managers in 10 countries. Each country was selected based on the size of its economy and the availability of data, ensuring that we had an adequate sample from which to draw valid conclusions. The assessment data was provided by SHL, a global leader in managerial and occupational assessment, based on the company’s

1 “Bench strength” refers to the capabilities and readiness of potential successors to

move into key professional and leadership positions.

To understand differences

in leadership styles,

our analysis included

assessment data from

leaders in 10 countries.

K E Y P O I N T

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behavioral competencies for effective leadership. Our methodology, along with the competencies evaluated, is described in more detail in the appendices at the end of this report.

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Executive SummaryOne size does not fit all in global leadership development. The skills sets and competencies of leaders in different countries vary; those variations have ramifications for corporate leadership development and talent strategies.

The demands on leadership are both transactional (focused on operations and execution) and transformational (focused on inspiring and setting direction). Competencies to address both sets of demands are needed, yet they are not often balanced in most individuals or across leadership teams.

Our research uncovered the following key takeaways, which are explained in more depth throughout this report.

1. Leadership competencies vary by country. Our research shows that leaders in some countries, such as India and China, are strong in operational effectiveness and execution. These leaders are adept at analyzing complex information and delivering results through careful planning and organization. In other countries, such as Sweden, Denmark and the Netherlands, leaders have a stronger visionary and transformational style. These leaders are strategic thinkers, and deliver results through innovation and persuasive communication.

As a result, a one-size-fits-all approach to leadership development will not effectively meet all needs. Companies must understand these differences and target leadership programs to build a diverse set of skills.

2. Leaders in global companies must respect their individual differences. For example, a U.S. manager, with a “business-driver” style focused on results, may frustrate a Chinese manager who is accustomed to a more flexible, unstructured approach and who prefers to build the relationship before committing to the task. In a global organization, leaders must recognize their differences and learn to work together for the ultimate good of the company.

3. Companies should also consider differences in individual competencies when positioning key talent. Highly skilled operational managers are less likely to succeed in roles in which highly transformational talent is needed – and vice versa.

Leaders in Sweden,

Denmark and the

Netherlands are

stronger in strategic

thinking and persuasive

communication.

K E Y P O I N T

Due to differences in

styles across countries,

a one-size-fits-all

approach to leadership

development will not

effectively meet all needs.

K E Y P O I N T

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4. Furthermore, companies following an expatriate model to fill leadership positions in their overseas operations should carefully review this strategy. Due in part to differences in leadership style and cultural awareness, the expatriate model is coming under increasing scrutiny. Many companies now think it better to hire and develop the skills of local leaders, rather than deploy expatriates with different styles and cultural norms.

5. Finally, our findings have implications for talent acquisition as corporations evaluate what makes successful leaders and strive to ensure a diversity of styles in their leadership teams. We recommend that recruiters and hiring managers assess candidates for the right skills sets to succeed in that particular environment.

A U.S. manager with a

“business-driver” style

may frustrate managers

accustomed to a more

flexible, unstructured

approach.

K E Y P O I N T

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Global Leadership: The Challenge for Economic GrowthToday’s leaders are under a microscope and face a daunting set of complex business issues. With the current economic volatility, and the speed of social and technological change, the challenges facing leaders are greater than ever. The pressure is heightened by the worldwide visibility of failed leadership in the press and through social media. The greatest business opportunities and also the greatest challenges are global – and demand leaders who can move the company forward in the face of these challenges. (See Figure 1).

Unfortunately, today’s leaders frequently lack skills in global business acumen, cultural awareness and understanding of new markets. They are often even less prepared to manage a diverse set of employees, customers and partners around the globe.

When opening new operations, many companies deploy expatriates to staff these positions. But the expatriate model is coming under increasing scrutiny; while this strategy has in some cases been successful, in many it has not. Many companies now think that it is better to hire and develop the skills of local leaders, rather than deploy expatriates with different styles and cultural norms.

For example, one global foods company we interviewed realized the failings of the expatriate model and changed its approach. The

2 Source: Delivering results: Growth and value in a volatile world,

PriceWaterhouseCoopers, 2012, http://www.pwc.com/gx/en/ceo-survey/index.jhtml.

Figure 1: Today’s Talent Challenges

• 54percentofCEOssaytheirresearchanddevelopmenteffortswerehamperedbytalentshortages

• 45percentclaimtheymissedmarketopportunities

• 41percentattributebelow-targetperformancetotalentofinsufficientquality

Source: PriceWaterhouseCoopers, 2012.2

Many companies now

think it better to hire

and develop the skills of

local leaders, rather than

relocate expatriates who

have different styles and

cultural norms.

K E Y P O I N T

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company’s goal is now to fill 80 percent of its management and leadership positions overseas with native-born individuals, and develop them with the necessary skills sets.

For these reasons, leadership development is once again on the front burner. In a renewed effort to build leadership capabilities, companies are now investing more in leadership development than they have in years.3 In the U.S., organizations increased their leadership development investments by 14 percent this year. With this increased investment, we estimate that U.S. companies will spend $13.6 billion on leadership development in 2012.

Companies need to make sure that they are investing wisely. Leaders differ in skills sets and styles, and any development solution must be customized to accommodate these differences. Our next section provides an overview of leadership styles and the competencies we analyzed.

3 For more information, TalentTrends™ 2012: A Year of Guarded Optimism, Bersin &

Associates / Kim Lamoureux and Josh Bersin, July 2012. Available to research members at

www.bersin.com/library.

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Understanding Differences in Leadership Styles Leaders emerge in organizations regardless of job title. Leaders may be managers, managers may be leaders – but it is clear that the competencies associated with “management” as opposed to “leadership” can be very different.

One way to look at the differences, as proposed by John Kotter, is shown in Figure 2.4 This model defines management primarily in terms of effective execution and operations. Leadership, in contrast, creates the systems and processes, and changes them to take advantage of opportunities and to avoid hazards.

4 Source: Force For Change: How Leadership Differs from Management, The Free

Press / John P. Kotter, 1990.5 Source: This chart is based on the work of John Kotter,

http://www.kotterinternational.com/.

Figure 2: Kotter’s Differences between Management and Leadership

Function Definition Process Responsibility

Management

Makessystemsofpeopleandtechnologyworkwelldayafterday,weekafterweek,yearafteryear

• Planningandbudgeting

• Organizingandstaffing

• Controllingandproblem-solving

• Takingcomplexsystemsofpeopleandtechnology,andmakingthemrepeatedlyrunefficientlyandeffectively

Leadership

Createsthesystemsthatmanagersmanage,andchangestheminfundamentalwaystotakeadvantageofopportunitiesandavoidhazards

• Creatingvisionandstrategy

• Communicatingandsettingdirection

• Motivatingaction

• Aligningpeople

• Creatingsystemsthatmanagerscanmanage,andtransformingthemwhenneededtoallowforgrowth,evolution,opportunitiesandhazardavoidance

Source: Bersin & Associates, 2012.5

Keywords for managers

are “control,” “organize”

and “plan.” For leaders,

keywords are “create,”

“inspire,” “motivate” and

“transform.”

K E Y P O I N T

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Clearly, a winning corporate strategy has to include both skills sets in its leadership ranks in order to be successful. Balance is key – lopsided skills clusters do not lead to success. Kotter maps the results of too much and too little of these yin-yang requirements, demonstrating that companies with an overabundance of managers lose agility and cannot adapt to changes, while an overabundance of innovative leaders can cause instability and chaos. (See Figure 3.)

Four Primary Functions of a Leader

We used a similar model of competencies, developed and validated by SHL, to study the differences in leaders. The SHL model provides a balanced view of both transactional and transformational competencies; it distinguishes between leaders who inspire, promoting change and business success (e.g., transformational) and those who excel at operational management, maintaining a steady-state environment

6 Source: Force For Change: How Leadership Differs from Management, The Free

Press / John P. Kotter, 1990, http://www.kotterinternational.com/kotterprinciples/

management-vs-leadership.

Basic

Innovative, adaptive, energetic, but if an organization is large it can be on

the edge of chaos.

The enterprise will soon go out of business unless it is a monopoly.

Meets today’s commitments to stakeholders superbly while also adapting to make the enterprise

stronger for the future.

Solid company if it has high market share, but bureaucratic and

controlling – unable to adapt to a changing environment.

High Competency

Lead

ersh

ip

Low Competency Management High Competency

Figure 3: The Results of Imbalance between Management and Leadership Skills

Source: John Kotter, 2012.6

Leaders who are

visionary, inspirational

and advocates of

change are strong

on transformational

competencies.

K E Y P O I N T

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deftly (e.g., transactional). Both types of talent are necessary – likely at different times and in different locales. Some leaders are strong on both traits; some are not. HR professionals will need to ascertain the current capabilities and potential of their leaders within their talent pipelines.

The grounds for comparison are the four main functions of a leader:

• Developingavision

• Sharinggoals

• Gainingsupport

• Deliveringsuccess

Each function is comprised of a transformational and a transactional competency. (See Figure 4.) For example, to develop a vision, transformational leaders rely on their creativity and strategic-thinking capabilities, whereas transactional managers analyze information and apply their expertise. These are two extremes – most leaders may have a balance of these traits.

The next section reviews leadership capabilities in the 10 countries researched (Australia, Belgium, China, Denmark, India, the Netherlands, Norway, Sweden, the U.K and the U.S.) on each of these four functions.

The four main functions

of a leader are the ability

to develop a vision, share

goals, gain support and

deliver success.

K E Y P O I N T

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Figure 4: Competency Model – Factors for Management versus Leadership Focus

Competencies

Leadership Function

DefinitionManagement Focus

(Transactional)Leadership Focus

(Transformational)

Developing the Vision

Thisinvolvesthecriticalanalysisofthecurrentsituation,andthegenerationofideastomoveforward(Strategy).

Analyzing & Interpreting

Analyzingcomplexinformationandapplyingexpertise.

Creating & Conceptualizing

Producinginnovativeideasandthinkingstrategically.

Sharing the Goals

Thisinvolvespersuasivelycommunicatingthevisiontoothers,aswellaspersonallyadaptingtothechangesthatthenewstrategybrings(Communication).

Adapting & Coping

Respondingandadaptingwelltochangeandpressure.

Interacting & Presenting

Communicatingwith,persuadingandinfluencingothers.

Gaining Support

Thisinvolvesgainingotherpeople’ssupportbymotivatingandempoweringthemtoimplementtheactionsneededtodeliverthestrategy(People).

Supporting & Co-operating

Supportingotherandworkingeffectivelywithpeople.

Leading & Deciding

Initiatingaction,givingdirectionandtakingresponsibility.

Delivering Success

Thisinvolvesusingoperationalefficiencyandcommercialacumentoeffectivelyimplementthestrategy(Operations).

Organizing & Executing

Planning,workinginanorganizedmannerandfocusingondelivery.

Enterprising & Performing

Focusingonresultsandonachievinggoals.

Source: SHL 2012.

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How Today’s Leaders Differ by Country Leaders display different styles or behavioral postures across the 10 countries we studied. Here, we look at the differences in transactional and transformational styles among these leaders as reflected by their competency data.

We segment our analysis by the four leadership functions discussed in the previous section:

• Developingavision

• Sharinggoalstoachievethatvision

• Gainingandmaintainingsupporttorealizethevision

• Deliveringsuccess

To succeed in each one of these functions, leadership teams require both transformational and transactional capabilities.

Note that all comparisons are solely an indication of relative style preferences across countries. Clearly, all leaders within a country do not share the same style or exhibit the same behaviors. Our analysis represents the average among all leaders studied in each country.

Developing the Vision

Developing a vision involves a critical analysis of the current situation and generating ideas to move forward with a cogent strategy. For a transactional leader, the focus may be on carefully analyzing data and applying well-proven methods. For a transformational leader (the visionary), the focus may be on creativity and the innovative production of ideas.

In organizational growth, developing a vision is the first stage. Leaders need to analyze the facts and identify areas with the greatest need for change. They also need to establish a mission, develop an appealing and convincing image of the future, and outline the strategy by which it can be achieved.

Visionary leaders have

stronger propensities in

creativity, innovation and

strategic thinking.

K E Y P O I N T

To be successful, a

leadership team requires

both transformational

and transactional

capabilities.

K E Y P O I N T

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True visionaries excel at creating the ideas and concepts that move the organization forward. “Visionary” leaders tend to have stronger propensities in creativity, innovation and strategic thinking. These leaders excel in developing a vision for the organization, while critically evaluating the facts, as well as for creating the ideas and concepts that move the organization forward. They are at their best in roles in which the strategy requires a fundamental change and out-of-the-box thinking.

Running a successful global company requires solid in-the-box thinking and planning, as well. Analyzing and correctly interpreting facts on which to make decisions (a tendency among leaders thought of as “conservators”) is clearly a critical part of business execution. Transactional or operational excellence may, but often does not, reside in the same leader as transformational excellence. In this case, it is important to have both visionaries and conservators on the leadership team.

We reviewed how the executives, midlevel and first-level managers assessed in the 10 countries compare, on average, in their approaches to developing their corporate visions. (See Figure 5.)

Figure 5: Developing the Vision

Source: : Bersin & Associates, 2012; data source: SHL, 2012.

Leadership Function: Developing the Vision

Key Competencies: Analyzing & Interpreting

Creating & Conceptualizing

Key Style Differences: Visionary vs. Conservator

Analyzing complex information and applying expertise.

Producing innovative ideas and thinking strategically.

Visionaries focus on new concepts, ideas and where the organization could be.

Conservators focus on pragmatism and what already works.

Visionary Conservator

Norway Sweden Denmark U.S. Australia India China U.K. Netherlands Belgium

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The findings reveal differences in how managers and executives develop a vision for the organization. Extrapolated from their assessments, the range includes leaders who are more pragmatic (conservators) and leaders who are prone to new ideas and possibilities (visionaries). (See Figure 6.)

A pragmatic or conservator approach to developing a vision appears to dominate in the Nordic regions. Leaders in Norway, Sweden and Denmark are more likely to thrive in environments in which they can continue to use well-proven methods to move the organization forward. These leaders are most comfortable in resolving practical problems and maintaining the status quo.

A visionary style is best demonstrated by leaders from the Netherlands and Belgium. These leaders excel in developing a vision for the organization by critically evaluating the facts, and creating the ideas and concepts. They are at their best in roles in which the strategy requires a fundamental change and out-of-the-box thinking.

One example is Layar, a Dutch provider of augmented reality technology. Layar has been at the forefront of this technology, which provides smartphone users with an array of information on their mobile screens – such as the location of the nearest metro station or the most deserted

7 Note that these terms, while making sense for an individual, can only partially

portray the leadership tendencies for an entire nation. Figure 5 shows averages across the

broad range of leadership styles and should not be the basis for assumptions about any

given individual.

A visionary style is best

demonstrated by leaders

from the Netherlands

and Belgium.

K E Y P O I N T

Figure 6: Definitions – Developing the Vision7

Leadership Style Definition

Conservator

Conservatorsthriveinenvironmentswheretheycancontinuetousewell-provenmethodsanddiscourageincompatibleideas.Theyarelessinclinedtowardqualitativeanalysis,andtypicallyapplyestablishedmethodsandwaysofworkingtoresolvepracticalproblemsandmaintainthestatusquo.

Visionary

Visionariesexcelindevelopingavisionfortheorganizationwhilecriticallyevaluatingthefacts,andcreatingtheideasandconceptsthatmovetheorganizationforward.However,incertaincontexts,theymaybeinclinedtooveranalyzeasituationandtooverlookpositiveaspectsofthestatusquo.

Source: SHL 2012.

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beach. The company’s CEO saw an opportunity to “make augmented reality part of every life” long before most people could even grasp the concept. Through this visionary leadership, Layar is now poised to crack open this emerging technology market and has been named to CNBC Magazine’s list of “Europe’s 25 Most Creative Companies.”8

Leaders in other countries (the U.S., Australia, India, China and the U.K.) exhibit a fairly balanced mix of styles. Their preferences may lean toward a flexible approach to problem-solving, and a level of comfort alternating between new and more tried-and-tested approaches.

Sharing the Goals

Leaders need to communicate their visions and goals. In doing so, they adapt their interpersonal style to persuade and influence others to accept and internalize those goals. Leaders also need to respond positively to changes in organizational mission and cope effectively with the increased pressure resulting from change. The transactional manager is likely to be more agile at dealing with change and responding to pressure, while the transformational leader is more adept at communicating, persuading and influencing others.

In our study, leaders in Denmark, Sweden and the Netherlands demonstrate the competencies that help them to inspire others to share the organization’s vision and goals. These leaders, referred to as “change ambassadors,” are at their best in high-profile roles in which they need to influence key stakeholders (see Figures 7 and 8).

One former American executive, the late Steve Jobs, is an example of an inspirational change ambassador. Jobs had the gift of being able to inspire his employees to accomplish incredible goals. He created an abiding passion in Apple employees to create ground-breaking products and a belief that they could accomplish what seemed impossible. One engineer recounted a story of working on a new development project. The team expected to take weeks to have a prototype ready, but Jobs challenged them to complete it in one week – a seemingly impossible task. Miraculously, the team pulled off the feat. The employee explained

8 Source: “Europe’s 25 Most Creative Companies,” July 2010,

http://www.cnbcmagazine.com/story/europeas-25-most-creative-companies/1182/2/.

More leaders in India

and the U.S. fit the

“adjuster” style – positive

about change, but less

outwardly passionate

about it.

K E Y P O I N T

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that somehow, when Jobs said it could be done, they believed they could do it.9

“Adjusters” are positive about change as well, but may be less outwardly passionate about it. A greater number of leaders in India and the U.S. fit this style, in which individuals’ behavioral postures may tend to be more socially reserved. These leaders focus on the positive aspects of the vision and strategy, and respond well to challenges.

9 Source: Steve Jobs, Walter Isaacson / Simon & Schuster, 2011.

Figure 7: Sharing the Goals

Source: : Bersin & Associates, 2012; data source: SHL, 2012.

Leadership Function: Sharing the Goals

Key Competencies: Adapting & Coping

Interacting & Presenting

Key Style Differences: Change Ambassador vs. Adjuster

Responding and adapting well to change and pressure.

Communicating with, persuading and influencing others.

Ambassadors emphasize socializing decisions, goals and the vision.

Adjusters are less focused on persuading others to buy-in to decisions and goals.

Change Ambassador Adjuster

India U.S. Belgium Australia China U.K. Norway Netherlands Sweden Denmark

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Gaining Support

Leaders need to gain other people’s support in achieving organizational goals – motivating others and empowering them to take ownership of the actions needed to achieve the required objectives. This means taking decisive action and accepting responsibility – a transformational competency. It also requires supporting others and working effectively with people – a transactional competency.

In gaining support, one leadership style is that of the “individualist.” These leaders are more strongly focused on the task-related than the people-related aspects of the job. Individualists are open in expressing their own opinions and may adopt an independent advisory role within the group. In this study, more leaders in India and the U.S. fit this individualist style.

“People leaders,” in contrast, are more oriented toward listening to and motivating others. Their people-oriented approach, combined with their natural tendency to take responsibility, enables them to build trust and empower others to achieve their goals.

Leaders in Sweden, Norway, the Netherlands and Denmark tend toward the people-leader style. Indeed, as countries with strong egalitarian values, decisions are often made by consensus across teams. As evidence of their people orientation, Swedish executives generally do not dress more

Leaders in Sweden,

Norway, the Netherlands

and Denmark tend

toward a “people-leader”

style.

K E Y P O I N T

Figure 8: Definitions – Sharing the Goals

Leadership Style Definition

Change Ambassador

ChangeAmbassadorsinspireotherstosharetheorganization’snewvisionandgoals.Theyrelatetoothersinaconfidentandrelaxedmanner,enjoypublicspeakingandnetworkeffectively.ChangeAmbassadorsflourishonpressureandchange,projectingconfidenceandprovidingreassurancetoothers.However,theymayunderestimatethepersonalchallengesexperiencedbyothersinadaptingtochange.

Adjustor

Adjustersfocusonthepositiveaspectsofthenewvisionandstrategy,andrespondwelltothechallengesitbrings.However,beingprivateandsociallyreserved,theymaynoteffectivelysharetheirpositiveoutlookandmissopportunitiestopersuadeandinfluenceothers.Theyprefernottobethecenterofattentionandmaydislikepublicspeaking.

Source: SHL 2012.

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elaborately than average employees10 and their pay is not so inflated, as compared with the employee base (as compared with other countries, such as the U.S. and the U.K.).11 Consequently, these leaders are able to build trust and support among the workforce. (See Figures 9 and 10.)

10 Source: http://www.kwintessential.co.uk/resources/global-etiquette/sweden.html.11 Source: “Sweden, where CEOs come cheap and still deliver,” Reuters /

Niklas Pollard, June 14, 2012, http://www.reuters.com/article/2012/06/14/

us-sweden-executives-salaries-idUSBRE85D0R920120614.

Figure 9: Gaining Support

Source: : Bersin & Associates, 2012; data source: SHL, 2012.

Leadership Function: Gaining Support

Key Competencies: Supporting & Cooperating

Leading & Deciding

Key Style Differences: People Leader vs. Individualist

Supporting others and working effectively with people.

Initiating action, giving direction and taking responsibility.

People leaders are oriented toward listening to others, building trust and empowering

others to achieve goals.

Individualists have a stronger task focus and express their opinions freely.

People Leader Individualist

Sweden Denmark India U.S. AustraliaU.K. Belgium China Netherlands Norway

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The following case in point describes how Danish manufacturer Grundfos exemplifies a people-approach to leadership.

Case in Point: A People Orientation at Grundfos

Grundfos is a global leader in advanced pump solutions and water technology. Founded more than 60 years ago, Grundfos does business in dozens of countries around the world. Its continuous growth (revenues grew almost 10 percent last year despite the recession) has been fueled by strong company values – sustainability, open and trustworthy, focused on people, independent, partnership, and relentlessly ambitious. These qualities come from the Nordic culture of global growth and long-term sustainability.

The company’s “talent engine,” the name of its talent management approach, focuses on growing people at all levels. One talent initiative launched recently involves creating new standards for Grundfos leadership. The initiative was kicked off with a co-creation workshop, for which 40 leaders from around the world were invited to share their thoughts, inspiration and practices from diverse vantage points in the organization. The purpose of the initiative is to bring leadership in Grundfos to

Figure 10: Definitions – Gaining Support

Leadership Style Definition

People Leader

Peopleleaderslistentootherpeople’sviewsandareastuteatjudginghowbesttomotivateandempowerothers.Theynaturallyprefertotakecontrol,initiateactionandexerciseleadership.Theirpeople-focusedapproach,combinedwithareadyacceptanceofresponsibility,helpsthemgainotherpeople’strust.Theymayfinditdifficult,however,tomaketoughdecisionswhichhaveanegativeimpactonothers.

Individualist

Individualistsaremorestronglyfocusedontask-relatedthanonpeople-relatedaspectsofthejob.Theyprefernottoengagewiththepersonalconcernsofothersandtendnottoactinadirectivemanner.Theyareopentoexpressingtheirownopinionsandmayseektotakeanindependentadvisoryrolewithinthegroup.

Source: SHL 2012.

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another level, supporting the company’s high ambitions for the future, and its ability to attract and develop great people. e

Delivering Success

Results matter. Identifying individuals who can actually deliver success is an important aspect of leadership development and succession planning. The effective implementation of strategy requires both solid organizational and operational skills (transactional capabilities), as well as a keen focus on results and achievement (transformational capabilities).

One leadership style for delivering success is that of the “idealist.” These leaders prefer to address issues flexibly and may be uncomfortable with a more structured approach. Idealists are less driven by the need for personal recognition and competition. Their steady pace and flexible styles allow them to deliver solid results.

A greater number of leaders in China and the Netherlands fit with the idealist style. With a focus on steady improvement, this style can prove successful in running a mature business.

As an example, Chinese personal computer manufacturer Lenovo improved its operations dramatically through system improvements and better supply-chain management. When Lenovo took over the business from IBM, only 60 percent of orders were delivered on time. Through an updated management system, which allows employees to see the progress of orders as they go through the factory lines and shipping, that number now reaches as high as 90 percent. The new infrastructure also helped to cut logistics and overhead costs by 50 percent since the acquisition.12

Another style of leadership in delivering success is known as the “business driver.” These leaders have a greater focus on achieving their objectives and on career advancement. They identify and act on new opportunities by working energetically in a systematic and organized

12 Source: “How Lenovo Pulled the Plug on IBM’s Legacy,” Joel

Schectman, August 7, 2012, http://blogs.wsj.com/cio/2012/08/07/

how-lenovo-pulled-the-plug-on-ibm%E2%80%99s-legacy/?mod=google_news_blog.

Case in Point: A People Orientation at Grundfos (cont’d)

Leaders with an “idealist”

style prefer to address

issues flexibly and may

be uncomfortable

with a more structured

approach.

K E Y P O I N T

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manner. They are generally respected for running the operation smoothly and efficiently.

Figure 11: Delivering Success

Source: : Bersin & Associates, 2012; data source: SHL, 2012.

Leadership Function: Delivering Success

Key Competencies: Organizing & Executing

Enterprising & Performing

Key Style Differences: Business Driver vs. Idealist

Planning, working in an organized manner and focusing on delivery.

Focusing on results and on achieving goals.

Business drivers focus on results, achieving goals and career advancement.

Idealists focus on flexibility and approaching tasks at a steady pace.

Business Driver Idealist

Norway U.S. IndiaDenmark Sweden U.K.Australia BelgiumChina Netherlands

Figure 12: Definitions – Delivering Success

Leadership Style Definition

Idealist

Idealistsprefertoaddressissuesflexibly.Theyderivesatisfactionfromapplyingsteadyefforttothetaskathandandmayfindituncomfortableandconstrainingtoadoptamorestructuredapproach.Theyarelessdrivenbycompetition,orbytheneedforpersonalrecognition,whichmeanstheymayfailtocapitalizeonpotentialcommercialopportunities.However,theirsteadypaceandflexiblestyleprovidesacounterbalancetomoreintenseapproaches.

Business Driver

Businessdriversfocusonresults,achievementofpersonalworkgoalsandcareeradvancement.Thismayalsomeanthattheyshowastronginterestinbusiness,commerceandfinance.Theyidentifyandactuponnewopportunitiesbyworkingenergeticallyinasystematicandorganizedmanner.Whiletheymaysometimesbecomepreoccupiedwithdetail,theyaregenerallyrespectedforrunningtheorganizationsmoothlyandefficiently.

Source: SHL 2012.

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One potential drawback of the business-driver style is that the quest for achievement may lead to a focus on short-term results and overshadow the long-term needs of the corporation. A study by Harvard Business School showed that companies which were focused on short-term results had more volatile stock returns and were riskier investments.13 American business leaders have long been criticized for this tendency, which some say helped to plunge the U.S. into its recent financial meltdown. Certain industries tend to have different styles, with banking, business services and electronics tending to a shorter-term focus, while pharmaceuticals, retail and beverage manufacturers focusing more on the long term.

As long as future needs are not sacrificed for short-term gains, a results-oriented approach is a positive aspect of leadership and, indeed, is necessary to deliver success. As demonstrated in the next case in point, Seagate is one company that has achieved success with a focus on results and execution. The company is now supplementing that style with greater flexibility and focus on teamwork, blending both transactional and transformational competencies.

Case in Point: Seagate Fosters a High-Performance Culture

With operations in more than 30 countries, Seagate is a leading provider of hard drives and data-storage technologies. For years, the company has been run with a high-performance culture – focusing all employees on commitment and execution. Seagate pioneered the use of an integrated goal and development process, and was an early user of HR talent management software. Each year, more than 95 percent of its employees define their goals and create individual development plans. These goals are aligned all the way up to the CEO – creating a tremendous amount of visibility and accountability.

Goals are reset each year, and employees continuously focus on their achievement within a culture of performance and accountability. This type of leadership and management structure

13 Source: “The High Risks of Short-term Management,” Harvard Business School / Sean

Silverthorne, April 11, 2012, http://hbswk.hbs.edu/item/6965.html.

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reflects a style of fast growth, high performance and disciplined execution.

Recognizing significant changes in the industry, Seagate is currently undergoing a cultural transformation – supplementing its focus on rigorous execution and engineering discipline with more flexibility in decision-making and an emphasis on teamwork. As part of this effort, Seagate has revised its key competencies, and is conducting workshops for directors and senior leaders. During the workshops, leaders discuss the current culture and the desired state. In addition, leaders complete an assessment that reveals how their individual style is aligned to the desired culture. Leaders then learn 10 leadership tools for promoting a more teamwork-oriented culture.

Before completing the workshop, participants create development plans and commitment forms, and are held accountable for their completion. More in-depth sessions are offered throughout the year to reinforce development and sustain the change in culture.

Seagate’s ability to reshape its leadership style and culture in response to environmental influences is one key to its continued success in a hypercompetitive market. e

Case in Point: Seagate Fosters a High-Performance Culture (cont’d)

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Learning to LeadAs demonstrated in the preceding sections, leaders in the 10 countries studied exhibit different preferences relating to the transformational and transactional competencies. Transformational leaders think strategically, generating innovative ideas. They are adept at communicating and influencing others to follow their vision. They gain support by taking decisive action and providing direction, and achieve their goals by focusing on results. In short, these leaders transform their organizations through innovation, drive and persuasive communication.

One Danish company, AP Moller-Maersk, is an example of an organization with a flair for transformational leadership. Founded in 1904, Maersk is one of the world’s most successful transportation, energy, manufacturing and retail companies. One key to Maersk’s long-term sustainability is through its leadership. Leaders are selected and evaluated using assessments, and then developed over many years. Rotational assignments throughout the various businesses help leaders to gain a global understanding of the marketplace. People development, innovation, growth and performance are highly valued at Maersk, and have become part of the corporate culture. These values reflect the company’s focus on transformational leadership and long-term success.

At the other end of the spectrum, transactional leaders typically have a strong focus on operational effectiveness and execution. They are adept at analyzing complex information and applying their expertise to develop a strategy. They deliver results through careful planning, organization and a focus on delivery.

One example is India’s Reliance Industries, which has achieved impressive results through its commitment to operational excellence. Within a short span of just more than three decades, Reliance Industries has emerged as India’s first private company to break into the FORTUNE Global 500 list. To achieve its significant growth, Reliance focuses heavily on both innovative leadership and technical execution. The company relies on the Six Sigma14 business strategy, encouraging managers at all levels to focus

14 “Six Sigma” is a rigorous, focused, high-impact process that uses proven quality

principles and techniques to reduce process variance. For more information on Six Sigma,

please visit http://www.isixsigma.com, which offers articles and easy-to-read examples of

how to apply Six Sigma to any business process.

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on quality and operational excellence. The leadership’s continuous focus on results, without compromising operational efficiency, has created a $66 billion company and India’s largest private sector employer.

Developing Leadership Competencies

When looking at the differences in leaders’ behaviors, many people ask, “Canleaderschangetheirstyles?”Theshortansweris,“Yes,toacertainextent.” An individual’s main tendencies (or behavioral posture) are likely to stay fairly constant and are typically the fallback position when under stress. But leaders can modify behaviors over time.

Understanding the makeup and potential of a leader helps organizations to identify where development is needed and the extent of that development. Whether leaders respond to the learning intervention depends on how motivated individual leaders are to achieve their career goals and the degree of change required.

Too many global companies try to roll out a standard development initiative around the world, not taking into account the differences in styles and skills sets across leaders. While some common components, such as organizational values and corporate mission, may apply around the globe, others will need to be customized at the local level.

Once the necessary skills are defined, developing them is, of course, the next challenge. As described in the following case in point, Mars pinpointed specific development needs among its Asian management teams and then created an initiative to build these capabilities.

Case in Point: Mars Creates Asia Leadership Forum

Mars is one of the world’s leading food manufacturers, with 70,000 associates in more than 65 countries. Over the past five years, the company has increased its investment in leadership development to strengthen its talent across regional operations. Since Asia is a key growth market, one of Mars’ initiatives is to build a strong talent pipeline across this region.

Mars’ initiative has

helped to build stronger

capabilities among its

Asian management

teams.

K E Y P O I N T

When looking at the

differences in leaders’

behaviors, many people

ask, “Can leaders change

theirstyles?”

K E Y P O I N T

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To this end, Mars launched its Asia Leadership Forum, a series of development experiences, learning events and networking opportunities for management teams in China, Japan, Korea, India, Thailand, Hong Kong, Taiwan and Southeast Asia. The initiative was designed to build stronger ties across countries, uncover the major challenges facing each market and provide inspiration to drive a new set of behaviors around how to win in the region.

The first session, held in Hong Kong, focused almost entirely on uncovering the business opportunities in each market by building skills in breakthrough thinking. The second session concentrated on networking to strengthen personal ties across the region. Through a network analysis, it became clear that the ties across the region were weak, with information flowing through only a few key individuals. Mars’ leaders were not using the diversity of knowledge within the region in the most effective manner. The goal of the networking event was to build a strong sense of community and to share practices across the region.

In the final part of the program, each country’s team presented a story of growth and opportunity to some of Mars’ highest-ranking executives. The goal of these sessions was to create greater visibility and understanding of the value of increased investment in the region.

As a result of the initiative, Mars now has a better understanding of the business needs and growth opportunities in the region. In addition, leaders have a greater sense of confidence around their capabilities and in the support from top management for their future direction. The initiative has helped to build stronger networks of leaders who have a shared ownership in the journey. e

Understanding the Differences

Before designing a development solution, organizations need to assess leaders to understand their current strengths and gaps. We would also advise HR leaders to develop an understanding of different countries and cultures, which will aid them in designing effective solutions. Our

Case in Point: Mars Creates Asia Leadership Forum (cont’d)

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years of research in global organizations lend some insights into why leadership styles vary from one country to another.

Culture and History

Native-born leaders have been immersed in the history and culture of their homeland their entire lives. They learn values and see behaviors from their parents, teachers, political leaders and friends. They are taught to value certain people and behaviors because these are adopted among the entire culture.

The U.S., for example, is a country built on rugged individualism. Many of the families here grew from immigrants who came to the U.S. for its freedom and equal opportunity. The principles of “life, liberty and the pursuit of happiness” lead to values of independence, drive and competition. Moreover, many Americans think of “the U.S. first,” because the nation is young and considers itself an exceptional country among others. These values lead to the individualist and business-driver styles explored in the preceding section. (See Figures 9 and 10.)

In Nordic countries, by contrast, children are taught the value of the collective good – and the governments play a role in making sure that people of all economic means are taken care of and supported. These countries are much older and their economies grew through globalizationthousandsofyearsago.Youngpeoplelearnaboutglobalism, the collective good and the importance of the “organization” over the “individual” at an early age. These values are reflected in the people-leader style described earlier. (See Figures 9 and 10.)

On the other side of the globe, the Chinese have a long history of Confucianism and focus on generational roles.15 The country is shifting from being dominated by the state to accelerating levels of individual freedom. This transformation has given rise to an increasing culture of entrepreneurship and hard work. With their long history, many Chinese people take a long-term view of organizational change, which is seen in their tendency toward an idealist style. (See Figures 11 and 12.)

15 Source: Into China: Talent Management Essentials in a Land of Paradox, PageUp

People Research / Sylvia Vorhauser-Smith, March 2012.

With principles grounded

in “life, liberty and the

pursuit of happiness,”

many U.S. leaders tend

toward the individualist

and business-driver styles.

K E Y P O I N T

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Political Conditions

The role of a government, and its view of commerce and international business affect leadership styles in different locales. Consider the degree of control, for example, the Chinese Communist Party maintains over all aspects of business and media. China’s governmental practices can confuse and frustrate business people from countries with very different ideologies and practices. This has caused some corporations to reconsider doing business there.16

Maturity and Size of the Corporations

Leadership qualities vary by organizational size and maturity. Founder-run companies are often started by a charismatic leader, someone who is entrepreneurial and innovative. As companies grow and mature, they often become more operational. Facing quarterly financial reports and being accountable to shareholders, they become increasingly concerned with maintaining a steady state. However, as companies grow, the competencies that support clear communication and gaining support also grow in importance.

Particularly in high-growth markets such as Asia, leaders may need to take on more responsibility relatively early in their careers. With most organizations still on a growth track, these leaders will have to learn key skills in a rapidly changing environment. This includes the maturity to appreciate what a leader is, manage role transitions, and understand business strategy and operations. Today’s comprehensive leadership development solutions must include areas that enable leaders to mature faster – with a deeper and more structured focus than traditional leadership programs.17

Industry Variances

Conservative companies are likely to breed conservative, operational behavior, especially in industries in which risk mitigation is highly prized. For example, fiscal responsibility and regulations impact governmental

16 Source: Into China: Talent Management Essentials in a Land of Paradox, PageUp

People Research / Sylvia Vorhauser-Smith, March 2012. 17 Source: Emerging Leadership Trends in India, Harvard Business Publishing, 2011.

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agencies and healthcare organizations. They are less likely, therefore, to reward highly innovative, risk-taking leaders. Technology companies, such as Apple and Google, on the other hand, go out of their way to foster creative, innovative behavior.

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Conclusion: Investing for Global AgilityGlobal expansion is one factor fueling additional spending on leadership development. Most large businesses are opening up new markets, requiring leaders with entrepreneurial skills, as well as with knowledge of local customs. In addition, with operations spreading around the globe, leaders now need to manage across geographic boundaries. Employers thus need to create virtual talent pools around the world to enable them to put talent where it is needed.18 This requires a new set of skills to manage employees, customers and partners with diverse cultures and needs.

Our research reveals the necessity of understanding the competencies and potential within the leadership ranks, and the need for diversity within the leadership team. Organizations require different types of leaders to open up new markets and to meet ever-changing business conditions.

The following is a summary of key findings and recommendations from our research.

Tailored Development – Since the balance of competencies varies from country to country, executives and leadership development professionals cannot adopt a one-size-fits-all approach to leadership development. Organizations must “meet leaders where they are” and use scientifically developed assessments to determine where a leader’s initial strengths lie. Development can then be tailored for the individual.

Many companies create global leadership programs and then customize them to meet local needs. The approach at General Mills, for example, is to blend a universal or corporate standard with local culture and business priorities. In striking this balance, the organization remains unified on leadership expectations and values which are common around the world, while remaining relevant to local needs. The company’s CLO, who sees real value in local input to development solutions, said,

18 Source:GloballyMobileWorkforcesAreChangingAreYou

KeepingUp?,Mercer,May15,2012,http://www.mercer.com/articles/

globally_mobile_workforces_are_changing*.

A global, one-size-fits-all

leadership solution will

not work, since leaders in

different countries may

have very different styles

and skills sets.

K E Y P O I N T

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“I have found local adoptions to be quite innovative and have leveraged them for later global leadership development. Remember, not all leadership wisdom

springs from headquarters!”

Respect Individual Differences – Leaders in global companies must respect the individual differences of all those working with them. A U.S. leader with a business-driver style focused on results may frustrate a Chinese leader who is accustomed to a more flexible approach and values the opportunity to build the relationships before committing to the task. Individuals must recognize their differences and learn to work together for the ultimate good of the company.

Broaden Leadership Capability Sets – Effective leaders have a blend of transactional and transformational styles. HR leaders look for opportunities to broaden leaders’ experiences, so that they can strengthen traits in areas in which they are less comfortable. For example, visionary leaders can hone their operational skills through special assignments, job rotations or group projects.

Play to Their Individual Strengths – The goal is not to create all leaders in the same mold. Although leaders should broaden their styles, companies must carefully position key talent to their strengths. Highly skilled operational-style managers are less likely to succeed in roles in which highly transformational talent is needed, and vice versa. The fit of the leader to the need is critical for organizational success; ascertaining that fit through the types of employee intelligence shared in this report is essential.

As an example, Cisco groups its leaders into four categories – innovators, scale business-growers, cost-cutters and turnaround specialists. The company has found that a leader who is good at one of these types should move to opportunities for which that type is needed (i.e., from one innovation business to another innovation business). Trying to place a cost-cutter in an innovation business, for example, fails to recognize each leader’s traits and likely will not succeed.

Understand the Culture – We strongly recommend that business and HR professionals study the history and culture of the countries in which they do business. As our research shows, leadership styles vary based on culture. A highly effective leader in the U.S., for example, may fail quickly in a collaborative culture like the Nordics, without sensitivity training.

Although leaders should

broaden their styles,

companies must carefully

position key talent to

their strengths.

K E Y P O I N T

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Leaders in the Middle East, if they grew up in a patriarchal culture, may appear to be adversely gender-biased when moved into another culture.

In looking for expatriates or foreign nationals to fill positions across borders, it is imperative to recognize the leadership competencies and styles in a particular geography. Although the expatriate model is still common, many companies are shifting away from it, recognizing that many expatriates lack the knowledge of the culture and local markets needed to succeed in these roles. If expatriates are used to fill positions, it is important to prepare them for these assignments, allowing time to understand and adjust to the norms in a new culture.

Recruit the Right Skills Sets – Finally, beyond executive development, there are implications for talent acquisition as corporations evaluate the skills sets that make leaders successful and strive to ensure a diversity of styles in their leadership teams. We see tremendous value in the use of scientific assessments to help in making the recruiting of executives more effective.

A highly effective leader

in the U.S., for example,

may fail quickly in a

collaborative culture

like the Nordics, without

sensitivity training.

K E Y P O I N T

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Appendix IResearch Methodology

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Appendix I: Research Methodology

In the summer of 2012, Bersin & Associates analyzed assessment data provided by global assessment provider, SHL. The data represents three sets of leaders – executives, midlevel and first-level managers. We evaluated the competency data across these three levels of leaders in 10 countries, using SHL’s existing leadership capability model.

The 10 countries are Australia, Belgium, China, Denmark, India, the Netherlands, Norway, Sweden, the U.K., and the U.S. Each country was selected based on the size of its economy and the availability of data, ensuring that we had adequate data from which to draw valid conclusions. The minimum sample size in each country was 1,000 participants. In total, our sample represents data from 30,576 individuals across a total of 778 separate organizations.

The breakdown of executives, midlevel managers and first-level managers by country is shown in Figure 13.

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Figure 14 displays the distribution of organizations by industry.

Figure 13: Breakdown of Leader Levels by Country

Source: : Bersin & Associates, 2012; data source: SHL, 2012.

7%

7%

10%

35%

8%

11%

10%

6%

10%

17%

22%

14%

22%

10%

40%

19%

27%

23%

32%

19%

71%

79%

67%

55%

53%

71%

63%

71%

59%

65%

0% 20% 40% 60% 80% 100%

Australia

Belgium

China

Denmark

India

Netherlands

Norway

Sweden

U.K.

U.S.

Executives Midlevel leaders First-level leaders

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How the Data Was Analyzed

Our analysis primarily included data on eight major competencies. (See section, “Appendix II: Leadership Competencies.”)

The data compares the average of leaders’ assessment scores in each country on a pair of competencies. The placement on the charts is an indication of relative performance versus other countries.

We caution against overgeneralization. This sample is indicative of trends on average across the 10 countries and is not applicable to individuals, per se.

Banks 14%

Construction / Engineering

5%

Durable Goods / Manufacturing

3%

Food & Beverage 5%

Healthcare Equipmentand Services

3% Industrial Transportation

3%

Insurance / Real Estate / Financial Services

7%

Public Sector andNon-Governmental

Organizations12%

Oil / Gas / Mining / Energy

1%

Other 6%

Pharmaceuticals & Biotechnology

5%

Retail 2%

Support Services 11%

Technology 4%

Telecommunications 9%

Travel & Leisure 6%

Utilities 2%

Figure 14: Industries Represented

Source: : Bersin & Associates, 2012; data source: SHL, 2012.

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Appendix IILeadership Competencies

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Figure 15 delineates SHL’s definitions of the eight key leadership competencies.

Appendix II: Leadership Competencies

Source: Bersin & Associates, 2012.

Figure 15: SHL’s Eight Leadership Competencies

Leading and Deciding Takescontrolandexercisesleadership.Initiatesaction,givesdirectionandtakesresponsibility.

Supporting and Co-operating

Supportsothersandshowsrespectandpositiveregardfortheminsocialsituations.Putspeoplefirst,workingeffectivelywithindividualsandteams,clientsandstaff.Behavesconsistentlywithclearpersonalvaluesthatcomplementthoseoftheorganization.

Interacting and Presenting Communicatesandnetworkseffectively.Successfullypersuadesandinfluencesothers.Relatestoothersinaconfidentandrelaxedmanner.

Analyzing and InterpretingShowsevidenceofclearanalyticalthinking.Getstotheheartofcomplexproblemsandissues.Appliesownexpertiseeffectively.Quicklylearnsnewtechnology.Communicateswellinwriting.

Creating and Conceptualizing

Opentonewideasandexperiences.Seeksoutlearningopportunities.Handlessituationsandproblemswithinnovationandcreativity.Thinksbroadlyandstrategically.Supportsanddrivesorganizationalchange.

Organizing and ExecutingPlansaheadandworksinasystematicandorganizedway.Followsdirectionsandprocedures.Focusesoncustomersatisfactionanddeliversaqualityserviceorproducttotheagreedstandards.

Adapting and Coping Adaptsandrespondswelltochange.Managespressureeffectivelyandcopeswithsetbacks.

Enterprising and Performing

Focusesonresultsandachievingpersonalworkobjectives.Worksbestwhenworkisrelatedcloselytoresultsandtheimpactofpersonaleffortsisobvious.Showsanunderstandingofbusiness,commerceandfinance.Seeksopportunitiesforself-developmentandcareeradvancement.

Source: SHL 2012.

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Appendix III: Table of Figures

Figure 1: Today’s Talent Challenges 8

Figure 2: Kotter’s Differences between Management and Leadership 10

Figure 3: The Results of Imbalance between Management and Leadership Skills 11

Figure 4: Competency Model – Factors for Management versus Leadership Focus 13

Figure 5: Developing the Vision 15

Figure 6: Definitions – Developing the Vision 16

Figure 7: Sharing the Goals 18

Figure 8: Definitions – Sharing the Goals 19

Figure 9: Gaining Support 20

Figure 10: Definitions – Gaining Support 21

Figure 11: Delivering Success 23

Figure 12: Definitions – Delivering Success 23

Figure 13: Breakdown of Leader Levels by Country 37

Figure 14: Industries Represented 38

Figure 15: SHL’s Eight Leadership Competencies 40

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About This ResearchCopyright © 2012 Bersin & Associates. All rights reserved. WhatWorks® and related names such as Rapid e-Learning: WhatWorks® and The High-Impact Learning Organization® are registered trademarks of Bersin & Associates. No materials from this study can be duplicated, copied, republished or reused without written permission from Bersin & Associates. The information and forecasts contained in this report reflect the research and studied opinions of Bersin & Associates analysts.