Today’s business environment is changing. A lot has been written in recent years about this change and its various aspects: globalization, emerging markets, different competitors, exponential rate of change, new technologies that change business models and market places, impact of social media, etc. It affects people and businesses worldwide, and surely also multinational companies. In working with multinational companies I see three specific changes that affect the role of its senior leaders. Three changes that require special attention and sometimes even a fundamental mind shift. Let me list these three changes in a condensed manner.
a) A shift from management & control focus to alignment focus
In today’s business world it is clear that agility, resilience, flexibility to respond, ability to adapt, speed of defining and executing strategic priorities, are more important for the company’s success than ever before. It has become one of the main roles of senior leaders to enable the organization to adopt these qualities. Hierarchical, top-down oriented mechanisms of control and management need therefore to be adapted and complemented with new ways of collaboration and teamwork. New ways that enable managers, employees, and teams to exchange relevant information faster with each other; to let knowledge and competencies flow more easily cross-boarder between units, departments and functions; to detect issues and solutions quicker; to be more flexible in adjusting to new circumstances; to speed up execution of new methods, processes and procedures.
New ways of working that focus on creating alignment between people and teams rather than on managing and controlling activities. An alignment focus that shows its power especially when changes are taking place, pressure is up, frictions occur, and opinions and ideas about what should be done are diverse. Senior leaders play an important role in creating this ‘alignment culture’. They focus their energy for instance more on building mutual understanding than on ‘who is right and who is wrong’. They want to understand the reasoning of others before they draw conclusions. They pay attention to the people behind the tasks and to the way people and teams collaborate. They show alignment focus inside the C-suite and are therefore perceived as a strong leadership team. But they show it also outside the C-suite and they expect the same behavior from their managers and employees. They make it a strategic success factor for their company. Alignment focused companies have the ability to quickly incorporate new insights, circumstances and opinions, and to convert these into choices, decisions and effective execution (read more here about the characteristics of Alignment focus).
b) Different and closer interaction between senior leaders and the rest of the organization
Not just more written communication or road shows, but more frequent and in-depth interaction with managers and teams within the organization. The key process from creating vision and defining strategy to implementing and monitoring execution has changed substantially. The organizational and market dynamics are changed in such a way that senior leaders can easily get disconnected from the company’s fundamental challenges and issues when they keep too much distance from the organization. In order to stay on top of their game they need to adjust their way of interacting with the organization.
Different interaction: by combining a traditional territorial focus (functional, business unit, geographical, etc.) with a focus on the informal cross-departmental networks and mechanisms that play an important role in the way the company operates. These networks and mechanisms are often less visible and can be important sources for success as well as for problems. Knowing and understanding these networks is becoming important for senior leaders in effectively handling today’s business complexity. This requires a change within the C-suite, where senior leaders sometimes tend to stay focused on their individual territories. Next to that a more integrated, cross-departmental orientation is needed to be able to better understand the organization and its informal networks and mechanisms. It allows senior leaders to interact with these networks or to stimulate networks deliberately, and to mobilize, share and transfer the benefits of the network to other parts of the organization (read more about dealing with informal networks).
Closer interaction: successful senior leaders create a flatter organization by having closer communication lines with managers and teams within the organization. They are more visible and accessible than they used to be. They actively carry out the vision and the company’s strategic focus and ask people for their ideas and concerns. They are aware of the power of leading by example and they coach their managers when needed (read more here about the coaching role of senior leaders).
c) Shift from one-culture thinking to cross-cultural thinking
Emerging markets and economies have created a shift in the way companies deal with cross-cultural differences. Expansion to new countries and cultures is no longer a ‘West moving East’ operation; bringing our culture to you. It is more and more also the other way around. Many multinational companies are confronted on the one hand with market places that develop and become mature rapidly, and on the other hand with ambitious and self-confident competitors. This creates new challenges for its leadership. One challenge is to address the question ‘how well do we understand and align with the local culture / how do we create the acceptance of the local market?’ Another challenge is the influx of new members from other cultures in senior leadership teams. This all means that cross-cultural sensitivity, skills and effectiveness are vital assets for senior leaders in multinational companies.
Cross-cultural effectiveness is based on ‘reconciling and combining the best of both worlds’ rather than on thinking in terms of ‘one culture fits all’. It requires senior leaders to make it a top priority on their agenda: How well do we understand the local cultures in the markets in which we operate (read this interesting article about how to deal with local cultures)? How well do we understand the cross-cultural differences within our company? Or within the C-suite? What is the level of cross-cultural effectiveness of our managers? How well do we stimulate and support our managers to grow the necessary cross-cultural skills (read more here about how to deal with cross-cultural differences)?
What is your experience with leadership in multinational companies? How do you perceive these three trends? Do you see more changes? Feel free to comment below.
Aad is an international business advisor, change & business transformation expert, leadership team facilitator and executive coach. He works with senior executives and leadership teams of multinational companies on topics like ‘leading complex change’, ‘cross-cultural leadership’, ‘post-merger integration’, and ‘amplifying business performance’. Find out more about Aad and his services. Feel free to contact Aad.
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- Leading Change in the 21st Century: 4 Myths About Cultural Change (leadershipwatch-aadboot.com)
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