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It has been said that Social Media is the future of advertising.
What is your opinion of social media? Does it empower or
exploit?
I believe that Social Media can be both and operates on a fine
line. For those over the age of 18, you are aware of the
information you are putting out there and the privacy levels of
which it is shown. I personally am not bothered by the targeted
advertising of which social media is the vehicle because I
choose what I participate in and what information I am offering
up. For the younger audience that is less aware and more
malleable it can work both ways. It can be a great outlet to
further self expression, but it can also be detrimental in
influencing young minds to look to external sources for self
acceptance.
Is social media really worth the kind of money that investors are
paying?
Yes, as we move away from print and cable, social media and
streaming services are becoming the easiest way to get
marketing impressions. If done successfully, items or
campaigns trend and reach a huge audience for a lower cost.
Explain what “Like”ing someone’s post on Facebook means to
you.
For me "like"ing is a way for me to express my interest in
something someone shared. I am fairly selective about liking
and only do so when I agree with something, fing
entertainment from the content, or have an emotional
connection to something shared. I only like content that
resonates with me. For some others I think "like"ing something
is just a way to identify they read or watched the content and
were listening.
Does knowing others “Like” what you “Like” influence you?
Explain.
I would not say it particularly influences whether I like
something, but does expose or impress upon me new content I
might be interested in. I find I enjoy content of those who have
common "likes" since we have similar taste. Facebook actually
use an algorithm to gear your feed to show content of those who
you "like" more. For example, during the presidential elections
you likely got more content that agreed with your viewpoints as
you liked others who had similar viewpoints and that content
then got prioritized on your feed. This can be good because you
may not be interested in content of which does not resonate with
you, but also bad in limiting your viewpoint.
How do companies use social media to advertise?
Mostly, social media is used by companies to produce targeted
marketing through big data or as a vehicle to create trendy
content that catches like wildfire. For example, the ALS Ice
Bucket Challenge, which raised awareness and donations for
ALS by inciting popular content people wanted to be involved
in. Marketing till social media was largely hands off, now it's
all about the power of the people.
Is social media empowering or exploiting teens?
I think it can be on both ends of the spectrum. From their
perspective I think most teens feel they now have a vehicle for
their voice and a way to express themselves. From a more adult
perspective I think it can elevate the value of external value to
internal value, which can be a negative.
Do Kids think they are being used? Do they care?
I think most kids are aware they are being physically being used
as a marketing vehicle, but don't feel used in the sense of being
exploited. In other words they don't feel exploited because they
are reaping benefits equal to what they are providing in
marketing, otherwise I don't think they would be so actively
involved. I think it makes them feel they have a voice, in a time
where they feel they are not understood or listened to.
Thunderbird Global Mindset
®
Inventory
Jiangyi Qiu
08-Feb-18
1/20© 2016 Thunderbird School of Global Management. All
Rights Reserved.
Jiangyi Qiu
What is Global Mindset?
Global Mindset is the ability to influence others who are
different than you. It is a critical combination of
intellectual, psychological and social capital:
• Intellectual Capital refers to your global business savvy,
cosmopolitan outlook, and cognitive
complexity.
• Psychological Capital refers to your passion for diversity,
quest for adventure, and your self-
assurance.
• Social Capital refers to your intercultural empathy,
interpersonal impact, and diplomacy.
Why is Global Mindset Important?
Today’s corporations are more globally connected than ever
before. They are in pursuit of global customers,
global talent, global credit, global manufacturing, global
partners, and global supply chains. They have a large
global workforce, use global business and virtual teams, and
need to work with large numbers of groups and
organizations in many parts of the world. As a consequence,
their managers and leaders need to be
effective in working and dealing with people who are different
from them. Their success will depend on their
ability to influence others from many parts of the world to help
achieve their organizational goals. Global
Mindset is a set of individual attributes that help global leaders
and managers do a better job of influencing
others who are different from them.
Can Global Mindset Be Developed?
YES! All elements of Global Mindset can be developed and
improved. But it is true that some aspects of
Global Mindset are easier to develop than others. During the
feedback workshop, you and your colleagues,
working individually and in groups, will identify ways of
improving your own, and your group's stock of Global
Mindset. At the end of the session, you will receive
Thunderbird's suggestions on how to improve your Global
Mindset.
2/20© 2016 Thunderbird School of Global Management. All
Rights Reserved.
QiuJiangyi
QiuJiangyi
QiuJiangyi
QiuJiangyi
Jiangyi Qiu
About This Report
This report is designed to provide you with feedback on your
approach in dealing with people from other
cultural and geographic backgrounds. Increasingly, managers
are expected to work effectively with
individuals and groups from different parts of the world.
Therefore, the ability to master such relationships is
becoming more important. The purpose of this feedback report
is to help you find ways of improving your
ability to deal with people from diverse cultural settings. The
report provides feedback on your personal
profile of Global Mindset, as well as your group's profile of
Global Mindset.
The report is based on the Thunderbird Global Mindset
Inventory, a scientifically based instrument that has
been used to collect data from thousands of respondents
working for global organizations in many
countries. The instrument has strong scientific properties and
has been developed through a rigorous
scientific process. Here are the details of your report:
Page 4 Your overall profile of Global Mindset
Page 5 The complete structure of Global Mindset
Page 6 Detailed explanation of Intellectual Capital
Page 7 Your profile of Intellectual Capital
Page 8 Detailed explanation of Psychological Capital
Page 9 Your profile of Psychological Capital
Page 10 Detailed explanation of Social Capital
Page 11 Your profile of Social Capital
Page 12 Your overall profile of Global Mindset (repeat of page
4)
Page 13 Your Global Mindset profile sorted from your highest
score to the lowest score.
Page 14-15 The Group Profile
Page 16 Global Mindset Scores Summary
Page 17-19 Your Personal Observations
Good Luck!
3/20© 2016 Thunderbird School of Global Management. All
Rights Reserved.
QiuJiangyi
Jiangyi Qiu
Your Global Mindset Profile
Intellectual
Capital
Psychological
Capital
Social Capital
Your Score Group Mean (n=24) Grand Mean (n=34,416)
1 2 3 4 5
Not at all To a small extent To a moderate extent To a large
extent To a very large extent
Note: The light gray bars below the Group Avg. and the Grand
Mean indicate the range of min. and max. values for the Group
and Grand Mean respectively.
TEST
TEST
TEST
3.24
3.28
3.26
3.21
3.58
3.86
3.10
3.51
3.48
4/20© 2016 Thunderbird School of Global Management. All
Rights Reserved.
QiuJiangyi
Jiangyi Qiu
On the following pages you will receive your scores on all of
the above elements of
Global Mindset.
5/20© 2016 Thunderbird School of Global Management. All
Rights Reserved.
QiuJiangyi
Jiangyi Qiu
Intellectual Capital
Your Intellectual Capital reflects your global business savvy,
your cosmopolitan outlook, and your cognitive
complexity. The following are major elements of Intellectual
Capital.
Global Business Savvy:
• Knowledge of global industry
• Knowledge of global competitive business and marketing
strategies
• Knowledge of how to transact business and assess risks of
doing business internationally
• Knowledge of supplier options in other parts of the world
Cosmopolitan Outlook:
• Knowledge of cultures in different parts of the world
• Knowledge of geography, history, and important persons of
several countries
• Knowledge of economic and political issues, concerns, hot
topics, etc. of major regions of the world
• Up-to-date knowledge of important world events
Cognitive Complexity:
• Ability to grasp complex concepts quickly
• Strong analytical and problem solving skills
• Ability to understand abstract ideas
• Ability to take complex issues and explain the main points
simply and understandably
Individuals with high scores on Intellectual Capital tend to be
very knowledgeable about their global industry.
They understand how the industry operates and how global
competitors position themselves to generate
competitive advantage. They also know how global customer
markets behave and how various competitors
attempt to target their markets. They have an understanding of
supply chain options and issues in their
industry and are cognizant of country risk analysis in global
decision making.
A high score on Intellectual Capital reflects strong
understanding of culture, history, geography, and political
and economic systems in different parts of the world. It also
reflects the ability to understand the complexity of
global business and the ability to find appropriate solutions to
complex problems.
TEST
6/20© 2016 Thunderbird School of Global Management. All
Rights Reserved.
QiuJiangyi
Jiangyi Qiu
Your Intellectual Capital Profile
Global Business
Savvy
Cosmopolitan
Outlook
Cognitive
Complexity
Your Score Group Mean (n=24) Grand Mean (n=34,416)
1 2 3 4 5
Not at all To a small extent To a moderate extent To a large
extent To a very large extent
Note: The light gray bars below the Group Avg. and the Grand
Mean indicate the range of min. and max. values for the Group
and Grand Mean respectively.
Your personal observations:
TEST
TEST
TEST
3.63
2.94
2.61
3.29
3.16
3.22
2.80
3.75
3.93
7/20© 2016 Thunderbird School of Global Management. All
Rights Reserved.
QiuJiangyi
Jiangyi Qiu
Psychological Capital
Psychological Capital reflects your passion for diversity, quest
for adventure, and your self- assurance. The
following are the major elements of Psychological Capital.
Passion for diversity:
• Enjoy exploring other parts of the world
• Enjoy getting to know people from other parts of the world
• Enjoy living in another country
• Enjoy traveling
Quest for Adventure:
• Interest in dealing with challenging situations
• Willingness to take risk
• Willingness to test one’s abilities
• Enjoy dealing with unpredictable situations
Self-Assurance:
• Energetic
• Self-confident
• Comfortable in uncomfortable situations
• Witty in tough situations
Individuals who score high on Psychological Capital, tend to
have a passion for diversity which leads them to
enjoy exploring other parts of the world, other cultures, and
other ways of doing things. They enjoy meeting
people from other countries and living in other corners of the
world. They tend to consider themselves as
citizens of the world and enjoy the opportunity to learn about
other cultures and peoples.
A high score on Psychological Capital reflects a high level of
self confidence, a sense of humor, and a
willingness to take risks. It reflects a desire to challenge oneself
and the ability to thrive in unpredictable and
complex environments.
TEST
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QiuJiangyi
Jiangyi Qiu
Your Psychological Capital Profile
Quest for
Adventure
Self-Assurance
Passion for
Diversity
Your Score Group Mean (n=24) Grand Mean (n=34,416)
1 2 3 4 5
Not at all To a small extent To a moderate extent To a large
extent To a very large extent
Note: The light gray bars below the Group Avg. and the Grand
Mean indicate the range of min. and max. values for the Group
and Grand Mean respectively.
Your personal observations:
TEST
TEST
TEST
3.40
3.62
3.77
3.20
3.45
3.66
3.03
3.67
4.15
9/20© 2016 Thunderbird School of Global Management. All
Rights Reserved.
QiuJiangyi
Jiangyi Qiu
Social Capital
Social Capital reflects your intercultural empathy, interpersonal
impact, and diplomacy. The following are the
major elements of Social Capital.
Intercultural Empathy:
• Ability to work well with people from other parts of the world
• Ability to understand nonverbal expressions of people from
other cultures
• Ability to emotionally connect to people from other cultures
• Ability to engage people from other parts of the world to work
together
Interpersonal Impact:
• Experience in negotiating contracts/agreements in other
cultures
• Strong networks with people from other cultures and with
influential people
• Reputation as a leader
Diplomacy:
• Ease of starting a conversation with a stranger
• Ability to integrate diverse perspectives
• Ability to listen to what others have to say
• Willingness to collaborate
Individuals who receive high scores on Social Capital, are
better able to build trusting relationships with
people who are different from them. They are viewed as
effective leaders and diplomats in the sense that they
are good listeners, at ease in conversations with other, and are
able to bring divergent views together and
develop consensus among different parties.
A high score signifies the ability to show empathy, and
emotionally connect to people from other parts of the
world. It reflects the ability to engage others and to have an
extensive network of friends and colleagues in
different countries.
TEST
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Rights Reserved.
QiuJiangyi
Jiangyi Qiu
Your Social Capital Profile
Interpersonal
Impact
Intercultural
Empathy
Diplomacy
Your Score Group Mean (n=24) Grand Mean (n=34,416)
1 2 3 4 5
Not at all To a small extent To a moderate extent To a large
extent To a very large extent
Note: The light gray bars below the Group Avg. and the Grand
Mean indicate the range of min. and max. values for the Group
and Grand Mean respectively.
Your personal observations:
TEST
TEST
TEST
3.33
3.13
3.03
3.17
3.52
3.44
2.80
3.88
3.97
11/20© 2016 Thunderbird School of Global Management. All
Rights Reserved.
QiuJiangyi
Jiangyi Qiu
Your Global Mindset Profile
Intellectual
Capital
Psychological
Capital
Social Capital
Your Score Group Mean (n=24) Grand Mean (n=34,416)
1 2 3 4 5
Not at all To a small extent To a moderate extent To a large
extent To a very large extent
Note: The light gray bars below the Group Avg. and the Grand
Mean indicate the range of min. and max. values for the Group
and Grand Mean respectively.
TEST
TEST
TEST
3.24
3.28
3.26
3.21
3.58
3.86
3.10
3.51
3.48
12/20© 2016 Thunderbird School of Global Management. All
Rights Reserved.
QiuJiangyi
Jiangyi Qiu
Your Detailed Global Mindset Profile
Global Business Savvy
Quest for Adventure
Interpersonal Impact
Cosmopolitan Outlook
Self-Assurance
Intercultural Empathy
Passion for Diversity
Cognitive Complexity
Diplomacy
1 2 3 4 5
Not at all To a small extent To a moderate extent To a large
extent To a very large extent
Note: The light gray bars below the Participant's score indicate
the range of min. and max. values for the Group
This chart is designed to show your nine dimensions of Global
Mindset sorted from the highest to the lowest
score based on your self-assessment. The dimensions are color
coded. Dimensions of Intellectual Capital
are shown in yellow boxes and borders. The three dimensions of
Psychological Capital are displayed in blue
boxes and borders. And dimensions of Social Capital are
displayed in red boxes and borders.
A score of 4 or higher means that you believe you are good at
that dimension, although there are still things
you can do to improve. A score of 3 to 4 means that you are
pretty good at that dimension but need to get
better at it. A score of 3 and below means that it is urgent for
you to think seriously about a plan to improve
that particular dimension. Your success as a global leader
requires serious attention to that dimension.
TEST
TEST
TEST
TEST
TEST
TEST
TEST
TEST
TEST
3.63
3.40
3.33
3.29
3.20
3.17
3.03
2.80
2.80
13/20© 2016 Thunderbird School of Global Management. All
Rights Reserved.
QiuJiangyi
Jiangyi Qiu
The Group Profile of Global Mindset
Psychological
Capital
Social Capital
Intellectual
Capital
Group Mean (n=24) Grand Mean (n=34,416)
1 2 3 4 5
Not at all To a small extent To a moderate extent To a large
extent To a very large extent
This chart shows the profile of your group's Global Mindset and
how it compares to our Grand Mean sample
of global managers. It is sorted from the highest score to the
lowest on the three categories of Intellectual
Capital, Psychological Capital, and Social Capital.
TEST
TEST
TEST
3.58
3.86
3.51
3.48
3.28
3.26
14/20© 2016 Thunderbird School of Global Management. All
Rights Reserved.
QiuJiangyi
Jiangyi Qiu
The Detailed Group Profile of Global Mindset
Diplomacy
Cognitive Complexity
Passion for Diversity
Quest for Adventure
Intercultural Empathy
Self-Assurance
Cosmopolitan Outlook
Interpersonal Impact
Global Business Savvy
Group Mean (n=24) Grand Mean (n=34,416)
1 2 3 4 5
Not at all To a small extent To a moderate extent To a large
extent To a very large extent
This chart shows the detailed profile of your group's Global
Mindset and how it compares to our Grand Mean
sample of global managers. It is sorted from the highest score to
the lowest on the nine dimensions of Global
Mindset. The dimensions are color coded. Dimensions of
Intellectual Capital are shown in yellow boxes and
borders. The three dimensions of Psychological Capital are
displayed in blue boxes and borders. And
dimensions of Social Capital are displayed in red boxes and
borders.
A score of 4 or higher means that the group believes it is good
at that dimension, although there are still
things you can do to improve. A score of 3 to 4 means that the
group is pretty good at that dimension but
needs to get better at it. A score of 3 and below means that it is
urgent for the group to think seriously about a
plan to improve that particular dimension. Your success as a
group of global leaders requires serious
attention to that dimension.
TEST
TEST
TEST
TEST
TEST
TEST
TEST
TEST
TEST
3.88
3.97
3.75
3.93
3.67
4.15
3.62
3.77
3.52
3.44
3.45
3.66
3.16
3.22
3.13
3.03
2.94
2.61
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Rights Reserved.
QiuJiangyi
Jiangyi Qiu
Global Mindset Scores Summary
Jiangyi Qiu 3.21 3.10 3.24 3.03 3.40 3.20 3.17 3.33 2.80 3.63
2.80 3.29
Group Mean 3.58 3.51 3.28 3.67 3.62 3.45 3.52 3.13 3.88 2.94
3.75 3.16
Max 4.94 4.77 4.09 4.82 5.00 5.00 4.50 5.00 4.80 4.00 5.00 4.43
75th Percentile 3.88 4.11 3.70 4.14 3.90 3.80 4.04 3.75 4.60
3.63 4.20 3.60
50th Percentile 3.65 3.45 3.30 3.61 3.60 3.50 3.59 3.33 4.00
3.00 3.80 3.07
25th Percentile 3.22 3.02 2.96 3.39 3.15 2.80 3.09 2.33 3.35
2.22 3.40 2.68
Min 2.58 1.95 2.42 2.61 2.40 2.20 2.17 1.33 2.00 1.75 2.40 2.14
Grand Mean 3.86 3.48 3.26 4.15 3.77 3.66 3.44 3.03 3.97 2.61
3.93 3.22
Max 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00
75th Percentile 4.30 3.95 3.72 4.83 4.20 4.20 4.00 3.67 4.40
3.25 4.40 3.86
50th Percentile 3.92 3.50 3.25 4.33 3.80 3.60 3.50 3.00 4.00
2.63 4.00 3.14
25th Percentile 3.50 3.02 2.79 3.67 3.40 3.20 2.83 2.33 3.60
1.88 3.60 2.57
Min 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
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QiuJiangyi
QiuJiangyi
QiuJiangyi
Your Score
Jiangyi Qiu
Your Personal Observations
1. What is your assessment of the need for you to possess a
global mindset? Now? Five years from now?
2. What are the consequences of your doing nothing to further
develop your global mindset?
3. What are your areas of relative strength?
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QiuJiangyi
Jiangyi Qiu
Your Personal Observations
4. What are your areas of developmental opportunities?
5. What are your priorities over the next 6 to 12 months for
further strengthening and leveraging your areas of
strength?
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QiuJiangyi
Jiangyi Qiu
Your Personal Observations
6. What are your priorities over the next 6 to 12 months for
improving your areas of developmental
opportunity?
7. What are your top 3 to 5 action plan steps for the next 6 to 12
months?
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QiuJiangyi
Jiangyi Qiu
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Rights Reserved.
Six global leaders confront the personal
and professional challenges of a new era of
uncertainty.
Leading
in the 21st century
Dominic Barton,
Andrew Grant, and
Michelle Horn
It is often said that the principles of great leadership are
timeless,
or based on immutable truths. But when we meet with the men
and women who run the world’s largest organizations, what we
hear
with increasing frequency is how different everything feels
from
just a decade ago. Leaders tell us they are operating in a
bewilder-
ing new environment in which little is certain, the tempo is
quicker,
and the dynamics are more complex. They worry that it is
impossible
for chief executives to stay on top of all the things they need to
know to do their job. Some admit they feel overwhelmed.
To understand the leadership challenge of our volatile,
globalized,
hyperconnected age more clearly, we recently initiated a series
of
structured interviews with the leaders of some of the world’s
largest and most vibrant organizations. Excerpts from six of
those
conversations appear below. The leaders—Josef Ackermann,
formerly of Deutsche Bank; Carlos Ghosn of Nissan and
Renault;
Moya Greene of Royal Mail Group; Ellen Kullman of DuPont;
President Shimon Peres of Israel; and Daniel Vasella of
Novartis—
represent a diverse array of viewpoints. All are grappling with
today’s environment in different ways. But the common themes
that
emerged from these conversations—what it means to lead in an
J U N E 2 0 1 2
Leaders on leadership
Meet the leaders
Josef Ackermann is the former
CEO and chairman of the
management board at Deutsche
Bank. He recently retired
after a decade as CEO and six
years as chairman.
Carlos Ghosn is the CEO and
chairman of the Renault-
Nissan Alliance. He has been the
CEO of Nissan since 2001
and the CEO of Renault since 2005.
Together, the two companies
produce more than one in ten cars
sold worldwide.
2
age of upheaval, to master personal challenges, to be in the
limelight continually, to make decisions under extreme
uncertainty—
offer a useful starting point for understanding today’s leader-
ship landscape.
After presenting the ideas of these leaders on leadership, we
offer a few additional reflections on the topic. They draw in
part on
the interviews, as well as on our experiences with clients; on
conversations with dozens of experts in academia, government,
and
the private sector; and on our review of the extensive academic
and popular literature on the subject. All reinforce our belief
that
today’s leaders face extraordinary new challenges and must
learn to think differently about their role and how to fulfill it.
Those
who do may have an opportunity to change the world in ways
their predecessors never imagined.
Daniel Vasella has been chairman
of the Swiss pharmaceutical
company Novartis AG since 1999.
He served as the company’s
CEO from 1996 to 2010.
Shimon Peres is the ninth and
current president of Israel. In a
political career spanning more than
65 years, he has served twice
as Israel’s prime minister and has
been a member of 12 cabinets.
Moya Greene was appointed
CEO of the United Kingdom’s Royal
Mail Group in 2010. From 2005 to
2010, she was CEO of Canada Post.
33
Ellen Kullman has served as
DuPont’s CEO and board chair since
2009. She joined the company
from General Electric in 1988 and
was ranked fourth on the
Forbes 100 Most Powerful Women
list in 2011.
4
Leading in an age of upheaval
A convergence of forces is reshaping the global economy:
emerging
regions, such as Africa, Brazil, China, and India, have over-
taken economies in the West as engines of global growth; the
pace
of innovation is increasing exponentially; new technologies
have created new industries, disrupted old ones, and spawned
communication networks of astonishing speed; and global
emergencies seem to erupt at ever-shorter intervals. Any one of
these developments would have profound implications for
organizations and the people who lead them. Taken together,
these
forces are creating a new context for leadership.
Josef Ackermann: We experienced a tremendous shift in
the global balance of power, which manifests itself in our
business.
In the 1980s, over 80 percent of Deutsche Bank revenues were
generated in Germany. In the mid-1990s, they still accounted
for
about 70 percent. Today, Germany, despite its continuing eco-
nomic strength, stands for 38 percent of global revenues. Over
the
years, people in our headquarters, in Frankfurt, started comp-
laining to me, “We don’t see you much around here anymore.”
Well,
there was a reason why: growth has moved elsewhere—to Asia,
Latin America, the Middle East—and this of course had
consequen-
ces on the time spent in each region.
Managing risk also has become much more complex for banks.
It’s not only market risk; there is more and more political and
social
risk. Increasingly, financial markets are becoming political
markets. That requires different skills—skills not all of us have
acquired at university; how to properly deal with society, for
example, a stakeholder that has immensely grown in importance
since the financial crisis.
Carlos Ghosn: I don’t think leadership shows unless it is high-
lighted by some kind of crisis. There are two kinds. There are
internal crises that arise because a company has not been
managed
well. Then there are external crises, like the collapse of Lehman
Brothers or the earthquake in Japan or the flood in Thailand. In
55
that case, you are managing your company, and all of a sudden
there is this thing falling on you.
Business schools may prepare people to deal with internal
crises.
But I think we need to be more prepared for external crises,
where it’s not the strategy of the company that is in question;
it’s the
ability of leaders to figure out how to adapt that strategy.
We are going to have a lot more of these external crises because
we are living in such a volatile world—an age where every-
thing is leveraged and technology moves so fast. You can be
rocked
by something that originated completely outside your area.
I think one of the reasons Nissan has been able to cope with
external crises better than some of our competitors is that we
have
a more diverse, multinational culture. We don’t just sit around
waiting for the solution to come from headquarters. We are
accus-
tomed to always looking around, trying to find out who has the
best ideas. Our people in the US talk to our people in Japan on
an
equal level. We have a lot more reference points.
Ellen Kullman: These days, there are things that just come
shooting across the bow—economic volatility and the impact of
natural events like the Japanese earthquake and tsunami—at
much greater frequency than we’ve ever seen. You have to be
able to
react very quickly. And the world is so connected that the feed-
back loops are more intense. You’ve got population growth and
the
world passing seven billion people last year, and the stresses
that
causes, whether it’s feeding the world, creating enough energy,
or
protecting the environment. We matched our focus, our research
and development, and our capital expenditures up against
megatrends
like these over the last five years. This is the future, so we need
to
understand how our science relates to it.
Shimon Peres: The last two decades have witnessed the greatest
revolution since Genesis. States have lost their importance and
strength. The old theories—from Adam Smith to Karl Marx—
have
lost their value because they are based on things like land,
labor,
and wealth. All of that has been replaced by science. Ideas are
now
6
more important than materials. And ideas are unpredictable.
Science knows no customs, no borders. It doesn’t depend on
distances
or stop at a given point.
Science creates a world where individuals can play the role of
the
collective. Two boys create Google. One boy creates Facebook.
Another individual creates Apple. These gentlemen changed the
world without political parties or armies or fortunes. No one
anticipated this. And they themselves did not know what would
happen as a result of their thoughts. So we are all surprised.
It is a new world. You may have the strongest army—but it
cannot
conquer ideas, it cannot conquer knowledge.
Mastering today’s personal challenges
The rigors of leadership have prompted many leaders to think
of themselves as being in training, much like a professional
athlete: continually striving to manage their energy and fortify
their
character. There is a growing recognition of the connection
between physical health, emotional health, and judgment—and
of how important it can be to have precise routines for diet,
sleep, exercise, and staying centered.1
Moya Greene: The first criterion is: do you love it? It’s a seven-
day-a-week job. I think that’s true for anyone in these roles.
If you don’t love the company and the people—really love
them—
you can’t do a job like this.
I’m pretty energetic. I start at five in the morning. I don’t even
think
about it anymore; the alarm goes off and I’m up. I go for a 30-
minute
run. I do weight training three mornings a week. I try to eat
well,
but not too much. I’m a big walker—that’s my favorite thing. I
try to
get a good walk every weekend. I go on walking vacations.
1 For more on centered leadership, see Joanna Barsh, Josephine
Mogelof, and Caroline
Webb, “How centered leaders achieve extraordinary results,”
mckinseyquarterly.com,
October 2010.
7
I’ve usually got three or four books on the go. I’ve given up on
novels.
I can’t get through them no matter how good they are; there’s
no way I’ll finish before there’s some kind of interruption. So I
read
poetry now: the collected works of Ted Hughes, Emily
Dickinson.
I’m working my way through Philip Larkin. You can take a
Larkin
poem and read it on the bus in 15 minutes. The good ones stay
with you and will come back to you. That’s what I like about
poetry:
you get a little shot of mental protein without a lot of time.
Josef Ackermann: Just to give you an idea of my calendar for
the next ten days: Berlin tomorrow, then Seoul, then Munich,
then
Frankfurt, then Singapore, then the Middle East. I’m almost
constantly on a plane. With all this traveling, physical stamina
has
become much more important.
I remember a time when after flying to Hong Kong you could
take
a whole day off to recover. Today, right after landing you rush
to
your first meeting. And maybe you already have a conference
call in
the car on your way into town. You are lucky if you get enough
time to take a shower.
And of course, with all the new information technology, you are
constantly available, and the flow of information you have to
manage
is huge; that has added to the pressure. You are much more
exposed
to unforeseen shifts and negative surprises and you have to
make quick decisions and respond to or anticipate market
movements
around the world. So you have to have a very stable psyche as
well.
I see more and more people these days who just burn out.
I’m not a tech freak. I use my iPhone and send text messages,
that’s
it. I still like to have paper in front of me and I do a lot in
written-
memo form. I think people who constantly use their BlackBerry
or
iPhone easily lose sight of the big picture.
It also helps me enormously that I can sleep anywhere, whether
I
am in a car or an airplane. If you’re unable to relax quickly, I
think
you can’t be a CEO for a considerable length of time. Some
people
do meditation or yoga. I don’t do any such thing. I think you
have it
in your DNA or you don’t.
8
Dan Vasella: I talk to my team about the seductions that come
with
taking on a leadership role. There are many different forms:
sexual seduction, money, praise. You need to be aware of how
you
can be seduced in order to be able to resist and keep your
integrity.
Every CEO needs someone who can listen—a board member,
an adviser—someone to whom he can speak in total confidence,
to whom he can say, “I’ve had it; I’m about to resign.” Or, “I
really want to beat this guy up.” You need someone who
understands
and can help you to find the balance. Leaders often forget the
importance of stable emotional relationships—especially
outside
the company. It helps tremendously to manage stress. Your
partner will do a lot to help keep you in sync.
You have to be able to switch on and switch off. Are you
entirely
present when you’re present? Can you be entirely away when
you’re
away? The expectation is that your job is 24/7. But no one can
be
the boss 24/7. You need to have a moment when you say, “I’m
home
now,” and work is gone.
Carlos Ghosn: Leading takes a lot of stamina. I became CEO at
45. But I was working like a beast. You think, “So I work 15,
16 hours
a day; who cares?” But you can’t do that when you are 60 or 65.
And now companies are more global. So you have jet lag, you
are tired, the food is different. You have to be very disciplined
about
schedules and about organizing everything. Physical discipline
is
crucial, for food, exercise, sleep. I live like a monk—well,
maybe not
a monk, but a Knight Templar. I wake at a certain hour, sleep at
a
certain hour. There are certain things I won’t do past a certain
time.
Ellen Kullman: I spend a lot more time on communication, more
time out at plant sites, in sales offices, with customers, in our
research laboratories. I’m bringing my board of directors to
India in
a couple of weeks to help them really see the issues we’re
facing.
That’s where I get my energy from. It’s contagious. I come
away from
these engagements with ideas, energy, and a real sense of focus
on where we as a company need to go. That’s part of what
drives me.
9
Shimon Peres: The mind of a leader must be free—a mind that
can dream and imagine. All new things were born in dreams.
A leader must have the courage to be a nonconformist, just like
a
scientist. He must dream, even if he dreams alone or if people
laugh at him. He must not let his heart falter.
Today, the separation between generations is stronger than
between
nations. Our children say, “Please don’t impose upon us your
own
arrogance—the world you created, wounded by war, corrupted
by
money, separated by hatred. And don’t try to build artificial
walls
between us and other youngsters.” Because they were born in a
new
age. For them, the modern equipment of communication is what
paper and pen are for us. They can communicate much more
easily
and don’t feel all this hidden discrimination that we were born
with and find so difficult to get rid of.
The (now 24/7) public face of leadership
Nearly everyone we spoke with commented on the challenge of
dealing with constant scrutiny and of acting as a connector
in a complex ecosystem. As the face of the organization, leaders
must be prepared to address the immediate, practical concerns
of the job while also maintaining and articulating a long-term
vision
of the organization’s purpose and role in society—all against
a backdrop of 24-hour financial coverage, ubiquitous blogs, and
Twitter feeds. That means learning new modes of communicat-
ing across today’s far-flung networks and working harder to
craft
clear, simple messages that resonate across cultures.
Josef Ackermann: CEOs have become highly public figures.
And media scrutiny has become very personal. Particularly in
our
home market, Germany, it’s always, “Ackermann says this” or
“Ackermann’s doing that”—even if I personally had nothing to
do
with it. You are the institution you lead.
10
“”
You’re a product. And the press will paint
you as either a hero or a villain—whatever sells.
If they paint you as a hero today, you
should be prepared to be painted as a villain
tomorrow.
After I became CEO, the former head of the Bundesbank one
day took me aside and gave me some valuable advice: “From
now
on, you must remember that you are two people. You are the
person whom you and your friends know, but you are also a
symbol
for something. Never confuse the two. Don’t take criticism of
the
symbol as criticism of the person.” That advice has helped me a
lot.
Dan Vasella: People have a legitimate demand for access to
the CEO. But you have to modulate that so you avoid
overexposure.
You’re a product. And the press will paint you as either a hero
or a villain—whatever sells. If they paint you as a hero today,
you
should be prepared to be painted as a villain tomorrow. Not
everything you do will work out every time, and you have to
accept
that people will be unfair.
Moya Greene: A decade ago, I’d have said that it was harder
to be a public official than an executive in the private sector.
But the
tables have turned. It’s tough these days to be the CEO of any
business—even a very successful one with a balanced view of
the
corporation’s position in society.
My public-sector experience has helped me to understand how
easily sound policies can be derailed by small, symbolic things.
It
—Dan Vasella
11
may not matter that the policy change you are advocating is
the product of fantastic analytics or years of brilliant
stakeholder
management; the tiniest little spark can become a flash fire—
something that takes hold and transforms perceptions in ways
that don’t seem rational. If you work in the public sector, you
learn the value of developing antennae for popular perceptions
and keeping them finely tuned.
I spend about 15 percent of my time trying to help our own
people
understand how good we are at what we do, which isn’t always
easy, because there is so much negativism in the press. I see
good
internal communications as a way to punch through and get
our message out, to tell our people—who are the most powerful
ambassadors for our brand—“Stand up and be proud.”
Carlos Ghosn: In business, there are no more heroes. The media
has become a lot more negative about corporate leaders over
the past ten years. Small mistakes get blown up into huge
things.
I cannot imagine myself today doing what I did in Japan in
1999,
when I stood up and said: “We’re going to get rid of the
seniority
system. We’re going to shut down plants. We’re going to reduce
headcount. We’re going to undo the keiretsu system.” I had a lot
of
criticism. But there were also people who said, “Let’s give him
the benefit of the doubt.” Today, if I were to stand up and try to
do
something like that, I would get massacred. I would need much
more emotional stability and certainty. Leaders of tomorrow are
going to have to be incredibly secure and sure of themselves.
Leaders of the future will also need to have a lot more empathy
and
sensitivity—not just for people from their own countries but for
people from completely different countries and cultures. They
are
going to need global empathy, which is a lot more difficult.
Shimon Peres: Words are the connection between leaders and
the public. They must be credible and clear and reflect a vision,
not
just a position. The three greatest leaders of the 20th century
were Winston Churchill, Charles de Gaulle, and David Ben-
Gurion.
Each had a brilliant mind and a brilliant pen. Their ability with
12
a pen demonstrated many things: curiosity, memory, courage.
They understood that you lead not with bayonets but with
words.
A leader’s words must be precise and totally committed.
Decision making under uncertainty
A final theme is that leaders must increasingly resist the
tempta-
tion to cope with chaos and complexity by trusting their gut.
At a time of extreme volatility, past experience is an unreliable
guide to future outcomes. Leaders must create cultures of
constructive skepticism and surround themselves with people
who bring multiple perspectives and have no fear of chal-
lenging the boss.
Carlos Ghosn: It is a paradox: on the one hand, you have to
be more confident and secure, but on the other, you have
to be a lot more open and empathetic. You need to listen, but
then
when you make a decision, that’s it—you must be a very hard
driver. Usually, these are not attributes you find in the same
person.
Once you have done the analysis and made the decision, then
you have
to learn to simplify the decision in communicating it to others.
Everything’s complex, but once you have decided, sometimes
you
need to simplify so much it’s almost a caricature. You must say,
“Nothing matters beyond this.” You must reduce everything to
zeros or
ones, black or white, go or no-go. You can’t have too much
nuance.
In a crisis, you have to be able to do all of these things—
listening,
deciding, and then simplifying—very quickly. That is what
makes
leading in a crisis so interesting. And because you have to move
so
fast, you have to empower people to make decisions themselves.
That’s the best way to restore calm.
Moya Greene: When I came here, we were running out of cash.
I was grappling with decisions that would determine whether or
not we could stay in business. But you cannot position your
company
13
in the broader social and economic fabric of the nation if all
you do
is look at the financial dimensions of performance. You have to
look at what your customers think, what your employees think,
and
what you can do for your customers.
Daniel Vasella: As a leader, to whom can you express your
doubts—and should you? In which situation is it appropriate
and
when not? I believe that you have to be able to express doubt in
your team and with a board. If you don’t—and you pretend—
then
you are playing a role, which eventually leads to an unhealthy
situation. That’s not to say you should act like you’re in a
confes-
sional. At some point [in decision making], you have to take
the sword and cut through the Gordian knot and make a
decision,
despite any uncertainties.
But the question is: are you being led by the context or do you
lead?
Are you being led by your followers and are they choosing for
you? Or do you choose and do you lead? I think you have to be
aware
of the context, and what people expect and hope for. But as a
leader, you’re not there to feed people with all the things they
hope
for. Your job is to persuade people to do the things you believe
will be the right direction for the long term. People want you to
lead.
And if you lead, you will hurt. You will satisfy sometimes. You
will celebrate and you will blame. That’s all part of your job.
Josef Ackermann: Problems have become so complex today
that you have to collect the expertise and opinions of a lot of
people
before you can make a sound decision. Some people say, “Don’t
decide until you have to.” I have a completely different view. I
hate
to be under time pressure. I think it is important that you aren’t
confronted with a situation where you haven’t heard anything
on
a particular issue for half a year—and then suddenly you have
to make a quick decision on the basis of an executive summary.
I believe in personal leadership, but no CEO can do it all on his
own.
You need the expertise, judgment, and buy-in of your team.
14
Preparing for a new era of leadership
It’s never been realistic to break leadership into a fixed set of
essential competences, and that’s particularly the case in
today’s
complex, volatile environment. Still, the themes our
interviewees
sounded represent a rich set of opportunities for leaders to boost
their effectiveness. To close, we’d like to amplify and extend
those
themes by emphasizing three skills that can help leaders thrive
in
today’s turbulent environment, which for many has prompted
a reexamination of fundamental assumptions about how they do
their jobs, while underscoring the importance of leading with
a purpose. Resilient leaders, as Shimon Peres reminded us, are
those who have “ambition for a cause greater than themselves.”
1. See with a microscope and a telescope
Over the next two decades, McKinsey research suggests, the
conditions of the late 20th century—cheap capital, low interest
rates,
a global demographic dividend, and a gradual decline in com-
modity prices—will either be reversed or seesaw violently.
Manag-
ing the immediacy of these changes, while also staying alert
for the inflection points that signal bigger, long-term “trend
breaks,”
will require leaders to see the world in multiple ways at once.
In different ways, many leaders have told us they’ve needed to
develop a facility for viewing the world through two lenses:
a telescope, to consider opportunities far into the future, and a
microscope, to scrutinize challenges of the moment at intense
magnification. Most of us are naturally more comfortable with
one
lens or the other; we are “farsighted” or “nearsighted,” but
rarely
both. In times of complexity, leaders must be able to see clearly
through either lens and to manage the shift between the two
with speed and ease.
Leaders must use the telescope to watch for long-term trends,
dream big dreams, imagine where a company should be in five
or
ten years, and reallocate resources accordingly. The
accelerating
pace of technological innovation makes this aspect of a leader’s
15
role more important than ever. The microscope, too, affords
a critical perspective. Leaders must force their organizations to
challenge conventional wisdom; consider the implications
of unlikely, “long-tail” scenarios; and focus on pressing issues
in
minute detail. As organizations grow larger and more complex,
leaders must work harder to stay in touch with the front line and
view themselves as “chief reality testers.”
2. Compete as a tri-sector athlete
Many of the forces buffeting leaders in the private sector—slow
growth, unemployment, sovereign indebtedness—can be
addressed only in concert with the public sector and are heavily
influenced by the actions of groups that are neither commer-
cial nor governmental entities. When governments play an ever
more active role in regulating markets, and social movements
can spring up in a matter of days, corporate leaders must be
nimble
“tri-sector athletes,” to borrow a phrase from Harvard political
scientist Joseph Nye: able to engage and collaborate across the
private, public, and social sectors. Leaders of governments
and nongovernmental organizations must likewise break out of
their silos. Issues such as infrastructure, unemployment, educa-
tion, or protecting the environment are too complex and
interrelated
to deal with in isolation. Many of the leaders with whom we
spoke said they have learned the value of examining their
business
decisions in a social and political context. Even those wary of
open-ended discussions about corporate social responsibility
say
As organizations grow larger and more
complex, leaders must work harder
to stay in touch with the front line and view
themselves as “chief reality testers.”
16
they find it useful to think about managing a “triple bottom
line”
that reflects their organizations’ performance in the public,
private,
and social spheres.
3. Stay grounded during a crisis
Everyone we interviewed agreed that modern leaders spend far
more of their time firefighting than their predecessors did.
Coping
with externally generated crises, many argued, has become a
key part of the modern leader’s role. In an age when crisis is the
new normal, global organizations need leaders who are able
to act quickly and calmly amid chaos. Many leaders highlighted
the
value of “stress-testing” members of the top team to gauge their
ability to cope with crisis. We heard again and again that
otherwise
competent managers can’t always perform in moments of
extraordinary pressure. The chief executive of one of the
world’s
largest companies marveled at how, in the face of a cash flow
crisis following the collapse of Lehman Brothers, two of his top
reports “shattered like glass.”
The emotional and physical stamina demanded of leaders today
is
extraordinary. Many of those we interviewed reserve crucial
decisions for moments when they know they will be rested and
free from distraction. They also talked about sequencing deci-
sions to focus on key issues first, not after they have been
depleted
by lesser matters. We are intrigued by the growing body of
research in psychology, sociology, and neuroscience that high-
lights the importance of “decision fatigue.” The implication
of this research is that trying to make too many decisions at
once
diminishes the ability to make wise decisions at all.
17
If the burden of leadership in the modern age seems
overwhelming,
the potential benefits are overwhelming too. Large
organizations—
if led well—can do more for more people than they have at any
other
moment in history. That is the flip side of all the chaos,
complex-
ity, and pressure, and it makes leading through those challenges
a
noble endeavor.
Copyright © 2012 McKinsey & Company. All rights reserved.
We welcome your comments on this article. Please send them to
[email protected]
Dominic Barton is McKinsey’s global managing director,
Andrew Grant
is a director in McKinsey’s Singapore office, and Michelle Horn
is a principal
in the Atlanta office.
Managing global organizations has been a business chal-
lenge for centuries. But the nature of the task is changing with
the
accelerating shift of economic activity from Europe and North
America to markets in Africa, Asia, and Latin America.
McKinsey
Global Institute research suggests that 400 midsize emerging-
market cities, many unfamiliar in the West, will generate nearly
40 percent of global growth over the next 15 years. The
International
Monetary Fund confi rms that the ten fastest-growing economies
during the years ahead will all be in emerging markets. Against
this
backdrop, continuing advances in information and communi-
cations technology have made possible new forms of
international
coordination within global companies and potential new ways
for them to fl ourish in these fast-growing markets.
There are individual success stories. IBM expects to earn 30
percent
of its revenues in emerging markets by 2015, up from 17
percent
in 2009. At Unilever, emerging markets make up 56 percent of
the
business already. And Aditya Birla Group, a multinational con-
glomerate based in India, now has operations in 40 countries
and
earns more than half its revenue outside India.
But, overall, global organizations are struggling to adapt. A
year ago,
we uncovered a “globalization penalty”: high-performing global
companies consistently scored lower than more locally focused
ones
The global company’s
challenge
As the economic spotlight shifts to
developing markets, global companies
need new ways to manage their
strategies, people, costs, and risks.
Martin Dewhurst, Jonathan Harris,
and Suzanne Heywood
J U N E 2 0 1 2
O R G A N I Z A T I O N P R A C T I C E
22
on several dimensions of organizational health.1 For example,
the
former were less effective at establishing a shared vision,
encouraging
innovation, executing “on the ground,” and building
relationships
with governments and business partners. Equally arresting was
evi-
dence from colleagues in McKinsey’s strategy practice showing
that global companies headquartered in emerging markets have
been
growing faster than counterparts headquartered in developed
ones, even when both are operating on “neutral turf”: emerging
mar-
kets where neither is based (see “Parsing the growth advantage
of emerging-market companies,” on mckinseyquarterly.com).
Over the past year, we’ve tried to understand more clearly the
chal-
lenges facing global organizations, as well as approaches that
are helping some to thrive. Our work has included surveys and
struc-
tured interviews with more than 300 executives at 17 of the
world’s
leading global organizations spanning a diverse range of sectors
and
geographies, a broader survey of more than 4,600 executives,
and
time spent working directly with the leaders of dozens of global
organizations trying to address these issues.2
Clearly, no single organizational model is best for all
companies hand-
ling the realities of rapid growth in emerging markets and
round-
the-clock global communications. That’s partly because the
opportu-
nities and challenges facing companies vary, depending on their
business models. R&D-intensive companies, for example, are
working
to staff new research centers in the emerging world and to inte-
grate them with existing operations. Firms focused on extracting
natural resources are adapting to regulatory regimes that are
evolving rapidly and sometimes becoming more interventionist.
Consumer-oriented fi rms are facing sometimes-confl icting
imper-
atives to tailor their businesses to local needs while maintaining
con-
sistent global processes.
Another reason no single model fi ts all global companies is that
their
individual histories are so different. Those that have grown
organ-
ically often operate relatively consistently across countries but
fi nd it
hard to adjust their products and services to local needs, given
their fairly standardized business models. Companies that have
mainly
grown through M&A, in contrast, may fi nd it easier to tailor
1 See Martin Dewhurst, Jonathan Harris, and Suzanne
Heywood, “Understanding
your ‘globalization penalty’,” mckinseyquarterly.com, July
2011.
2 See “Managing at global scale: McKinsey Global Survey
results,” mckinseyquarterly.com,
June 2012.
3
operations to local markets but harder to integrate their various
parts so they can achieve the potential of scale and scope and
align a
dispersed workforce behind a single set of strategies and values.
Although individual companies are necessarily responding
differently
to the new opportunities abroad, our work suggests that most
face
a common set of four tensions in managing strategy, people,
costs, and
risk on a global scale. The importance of each of these four
tensions
will vary from company to company, depending on its particular
oper-
ating model, history, and global footprint. (For more on the
impli-
cations of these uneven globalization efforts, see “Developing
global
leaders,” on mckinseyquarterly.com.) Taking stock of the status
of all
four tensions can be a useful starting point for a senior-
management
team aiming to boost an organization’s global performance.
Strategic confidence and stretch
Being global brings clear strategic benefi ts: the ability to
access new
customer markets, new suppliers, and new partners. These
immediate
benefi ts can also create secondary ones. Building a customer
base
in a new market, for example, provides familiarity and
relationships
that may enable additional investments—say, in a research
center.
But being global also brings strategic challenges. Many
companies
fi nd it increasingly diffi cult to be locally fl exible and
adaptable
as they broaden their global footprint. In particular, processes
for
developing strategy and allocating resources can struggle to
cope
with the increasing diversity of markets, customers, and
channels.
These issues were clear in our research: fewer than 40 percent
of the 300 senior executives at global companies we interviewed
and
surveyed believed that their employers were better than local
competitors at understanding the operating environment and
cus-
tomers’ needs. And barely half of the respondents to our
broader
survey thought that their companies communicated strategy
clearly
to the workforce in all markets where they operate.
People as an asset and a challenge
Many of the executives we interviewed believed strongly that
the
vast reserves of skills, knowledge, and experience within the
global
workforce of their companies represented an invaluable asset.
But
44
making the most of that asset is diffi cult: for example, few
surveyed
executives felt that their companies were good at transferring
les-
sons learned in one emerging market to another.
At the same time, many companies fi nd deploying and
developing
talent in emerging markets to be a major challenge. Barely half
the executives at the 17 global companies we studied in depth
thought
they were effective at tailoring recruiting, retention, training,
and development processes for different geographies. An
emerging-
market leader in one global company told us that “our current
pro-
cess favors candidates who have been to a US school,
understand the
US culture, and can conduct themselves effectively on a call
with
head offi ce in the middle of the night. The process is not
designed to
select for people who understand our market.”
One of our recent surveys showed how hard it is to develop
talent
for emerging markets at a pace that matches their expected
growth.
Executives reported that just 2 percent of their top 200
employees
were located in Asian emerging markets that would, in the years
ahead, account for more than one-third of total sales.
Complicating
matters is the fact that local highfl iers in some key markets
increas-
ingly prefer to work for local employers (see “How
multinationals can
attract the talent they need,” on mckinseyquarterly.com). Global
companies are conscious of this change. “Local competitors’
brands
are now stronger, and they can offer more senior roles in the
home
market,” noted one multinational executive we interviewed.
Scale and scope benefits, complexity costs
Large global companies still enjoy economic leverage from
being able
to invest in shared infrastructure ranging from R&D centers to
procurement functions. Economies of scale in shared services
also
are signifi cant, though no longer uniquely available to global
companies, as even very local ones can outsource business
services
and manufacturing and avail themselves of cloud-based
computing.
But as global companies grow bigger and more diverse,
complexity
costs inevitably rise. Efforts to standardize the common
elements
of essential functions, such as sales or legal services, can clash
with
local needs. And emerging markets complicate matters, as oper-
ations located there sometimes chafe at the costs they must bear
as
5
part of a group centered in the developed world: their share of
the expense of distant (and perhaps not visibly helpful)
corporate and
regional centers, the cost of complying with global standards
and
of coordinating managers across far-fl ung geographies, and the
loss
of market agility imposed by adhering to rigid global processes.
Risk diversification and the loss of familiarity
A global company benefi ts from a geographically diverse
business
portfolio that provides a natural hedge against the volatility of
local
growth, country risk, and currency risk. But pursuing so many
emerging-market opportunities is taking global companies deep
into
areas with unfamiliar risks that many fi nd diffi cult to evaluate.
Less than half of the respondents to our 2011 survey thought
these
organizations had the right risk-management infrastructure and
skills to support the global scale and diversity of their
operations.
Furthermore, globally standard, exhaustive risk-management
processes may not be the best way to deal with risk in markets
where
global organizations must move fast to lock in early
opportunities.
One executive in an emerging-market outpost of a global
company
told us “a mind-set that ‘this is the way that we do things
around
here’ is very strongly embedded in our risk process. When
combined
with the fact that the organization does not fully understand
emerging markets, it means that our risk process might reject
opportunities that [the global] CEO would approve.”
Understanding these tensions is just a starting point. Capturing
the
benefits and mitigating the challenges associated with each
will require global companies to explore new ways of
organizing and
operating.
The authors would like to acknowledge the contributions of
Kate Aquila and Roni
Katz to the development of this article.
Martin Dewhurst is a director in McKinsey’s London office,
where Suzanne
Heywood is a principal; Jon Harris is a director in the New
York office.
Copyright © 2012 McKinsey & Company. All rights reserved.
We welcome your
comments on this article. Please send them to [email protected]
Read the following articles and optional chapters and answer
the following questions:
· Behind the Global Curve(HR People & Strategy, 5 page
article, Dr. Mandi coauthored while on the faculty at
Thunderbird; it repeats the overview material about the GMI, so
you can skip over those parts)
· The global company’s challenge(McKinsey Quarterly, 5
pages)
· Leading in the 21st century(McKinsey Quarterly,
17 pages; 6 global leaders share their thoughts on challenges of
global uncertainty; skim the article and read the parts you find
interesting)
· Optional: GM Book Introduction
· Optional: GM Book GLOBAL Mindset
1. In the back of your GMI reports there is space for reflection.
Complete the questions on your own individually. Then,
summarize your answers into 2 paragraphs.
2. How does this material help you, personally, enhance your
global mindset capabilities and be a more effective leader and
manager? Be specific by referring to the articles.
· Post answers to all the questions proposed in the
assignment by 2/13 5:30pm (see the schedule in this syllabus
for exact due dates) and bring your answers with you to class.
You will then discuss your answers with your classmates in
class.
· These deadlines are very strictly adhered to. Each assignment
is available for at least two weeks and will expire at 5:30 on
Wednesdays, according to the dates on the course schedule in
this syllabus. Students are discouraged from waiting until the
last minute to complete each assignment. It is always hard to
predict technical difficulties, like being sick, having car
trouble, or losing electricity or an internet connection. Late
submissions are never accepted. Failure to submit the
assignment by the posted due date/time will result in a grade of
0 for that assignment, and there are NO EXCEPTIONS to this
rule, even if the student has a excused absence from class.
· Homework assignment grades will be determined by the
quality of each student’s post and the timeliness of meeting the
posting deadlines. You should provide thoughtful answers that
relate to and utilize the material in the course. If the question
asks for your opinion, then share it and allow the others to
agree, disagree, or simply comment when you dialog with them
in class. Simple and short answers that do not sufficiently or
intelligently answer the question will be graded poorly.
However, you also want to be aware of being too long winded
and not being able to efficiently communicate your thoughts in
a concise statement.
Rubric
BUAD 878 Hybrid Homework Assignments
BUAD 878 Hybrid Homework Assignments
Criteria
Ratings
Pts
This criterion is linked to a Learning OutcomeAnswered all the
required questions
5.0 pts
Full Marks
0.0 pts
No Marks
5.0 pts
This criterion is linked to a Learning OutcomeCited assigned
material
5.0 pts
Full Marks
0.0 pts
No Marks
5.0 pts
This criterion is linked to a Learning OutcomeProvided an
opinion/personal experiences and thoughtful comments that
relate to and utilize the material in the course
5.0 pts
Full Marks
0.0 pts
No Marks
5.0 pts
Total Points: 15.0
Generation "LIKE"
Discussion Forum
SOCIAL MEDIA – Generation “LIKE”
It has been said that Social Media is the future of advertising.
What is your opinion of social media? Does it empower or
exploit?
The following link takes you to a PBS documentary entitled
“Generation Like”
http://www.pbs.org/wgbh/pages/frontline/generation-like/
This program examines how consumers are now also marketers,
and teens are able to create and interact with culture very new
ways. Companies are still figuring out how to profit from this
shift.
Is social media really worth the kind of money that investors are
paying?
Explain what “Like”ing someone’s post on Facebook
means to you.
Does knowing others “Like” what you “Like” influence
you? Explain.
How do companies use social media to advertise?
Is social media empowering or exploiting teens?
Do Kids think they are being used? Do they care?

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It has been said that Social Media is the future of advertising.  .docx

  • 1. It has been said that Social Media is the future of advertising. What is your opinion of social media? Does it empower or exploit? I believe that Social Media can be both and operates on a fine line. For those over the age of 18, you are aware of the information you are putting out there and the privacy levels of which it is shown. I personally am not bothered by the targeted advertising of which social media is the vehicle because I choose what I participate in and what information I am offering up. For the younger audience that is less aware and more malleable it can work both ways. It can be a great outlet to further self expression, but it can also be detrimental in influencing young minds to look to external sources for self acceptance. Is social media really worth the kind of money that investors are paying? Yes, as we move away from print and cable, social media and streaming services are becoming the easiest way to get marketing impressions. If done successfully, items or campaigns trend and reach a huge audience for a lower cost. Explain what “Like”ing someone’s post on Facebook means to you. For me "like"ing is a way for me to express my interest in something someone shared. I am fairly selective about liking and only do so when I agree with something, fing entertainment from the content, or have an emotional connection to something shared. I only like content that resonates with me. For some others I think "like"ing something is just a way to identify they read or watched the content and were listening. Does knowing others “Like” what you “Like” influence you? Explain. I would not say it particularly influences whether I like something, but does expose or impress upon me new content I
  • 2. might be interested in. I find I enjoy content of those who have common "likes" since we have similar taste. Facebook actually use an algorithm to gear your feed to show content of those who you "like" more. For example, during the presidential elections you likely got more content that agreed with your viewpoints as you liked others who had similar viewpoints and that content then got prioritized on your feed. This can be good because you may not be interested in content of which does not resonate with you, but also bad in limiting your viewpoint. How do companies use social media to advertise? Mostly, social media is used by companies to produce targeted marketing through big data or as a vehicle to create trendy content that catches like wildfire. For example, the ALS Ice Bucket Challenge, which raised awareness and donations for ALS by inciting popular content people wanted to be involved in. Marketing till social media was largely hands off, now it's all about the power of the people. Is social media empowering or exploiting teens? I think it can be on both ends of the spectrum. From their perspective I think most teens feel they now have a vehicle for their voice and a way to express themselves. From a more adult perspective I think it can elevate the value of external value to internal value, which can be a negative. Do Kids think they are being used? Do they care? I think most kids are aware they are being physically being used as a marketing vehicle, but don't feel used in the sense of being exploited. In other words they don't feel exploited because they are reaping benefits equal to what they are providing in marketing, otherwise I don't think they would be so actively involved. I think it makes them feel they have a voice, in a time where they feel they are not understood or listened to.
  • 3. Thunderbird Global Mindset ® Inventory Jiangyi Qiu 08-Feb-18 1/20© 2016 Thunderbird School of Global Management. All Rights Reserved. Jiangyi Qiu What is Global Mindset? Global Mindset is the ability to influence others who are different than you. It is a critical combination of intellectual, psychological and social capital: • Intellectual Capital refers to your global business savvy, cosmopolitan outlook, and cognitive complexity. • Psychological Capital refers to your passion for diversity, quest for adventure, and your self- assurance. • Social Capital refers to your intercultural empathy, interpersonal impact, and diplomacy. Why is Global Mindset Important? Today’s corporations are more globally connected than ever
  • 4. before. They are in pursuit of global customers, global talent, global credit, global manufacturing, global partners, and global supply chains. They have a large global workforce, use global business and virtual teams, and need to work with large numbers of groups and organizations in many parts of the world. As a consequence, their managers and leaders need to be effective in working and dealing with people who are different from them. Their success will depend on their ability to influence others from many parts of the world to help achieve their organizational goals. Global Mindset is a set of individual attributes that help global leaders and managers do a better job of influencing others who are different from them. Can Global Mindset Be Developed? YES! All elements of Global Mindset can be developed and improved. But it is true that some aspects of Global Mindset are easier to develop than others. During the feedback workshop, you and your colleagues, working individually and in groups, will identify ways of improving your own, and your group's stock of Global Mindset. At the end of the session, you will receive Thunderbird's suggestions on how to improve your Global Mindset. 2/20© 2016 Thunderbird School of Global Management. All Rights Reserved. QiuJiangyi QiuJiangyi
  • 5. QiuJiangyi QiuJiangyi Jiangyi Qiu About This Report This report is designed to provide you with feedback on your approach in dealing with people from other cultural and geographic backgrounds. Increasingly, managers are expected to work effectively with individuals and groups from different parts of the world. Therefore, the ability to master such relationships is becoming more important. The purpose of this feedback report is to help you find ways of improving your ability to deal with people from diverse cultural settings. The report provides feedback on your personal profile of Global Mindset, as well as your group's profile of Global Mindset. The report is based on the Thunderbird Global Mindset Inventory, a scientifically based instrument that has been used to collect data from thousands of respondents working for global organizations in many countries. The instrument has strong scientific properties and has been developed through a rigorous scientific process. Here are the details of your report: Page 4 Your overall profile of Global Mindset Page 5 The complete structure of Global Mindset Page 6 Detailed explanation of Intellectual Capital
  • 6. Page 7 Your profile of Intellectual Capital Page 8 Detailed explanation of Psychological Capital Page 9 Your profile of Psychological Capital Page 10 Detailed explanation of Social Capital Page 11 Your profile of Social Capital Page 12 Your overall profile of Global Mindset (repeat of page 4) Page 13 Your Global Mindset profile sorted from your highest score to the lowest score. Page 14-15 The Group Profile Page 16 Global Mindset Scores Summary Page 17-19 Your Personal Observations Good Luck! 3/20© 2016 Thunderbird School of Global Management. All Rights Reserved. QiuJiangyi Jiangyi Qiu Your Global Mindset Profile
  • 7. Intellectual Capital Psychological Capital Social Capital Your Score Group Mean (n=24) Grand Mean (n=34,416) 1 2 3 4 5 Not at all To a small extent To a moderate extent To a large extent To a very large extent Note: The light gray bars below the Group Avg. and the Grand Mean indicate the range of min. and max. values for the Group and Grand Mean respectively. TEST TEST TEST 3.24 3.28 3.26 3.21 3.58
  • 8. 3.86 3.10 3.51 3.48 4/20© 2016 Thunderbird School of Global Management. All Rights Reserved. QiuJiangyi Jiangyi Qiu On the following pages you will receive your scores on all of the above elements of Global Mindset. 5/20© 2016 Thunderbird School of Global Management. All Rights Reserved. QiuJiangyi Jiangyi Qiu Intellectual Capital Your Intellectual Capital reflects your global business savvy, your cosmopolitan outlook, and your cognitive
  • 9. complexity. The following are major elements of Intellectual Capital. Global Business Savvy: • Knowledge of global industry • Knowledge of global competitive business and marketing strategies • Knowledge of how to transact business and assess risks of doing business internationally • Knowledge of supplier options in other parts of the world Cosmopolitan Outlook: • Knowledge of cultures in different parts of the world • Knowledge of geography, history, and important persons of several countries • Knowledge of economic and political issues, concerns, hot topics, etc. of major regions of the world • Up-to-date knowledge of important world events Cognitive Complexity: • Ability to grasp complex concepts quickly • Strong analytical and problem solving skills • Ability to understand abstract ideas • Ability to take complex issues and explain the main points
  • 10. simply and understandably Individuals with high scores on Intellectual Capital tend to be very knowledgeable about their global industry. They understand how the industry operates and how global competitors position themselves to generate competitive advantage. They also know how global customer markets behave and how various competitors attempt to target their markets. They have an understanding of supply chain options and issues in their industry and are cognizant of country risk analysis in global decision making. A high score on Intellectual Capital reflects strong understanding of culture, history, geography, and political and economic systems in different parts of the world. It also reflects the ability to understand the complexity of global business and the ability to find appropriate solutions to complex problems. TEST 6/20© 2016 Thunderbird School of Global Management. All Rights Reserved. QiuJiangyi Jiangyi Qiu Your Intellectual Capital Profile Global Business Savvy
  • 11. Cosmopolitan Outlook Cognitive Complexity Your Score Group Mean (n=24) Grand Mean (n=34,416) 1 2 3 4 5 Not at all To a small extent To a moderate extent To a large extent To a very large extent Note: The light gray bars below the Group Avg. and the Grand Mean indicate the range of min. and max. values for the Group and Grand Mean respectively. Your personal observations: TEST TEST TEST 3.63 2.94 2.61 3.29 3.16
  • 12. 3.22 2.80 3.75 3.93 7/20© 2016 Thunderbird School of Global Management. All Rights Reserved. QiuJiangyi Jiangyi Qiu Psychological Capital Psychological Capital reflects your passion for diversity, quest for adventure, and your self- assurance. The following are the major elements of Psychological Capital. Passion for diversity: • Enjoy exploring other parts of the world • Enjoy getting to know people from other parts of the world • Enjoy living in another country • Enjoy traveling Quest for Adventure:
  • 13. • Interest in dealing with challenging situations • Willingness to take risk • Willingness to test one’s abilities • Enjoy dealing with unpredictable situations Self-Assurance: • Energetic • Self-confident • Comfortable in uncomfortable situations • Witty in tough situations Individuals who score high on Psychological Capital, tend to have a passion for diversity which leads them to enjoy exploring other parts of the world, other cultures, and other ways of doing things. They enjoy meeting people from other countries and living in other corners of the world. They tend to consider themselves as citizens of the world and enjoy the opportunity to learn about other cultures and peoples. A high score on Psychological Capital reflects a high level of self confidence, a sense of humor, and a willingness to take risks. It reflects a desire to challenge oneself and the ability to thrive in unpredictable and complex environments. TEST 8/20© 2016 Thunderbird School of Global Management. All
  • 14. Rights Reserved. QiuJiangyi Jiangyi Qiu Your Psychological Capital Profile Quest for Adventure Self-Assurance Passion for Diversity Your Score Group Mean (n=24) Grand Mean (n=34,416) 1 2 3 4 5 Not at all To a small extent To a moderate extent To a large extent To a very large extent Note: The light gray bars below the Group Avg. and the Grand Mean indicate the range of min. and max. values for the Group and Grand Mean respectively. Your personal observations: TEST TEST
  • 15. TEST 3.40 3.62 3.77 3.20 3.45 3.66 3.03 3.67 4.15 9/20© 2016 Thunderbird School of Global Management. All Rights Reserved. QiuJiangyi Jiangyi Qiu Social Capital Social Capital reflects your intercultural empathy, interpersonal impact, and diplomacy. The following are the major elements of Social Capital.
  • 16. Intercultural Empathy: • Ability to work well with people from other parts of the world • Ability to understand nonverbal expressions of people from other cultures • Ability to emotionally connect to people from other cultures • Ability to engage people from other parts of the world to work together Interpersonal Impact: • Experience in negotiating contracts/agreements in other cultures • Strong networks with people from other cultures and with influential people • Reputation as a leader Diplomacy: • Ease of starting a conversation with a stranger • Ability to integrate diverse perspectives • Ability to listen to what others have to say • Willingness to collaborate Individuals who receive high scores on Social Capital, are better able to build trusting relationships with people who are different from them. They are viewed as effective leaders and diplomats in the sense that they
  • 17. are good listeners, at ease in conversations with other, and are able to bring divergent views together and develop consensus among different parties. A high score signifies the ability to show empathy, and emotionally connect to people from other parts of the world. It reflects the ability to engage others and to have an extensive network of friends and colleagues in different countries. TEST 10/20© 2016 Thunderbird School of Global Management. All Rights Reserved. QiuJiangyi Jiangyi Qiu Your Social Capital Profile Interpersonal Impact Intercultural Empathy Diplomacy Your Score Group Mean (n=24) Grand Mean (n=34,416) 1 2 3 4 5
  • 18. Not at all To a small extent To a moderate extent To a large extent To a very large extent Note: The light gray bars below the Group Avg. and the Grand Mean indicate the range of min. and max. values for the Group and Grand Mean respectively. Your personal observations: TEST TEST TEST 3.33 3.13 3.03 3.17 3.52 3.44 2.80 3.88 3.97 11/20© 2016 Thunderbird School of Global Management. All Rights Reserved.
  • 19. QiuJiangyi Jiangyi Qiu Your Global Mindset Profile Intellectual Capital Psychological Capital Social Capital Your Score Group Mean (n=24) Grand Mean (n=34,416) 1 2 3 4 5 Not at all To a small extent To a moderate extent To a large extent To a very large extent Note: The light gray bars below the Group Avg. and the Grand Mean indicate the range of min. and max. values for the Group and Grand Mean respectively. TEST TEST TEST 3.24
  • 20. 3.28 3.26 3.21 3.58 3.86 3.10 3.51 3.48 12/20© 2016 Thunderbird School of Global Management. All Rights Reserved. QiuJiangyi Jiangyi Qiu Your Detailed Global Mindset Profile Global Business Savvy Quest for Adventure Interpersonal Impact Cosmopolitan Outlook
  • 21. Self-Assurance Intercultural Empathy Passion for Diversity Cognitive Complexity Diplomacy 1 2 3 4 5 Not at all To a small extent To a moderate extent To a large extent To a very large extent Note: The light gray bars below the Participant's score indicate the range of min. and max. values for the Group This chart is designed to show your nine dimensions of Global Mindset sorted from the highest to the lowest score based on your self-assessment. The dimensions are color coded. Dimensions of Intellectual Capital are shown in yellow boxes and borders. The three dimensions of Psychological Capital are displayed in blue boxes and borders. And dimensions of Social Capital are displayed in red boxes and borders. A score of 4 or higher means that you believe you are good at that dimension, although there are still things you can do to improve. A score of 3 to 4 means that you are pretty good at that dimension but need to get better at it. A score of 3 and below means that it is urgent for you to think seriously about a plan to improve that particular dimension. Your success as a global leader requires serious attention to that dimension.
  • 23. 13/20© 2016 Thunderbird School of Global Management. All Rights Reserved. QiuJiangyi Jiangyi Qiu The Group Profile of Global Mindset Psychological Capital Social Capital Intellectual Capital Group Mean (n=24) Grand Mean (n=34,416) 1 2 3 4 5 Not at all To a small extent To a moderate extent To a large extent To a very large extent This chart shows the profile of your group's Global Mindset and how it compares to our Grand Mean sample of global managers. It is sorted from the highest score to the lowest on the three categories of Intellectual Capital, Psychological Capital, and Social Capital. TEST
  • 24. TEST TEST 3.58 3.86 3.51 3.48 3.28 3.26 14/20© 2016 Thunderbird School of Global Management. All Rights Reserved. QiuJiangyi Jiangyi Qiu The Detailed Group Profile of Global Mindset Diplomacy Cognitive Complexity Passion for Diversity Quest for Adventure
  • 25. Intercultural Empathy Self-Assurance Cosmopolitan Outlook Interpersonal Impact Global Business Savvy Group Mean (n=24) Grand Mean (n=34,416) 1 2 3 4 5 Not at all To a small extent To a moderate extent To a large extent To a very large extent This chart shows the detailed profile of your group's Global Mindset and how it compares to our Grand Mean sample of global managers. It is sorted from the highest score to the lowest on the nine dimensions of Global Mindset. The dimensions are color coded. Dimensions of Intellectual Capital are shown in yellow boxes and borders. The three dimensions of Psychological Capital are displayed in blue boxes and borders. And dimensions of Social Capital are displayed in red boxes and borders. A score of 4 or higher means that the group believes it is good at that dimension, although there are still things you can do to improve. A score of 3 to 4 means that the group is pretty good at that dimension but needs to get better at it. A score of 3 and below means that it is urgent for the group to think seriously about a plan to improve that particular dimension. Your success as a group of global leaders requires serious
  • 26. attention to that dimension. TEST TEST TEST TEST TEST TEST TEST TEST TEST 3.88 3.97 3.75 3.93 3.67 4.15 3.62 3.77 3.52 3.44 3.45
  • 27. 3.66 3.16 3.22 3.13 3.03 2.94 2.61 15/20© 2016 Thunderbird School of Global Management. All Rights Reserved. QiuJiangyi Jiangyi Qiu Global Mindset Scores Summary Jiangyi Qiu 3.21 3.10 3.24 3.03 3.40 3.20 3.17 3.33 2.80 3.63 2.80 3.29 Group Mean 3.58 3.51 3.28 3.67 3.62 3.45 3.52 3.13 3.88 2.94 3.75 3.16 Max 4.94 4.77 4.09 4.82 5.00 5.00 4.50 5.00 4.80 4.00 5.00 4.43 75th Percentile 3.88 4.11 3.70 4.14 3.90 3.80 4.04 3.75 4.60 3.63 4.20 3.60 50th Percentile 3.65 3.45 3.30 3.61 3.60 3.50 3.59 3.33 4.00 3.00 3.80 3.07
  • 28. 25th Percentile 3.22 3.02 2.96 3.39 3.15 2.80 3.09 2.33 3.35 2.22 3.40 2.68 Min 2.58 1.95 2.42 2.61 2.40 2.20 2.17 1.33 2.00 1.75 2.40 2.14 Grand Mean 3.86 3.48 3.26 4.15 3.77 3.66 3.44 3.03 3.97 2.61 3.93 3.22 Max 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 75th Percentile 4.30 3.95 3.72 4.83 4.20 4.20 4.00 3.67 4.40 3.25 4.40 3.86 50th Percentile 3.92 3.50 3.25 4.33 3.80 3.60 3.50 3.00 4.00 2.63 4.00 3.14 25th Percentile 3.50 3.02 2.79 3.67 3.40 3.20 2.83 2.33 3.60 1.88 3.60 2.57 Min 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 16/20© 2016 Thunderbird School of Global Management. All Rights Reserved. QiuJiangyi QiuJiangyi QiuJiangyi Your Score
  • 29. Jiangyi Qiu Your Personal Observations 1. What is your assessment of the need for you to possess a global mindset? Now? Five years from now? 2. What are the consequences of your doing nothing to further develop your global mindset? 3. What are your areas of relative strength? 17/20© 2016 Thunderbird School of Global Management. All Rights Reserved. QiuJiangyi Jiangyi Qiu Your Personal Observations 4. What are your areas of developmental opportunities? 5. What are your priorities over the next 6 to 12 months for further strengthening and leveraging your areas of strength? 18/20© 2016 Thunderbird School of Global Management. All Rights Reserved.
  • 30. QiuJiangyi Jiangyi Qiu Your Personal Observations 6. What are your priorities over the next 6 to 12 months for improving your areas of developmental opportunity? 7. What are your top 3 to 5 action plan steps for the next 6 to 12 months? 19/20© 2016 Thunderbird School of Global Management. All Rights Reserved. QiuJiangyi Jiangyi Qiu 20/20© 2016 Thunderbird School of Global Management. All Rights Reserved. Six global leaders confront the personal and professional challenges of a new era of uncertainty.
  • 31. Leading in the 21st century Dominic Barton, Andrew Grant, and Michelle Horn It is often said that the principles of great leadership are timeless, or based on immutable truths. But when we meet with the men and women who run the world’s largest organizations, what we hear with increasing frequency is how different everything feels from just a decade ago. Leaders tell us they are operating in a bewilder- ing new environment in which little is certain, the tempo is quicker, and the dynamics are more complex. They worry that it is impossible for chief executives to stay on top of all the things they need to know to do their job. Some admit they feel overwhelmed. To understand the leadership challenge of our volatile, globalized, hyperconnected age more clearly, we recently initiated a series of structured interviews with the leaders of some of the world’s largest and most vibrant organizations. Excerpts from six of those conversations appear below. The leaders—Josef Ackermann, formerly of Deutsche Bank; Carlos Ghosn of Nissan and Renault;
  • 32. Moya Greene of Royal Mail Group; Ellen Kullman of DuPont; President Shimon Peres of Israel; and Daniel Vasella of Novartis— represent a diverse array of viewpoints. All are grappling with today’s environment in different ways. But the common themes that emerged from these conversations—what it means to lead in an J U N E 2 0 1 2 Leaders on leadership Meet the leaders Josef Ackermann is the former CEO and chairman of the management board at Deutsche Bank. He recently retired after a decade as CEO and six years as chairman. Carlos Ghosn is the CEO and chairman of the Renault- Nissan Alliance. He has been the CEO of Nissan since 2001 and the CEO of Renault since 2005. Together, the two companies produce more than one in ten cars sold worldwide. 2 age of upheaval, to master personal challenges, to be in the limelight continually, to make decisions under extreme
  • 33. uncertainty— offer a useful starting point for understanding today’s leader- ship landscape. After presenting the ideas of these leaders on leadership, we offer a few additional reflections on the topic. They draw in part on the interviews, as well as on our experiences with clients; on conversations with dozens of experts in academia, government, and the private sector; and on our review of the extensive academic and popular literature on the subject. All reinforce our belief that today’s leaders face extraordinary new challenges and must learn to think differently about their role and how to fulfill it. Those who do may have an opportunity to change the world in ways their predecessors never imagined. Daniel Vasella has been chairman of the Swiss pharmaceutical company Novartis AG since 1999. He served as the company’s CEO from 1996 to 2010. Shimon Peres is the ninth and current president of Israel. In a political career spanning more than 65 years, he has served twice as Israel’s prime minister and has been a member of 12 cabinets. Moya Greene was appointed CEO of the United Kingdom’s Royal
  • 34. Mail Group in 2010. From 2005 to 2010, she was CEO of Canada Post. 33 Ellen Kullman has served as DuPont’s CEO and board chair since 2009. She joined the company from General Electric in 1988 and was ranked fourth on the Forbes 100 Most Powerful Women list in 2011. 4 Leading in an age of upheaval A convergence of forces is reshaping the global economy: emerging regions, such as Africa, Brazil, China, and India, have over- taken economies in the West as engines of global growth; the pace of innovation is increasing exponentially; new technologies have created new industries, disrupted old ones, and spawned communication networks of astonishing speed; and global emergencies seem to erupt at ever-shorter intervals. Any one of these developments would have profound implications for organizations and the people who lead them. Taken together, these forces are creating a new context for leadership. Josef Ackermann: We experienced a tremendous shift in the global balance of power, which manifests itself in our business.
  • 35. In the 1980s, over 80 percent of Deutsche Bank revenues were generated in Germany. In the mid-1990s, they still accounted for about 70 percent. Today, Germany, despite its continuing eco- nomic strength, stands for 38 percent of global revenues. Over the years, people in our headquarters, in Frankfurt, started comp- laining to me, “We don’t see you much around here anymore.” Well, there was a reason why: growth has moved elsewhere—to Asia, Latin America, the Middle East—and this of course had consequen- ces on the time spent in each region. Managing risk also has become much more complex for banks. It’s not only market risk; there is more and more political and social risk. Increasingly, financial markets are becoming political markets. That requires different skills—skills not all of us have acquired at university; how to properly deal with society, for example, a stakeholder that has immensely grown in importance
  • 36. since the financial crisis. Carlos Ghosn: I don’t think leadership shows unless it is high- lighted by some kind of crisis. There are two kinds. There are internal crises that arise because a company has not been managed well. Then there are external crises, like the collapse of Lehman Brothers or the earthquake in Japan or the flood in Thailand. In 55 that case, you are managing your company, and all of a sudden there is this thing falling on you. Business schools may prepare people to deal with internal crises. But I think we need to be more prepared for external crises, where it’s not the strategy of the company that is in question; it’s the ability of leaders to figure out how to adapt that strategy. We are going to have a lot more of these external crises because we are living in such a volatile world—an age where every- thing is leveraged and technology moves so fast. You can be rocked
  • 37. by something that originated completely outside your area. I think one of the reasons Nissan has been able to cope with external crises better than some of our competitors is that we have a more diverse, multinational culture. We don’t just sit around waiting for the solution to come from headquarters. We are accus- tomed to always looking around, trying to find out who has the best ideas. Our people in the US talk to our people in Japan on an equal level. We have a lot more reference points. Ellen Kullman: These days, there are things that just come shooting across the bow—economic volatility and the impact of natural events like the Japanese earthquake and tsunami—at much greater frequency than we’ve ever seen. You have to be able to react very quickly. And the world is so connected that the feed- back loops are more intense. You’ve got population growth and the world passing seven billion people last year, and the stresses that
  • 38. causes, whether it’s feeding the world, creating enough energy, or protecting the environment. We matched our focus, our research and development, and our capital expenditures up against megatrends like these over the last five years. This is the future, so we need to understand how our science relates to it. Shimon Peres: The last two decades have witnessed the greatest revolution since Genesis. States have lost their importance and strength. The old theories—from Adam Smith to Karl Marx— have lost their value because they are based on things like land, labor, and wealth. All of that has been replaced by science. Ideas are now 6 more important than materials. And ideas are unpredictable. Science knows no customs, no borders. It doesn’t depend on distances or stop at a given point.
  • 39. Science creates a world where individuals can play the role of the collective. Two boys create Google. One boy creates Facebook. Another individual creates Apple. These gentlemen changed the world without political parties or armies or fortunes. No one anticipated this. And they themselves did not know what would happen as a result of their thoughts. So we are all surprised. It is a new world. You may have the strongest army—but it cannot conquer ideas, it cannot conquer knowledge. Mastering today’s personal challenges The rigors of leadership have prompted many leaders to think of themselves as being in training, much like a professional athlete: continually striving to manage their energy and fortify their character. There is a growing recognition of the connection between physical health, emotional health, and judgment—and of how important it can be to have precise routines for diet, sleep, exercise, and staying centered.1 Moya Greene: The first criterion is: do you love it? It’s a seven- day-a-week job. I think that’s true for anyone in these roles. If you don’t love the company and the people—really love them— you can’t do a job like this.
  • 40. I’m pretty energetic. I start at five in the morning. I don’t even think about it anymore; the alarm goes off and I’m up. I go for a 30- minute run. I do weight training three mornings a week. I try to eat well, but not too much. I’m a big walker—that’s my favorite thing. I try to get a good walk every weekend. I go on walking vacations. 1 For more on centered leadership, see Joanna Barsh, Josephine Mogelof, and Caroline Webb, “How centered leaders achieve extraordinary results,” mckinseyquarterly.com, October 2010. 7 I’ve usually got three or four books on the go. I’ve given up on novels. I can’t get through them no matter how good they are; there’s no way I’ll finish before there’s some kind of interruption. So I read poetry now: the collected works of Ted Hughes, Emily Dickinson.
  • 41. I’m working my way through Philip Larkin. You can take a Larkin poem and read it on the bus in 15 minutes. The good ones stay with you and will come back to you. That’s what I like about poetry: you get a little shot of mental protein without a lot of time. Josef Ackermann: Just to give you an idea of my calendar for the next ten days: Berlin tomorrow, then Seoul, then Munich, then Frankfurt, then Singapore, then the Middle East. I’m almost constantly on a plane. With all this traveling, physical stamina has become much more important. I remember a time when after flying to Hong Kong you could take a whole day off to recover. Today, right after landing you rush to your first meeting. And maybe you already have a conference call in the car on your way into town. You are lucky if you get enough time to take a shower. And of course, with all the new information technology, you are
  • 42. constantly available, and the flow of information you have to manage is huge; that has added to the pressure. You are much more exposed to unforeseen shifts and negative surprises and you have to make quick decisions and respond to or anticipate market movements around the world. So you have to have a very stable psyche as well. I see more and more people these days who just burn out. I’m not a tech freak. I use my iPhone and send text messages, that’s it. I still like to have paper in front of me and I do a lot in written- memo form. I think people who constantly use their BlackBerry or iPhone easily lose sight of the big picture. It also helps me enormously that I can sleep anywhere, whether I am in a car or an airplane. If you’re unable to relax quickly, I think you can’t be a CEO for a considerable length of time. Some people
  • 43. do meditation or yoga. I don’t do any such thing. I think you have it in your DNA or you don’t. 8 Dan Vasella: I talk to my team about the seductions that come with taking on a leadership role. There are many different forms: sexual seduction, money, praise. You need to be aware of how you can be seduced in order to be able to resist and keep your integrity. Every CEO needs someone who can listen—a board member, an adviser—someone to whom he can speak in total confidence, to whom he can say, “I’ve had it; I’m about to resign.” Or, “I really want to beat this guy up.” You need someone who understands and can help you to find the balance. Leaders often forget the importance of stable emotional relationships—especially outside the company. It helps tremendously to manage stress. Your partner will do a lot to help keep you in sync.
  • 44. You have to be able to switch on and switch off. Are you entirely present when you’re present? Can you be entirely away when you’re away? The expectation is that your job is 24/7. But no one can be the boss 24/7. You need to have a moment when you say, “I’m home now,” and work is gone. Carlos Ghosn: Leading takes a lot of stamina. I became CEO at 45. But I was working like a beast. You think, “So I work 15, 16 hours a day; who cares?” But you can’t do that when you are 60 or 65. And now companies are more global. So you have jet lag, you are tired, the food is different. You have to be very disciplined about schedules and about organizing everything. Physical discipline is crucial, for food, exercise, sleep. I live like a monk—well, maybe not a monk, but a Knight Templar. I wake at a certain hour, sleep at a certain hour. There are certain things I won’t do past a certain
  • 45. time. Ellen Kullman: I spend a lot more time on communication, more time out at plant sites, in sales offices, with customers, in our research laboratories. I’m bringing my board of directors to India in a couple of weeks to help them really see the issues we’re facing. That’s where I get my energy from. It’s contagious. I come away from these engagements with ideas, energy, and a real sense of focus on where we as a company need to go. That’s part of what drives me. 9 Shimon Peres: The mind of a leader must be free—a mind that can dream and imagine. All new things were born in dreams. A leader must have the courage to be a nonconformist, just like a scientist. He must dream, even if he dreams alone or if people laugh at him. He must not let his heart falter. Today, the separation between generations is stronger than between
  • 46. nations. Our children say, “Please don’t impose upon us your own arrogance—the world you created, wounded by war, corrupted by money, separated by hatred. And don’t try to build artificial walls between us and other youngsters.” Because they were born in a new age. For them, the modern equipment of communication is what paper and pen are for us. They can communicate much more easily and don’t feel all this hidden discrimination that we were born with and find so difficult to get rid of. The (now 24/7) public face of leadership Nearly everyone we spoke with commented on the challenge of dealing with constant scrutiny and of acting as a connector in a complex ecosystem. As the face of the organization, leaders must be prepared to address the immediate, practical concerns of the job while also maintaining and articulating a long-term vision of the organization’s purpose and role in society—all against a backdrop of 24-hour financial coverage, ubiquitous blogs, and Twitter feeds. That means learning new modes of communicat- ing across today’s far-flung networks and working harder to craft clear, simple messages that resonate across cultures.
  • 47. Josef Ackermann: CEOs have become highly public figures. And media scrutiny has become very personal. Particularly in our home market, Germany, it’s always, “Ackermann says this” or “Ackermann’s doing that”—even if I personally had nothing to do with it. You are the institution you lead. 10 “” You’re a product. And the press will paint you as either a hero or a villain—whatever sells. If they paint you as a hero today, you should be prepared to be painted as a villain tomorrow. After I became CEO, the former head of the Bundesbank one day took me aside and gave me some valuable advice: “From now on, you must remember that you are two people. You are the person whom you and your friends know, but you are also a symbol for something. Never confuse the two. Don’t take criticism of the symbol as criticism of the person.” That advice has helped me a
  • 48. lot. Dan Vasella: People have a legitimate demand for access to the CEO. But you have to modulate that so you avoid overexposure. You’re a product. And the press will paint you as either a hero or a villain—whatever sells. If they paint you as a hero today, you should be prepared to be painted as a villain tomorrow. Not everything you do will work out every time, and you have to accept that people will be unfair. Moya Greene: A decade ago, I’d have said that it was harder to be a public official than an executive in the private sector. But the tables have turned. It’s tough these days to be the CEO of any business—even a very successful one with a balanced view of the corporation’s position in society. My public-sector experience has helped me to understand how easily sound policies can be derailed by small, symbolic things. It —Dan Vasella
  • 49. 11 may not matter that the policy change you are advocating is the product of fantastic analytics or years of brilliant stakeholder management; the tiniest little spark can become a flash fire— something that takes hold and transforms perceptions in ways that don’t seem rational. If you work in the public sector, you learn the value of developing antennae for popular perceptions and keeping them finely tuned. I spend about 15 percent of my time trying to help our own people understand how good we are at what we do, which isn’t always easy, because there is so much negativism in the press. I see good internal communications as a way to punch through and get our message out, to tell our people—who are the most powerful ambassadors for our brand—“Stand up and be proud.” Carlos Ghosn: In business, there are no more heroes. The media has become a lot more negative about corporate leaders over
  • 50. the past ten years. Small mistakes get blown up into huge things. I cannot imagine myself today doing what I did in Japan in 1999, when I stood up and said: “We’re going to get rid of the seniority system. We’re going to shut down plants. We’re going to reduce headcount. We’re going to undo the keiretsu system.” I had a lot of criticism. But there were also people who said, “Let’s give him the benefit of the doubt.” Today, if I were to stand up and try to do something like that, I would get massacred. I would need much more emotional stability and certainty. Leaders of tomorrow are going to have to be incredibly secure and sure of themselves. Leaders of the future will also need to have a lot more empathy and sensitivity—not just for people from their own countries but for people from completely different countries and cultures. They are going to need global empathy, which is a lot more difficult. Shimon Peres: Words are the connection between leaders and
  • 51. the public. They must be credible and clear and reflect a vision, not just a position. The three greatest leaders of the 20th century were Winston Churchill, Charles de Gaulle, and David Ben- Gurion. Each had a brilliant mind and a brilliant pen. Their ability with 12 a pen demonstrated many things: curiosity, memory, courage. They understood that you lead not with bayonets but with words. A leader’s words must be precise and totally committed. Decision making under uncertainty A final theme is that leaders must increasingly resist the tempta- tion to cope with chaos and complexity by trusting their gut. At a time of extreme volatility, past experience is an unreliable guide to future outcomes. Leaders must create cultures of constructive skepticism and surround themselves with people who bring multiple perspectives and have no fear of chal- lenging the boss. Carlos Ghosn: It is a paradox: on the one hand, you have to be more confident and secure, but on the other, you have to be a lot more open and empathetic. You need to listen, but
  • 52. then when you make a decision, that’s it—you must be a very hard driver. Usually, these are not attributes you find in the same person. Once you have done the analysis and made the decision, then you have to learn to simplify the decision in communicating it to others. Everything’s complex, but once you have decided, sometimes you need to simplify so much it’s almost a caricature. You must say, “Nothing matters beyond this.” You must reduce everything to zeros or ones, black or white, go or no-go. You can’t have too much nuance. In a crisis, you have to be able to do all of these things— listening, deciding, and then simplifying—very quickly. That is what makes leading in a crisis so interesting. And because you have to move so fast, you have to empower people to make decisions themselves. That’s the best way to restore calm.
  • 53. Moya Greene: When I came here, we were running out of cash. I was grappling with decisions that would determine whether or not we could stay in business. But you cannot position your company 13 in the broader social and economic fabric of the nation if all you do is look at the financial dimensions of performance. You have to look at what your customers think, what your employees think, and what you can do for your customers. Daniel Vasella: As a leader, to whom can you express your doubts—and should you? In which situation is it appropriate and when not? I believe that you have to be able to express doubt in your team and with a board. If you don’t—and you pretend— then you are playing a role, which eventually leads to an unhealthy situation. That’s not to say you should act like you’re in a confes- sional. At some point [in decision making], you have to take
  • 54. the sword and cut through the Gordian knot and make a decision, despite any uncertainties. But the question is: are you being led by the context or do you lead? Are you being led by your followers and are they choosing for you? Or do you choose and do you lead? I think you have to be aware of the context, and what people expect and hope for. But as a leader, you’re not there to feed people with all the things they hope for. Your job is to persuade people to do the things you believe will be the right direction for the long term. People want you to lead. And if you lead, you will hurt. You will satisfy sometimes. You will celebrate and you will blame. That’s all part of your job. Josef Ackermann: Problems have become so complex today that you have to collect the expertise and opinions of a lot of people before you can make a sound decision. Some people say, “Don’t decide until you have to.” I have a completely different view. I hate
  • 55. to be under time pressure. I think it is important that you aren’t confronted with a situation where you haven’t heard anything on a particular issue for half a year—and then suddenly you have to make a quick decision on the basis of an executive summary. I believe in personal leadership, but no CEO can do it all on his own. You need the expertise, judgment, and buy-in of your team. 14 Preparing for a new era of leadership It’s never been realistic to break leadership into a fixed set of essential competences, and that’s particularly the case in today’s complex, volatile environment. Still, the themes our interviewees sounded represent a rich set of opportunities for leaders to boost their effectiveness. To close, we’d like to amplify and extend those themes by emphasizing three skills that can help leaders thrive in today’s turbulent environment, which for many has prompted a reexamination of fundamental assumptions about how they do their jobs, while underscoring the importance of leading with a purpose. Resilient leaders, as Shimon Peres reminded us, are those who have “ambition for a cause greater than themselves.”
  • 56. 1. See with a microscope and a telescope Over the next two decades, McKinsey research suggests, the conditions of the late 20th century—cheap capital, low interest rates, a global demographic dividend, and a gradual decline in com- modity prices—will either be reversed or seesaw violently. Manag- ing the immediacy of these changes, while also staying alert for the inflection points that signal bigger, long-term “trend breaks,” will require leaders to see the world in multiple ways at once. In different ways, many leaders have told us they’ve needed to develop a facility for viewing the world through two lenses: a telescope, to consider opportunities far into the future, and a microscope, to scrutinize challenges of the moment at intense magnification. Most of us are naturally more comfortable with one lens or the other; we are “farsighted” or “nearsighted,” but rarely both. In times of complexity, leaders must be able to see clearly through either lens and to manage the shift between the two with speed and ease. Leaders must use the telescope to watch for long-term trends, dream big dreams, imagine where a company should be in five or ten years, and reallocate resources accordingly. The accelerating pace of technological innovation makes this aspect of a leader’s 15
  • 57. role more important than ever. The microscope, too, affords a critical perspective. Leaders must force their organizations to challenge conventional wisdom; consider the implications of unlikely, “long-tail” scenarios; and focus on pressing issues in minute detail. As organizations grow larger and more complex, leaders must work harder to stay in touch with the front line and view themselves as “chief reality testers.” 2. Compete as a tri-sector athlete Many of the forces buffeting leaders in the private sector—slow growth, unemployment, sovereign indebtedness—can be addressed only in concert with the public sector and are heavily influenced by the actions of groups that are neither commer- cial nor governmental entities. When governments play an ever more active role in regulating markets, and social movements can spring up in a matter of days, corporate leaders must be nimble “tri-sector athletes,” to borrow a phrase from Harvard political scientist Joseph Nye: able to engage and collaborate across the private, public, and social sectors. Leaders of governments and nongovernmental organizations must likewise break out of their silos. Issues such as infrastructure, unemployment, educa- tion, or protecting the environment are too complex and interrelated to deal with in isolation. Many of the leaders with whom we spoke said they have learned the value of examining their business decisions in a social and political context. Even those wary of open-ended discussions about corporate social responsibility say As organizations grow larger and more complex, leaders must work harder
  • 58. to stay in touch with the front line and view themselves as “chief reality testers.” 16 they find it useful to think about managing a “triple bottom line” that reflects their organizations’ performance in the public, private, and social spheres. 3. Stay grounded during a crisis Everyone we interviewed agreed that modern leaders spend far more of their time firefighting than their predecessors did. Coping with externally generated crises, many argued, has become a key part of the modern leader’s role. In an age when crisis is the new normal, global organizations need leaders who are able to act quickly and calmly amid chaos. Many leaders highlighted the value of “stress-testing” members of the top team to gauge their ability to cope with crisis. We heard again and again that otherwise competent managers can’t always perform in moments of extraordinary pressure. The chief executive of one of the world’s largest companies marveled at how, in the face of a cash flow crisis following the collapse of Lehman Brothers, two of his top reports “shattered like glass.” The emotional and physical stamina demanded of leaders today is extraordinary. Many of those we interviewed reserve crucial
  • 59. decisions for moments when they know they will be rested and free from distraction. They also talked about sequencing deci- sions to focus on key issues first, not after they have been depleted by lesser matters. We are intrigued by the growing body of research in psychology, sociology, and neuroscience that high- lights the importance of “decision fatigue.” The implication of this research is that trying to make too many decisions at once diminishes the ability to make wise decisions at all. 17 If the burden of leadership in the modern age seems overwhelming, the potential benefits are overwhelming too. Large organizations— if led well—can do more for more people than they have at any other moment in history. That is the flip side of all the chaos, complex- ity, and pressure, and it makes leading through those challenges a noble endeavor. Copyright © 2012 McKinsey & Company. All rights reserved. We welcome your comments on this article. Please send them to [email protected] Dominic Barton is McKinsey’s global managing director, Andrew Grant is a director in McKinsey’s Singapore office, and Michelle Horn is a principal
  • 60. in the Atlanta office. Managing global organizations has been a business chal- lenge for centuries. But the nature of the task is changing with the accelerating shift of economic activity from Europe and North America to markets in Africa, Asia, and Latin America. McKinsey Global Institute research suggests that 400 midsize emerging- market cities, many unfamiliar in the West, will generate nearly 40 percent of global growth over the next 15 years. The International Monetary Fund confi rms that the ten fastest-growing economies during the years ahead will all be in emerging markets. Against this backdrop, continuing advances in information and communi- cations technology have made possible new forms of international coordination within global companies and potential new ways for them to fl ourish in these fast-growing markets. There are individual success stories. IBM expects to earn 30 percent of its revenues in emerging markets by 2015, up from 17 percent in 2009. At Unilever, emerging markets make up 56 percent of the business already. And Aditya Birla Group, a multinational con- glomerate based in India, now has operations in 40 countries and earns more than half its revenue outside India. But, overall, global organizations are struggling to adapt. A
  • 61. year ago, we uncovered a “globalization penalty”: high-performing global companies consistently scored lower than more locally focused ones The global company’s challenge As the economic spotlight shifts to developing markets, global companies need new ways to manage their strategies, people, costs, and risks. Martin Dewhurst, Jonathan Harris, and Suzanne Heywood J U N E 2 0 1 2 O R G A N I Z A T I O N P R A C T I C E 22 on several dimensions of organizational health.1 For example, the former were less effective at establishing a shared vision, encouraging innovation, executing “on the ground,” and building relationships with governments and business partners. Equally arresting was evi-
  • 62. dence from colleagues in McKinsey’s strategy practice showing that global companies headquartered in emerging markets have been growing faster than counterparts headquartered in developed ones, even when both are operating on “neutral turf”: emerging mar- kets where neither is based (see “Parsing the growth advantage of emerging-market companies,” on mckinseyquarterly.com). Over the past year, we’ve tried to understand more clearly the chal- lenges facing global organizations, as well as approaches that are helping some to thrive. Our work has included surveys and struc- tured interviews with more than 300 executives at 17 of the world’s leading global organizations spanning a diverse range of sectors and geographies, a broader survey of more than 4,600 executives, and time spent working directly with the leaders of dozens of global organizations trying to address these issues.2 Clearly, no single organizational model is best for all companies hand- ling the realities of rapid growth in emerging markets and round- the-clock global communications. That’s partly because the opportu- nities and challenges facing companies vary, depending on their business models. R&D-intensive companies, for example, are working to staff new research centers in the emerging world and to inte- grate them with existing operations. Firms focused on extracting natural resources are adapting to regulatory regimes that are evolving rapidly and sometimes becoming more interventionist.
  • 63. Consumer-oriented fi rms are facing sometimes-confl icting imper- atives to tailor their businesses to local needs while maintaining con- sistent global processes. Another reason no single model fi ts all global companies is that their individual histories are so different. Those that have grown organ- ically often operate relatively consistently across countries but fi nd it hard to adjust their products and services to local needs, given their fairly standardized business models. Companies that have mainly grown through M&A, in contrast, may fi nd it easier to tailor 1 See Martin Dewhurst, Jonathan Harris, and Suzanne Heywood, “Understanding your ‘globalization penalty’,” mckinseyquarterly.com, July 2011. 2 See “Managing at global scale: McKinsey Global Survey results,” mckinseyquarterly.com, June 2012. 3 operations to local markets but harder to integrate their various parts so they can achieve the potential of scale and scope and align a dispersed workforce behind a single set of strategies and values. Although individual companies are necessarily responding
  • 64. differently to the new opportunities abroad, our work suggests that most face a common set of four tensions in managing strategy, people, costs, and risk on a global scale. The importance of each of these four tensions will vary from company to company, depending on its particular oper- ating model, history, and global footprint. (For more on the impli- cations of these uneven globalization efforts, see “Developing global leaders,” on mckinseyquarterly.com.) Taking stock of the status of all four tensions can be a useful starting point for a senior- management team aiming to boost an organization’s global performance. Strategic confidence and stretch Being global brings clear strategic benefi ts: the ability to access new customer markets, new suppliers, and new partners. These immediate benefi ts can also create secondary ones. Building a customer base in a new market, for example, provides familiarity and relationships that may enable additional investments—say, in a research center. But being global also brings strategic challenges. Many companies fi nd it increasingly diffi cult to be locally fl exible and adaptable
  • 65. as they broaden their global footprint. In particular, processes for developing strategy and allocating resources can struggle to cope with the increasing diversity of markets, customers, and channels. These issues were clear in our research: fewer than 40 percent of the 300 senior executives at global companies we interviewed and surveyed believed that their employers were better than local competitors at understanding the operating environment and cus- tomers’ needs. And barely half of the respondents to our broader survey thought that their companies communicated strategy clearly to the workforce in all markets where they operate. People as an asset and a challenge Many of the executives we interviewed believed strongly that the vast reserves of skills, knowledge, and experience within the global workforce of their companies represented an invaluable asset. But 44 making the most of that asset is diffi cult: for example, few surveyed executives felt that their companies were good at transferring les- sons learned in one emerging market to another.
  • 66. At the same time, many companies fi nd deploying and developing talent in emerging markets to be a major challenge. Barely half the executives at the 17 global companies we studied in depth thought they were effective at tailoring recruiting, retention, training, and development processes for different geographies. An emerging- market leader in one global company told us that “our current pro- cess favors candidates who have been to a US school, understand the US culture, and can conduct themselves effectively on a call with head offi ce in the middle of the night. The process is not designed to select for people who understand our market.” One of our recent surveys showed how hard it is to develop talent for emerging markets at a pace that matches their expected growth. Executives reported that just 2 percent of their top 200 employees were located in Asian emerging markets that would, in the years ahead, account for more than one-third of total sales. Complicating matters is the fact that local highfl iers in some key markets increas- ingly prefer to work for local employers (see “How multinationals can attract the talent they need,” on mckinseyquarterly.com). Global companies are conscious of this change. “Local competitors’ brands are now stronger, and they can offer more senior roles in the
  • 67. home market,” noted one multinational executive we interviewed. Scale and scope benefits, complexity costs Large global companies still enjoy economic leverage from being able to invest in shared infrastructure ranging from R&D centers to procurement functions. Economies of scale in shared services also are signifi cant, though no longer uniquely available to global companies, as even very local ones can outsource business services and manufacturing and avail themselves of cloud-based computing. But as global companies grow bigger and more diverse, complexity costs inevitably rise. Efforts to standardize the common elements of essential functions, such as sales or legal services, can clash with local needs. And emerging markets complicate matters, as oper- ations located there sometimes chafe at the costs they must bear as 5 part of a group centered in the developed world: their share of the expense of distant (and perhaps not visibly helpful) corporate and regional centers, the cost of complying with global standards and of coordinating managers across far-fl ung geographies, and the
  • 68. loss of market agility imposed by adhering to rigid global processes. Risk diversification and the loss of familiarity A global company benefi ts from a geographically diverse business portfolio that provides a natural hedge against the volatility of local growth, country risk, and currency risk. But pursuing so many emerging-market opportunities is taking global companies deep into areas with unfamiliar risks that many fi nd diffi cult to evaluate. Less than half of the respondents to our 2011 survey thought these organizations had the right risk-management infrastructure and skills to support the global scale and diversity of their operations. Furthermore, globally standard, exhaustive risk-management processes may not be the best way to deal with risk in markets where global organizations must move fast to lock in early opportunities. One executive in an emerging-market outpost of a global company told us “a mind-set that ‘this is the way that we do things around here’ is very strongly embedded in our risk process. When combined with the fact that the organization does not fully understand emerging markets, it means that our risk process might reject opportunities that [the global] CEO would approve.” Understanding these tensions is just a starting point. Capturing the
  • 69. benefits and mitigating the challenges associated with each will require global companies to explore new ways of organizing and operating. The authors would like to acknowledge the contributions of Kate Aquila and Roni Katz to the development of this article. Martin Dewhurst is a director in McKinsey’s London office, where Suzanne Heywood is a principal; Jon Harris is a director in the New York office. Copyright © 2012 McKinsey & Company. All rights reserved. We welcome your comments on this article. Please send them to [email protected] Read the following articles and optional chapters and answer the following questions: · Behind the Global Curve(HR People & Strategy, 5 page article, Dr. Mandi coauthored while on the faculty at Thunderbird; it repeats the overview material about the GMI, so you can skip over those parts) · The global company’s challenge(McKinsey Quarterly, 5 pages) · Leading in the 21st century(McKinsey Quarterly, 17 pages; 6 global leaders share their thoughts on challenges of global uncertainty; skim the article and read the parts you find interesting) · Optional: GM Book Introduction · Optional: GM Book GLOBAL Mindset 1. In the back of your GMI reports there is space for reflection.
  • 70. Complete the questions on your own individually. Then, summarize your answers into 2 paragraphs. 2. How does this material help you, personally, enhance your global mindset capabilities and be a more effective leader and manager? Be specific by referring to the articles. · Post answers to all the questions proposed in the assignment by 2/13 5:30pm (see the schedule in this syllabus for exact due dates) and bring your answers with you to class. You will then discuss your answers with your classmates in class. · These deadlines are very strictly adhered to. Each assignment is available for at least two weeks and will expire at 5:30 on Wednesdays, according to the dates on the course schedule in this syllabus. Students are discouraged from waiting until the last minute to complete each assignment. It is always hard to predict technical difficulties, like being sick, having car trouble, or losing electricity or an internet connection. Late submissions are never accepted. Failure to submit the assignment by the posted due date/time will result in a grade of 0 for that assignment, and there are NO EXCEPTIONS to this rule, even if the student has a excused absence from class. · Homework assignment grades will be determined by the quality of each student’s post and the timeliness of meeting the posting deadlines. You should provide thoughtful answers that relate to and utilize the material in the course. If the question asks for your opinion, then share it and allow the others to agree, disagree, or simply comment when you dialog with them in class. Simple and short answers that do not sufficiently or intelligently answer the question will be graded poorly. However, you also want to be aware of being too long winded and not being able to efficiently communicate your thoughts in a concise statement. Rubric BUAD 878 Hybrid Homework Assignments BUAD 878 Hybrid Homework Assignments
  • 71. Criteria Ratings Pts This criterion is linked to a Learning OutcomeAnswered all the required questions 5.0 pts Full Marks 0.0 pts No Marks 5.0 pts This criterion is linked to a Learning OutcomeCited assigned material 5.0 pts Full Marks 0.0 pts No Marks 5.0 pts This criterion is linked to a Learning OutcomeProvided an opinion/personal experiences and thoughtful comments that relate to and utilize the material in the course 5.0 pts Full Marks 0.0 pts No Marks 5.0 pts Total Points: 15.0 Generation "LIKE" Discussion Forum
  • 72. SOCIAL MEDIA – Generation “LIKE” It has been said that Social Media is the future of advertising. What is your opinion of social media? Does it empower or exploit? The following link takes you to a PBS documentary entitled “Generation Like” http://www.pbs.org/wgbh/pages/frontline/generation-like/ This program examines how consumers are now also marketers, and teens are able to create and interact with culture very new ways. Companies are still figuring out how to profit from this shift. Is social media really worth the kind of money that investors are paying? Explain what “Like”ing someone’s post on Facebook means to you. Does knowing others “Like” what you “Like” influence you? Explain. How do companies use social media to advertise? Is social media empowering or exploiting teens? Do Kids think they are being used? Do they care?