PSO Report 2012

Leadership Run by Organization to
Enhance the Ability of Organization
Employees
ORGANIZATIONAL
BEHAVIOUR
Submitted To :
Dr.Fazal Khalidi
11-Dec-2012 Fall 2012
SubmittedBy:
ShehrozAhmedAdil

ORGANIZATIONAL BEHAVIOUR
Organizational Behaviour – Fall 2012 Page 2
LETTER OF TRANSMITTAL
DATE: December 12, 2011
TO: Mr. Fazal Khalidi
FROM: Shehroz Ahmed Adil
SUBJECT: Leadership By Organization (P.S.O) To Enhance The Ability Of Organization
Employees.
This is our term project chosen from one of the topics provided by the course instructor. We
are pleased to present our report on “Leadership by Organization to Enhance the Ability of
Organization Employees”. This research gave us a good opportunity to understand the concept
of how to train develop leadership to make the organization work for effective and its
applications in our chosen organization – PSO.
We would also like to thank all our respondents, who were kind enough to answer our
questionnaires and gave their valuable time in guiding and informing us about their perception
on our chosen topic. We acknowledge all of your help and support for this research.
This research is as per the instructions of Mr.Fazal Khalidi, containing all the relevant
information. We sincerely thank you for the reliability you showed in our capabilities and the
support you gave us throughout the semester. This research helped in our learning process and
also gave us first hand experience regarding research methodology.
Yours Sincerely,
Shehroz Ahmed Adil

Table of Contents
LETTER OF TRANSMITTAL
INTRODUCTION OF COMPANY
LITRATURE REVIEW
REPORT SUBJECT ANALYSIS
WEAKNESSES
RECOMMENDATIONS
CONCLUSION
ARTICLE’S REVIEW

COMPANY PROFILE
Pakistan State Oil Company Limited, namely PSO was found in 1976, as a result of
amalgamation of the formal three oil marketing companies i-e Pakistan National Oils Limited,
Premier Oil Company and Esso Undertakings in Pakistan. There is a chronology of events
leading to the formation of Pakistan State Oil Co. Ltd .
As the largest oil marketing company of Pakistan, PSO is engaged in the storage, import,
distribution and marketing of Petroleum products, petrochemicals, Aviation and Bunker fuels,
LPG and CNG dominates the country’s fuel and energy needs. Since its inception in 1976 the
company has been meeting more than 70% of the country’s fuel needs. PSO’s 3805 outlets all
across the country markets more than 12 million tons of fuel products annually. This network is
supported by PSO’s 28 storage facilities with a capacity of more than 800,000 tons . As a
manifestation of PSO’s greater customer focus PSO 24hr customer service has been launched
where customers can lodge their queries and suggestions about various PSO products and
services.
As the largest oil marketing company of Pakistan, PSO is engaged in the storage, import,
distribution and marketing of Petroleum products, petrochemicals, Aviation and Bunker fuels,
LPG and CNG dominates the country’s fuel and energy needs. Since its inception in 1976 the
company has been meeting more than 70% of the country’s fuel needs The company will
recruit, train and promote staff on the basis of their ability, according to relevant legislation and
company policies and request.
CONTINUOUS GROWTH
PSO continues to expand its physical, technical and marketing resources to meet the
requirements of the country .To keep pace with growth, PSO has maintained International
Collaborations to import latest technology. These are:
1. Castrol (UK) Blending and marketing of lubricants in Pakistan
2. Air Total (France) Technical and Commercial agreements in Aviation Services
3. Exxon Chemicals (Singapore) Petrochemical Business and Technology

MISSION STATEMENT
“To ensure availability and security of sustainable supply of oil and gas for economic
development and strategic requirements of Pakistan and to coordinate development of natural
resources of energy and minerals.”
STRATEGYTO ACHIEVE OBJECTIVES
 To adopt an integrated approach for promoting exploration and fast track development
of oil, gas and mineral resources.
 To deregulate and liberalize and privatize oil, gas and mineral sector through structured
reforms.
 To attract private investment and to establish credible institutions for facilitating the
development of petroleum and mineral sector.
 To develop technical professional human resources. To optimize existing energy delivery
infrastructure oil and gas pipelines.
 To reduce imported fuel oil consumption with indigenous gas by optimally balancing the
gas availability and supplies from local and imported resources.
ORGANIZATIONAL STRUCTURE
The organization’s formal framework by job tasks is divided in groups but is coordinated. The
basis on which jobs are grouped in order to accomplish organizational goals is functional
departmentalization.
CHAIN OF COMMAND
It is an unbroken line of authority that extends from the upper levels of the organization to the
lowest levels and defines who reports to whom.
As PSO follows traditional objective setting decision are made totally by the top management.
The authority is given to the managers to give orders and employees are bound to follow them.
It is the responsibility of the employees to perform those duties assigned to them.

CENTRALIZATION
PSO is a highly centralized company i.e. decision-making is concentrated in the upper levels of
the organization. The Top management makes the company’s key decisions with little or no
input from the lower level employees. PSO is more centralized because the environment is
stable company is large and lower level managers are not as capable or experienced at making
decisions as upper level managers.
PSO is a mechanistic organization with a highly controlled structure. In the mechanistic
structure work specialization creates jobs that are simple routine and standardized. Extensive
departmentalization increases impersonality and the need for multiple layers of management
to coordinate these specialized departments. There is also a strict adherence to the unity of
command principle. As the distance between the top and the bottom of the organization is
wide, top managers tend to impose rules and regulations to control the employees’ behavior.
DECISION MAKING
Decision-making is an important aspect of the company, which needs to be thoroughly
evaluated before making a final and firm decision. The working of organization depends upon
top management; so good and firm decision in the organization will have a direct impact on the
working environment of such organizations. The manager is responsible for taking the decision
CHAIRMAN
MANAGING
DIRECTOR
GENERAL
MANAGER
DIVISIONAL
MANAGER
SALES
EXECUTIVE
SALES
OFFICERS
Managing Director is answerable to
the Chairman. MD has 7 general
managers working under him. Every
G.M has 8 DMs working under him.
Every DM has a Sales executive and
under him there are 8-12 sales
officers.

of effected matter keeping in view the after effects. The decisions must be in the interests of
the organization.
CULTURE
According to the opinion of the PSO’s sales officer PSO is a sales oriented company. Strong
culture is a symbol of more profit more earning and sense of responsibility. It is also a
monument of well-disciplined enterprises in which every organ of that organization is well
concerned with the ultimate objective of the organization. As it’s a fundamental truth that
every individual from worker to top manager is aware of his rights privileges responsibilities
and outcome of efforts being invested.
APPRAISAL
During the performance appraisal for each employee is made after each quarterly. After
completion of a performance review is made and if the performance is satisfactory then the
employee is appointed to a leader designation i.e group leader, manager, head of department.
INFORMATIONAL NEED
COMPETENCY BASEDMODEL
Competencies describe what is needed for each employee to perform his or her job successfully
regarding the expected knowledge, experience and capabilities. The Competency Model
defines the competencies that are required by PSO in various positions as the requirement of a
competency arises from one job to another. The form to be used in this connection is Training
Needs Analysis.
The PSO competency model forms the basis for assessing the training needs of the whole
organization. It is the responsibility of heads of all organizational units to take account
of that specific knowledge and skills the jobs involve what the individuals alread y p os s es s ,
and wha t g a ps in s uc h k no wle dg e an d s kill le vels , training can fill. Guided
by business targets/departmental objectives and evaluating employees on their
existing capabilities, with the help of the Training Needs Analysis document, the training
needs of each individual are determined.

LITRATURE REVIEW
ON
“EFFECTIVE LEADERSHIP”
Effective leadership is crucial to an organization’s success. There are several common
characteristics that effective organizational leaders share. Without these characteristics,
initiatives and change can fail. Leaders can take many different steps to help keep projects
from failing.
Leaders need to be self-aware of how their actions are perceived by those they manage
(Moment, 2007). Employees will sometimes mirror the behavior of managers. Aghdaei (2008)
talks about the philosophy of “shadow of a leader,” where the leader demonstrates the wanted
behavior (p. 16). Leaders should model hard work for employees (Weiss, 2000). Aghdaei (2008)
states that “when you repeatedly demonstrate meaningful, positive behavior, people are
motivated to follow” (p. 16).
Leaders must have enthusiasmfor their work so that it spreads to those whom they supervise.
That involves leaders believing in the company in which they work. “The ability to inspire
loyalty and build relationships is a key component of leadership” (Newcomb, 2005, p. 35). “The
CEO who wants to be a true leader must be the most vivid example of the culture at work. Only
then can the CEO inspire passion in the rest of the team” (Hesselbein, Goldsmith, & Somerville,
2002, p. 124). To get the best out of workers, leaders need to be able to motivate them
(Moment, 2007). Leaders should look to all of their employees for new ideas and solutions
(Hesselbein, Goldsmith, & Somerville, 2002). Leaders should also “cultivate, champion, and
then support” new ideas and “provide an environment for the development and expression of
the entrepreneurial spirit (Hesselbein, Goldsmith, & Somerville, 2002, p. 88). Leaders create
the organizational climate to which followers react (Hrebiniak, 2005).
Strategic planning is crucial to guide leadership (Choen, 2008). Leaders must make clear and
specific goals and objectives, be able to communicate those, and make sure that the goals are
measurable. Planning and having a strategy are important in order to make initiatives succeed.
Managers have to move ideas and initiatives to executable steps that their team can implement
(Maddock & Viton, 2008). A leader has to clearly communicate what is needed (Weiss, 2000).
If the employee does not understand what to do, then the initiative is set up for failure.

Effective leaders must establish a culture of accountability. “Leaders need to be held
accountable to the organization for results, [a] plan must be accountable to the outcomes, and
the employees must be accountable for their actions” (Newcomb, 2005, p. 36). There needs to
be measurable goals for which everyone can be held responsible. “Without clear responsibility
and accountability, execution programs go nowhere” (Hrebiniak, 2005, p. 25).
Leaders also need to know how to handle and address failure. Hesselbein et al states that
“failure can become the next step of learning, the beginning of another new creative idea”
(Hesselbein, Goldsmith, & Somerville, 2002, p. 89). Failure can be a learning experience and
should not necessarily be punished. Also by punishing failure, employees may be more
reluctant to suggest innovative ideas for fear of failure.
Leaders must organize and manage employees. While innovation requires the organized efforts
of others to work (Hesselbein, Goldsmith, & Somerville, 2002), the result of not involving
everyone is that increased resistance to change can appear (Dooley & O’Sullivan, 2001).
Gratton and Erickson (2007) report that “a team’s success or failure at collaborating reflects the
philosophy of top executives in the organization. Teams do well when executives invest in
supporting social relationships, [and] demonstrate collaborative behavior themselves …” (p.
103). Lack of widespread company support can make initiatives fail (Strebel, 1996).
Leaders need to be able to adapt to “shifting circumstances” and cope with those changes
(Moment, 2007). “Every organization needs leaders who can change as fast as market
conditions do” (Newcomb, 2005, p. 34). Business needs can change rapidly and employees look
to their leaders to guide them through change. Uncertainty in leaders can lead to a lack of faith
by employees.
Leaders are important for promoting ethical standards and for modeling ethical behavior and
promoting it to employees (Stansbury, 2009). Leaders need to be honest and accountable for
their actions (Hesselbein, Goldsmith, & Somerville, 2002). For employees to practice ethical
behavior, “they must work in an environment where that behavior is encouraged and
supported” (Duncan, 2002, p. 685). Professionals are expected be truthful and “stand
accountable for their mistakes and in turn expect the same from their subordinates
(Hesselbein, Goldsmith, & Somerville, 2002, p. 63).
Employees should be treated equally. Managers should not ignore exemplary or poor behavior.
Rather, effective leaders should reinforce good behavior and negatively reinforce bad behavior,
and should avoid making blanket statements (Weiss, 2000). If employees see unequal
treatment and do not get rewarded for their extra effort, that extra effort may disappear.
Everyone should be treated the same (Weiss, 2000).

Failure of Organizational Initiatives
There are many causes that can contribute to the failure of organizational initiatives. “Research
in organizational development suggests that 90% of culture change initiatives fail in achieving
their objectives” (Atkinson, 2005, p. 1). Some of the failures are caused by leadership. Others
are caused by a lack of communication within the organization.
One of the causes of failure have been by organizations being too insular and not hiring outside
consultants, and looking for all of the ideas for change internally (Mirza, 2009, p. 31).
Sometimes the skills necessary for a project require outside assistance and organizations might
be reluctant to ask for outside help. Katzenback and Smith (2005) state that team members
need to be selected for skill potential and not personality; “no team succeeds without all the
skills needed to meet its purpose and performance goals” (p. 166).
Another cause of failure is when managers rely on over-optimistic projections when evaluating
strategy (Lovallo & Kahneman, 2003). Projects can be under-budgeted in both time and money,
which can cause the projects to fail when the projections are not met.
Employees can be also be the cause of failure. Sometimes there is a belief among employees
that change will mean more work (Atkinson, 2005). It can be difficult to modify the way
someone has always done something. Changes might be a perceived loss of control or job
security (Atkinson, 2005). Change can scare workers but by clearly communicating what
change really means and how it affects employees, some of the problems can be overcome.
However, leaders should expect a little hesitation for anything that goes against the status quo
(Strebel, 1996).
Rumors and gossip can also cause initiatives to fail. Effective leaders, however, respond to
rumors and eliminate gossip through clear communication of what the initiative entails. The
benefits of change also need to be communicated to the employees to head off gossip and
assumptions (Atkinson, 2005). Stopping gossip before it starts is ideal.
Some organizations are known for short-term commitment to projects. This can cause
employees not to work as hard on an initiative because they expect it is a fad and the company
will move on to something else (Atkinson, 2005). Abrupt change can make people turn passive
(Hesselbein, Goldsmith, & Somerville, 2002). Hesselbein et al. (2002) asks the question, “Why
bother working on anything new, or anything that will take time to develop, when the
organization could change direction unexpectedly at any moment, with no time to prepare for
it?” (p. 81). When an organization launches an initiative, it should make sure the initiative is

something that is important and to which the organization is committed. Otherwise,
employees might become skeptical of initiatives and not invest themselves.
Performance improvement in an organization can be accomplished in other ways as well.
Having the right focus can lead to success. Leaders need to make sure the focus of initiatives is
the end result and not be distracted toward developing recommendations, technology or
partial solutions (Matta & Ashkenas, 2003). Having a culture with employee buy-in is important
Organizational culture should reflect results orientation, employee commitment to task and
organizational commitment to coworkers (Hrebiniak, 2005).
There are many characteristics of effective leaders. These characteristics can help to improve
the success rate for new initiatives and improve the performance of an organization and its
employees.
Bibliography:
Atkinson, P. (2005, Spring). Managing Resistance to Change. Management Services , 14-19.
Choen, W. (2008, August). Effective Leadership. Leadership Excellence , 25 (8).
Dooley, L., & O’Sullivan, D. (2001). Structuring Innovation: A Conceptual Model and
Implementation
Methodology. Enterprise and Innovation Managment Studies , 2, No.3, 177-194.
Duncan, T. (2002). IMC: Using Advertising & Promotion to Build Brands. New York: McGraw-Hill.

REPORT SUBJECT ANALYSIS
In our surveyandinterviewwhichwe conductedfromMr.GhulamMurtazaShaikh,He’sthe Manager of
Retail BusinessinPSOhouse HeadOffice.We hadgone through some factual questionsandthe answers
were impressive enoughasperPSOreputationinthe Market.The AnalysisquestionsonLeadership
were as follows:
Are there any leadershipprogramsmade forthe employeesinPSO?
 On jobtrainingisone of the programswhichPSOofferstotheiremployees,widelyaroundall
branchesof PakistanPSOkeepsconsistenttrainingonjobfortheiremloyees,the Line Manager
nominatesthe employeesaheadforhigherdesignationafterevaluatingthe employees
performance andtheirabilitieswithenhance skill comparingwiththeirpreviousskillscompared
to theirpresent.There are External Leadershiptrainingwhere itispossibilityforthe employees
to getshiftedtootherbranchesor citiesnoticingtheirabilitiesandskillsthathow theycanbe
betterandunderwhichkindof atmosphere wouldbe suitable forthemtoenhance their
performance.
 Aside fromdomesticPSOhave beenintoarecentlyinternational leadershipprogramwhichwas
namedas KATCOM,it includesthe bulletproof leadersof the business,the oneswhohadbeen
the benchmarksof PSOin theirperformance.
 The Top 20 employeeswererecognizedbytheirskillsof leadershipandare selectedbyH.R
heads,andthose top performersare thensendunderconsecutive training toenhance and
polishtheirleadershipskillsandqualities,theseprogramshave adurationof 1 yearas
Mr.Murtaza was alsointothese Programsat the growingstage inhiscareer inPSO.
 The employeesunderthese skillsenhancementprogramshadare kept undercontinues
recognizationof the headsif theykeptgroomingandenhancingtheirskillsrapidlytheyare
offeredpromotionsand incentivesasthe extrinsicmotivators.
How doyou evaluate the performance?
 The leadershipsperformance canbe evaluatedunderseveral factorsasitvariesfrom
environmenttoenvironmentandfromorganizationtoorganization,soapartfrom thatthe
otheradvantage of leadershipinourorganizationisthatwhenaleaderperformwell setaswith
a patternhe/she make arole model fortheirsub-ordinates.
Do the leadersengage otheremployees(sub-Ordinates)intheirdecisionmaking?
 Obviouslyinagoodleaderthere youwill alwaysfindthisqualitytotake the whole crew asa
unitand make decisionsaftertakingall the inputideasfromthe subsandthenfinalizingone
decision.

 In orderto make the decisionnotonlyfromhimself butthatdecisionstandsasthe decisionof
the whole team/group/departmentthatleaderisleading.Exactlyaftertakingall the inputsof
the subordinatesbecause sometimesthereare some veryvaluable advicesmade whichin
crucial and urgenttime are not consideredandthatisthe lossof the organizationaswell as
employee’sinterestintakingpartinthe organization’sdecisionanddiscussions.
 As there are certainveryimportantadvantageswhenitcomestoinclude yourteamindecision
making,firstmostimportantisthat the individual fromwhomyouaskforhis/her
recommendationfeelsabitof ownershipwhichresultsincrease ininterestand loyaltyof the
employeeforhis/herorganization.
What are the certainmethodsof communicationadoptedbythe leadersinPSO?
 There are certainconditionandcircumstanceswhichhave there differentwaystocommunicate
withthe employeesi.e asforinternal meetingthere are manywaystocommunicate induration
of internal meeting,ithasalot of varieties,asitvariesfromleadertoleaderandorganizationto
organization.
 There can be considerablysaidthatthere isa verbal wayto communicate inwithyourteam,
apart fromthat theircan behaviourbywhichyoucanreflectthe work/decisionyouwantto
discussor tell toyourteam byexpressions,thesewayshelpstoexecutetasks,expectedthe
attitude requiredbythe teamfromhisleader.
How doyou motivate the employees inyourorganization?
 The superiorsfill the evaluationformsof the companyemployeesandthe promotionspayraise
and payfor performance are givenannuallytothe employees,apartfrommotivation,the
meetingsandjob enrichmentandenhancementare offeredbypromotions,motivationisnot
onlyresultedonmonetarybenefits.
Are there any weaknessesinthe leadershipprogramsof PSO?
 There are some weaknessesaswe are tryingour bestto increase the appraisal system,notonly
the subordinatesare beingevaluatedbutalsothatthe leaderscanalsoevaluatedbytheirsub-
ordinates,sothatthe weaknesseswhichare ina leadercan be reflected andhe/she cantake
overthat weakness,we are tryingforsuchkindof an appraisal system.
 The other mostrecognizable weaknessof PSOfirmisthatthere isnot a runningprocessof Job
Rotationitis veryhard to getthe rotationrecognizedbecause itisnotbeingusedinourfirm
and we are tryingto getit inPSObecause itfavor everyemployeesaswell asitincrease the
experience andskillsof everyemployee engagedindifferentactivitiesinsidehis/herjobtime
whichalsomakesup newchallengesandchallengesinmajorexample increasesthe
performance of majority of the employees.

METHODOLOGY
TRAININGSESSIONS TOENHANCE LEADERSHIP SKILLS AMONG
EMPLOYEES TO ENHANCE LEADERSHIP SKILLS ANDFUTURE PLANING
OF EFFECTIVE WORK IN PSO
At Pakistan State Oil there training session and evaluations which are held every year and
Pakistan state Oil covers all the area where an employee needs to be trained and checked to
get the better output.
At Pakistan State Oil these are some training sessions which are held every year.
1. Leadership
2. Team Building
3. Decision making
4. Communication Skills
PSO
Leadership
Decision making
Communication
Skills
Team Building

TRAININGPYRAMID
The employee is evaluated in the five stages at Pakistan State Oil and those are mainly the
stages where the employee gets checked by the organization.
The five stages are :-
Employee at Pakistan State Oil is rated on scale of 1 to 5 (1 being lowest and 5 being highest))
on the HR scorecard. Above the are main stages where an employee gets checked and mainly
there are only four stages: Reaction, Learning, Transfer, Result.
A new study has been placed which has involved Return On Investment (ROI) which is an
extensive process stage as in PSO the employee appraisal is based on qualitative outcome and
not quantitative. Mostly, the organization doesn’t follow ROI but at times when it does the
organization corroborates the Return on Sales of an employee at Pakistan State Oil.
ANALYSIS
COMPARISON 2011 & 2012
Once training sessions are completed at PSO, the comparison is drawn between the previous
years’ and current years’ outcome. Comparing 2011 & 2012 results, growth of almost 11
percent is perceived. From 2011 to 2012, employee’s efficiency has grown from 67% to 78%.
Evaluation band set at PSO ranges from 12% to 18% upwards or downwards. By so far, PSO has
been able to drive its employee’s performance aloft.
Return on
Investment
Result
Transfer Of Knowledge
Learning
Reaction

COSTBENEFIT ANALYSIS
Cost benefit analysis at Pakistan State Oil is not always preferred but to save the cost and to
give the best productivity that is the main stream of the organization and at Pakistan State Oil
the four main sessions are held every year they are Leadership, Team Building. Decision Making
& Communication Skills and if the organization sees that the employees does not require any
one of those sessions, so that is where the organization counts its benefit of the cost. From
2011 to 2012 Pakistan State Oil has got the benefit of 12%, In 2011 it was 30% and in 2012 it
has retain at 30% despite of 2010 decrease of 10% from 40-30%, this is how the organization
ascertains the benefit.
EFFICIENCYOF THE EMPLOYEES
At Pakistan State Oil the efficiency of employees has grown up to 60% if we compare the year
2010 with 2011 the organization employees efficiency has improved. Every year the efficiency
bar rises. Whereas, in 2012 it is expected be more than 70%.
RECOMMENDATIONS
On the Job assessment and implementation is the responsibility of the department’s training
coordinator. They should provide, at a minimum, on-the-job training or work-related
instructions that prepare employees to perform their current jobs. These instructions should
include directions for adapting to technological change and to make new employees feel
comfortable.
The duration that an employee spends at an approved training program during normal work
hours should be considered as part of the employee's normal working hours and should not be
charged to his or her accumulated leave or considered leave without pay.
Training records and maintenance have to be kept by the coordinator where the records should
be maintained for the following three years after the completion of the training. Training
records should include, at a minimum:
 Participant's age
 Race
 Gender
 Course identification
 Dates of training

When proper records will be available it will be easier to assess the change in an employee’s
performance and to compare performances. Also there is a need to eliminate nepotism. This
can be done by regular feedback taken by the HR department from employees about their
problems.
Additionally, PSO must develop a TNA model which is a mix of qualitative and quantitative
factors for a realistic picture of the training needs. It also needs to hire an external consultant
for Training & Development who also needs to hire an external consultant for Training &
Development who can impartially assess the flaws of the system. PSO must hire an
Organizational Psychologist who can perform these tasks well and coordinate all the things
within the company.
Employees working in rural areas should be given the opportunity to visit the head office for
training. Training is also helpful because it helps in filling the gaps that might arise because of
the lack of skills or abilities that are required to perform a particular job. By giving proper
training to employees, employees can acquire those skills and perform the jobs in an effective
and efficient manner.
CONCLUSION
The Leadership department of PSO is playing an important role in training and development of its
employees to be at competitive edge and to develop its potential employees to enrich their
knowledge. PSO also wants to enhance their skills by training them with business related
courses available in the corporate sector
At PSO training usually starts from its orientation programs to manage trainees. They spend
millions of dollars each year to enhance the skills of its management and non-management
employee’s through on the job, off job, apprenticeship and coaching training programs.
It can be concluded after the analysis, that, training and development of employees is an
investment rather than cost for the organizations. To retain employees, proper training and
motivation are the basic tools. A well-trained group of employees result in the reduction of
costs, stress, turnover, and absenteeism and corresponding increase in efficiency and
customer satisfaction.

ARTICLES
“Looking In The Mirror”
When CEOs speak with Rob Kaplan looking for answers, he usually focuses them instead on
figuring out and discussing the right questions.
"Show me a company, nonprofit, or a government leader that is struggling, and almost
invariably you'll see someone who isn't sufficiently focused on asking the right questions,"
says Kaplan, a Professor of Management Practice at Harvard Business School. "Most leaders
spend a lot of their time looking for answers. Very often, they may feel isolated and alone. I
want to help them refocus their attention on framing and then discussing the key questions
that will help them regroup, mobilize their team, formulate a plan of action, and move
forward."
In his new book, What to Ask the Person in the Mirror , Kaplan argues against the notion
that great leadership is about having all the answers. He believes that leadership skills can
be learned--and that many of these skills require executives to rethink their conception of
what a superb leader actually does. Developing and practicing these skills requires hard
work and may demand that talented executives overcome some degree of discomfort and
even anxiety in order to raise their game.
The book discusses several key areas of inquiry that can help leaders improve the success
of their companies and nonprofit organizations including: vision and priorities, managing
your time, giving and getting feedback, succession planning and delegation, evaluation and
alignment, being a role model, and reaching your potential. "My objective is to help leaders
reach their potential by helping them realize that they don't need to have all the answers or
do this alone. I hope they will see that framing a question and listening can be enormously
powerful in leading to excellent decisions. A leader needs to master the use of inquiry and
reflection as well as advocacy in order to build his or her organization and career."
Have you developed a clear vision and key priorities for your enterprise?
"When I see a problem with a business or nonprofit, it often starts with a lack of clarity
about the organization's aspirations," Kaplan says. The leader may have a clear vision in his
or her head but has not communicated it effectively throughout the organization. "When
there is not a clearly articulated vision along with a manageable set of key priorities, you
may see an organization where employees are expending their energies in a number of
divergent and uncoordinated directions."

Leaders need to ask whether they articulate a clear vision and, just as importantly, whether
their key employees can rearticulate this vision in a consistent manner. For instance,
DuPont's vision is "to be the world's most dynamic science company, creating sustainable
solutions essential to a better, safer and healthier life for people everywhere." This vision
helps DuPont employees better understand what (and why) they are spending their
professional energies trying to accomplish.
Once the vision is established, Kaplan advises leaders to come up with and communicate a
list of no more than three to five priorities that are critical to the organization in order to
achieve the vision. In his book, Kaplan describes various approaches to formulating and
adapting these priorities to each department and geographic region in order to better
achieve overall organization objectives. "When a leadership has this discipline, they focus
much more intently on what tasks they need to do superbly well in order to achieve their
goals. This also can help them to question certain activities where they are spending
substantial time and money yet not contributing to organizational goals and maybe they
shouldn't be pursuing."
Does the way you spend your time match your key priorities?
Many CEOs tell Kaplan that they don't have time to figure out their vision and priorities--
they're working 80-hour weeks! In his book, Kaplan discusses techniques for matching
available hours with key priorities, so executives can learn to do much more effective work
and better manage their time.
He recommends that executives track their time for a couple of weeks and then analyze
how it is being spent. If substantial time allocations do not match top priorities, he
discusses how these tasks should be either delegated or eliminated.
"When someone asks you to spend time on work that doesn't match your key priorities, the
right action is probably to say no," Kaplan says. "Once you have a better matching of your
time with priorities, you'll want to encourage your direct reports to do the same."
Do you coach and also solicit feedback from your key subordinates?
Most good leaders understand they need to coach key employees, but fewer realize the
importance of asking subordinates for coaching. The more senior you are in a company, the
fewer senior executives and peers are able to effectively observe and coach you. Kaplan
gives advice on several techniques that leaders can use to solicit coaching from their direct
reports.
"Ironically, the executives most in need of feedback in many organizations are very senior,"
he says. "They may have become isolated or not realize that their direct reports have

constructive advice regarding specific changes they need to make to improve their
leadership effectiveness."
The book describes various approaches forgiving and receiving feedback. In particular, it
offers various techniques that should be implemented in advance of the year-end review,
which typically arrives too late for professionals to make changes that would improve their
compensation and/or promotion prospects in that year.
When senior leaders ultimately do cultivate junior coaches, they find that the criticism can
feel "devastating at first because you realize it is accurate and that it is probably a
widespread view within the organization. You have to thank the junior coach, and then go
out and work on what they've told you." Not sure the assessment is accurate? Call a few
close friends or loved ones and see what they think. Most likely, Kaplan says, they'll agree
with your subordinates.
"Leadership is a team game," he says. "You have to solicit help from others or you're likely
to under-achieve your potential."
Do you have a succession-planning process in place?
Kaplan stresses the importance of developing potential successors for key positions in your
company-including your own-and creating a confidential list. "Many great companies do
this but a surprising number don't," he says.
Senior leaders should leverage this depth chart information about up-and-comers by
delegating to them more extensively. This also allows senior leaders more time to achieve a
better match between their own time and key priorities. Leaders who fail to train
successors risk not only doing too much themselves but also losing these valuable
employees, who can become frustrated that they aren't being challenged to build their
skills and careers at the company.
If you had to design your company today with a clean sheet of paper, what would you
change?
The world doesn't stand still and it's natural for companies to fall out of alignment with
achievement of key objectives. Too often, leaders don't realize how off-track they are until
serious damage has been done to the business or the firm's reputation. Kaplan likens the
situation to realizing your health is at risk only after you're stricken with a heart attack.
He describes various approaches for reviewing your organization with a clean sheet of
paper. For example, one approach involves creating a task force of younger emerging
company leaders. "Emerging leaders, organized and mandated properly, can give you

fabulous strategic recommendations," he says. "Looking to up-and-comers is not only quite
effective in getting great strategic advice but also in motivating these future leaders."
Do you act as a role model?
Leaders don't always realize that their actions set an example for the people who work for
them, especially if they have risen through the ranks of a company so quickly that they fail
to realize their influence as role models. Kaplan learned this from personal experience
during his tenure at the Goldman Sachs Group, where he worked in several capacities,
eventually serving as vice chairman before leaving the firm in 2005.
"I went from being a junior person to running a large business in what seemed like a
nanosecond," he says. "And suddenly more people were watching what I did, and I had to
adjust my actions because I wasn't quite ready for that." In his book, he discusses various
approaches that leaders should take in order to connect their behaviors with the messages
they want to be sending.
Are you reaching your potential and being true to yourself?
While much of this book is about tangible "blocking and tackling" to become a more
effective executive, Kaplan dedicates the last two chapters to methods of gaining
perspective and managing oneself more effectively.
"In the end, it's not about meeting everyone else's expectations," he says. "It's about
reaching your unique potential and developing your own leadership style.
“The Power of Conversational
Leadership”
When a company is small, communication among employees is as simple as rolling a desk
chair around the room to talk to the president, the admin, or the chief engineer. But as a
company grows, communication becomes more difficult. And strategic direction can suffer
as a result, even if those at the top assume otherwise.
"Having communication that goes bottom-up is just as important as having communication
that goes top-down."
"In many cases you have an executive team that's so sure about company strategy, but then
you go inside the organization and find that nobody else has a clue," says Harvard Business

School Professor Boris Groysberg. "Nobody knows what strategic conversations are
actually unfolding."
For that reason, many CEOs are reconsidering the classic command-and-control structure
in which a few people are sending all the directives from the top of the corporate hierarchy.
Instead, they are adopting a conversational approach. In their new book, Talk, Inc.: How
Trusted Leaders Use Conversation to Power Their Organizations, Groysberg and
communication professional Michael Slind show how several global companies are
adopting principles of face-to-face conversation, and why this approach positively affects a
company's bottom line.
"In many ways the book is not about communication as much as it is about performance,"
Groysberg says. "In an economic environment where there is so much uncertainty, the
senior management of a company might not know where the company should be going in
three years. But your frontline customer-facing people might. Having communication that
goes bottom-up is just as important as having communication that goes top-down."
To try to suss out best practices for communication, the authors interviewed
communications directors and CEOs at more than 100 companies. "We were struck by how
often that word 'conversation' kept popping up," Slind says. "CEOs, especially, expressed an
aspiration to promote a conversation in their organization. They talked about wanting
everyone to be on board with the conversation about what they want to do with the
company."
Borne of those interviews, the book advocates an approach called "organizational
conversation," which applies to all processes a company uses to circulate information
across the organization, rather than just from the top down. "It's about creating a culture in
which the communication function becomes something that more and more resembles the
way that two friends would talk," Slind says.
The properties of a good organizational conversation
The book divides good organizational conversation into four alliterative elements—
intimacy, interactivity, inclusion, and intentionality—each of which applies to a particular
attribute of an organization. "Intimacy is about leadership," Groysberg explains.
"Interactivity is about channels. Inclusion is about content. And intentionality is about
goals, vision, and the strategy of getting things done."
INTIMACY: The authors note that intimacy need not require physical proximity, which
would be impossible in a multinational company where employees are separated by
thousands of miles. Rather, it requires emotional or mental intimacy. "It's about trust, it's

about being authentic, it's about communicating your vision but also at the same time
listening to what employees have to say," Groysberg says.
Talk, Inc. highlights the case of the Indian company Hindustan Petroleum Corporation Ltd.,
which at the turn of the twenty-first century launched an effort to develop a new vision
statement. Rather than keeping the effort confined to the C-suite, Hindustan held an
extensive series of "vision workshops" where employees at all levels of the company were
invited to share their thoughts.
A typical vision workshop included about 20 people and lasted three days. HPCL is a
Fortune Global500 company employing more than 11,000 people, so it took years to
complete the workshops. But by the end of the process, "almost every person felt that the
company vision was his or her own vision," Groysberg says.
INTERACTIVITY: Once some intimacy is established, it's important to keep the
conversation flowing. "It's not just that one person is both talking and listening, it means
that there is a real sort of back and forth where the act of listening actually changes what
you think and say," Slind explains. "As your company gets larger, that gets more difficult.
But one of the ways to do it is by using technology."
The book provides a quick overview of the social technology that helps global corporate
communication mimic personal conversation: internal blogs (in which leaders share their
thoughts and employees have a chance to comment), wikis (which enable collaboration on
corporate databases), online communities (which help far-flung employees find like-
minded colleagues), Twitter (which lets employees broadcast information widely, both
internally and externally), networks such as Facebook and LinkedIn (which enable
information sharing among a particular group), video sharing (YouTube and the like), and
web-enabled video chat (which help to mimic in-person communication).
Global computer networking giant Cisco Systems, for example, uses its own TelePresence
videoconferencing technology to simulate in-person meetings among its ranks—more than
6,200 executives and some 72,000 employees in total. "You really forget that you're
speaking across a fiber-optic cable," says Slind, who has observed videoconferencesat the
San Jose, California-based company. "You feel like you're sitting across from this person."
Slind hastens to add that technology is only as effective as those deploying it. "Interactivity
isn't just about technology," he says. "It's equally important to build an interactive culture."
INCLUSION: In organizational conversation, inclusion means giving employees a chance to
help tell a company's story. Ceding a measure of control over communication to employees
comes with the obvious risk of uncontrolled messaging, but the authors report that the
rewards of inclusion often outweigh the risks.

A traditional command-and-control company will filter a bunch of top-down messages
through the communications department. But the book recommends a more organic
approach. Sales teams can share success stories from the field via public video blogs, which
journalists and customers may consider more authentic and more useful than slick
marketing material. Furthermore, besides meeting with sales teams, customers might have
a chance to meet with the no-nonsense engineers who actually created the technology.
Talk, Inc. discusses a project at EMC, a Hopkinton, Massachusetts-based storage
networking company with more than 40,000 employees. In 2009, the company employees
produced a book about the lives of working mothers at the company, gathering personal
essays by 97 women at EMC (and one essay by a man). "It bubbled up organically,"
Groysberg says. "And in that way the message they created was more compelling than a
marketing campaign. It's helping the company to recruit women, which creates a great
competitive advantage. And internally, it has served to engage employees by letting them
become content creators. That's an example of being inclusive and allowing people to have
voice. And what we find is that that fundamentally will drive engagement. And engagement
will drive more effort. And effort will drive individual performance, and subsequently that
will drive organizational performance."
INTENTIONALITY: While the goal of organizational conversation is to draw on the
characteristics of a talk between friends, it must always have an agenda—and a leader
must always have a goal in mind. Otherwise it might take the form of talk just for the sake
of talking. The goal may be to ensure that all the employees understand the company's
competitive strategy, or it may be to ask every employee to help shape that strategy. But
there must be a goal, and the leader should use conversation to achieve that goal.
"Even if you can't control everything anymore you still are the leader," Slind says. "You still
have responsibility for setting the tone and setting the direction. And that's what
intentionality is about. As you're planning a conversation, you need to make sure that it's in
alignment with your company's strategic goals. And if it's done well, the power of
communication can support those goals."
"A productive conversation is a source of sustainable competitive advantage," Groysberg
says. "We find that if you can have good conversations in a company, you can actually
achieve a lot."

“Are You a Level-Six Leader?”
The central, most telling question to ask a leader is, whom do you serve?
Some leaders will tell you, using a popular descriptor, that they aspire to be "servant
leaders." The question still remains, however, a servant to whom: to yourself, to your
group, or to society (to cite three of several options)?
"Opportunists are the people who always ask, 'What's in it for me?'"
Asking the question whom do you serve? is a powerful vector on which to build a useful
typology of leadership. Based on this idea, I have constructed a six-level Purpose-Driven
Model of Leadership informed by the work of Jean Piaget, Lawrence Kohlberg, and his
colleague, Robert Kegan (see table 1). The answer to the question whom do you serve often
reveals more about leaders than knowing their personality traits, level of achievement, or
whether they were "transformational" or "transactional" leaders.
Level One: Sociopath
At the base of the model is the person who literally serves no one: the Sociopath. The
Sociopath, afflicted with what the Diagnostic and Statistical Manual of Mental Disorders
(DSM-III) describes as antisocial personality disorder, exhibits abnormally low empathy
and destroys value, himself, and, ultimately, those who surround him as well. (I use the
male pronoun because the vast majority of Sociopaths and psychopaths are male.)
Fortunately, Sociopaths comprise less than 1 percent of the population. An excellent
current example is Muammar Gaddafi, who is destroying his country, his tribe, his family,
and, in time, himself. Indeed, he serves no one. The same was true of Adolf Hitler and
Saddam Hussein.
Level Two: Opportunist
The second level is the leader who serves only himself or herself, often at the expense of
others: the Opportunist. These are the people who always ask, "What's in it for me?" Their
moral compass is guided primarily by the accumulation of wealth and power, all else be
damned. Bernie Madoff, now in prison, is a poster boy for the Opportunists. While Madoff
enjoyed the luxuries of a life of wealth and power, hundreds if not thousands of retirees
saw their nest eggs evaporate because of their unwitting participation in a deliberately
contrived Ponzi scheme that, in time, became the largest ($50 billion) in Wall Street
history. By this measure, or in terms of the families brought to financial ruin, Madoff
remains one of the modern world's greatest Opportunists. Also of this genre, although
somewhat lesser known, is Jeffrey Skilling, the Enron CEO who sold off tens of millions of

dollars of stock just before Enron filed for bankruptcy, claiming he had no knowledge of the
scandal that would engulf his company. He was sentenced to 24 years and four months in
prison.
Level Three: Chameleon
At the next level sits Chameleons. These are the "leaders" who bend with the wind and
strive to please as many people as possible at all times. In some cases this could be the
group they work with; in other cases, the regional or national electorate. It is difficult to
find renowned corporate leaders who fit this category because in business, typically, the
Chameleons are weeded out before they reach the top. The world of politics is another
matter. Many politicians fall into this category. Those who follow presidential politics will
remember Senator John Kerry (D-MA), who was pilloried as a "flip-flopper" after explaining
a vote regarding the Iraq war: "I actually did vote for the [authorization bill] before I voted
against it." In Florida, former governor Charlie Crist changed colors so often that it was
difficult to know with precision where he stood on any given issue, from climate change to
which party, if any, he really belonged to.
There is a natural cleavage between the model's first three levels described above and the
next three levels. There is not much to celebrate about the first three levels, although
certainly levels two and three abound in organizations. There's much more to admire in
levels four, five, and six.
Level Four: Achiever
"Achievers often substitute the needs of the whole with their personal striving to succeed."
The level-four leader, the Achiever, fills the senior executive ranks. These leaders rarely fail
to achieve their goals and often exceed sales quotas, create generous profits, and are
frequent stars at merit-award dinners. The Achiever, to use Peter Drucker's felicitous
phrase, is often a "monomaniac with a mission" and is focused, energetic, results-oriented,
and highly prized by top management. Achievers pursue goals established by their bosses
or by themselves, in a single-minded manner. Therein lies the Achilles' heel of Achievers:
They drive toward a goal without giving much consideration to the broader mission.
Former Hewlett-Packard CEO Mark Hurd is an excellent example of a level-four leader.
Under his watch HP's stock price more than doubled, but he decimated the infrastructure
and intellectual seed corn (R&D) of the company to do so. By simply cutting R&D to a level
of about 2.5 percent of revenue, down from 6 percent during the 1990s, the Carly
Fiorina/Mark Hurd team "saved" HP about $4 billion—about the equivalent of half the
profits earned during Hurd's last year. HP's once formidable technological and product
strength was slowly sapped away. When I asked Dave Packard in the early 1980s what
accounted for HP's extraordinary run he modestly replied, "I guess we found a way to make

a better product." Where are those better products today? Referring to one of HP's most
visible new product initiatives, the TouchPad, a late entry into the iPad dominated tablet
space, a senior HP executive reportedly told the Wall Street Journal, "We know we're the
fifth man in a four-man race." In their drive towards a goal, Achievers often substitute the
needs of the whole with their personal striving to succeed.
Level Five: Builder
The level-five leader, the Builder, strives not to reach a goal but to build an institution.
Builders are legendary leaders such as IBM's Tom Watson Jr., GM's Alfred P. Sloan, and
Harpo's Oprah Winfrey. These people serve their institutions by managing for the long
term and not allowing themselves to be seduced by the twin mirages of short-term profit or
stock market valuations. They have a grand vision for the future of their organizations, and
they infect others with their energy, enthusiasm, and integrity. These are the leaders we
write books about, study, try to understand, and lionize.
Level Six: Transcendent
Builders are few and far between, but there is an even rarer type of leader who transcends
the Builder: the Transcendent. Level-six leaders transcend their political party, their ethnic
or racial group, and even their institutions. They focus on how to benefit all of society.
These are "global citizens," in the words of Howard Gardner's recent book, Truth, Beauty,
and Goodness Reframed, who watch out not only for numero uno but for the wider public
as well. There is no better example of what it really takes to be a Transcendent than the
first black president of South Africa, Nelson Mandela. He was able to soar above hatred for
his white jailers, the political tug of the African National Congress, the pull of his racial and
tribal group, and the rejection by the Afrikaners to build a South Africa for all South
Africans. Now in his 90s, he is perhaps the world's greatest living leader.
“What CEOs Do, and How They Can Do it
Better”
Why did you come in late on Tuesday? Did you really need an hour and a half for lunch on
Wednesday? Why wasn't that report done by Thursday? For most of us, justifying our
schedules is an expected part of the job.
But what employee hasn't looked at the closed door of the corner office and wondered
what the boss is doing all day. For all of the minute-to-minute monitoring of employee

performance from the time of Henry Ford onward, it's amazing how little any of us really
know about how CEOs of major companies spend their time.
"Fundamentally, it's because no one knows what a CEO should do," says Harvard Business
School professor Raffaella Sadun. "Most of the time it's difficult to codify the qualities of a
good manager."
"We went in with the curiosity of trying to understand the life of a CEO"
Despite that difficulty, however, it's self-evident that the way a CEO chooses to spend his or
her time has much more of an effect on a company's success or failure than if a middle
manager spends a half hour more at lunch. With that in mind, Sadun and three colleagues-
Oriana Bandiera and Andrea Prat of the London School of Economics and Luigi Guiso of the
European University Institute—set out to get to the bottom of CEO time management by
following nearly 100 top managers in Italy, as reported in a recent paper with the
deceptively simple title, What Do CEOs Do?
"We had no way of knowing what we were going to find," says Sadun. "We went in with the
curiosity of trying to understand the life of a CEO."
But what they did discover should help CEOs learn to be more effective with their time, and
provide boards with a new tool to help assess the effectiveness of their chief executives.
Under a microscope
Of course, it's not so easy to codify all of the many actions a CEO could take during the
course of a day—attending meetings, reviewing a marketing campaign, schmoozing clients
on the golf course. So Sadun and her colleagues instead divided up activities with a much
simpler measure of looking at the people with whom a CEO spent time.
After all, the boss is in a unique position within a firm not only to spend time with
employees, but also with the outside world, making connections and gathering information.
However, not all of the time the boss spends with outsiders might help the firm, especially
if a CEO's and a company's interests are not aligned.
"CEOs should be working with both constituencies, insiders and outsiders," says Sadun.
"However, if there are governance issues, there might be the possibility that the CEO is in
the outside world more for his or her personal benefit than for the benefit of the firm."
In order to test whether this was true, the researchers enlisted 94 CEOs of major Italian
corporations who agreed to put their lives under the microscope for a period of a week at a
time. The CEO's personal assistant was asked to record every activity the boss engaged in
that lasted at least 15 minutes.

Tabulating the data, the researchers discovered that the vast majority of a CEO's time, some
85 percent, was spent working with other people through meetings, phone calls, and public
appearances, while only 15 percent was spent working alone. Of the time spent with
others, chief execs spent on average 42 percent with only "insiders" (employees or
directors of the CEO's firm); 25 percent with insiders and outsiders together; and 16
percent with only outsiders. (Exact numbers varied dramatically among the sample, with
some CEOs spending more than 20 hours a week outside the office, while others spent
almost none.)
Next, the researchers crunched a number of factors measuring company performance—for
example, profits per employee—in order to see which CEOs were more productively using
their time.
Better on the inside
Their first finding, which might seem unsurprising, was that the top managers who spent
more time at work were more productive than those who spent less time at work. In fact,
Sadun and company found, for every 1 percent increase in hours worked, there was a 2.14
percent increase in productivity. "That's never been shown before, so that was reassuring,"
Sadun says.
Likewise, time spent with insiders was strongly correlated with productivity increases. For
every 1 percent gain in time spent with at least one insider, productivity advanced 1.23
percent. Less reassuring, however, was that the time CEOs spent with outsiders had no
measurable correlation with firm performance.
"It's a way to monitor where the efforts of the CEO are going"
In a final measure of CEO's performance, the researchers rated firms based on the quality
of governance, measuring a variety of factors such as the size of the board, the presence of
at least one woman on the board, ownership, whether the company was based in another
country, and if so, the general level of governance in that country. Again they found a clear
correlation: in companies with stronger governance, CEOs spent more time with insiders
and less time with outsiders, and at the same time were more productive.
"There are some industries where a CEO really needs to be outside, so we don't need to be
proscriptive, but if you were taking these results literally it would tell you that since a
CEO's time is constrained, he should be mindful of the time spent with his own employees,"
says Sadun.
In extrapolating from the data, Sadun cautions the sample size used in the study was
relatively small (though exponentially bigger than any past research on the topic), and that
the results of the study (especially when it comes to the link between CEO time use and

firm performance) should for the moment be interpreted as suggestive correlations rather
than firm causality statements. Even so, encouraged by the results of the initial study, the
group is planning to continue along this line of research by expanding the data collection in
other countries (India, China, and the US) in order to increase the sample as well as to take
cultural differences into account.
Sadun says that the group has received nothing but positive feedback from the anonymous
CEOs who participated in the study. In keeping with the adage that "it's lonely at the top,"
many of the managers studied had little idea of how they could make their time more
productive. Sadun hopes that the information will be equally helpful for boards in
evaluating the performance of their CEOs.
"It's a way to monitor where the efforts of the CEO are going, and to get them
understanding that perhaps spending too much time on the outside might not be as
beneficial as they might think," she says.
If nothing else, next time employees ask the question "What is the boss doing with all of his
time?" at least they'll have an answer.
“Developing the Global Leader”
What skills do today's executives need to develop to become effective global leaders of
tomorrow? And how do corporations teach these skills to their own leaders?
"The shift from a country-centric corporation to one that is more global in its outlook will
have a radical impact on leadership development," says Professor of Management Practice
William George, the former chairman and chief executive officer of Medtronic.
"We're looking to companies to create a global cadre of people who are comfortable
operating anywhere in the world."
George developed and taught for many years the popular second-year MBA course
Authentic Leadership Development (ALD), which he has compressed into a five-day
Executive Education program at Harvard Business School.
"The most successful leaders will not necessarily be those with the highest IQ," he says. "Of
course, they will need to be intelligent. But they'll also need to have a high level of cultural
and emotional intelligence."
According to George, additional characteristics of a successful global leader include:
An intellectual understanding of the global business context—in other words, an ability to
comprehend just how complex it can be to do business around the world.

The capacity to simultaneously develop a global and local perspective. "This is much easier
said than done," George says. "And it's almost impossible to achieve without a great deal of
experience living in different parts of the world."
Being able to overcome the dominant thinking at headquarters. "Leadership has to lean in
favor of nondominant thinking," says George. "That requires a tremendous amount of
intercultural empathy and a passion for diversity in life experiences." In other words: "An
insatiable need to learn about other cultures."
A knack for cross-boundary partnering. "You need to feel comfortable engaging a team in
India and giving them as much power as a team in Germany or the United States. There's a
certain level of executive leadership maturity involved in having the respect and capacity to
pull the best out of each area of the corporation."
A self-awareness and self-assurance when it comes to one's values and sense of purpose. At
the same time, however, "you need to be flexible in learning from and empowering others."
The ability to develop networks that are internal and external to the organization. "It's a
process of shifting from vertical management to horizontal collaboration. One's title and
role are far less important than the capacity to get things done."
How should one cultivate these qualities? One of George's first recommendations for
would-be global leaders is to live in a country where the language spoken is different from
that in one's home country.
"When my wife and I lived in Japan we had a two-year-old child, which meant we had to
dive in and learn very quickly," he recalls. "Doing this gives you a heightened sensitivity to
cultural differences, and how those differences are tied up in language."
After 60 or so hours of Japanese language instruction, George could more or less carry on a
conversation, and did so with a retired chairman of Mitsubishi—who gently informed him
that he was speaking "female Japanese."
Get lost
"These are great learning experiences," he says. "The first weekend after I had moved to
Belgium, I asked someone how I should explore and get to know the place. I was told to go
get lost, which is great advice. It's about really engaging in the culture and learning to be
vulnerable."
Accepting one's vulnerabilities is a primary objective of ALD, which requires participants to
work together in six-person groups.

"It's more than a knowledge transfer from HBS to individuals; it's also an exchange
between people and a process of understanding who I am, what I desire, what is my
purpose, and what are my values," says George, who notes that this year the number of
participants who can enroll in ALD has doubled to 240 people.
Also coming next July is The Global Enterprise Leader, a course developed with Professor
Krishna Palepu that will extend ALD's objectives to include cultivating a greater capacity
for cultural intelligence. "It's not so much about understanding geopolitics," George says.
"The characteristics that I've cited above are far more important."
Aligning employees across a diversity of geographies and experiences is easier said than
done, George concedes, although he does highlight a few standouts, including Coca-Cola
(which has had five non-American CEOs), Nestlé, Unilever, Siemens, IBM, and Novartis,
among others.
"Ultimately, a global organization is measured by how well the diversity of its leadership
reflects the diversity of its customer base and how well that leadership can leverage the
skills of teams working around the world," he says, adding that Medtronic's CEO is Omar
Ishrak, a native of Bangladesh who was educated in London and has worked in the United
States for nearly 20 years.
"We're looking to companies to create a global cadre of people who are comfortable
operating anywhere in the world," George concludes. "That's where we're heading."

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