Global leadership: the rise of the GEO

GEOs have to be able to navigate the uncharted waters of the complex, trans-national, interdependent business environment. They must articulate the corporate vision and strategy from a multi-country, multi-environment and multi-function perspective, so that they unite and engage all people. With virtual and dispersed teams spread across time zones, the demands of remote leadership and team connectedness are unrelenting. The teams that these GEOs lead need a set of principles that respect and build on the strengths and innovation that each of the regional or national businesses bring to the collective corporate capability.

Parallel agendas

One of the foremost challenges for GEOs is finding a way to meet the continual trade offs that accompany parallel global and local agendas. Strategy is fundamentally about choice, difference and advantage. It is as much about deciding what not to do as it is about deciding what to do. It is about choosing paths that others cannot follow. There can be no fixed agendas and what is needed is the potential to turn discontinuous change into strategic options. The GEO role is to develop the organisational capacity to act on these options when the time is right or when the company chooses.

In John Roberts’ book The Modern Firm: Organisational Design for Performance and Growth, voted Best Business Book of the Year by The Economist, identified seven key “drivers” that companies use to help determine the correct balance between global coordination and local responsiveness. Soft drivers are strategy, networks and culture, while hard drivers include process, metrics and incentives. There is an emphasis on structure, but to varying degrees. “How you want to organise depends very much on the strategy you’re trying to execute and the context in which you’re trying to execute it,” Roberts says.

Leading GEOs rely on more than structure. The tone of their business resonates from their distinctive corporate purpose, and they use this purpose to shape agendas and dialogues and decide to what to give attention. There is real effort to obtain clarity around context, processes and people, and how they interlink. They get buy-in by communicating this purpose time and time again, as they never assume what is obvious to them is obvious to others.

Changing contexts

The role of strategy is to create change, for standing still will soon make any position irrelevant or redundant. The profound complexity that comes with working across countries, cultures and markets presents new challenges and contexts at every point. GEOs constantly work on the inside, the edge or the outside of shifting global agendas.

Astute GEOs in international climates need to work with duality and mutuality so they can lead sustainable change without causing destructive conflict. Therefore, it is increasingly important for GEOs to be open-minded, flexible, to stretch their boundaries, and to have a high degree of emotional intelligence if they are to be effective.

GEOs deal with change from a mindset of resolve. Ichak Adizes explains in Managing Corporate Lifecycles that “when we encounter changes, we need to make decisions and do something different because we face a different phenomenon. We need to decide and act, and whatever we decide to do is itself a change that leads to new problems. Every problem or opportunity introduced by change generates a solution, which causes more change, and we face a new reality and a new set of problems or opportunities. Thus as long as there is change, there will be problems and opportunities”.

GEOs see the organisation as not only whole, but also as a fluid and flexible entity. This integrated mental map of details and patterns helps them explain to others why certain priorities are meaningful and when other priorities need to change. We are as much in the age of adaptability as we are in the age of information.

Kenneth Chenault, chairman and CEO of American Express, recently told a Wharton Business School audience that adaptability is one of the keys of company success in the global marketplace. “It’s not the strongest or the most intelligent who survive, but the most adaptive to change. Over the past ten years, the need for, and focus on adaptability has accelerated.”

New leadership

Globalisation has clearly changed the corporate leadership agenda. The GEO mantra is “market driven, culture led”. This means it is the market or customer that determines what to do, and it is the company’s culture that shapes the how – including the acceptance of change and difference, degrees of choice, trust and collaboration and the flow of information across the company.

Current conditions and future assumptions are driving GEOs to respond to the question, ‘How do we create a more transparent organisation?’. Transparency helps move from an opaque organisation to one that encourages open access to information, participation, decision-making and potentially higher levels of trust.

The high-performance organisation of the GEO is becoming what Lynda Gratton, associate professor of organisational behaviour at the London Business School, calls a “democratic enterprise”. The companies such as BP, BT, HP, Tesco, Sony and AstraZeneca which formed the basis of her research for The Democratic Enterprisehave learnt the benefits of treating employees as individuals, of creating adult-to-adult relationships, of moulding democratic companies.

In part, these GEOs have been responding to three critical forces, which are growing in momentum and will influence companies all over the globe. The first force is demographic and more specifically the expectations and aspirations of Generation X and Generation Y coupled with Baby Boomers who have new notions about retirement and workforce participation. The second is technology, which enables companies to bring choice and information to their employees. And the third is the very real skills and talent shortage.

“All over the world talented employees see themselves more as investors, actively building their personal capital, less as assets managed and owned by the companies by which they are employed,” Gratton argues. “As investors they want more freedom to act and a flexible relationship with the company. The landscape in which many companies operate is becoming more complex in unpredictable ways. For both, competitive pressures dictate that only the flexible and agile will survive.”

John Browne, group CEO of global energy giant BP, recently told an audience at Stanford Graduate School of Business that “it is an extraordinary thing to assure people that the way in which they move in a company or society will depend strictly on merit”. He believes that not only do leaders strive to create a pure meritocracy in their organisations, but they also recognise “people have incredibly diverse, complex needs that they’re trying to fulfil simultaneously. And your leadership style has to reflect that”.

GEOs must remember that it is human nature to make distinctions and in reality the majority group normalises their power to the point that they no longer see their advantage and privilege. This group believes there is a meritocracy while others who are in the minority may not.

Inclusive cultures

Global companies want strong, respected cultures to continually attract, engage and retain the best talent from around the world. These global firms understand the desirability and inevitability of diversity and the need to create equal opportunity for all.

Companies that continue to struggle with diversity in the domestic arena will find themselves challenged. Businesses that aim to be at the forefront of international competitiveness should look closely at the inclusiveness of their cultures if they are to prevail in the talent war. Companies need talented people with the mindset, competencies and commitment to execute and devolve global strategy. Clients and other key stakeholders rely on it.

Culture shock is the inimitable global experience. Living in another country in itself does not create a true global attitude, particularly if the executive replicates their local way of living and working. In fact, a key reason for failure in an offshore post is the inability to adjust to the foreign culture or to cope with what it feels like to be in an outsider. Similarly, when a company mostly uses home country leadership in each of their overseas businesses, not only does that home culture prevail, but the overall mindset tends to be more cloistered than the wider global milieu.

Some of the lessons of leadership are common to both local and global roles, such as setting strategy, team building, fostering purposeful relationships and, particularly, learning to listen. However, GEOs also have to truly understand the diversity of cultures with which they do business, (including race, custom, religion, gender, age and generational differences) and the variety of ways in which people work (communication, worldviews, negotiation and relationship to status and time) if they are to be successful in the international arena.

Leading GEOs and their leadership team regard the power of diversity as a way to leverage advantage, performance, growth and talent. Yet, the thought remains: if exposure to the global context is becoming necessary for positions at higher levels in the corporate hierarchy, then more line management expatriate opportunities need to be offered to women or nationals of non-head office countries.

Shared creativity

As companies need to compete in differing and changing climates, new thinking and shared knowledge will be as important to the bottom line as any other driver. No advantages or successes last. Savvy GEOs understand this and regard innovation as a core competency and a critical means to drive current and future value.

Innovation is being treated as a hard metric in high-performance firms. General Electric's Jeff Immelt comments: "We've prepared GE to innovate by making it central to our business process. It's critical that innovation has a measurable return - and that companies have a strategy to exploit their strength and make money off their R&D. We're constantly looking for global change, and placing bets on things that we think we can do uniquely."

There is a stimulating energy and creative synergy that can be forged when people from different perspectives work successfully together. Creativity is a source of meaning in people's lives and most of the things that are interesting, important and human are the results of creativity. This has been true throughout history, and particularly in periods of renaissance and enlightenment, where artistic and scientific thinking flourished alongside the thriving trading ports - the original global businesses.

Today, with globalisation we have modern trading ports, where knowledge and 'knowledge workers' are highly mobile, coming together to provide a strong impetus for insightful and outside-in thinking. Within global firms there is the possibility for many ideas to come from many places. Being open and willing to accept ideas irrespective of where they originate requires a genuine global attitude and one that respects the value of the diaspora.

Follow the yellow brick road

People with global skills are very aware that their experience is unique and in demand. Potential GEOs look for high-performance firms that respect their global expertise and provide rewarding learning experiences with international leadership opportunities.

The frequent-flyer model for global executive development is too simplistic. Companies that are changing rapidly to adapt to external conditions know that they need to offer divergent routes to global leadership. As Dorothy from The Wizard of Oz learned during her many adventures on the Emerald Path, the road to global leadership is a varied journey.

Potential GEOs are increasingly in charge of their careers, finding segues to suit their needs and talents. The global framework lends itself to this ‘take charge’approach. Potential GEOs select themselves, let their ambition be known and take an active role in making their global career happen.

Early on in their career, potential GEOs fall under the spell of the global village. They choose to participate in anything international – travel, university exchange programs, global task forces, offshore training courses and mobility assignments – whatever it takes to get global coverage and experience. They also take advantage of mentoring from successful executives in other regions, and seek out multiple role models with differing global perspectives.

The business skills gained from the exposure to varying ways of doing business is essential to overall development. Conversely, upcoming leaders can tend to pursue results at the expense of their personal growth. Undoubtedly, performance counts, but success at the GEO level will depend on accumulated wisdom, and that stems from knowledge, learning and insight. The secret then is not just the ability to attain results, but the ability to learn from a full range of experiences while achieving results.

Not all international experience is equal and the most valuable is when there is an immersion into a new culture or a new approach to business. It would be folly not to value and appreciate the richness that other cultures offer and to learn as much as possible from the broadest of these experiences.

Closer to home, local experience can teach important lessons. Nonetheless, the vital education in global leadership is obtained doing global work – the combination of global business and global culture is essential. The recommendation? Get that global exposure and know-how.

Dianne Jacobs is principal of human resources for Goldman Sachs JBWere.