LeadershipWatch

Cross-Cultural Leadership: How Misinterpretations of Dishonesty Can Destroy Team Alignment

Sun Flower with the word Honesty

When leading change, for instance in post merger integrations, leadership teams are very often confronted with cross-cultural differences. These can be corporate or national culture differences. Not dealing with these cultural differences effectively can have a serious impact on leadership teams. As executive and leadership team consultant and facilitator I have seen many situations over the years where mutual distrust seriously hindered a team’s alignment and performance. And almost every time this lack of trust was related to perceptions of dishonest behavior of fellow team members.

Honesty and dishonesty are clearly very important to us. The feeling of being confronted with dishonesty blocks our openness and decreases our level of trust. But what if our perception of another person’s dishonesty is based on misinterpretation? What if the other person is not trying to harm us at all, but simply has a different perspective on the situation? Unfortunately misinterpretations occur rather often! They can hamper leadership teams in such a way that the negative effects spread out over the whole organization.

How to avoid these false interpretations? How do they start and how can you stop them in time? Apparently they grow in a subtle way, sometimes unconsciousness. Two real life examples I witnessed:

A leadership team launched a number of transformation initiatives to improve the cross-regional collaboration between Europe, the Americas, and Asia. Each member of the team was responsible to sponsor and steer one of the task forces and to present progress and results in the monthly leadership team meeting. After three months an open clash took place in the meeting. European executives accused their South American colleague of not sharing the real facts with them. They received inside information from his task force members, information that was not in line with what he presented in the meeting. They felt he was not honest and tried to cover up facts so he could push through his plan for a new design process that he knew would not completely fit the European needs. There was a lot of emotion in the room and the atmosphere was deteriorating rapidly. Finally and luckily one of the people around the table raised a question: “Please explain once more to us why you are not sharing all the information here, why do you keep it to yourself?” After some hesitation the reply came: “I don’t want to feed information to you of which I am not sure it will stay valid. I still remember last year when I showed my reorganization plans for the plant in Argentina and you blocked it because you believed my work was not thorough enough. I for sure will prevent that from happening again. I will tell you my plans when the task force has all details figured out. Not before.” This confession turned the meeting around. Instead of distrusting each other, the team should maybe focus more on exchanging expectations and maybe support their colleague a bit more.

Another example: an executive team that was newly formed after an acquisition (Japanese acquirer taking over a European/American company). After a few weeks the first signs of tension and distrust were showing. Western team members clinging together and forming a block against the Japanese invaders who didn’t share any of their plans and only attended meetings to be nice and friendly, but did not explain anything of the changes they wanted to roll out. When I had meetings with each team member to figure out what was going on I found out that cultural differences in how to establish relationship and openness were hindering the team. Clearly the Japanese culture was much more following the path of ‘establishing relationship first and then gradually show more openness and sharing’, where the more Anglo-Saxon oriented culture of the Western leaders was more following the path of ‘openness and sharing as prerequisite for creating a trust based relationship’ (read my earlier post on how relationships and openness can be experienced differently from culture to culture). Discussing this with the team did of course not solve the problem at once, but created a better understanding of the cultural difference and allowed the team to let go of a big part of the negative energy. They realized the situation was not caused by bad intentions, and that allowed them to discuss the way forward as a team.

These are just two examples of how easily wrong perceptions of dishonesty can lead to team conflict that will hinder the leadership team’s performance with all its negative impact on the organization. How to avoid this from happening? First of all by creating a stronger individual and team awareness for these potential misinterpretations. By developing as a leader specific cross-cultural antennas that help you to detect situations where miscommunication, misinterpretation, misunderstanding, derailment of the team, is taking place. To be able to spot these moments early enough. The following questions can maybe help as a kind of checklist for you and your team.

When dealing with perceived dishonesty and distrust, how is our team reacting?:

  • Do we by default want to believe the following two principles (until proven wrong based on hard facts)?: I believe that nobody in this team is deliberately trying to harm the others. I believe that this team consists of reasonable and intelligent people. Or do we unconsciously believe the opposite? How is this affecting our contribution to the team?
  • Do we raise open questions to better understand why and what others are saying or doing? Or do we make statements and use leading questions trying to prove our point?
  • Do we try to learn from other’s interpretation of honesty or dishonesty? Or do we believe that our perspective is the only right one?
  • Do we base our judgments on real facts? Or do we judge dishonesty mostly based on feelings and interpretations?
  • Do we believe we can be wrong in our judgment, that we missed something and misunderstood the situation? Or do we blindly trust our own judgment regardless the consequences?
  • Do we focus on the impact it has on us as leadership team and how it affects the organization? Or do we tend to focus on our personal feelings and interest?

How do you interpret honesty or dishonesty? I look forward to reading your comments.

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Photo: kkimpel/Flickr (Creative Commons)

___________________

As international business consultant, change leader, leadership team facilitator and executive coach Aad supports executives and leadership teams of multinational companies. Over the past 25 years he has acquired a vast experience and expertise in leading complex change, cross-cultural leadership, and post-merger integration. Find out more about Aad and his services. If you would like to hire Aad, contact him here.

Leading Change: Three Major Misconceptions That Hinder Innovation

Road sign with the word Innovation on it

These days almost every organization is discussing the need for innovation. There is no CEO that talks with me about the company’s strategic drivers without mentioning ‘building more innovation power’. Every government is claiming innovation to be one of its key economic drivers. Innovation is hot. And of course it makes sense! In my previous post I described the difference between focus on sustainable value creation versus focus on short term financial growth, and how the latter can jeopardize a company’s future success. It is clear that innovation has become vital for value creation. More than ever will it distinguish successful businesses from the less successful.

The point is, there is so much talk, discussion, and buzz going on around innovation that it makes me wonder: do we all really talk about the same thing? What do we actually mean with innovation? Are we maybe mixing up things? And which businesses are really innovative? What differentiates the successful innovators from the others? It triggered me to write this piece. I believe there are a number of misconceptions about what innovation really is and what it requires from leaders to actually lead a company to innovation. Three fundamental misconceptions stick out.

1.     Innovation is synonym for change

There are many definitions of innovation. To mention just a view:

“The act of introducing something new” (the American heritage dictionary) / “A new idea, method or device” (Webster online) / “Change that creates a new dimension of performance” (Peter Drucker)

To create innovation is to put something new into the marketplace. Innovation can occur in products, processes, approaches, or services. This means that every innovation is by definition a change. But the reverse is not necessarily the case. Not every change in product, process or service is innovative. Innovation is almost always found outside what is known to us, outside our comfort zones! And that makes it different. Too often innovation and change initiatives are mixed up. Many change initiatives are actually improvement oriented and based on knowledge and examples that are already available in the marketplace (best practices, benchmarks, pilots), and are therefore not innovative. Real innovation requires a company to go first, to go where no one has been before; to be a leader rather than a follower.

2.     Innovation is a business goal as any other

Innovation does not belong on the annual short list of business goals for the coming 12 months. Research shows that successful innovation depends on the level of strategic alignment in the organization: alignment between the corporate strategy, the innovation strategy and the corporate culture (see a recent study in S+B on this). Innovation is therefore more than just one of the business goals. It is more fundamental. It requires a specific innovation strategy and culture, based on a profound understanding of the external developments, how we adjust our strategy to it, which part of the business (products, services, processes, systems) we need to innovate, how we use our qualities and competencies to create innovation, which competencies we miss and need to develop, how we deal with trial & error and failure, how we will change the way we work in teams, how we will refocus resources. And it hugely depends on the power of the company’s leaders to let go of the past (see also my earlier post ‘the power of letting go’).

3.     An innovation culture is something you can copy from successful innovative companies

Let’s have a close look at how successful companies have created innovation and do the same. Wrong, doing what others do is not innovating! You can learn lessons from others, but you will have to translate those to your own reality. Companies are unique, because their people are unique. Creating innovation successfully requires a corporate culture that is aligned with your specific innovation strategy and is based on transparent values, rules and guidelines that encourage innovation oriented behavior in line with this strategy. Based on people who have adopted an innovation mindset that is specific to your company’s reality and challenges. Needless to say that the leaders (starting on C-level), their leadership style and their behavior, are important if not crucial in creating and stimulating such a culture.

Feel free to join the discussion by sharing your ideas and experiences below. I look forward to reading your comments.

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Photo: Hampton Roads Partnership/Flickr (Creative Commons)

___________________

As international business consultant, change leader, leadership facilitator and executive coach Aad supports executives and leadership teams of multinational companies. Over more than 20 years he has acquired a vast experience and expertise in leading complex change, cross-cultural leadership, post-merger integration, and amplifying business performance. If you are interested, find out more about Aad and his services. If you would like to hire Aad, don’t hesitate to contact him here.

Amplifying Business Performance: Successful Leaders Approach Financial Growth Differently

Green watering can that waters money coins

We all see significant economic changes taking place around us. The financial crisis, emerging markets, new technologies are putting their stamp on our economies, on market places, and on businesses. Organizations face changing circumstances that require different approaches. Yesterday’s success formulas are no longer a guarantee for future success. Leaders will need to adjust, review, transform, innovate their business performance models. And maybe that requires a new way of thinking about financial growth.

I work internationally with executives and their leadership teams on how to address these challenges. What should be our direction, strategy and focus for the coming years? Why is this so important for our future success? What do we need to change in our business performance to create that success? How should we lead this transformation within our organization? How do we stimulate motivation and commitment of our management and employees for these changes?

I know it may sound a bit harsh but I see a growing divide between leaders who are successful at this and those who struggle with it. And a great part of this divide is related to what I call ‘one-dimensional financial growth thinking’.

The other day I had a conversation with an executive. He explained to me how difficult it was for him to lead his division effectively. “I see significant changes coming towards us. One, the economic forecast for the coming two to three years is showing a decline in customer spending in our sector. Two, we face a clear trend in the marketplace where customers expect us to deliver our services in a different way. Much more customized, more flexible, faster, using new and customized channels. They want us to deliver our products under specific conditions. Almost as if our products are uniquely made for them. Our operating model, our supply chain and our customer service organization are not responsive enough to those needs. On top of this we’re in the middle of our annual budget cycle and the board has requested me to further increase turnover with 20% as we did the last three years. And they want us to keep up our margin target. In the last executives meeting with the board a number of executives stressed that it would probably be very difficult to meet these figures and that the company needed to think about innovating and changing our going to market model for the future. The answer was ‘yes, you are right and we will make time for this, but we don’t want this to take energy and resources away from our core purpose, and that is to focus on maintaining our financial growth’”. He continued: “I know how to run a business and I have always been very successful, but I honestly do not see anymore how we can meet these financial expectations for next year. It is very hard to keep people motivated under these circumstances. My management team is a great group of experienced people but they start losing faith in the direction and future of this company. They feel the company is losing ground on the competition every day because we do not invest time in defining the required changes in our organization that allow us to stay successful in the medium and long-term.”

Does this example sounds familiar to you? It is just an example but I could give you many more examples of leaders who suffer from this ‘one-dimensional financial growth focus’. Now don’t get me wrong, there is nothing wrong with wanting to create financial growth! Especially in times of change it is vital not to lose sight of finance. I’m for instance always very cautious when people show ‘hockey stick’ charts to support their claim that making less money in the short-term is the only way to create financial growth in the future. But that is not the point.

The point is: triggering and pushing people to focus on short-term financial growth will never allow you to create the breakthrough transformation that might be necessary to guarantee your future business success. It will prevent people from seeing opportunities for new ways of value creation and they will get stuck in the past!

Companies that follow ‘one-dimensional financial growth thinking’ are becoming more and more easy to recognize these days. They suffer from:

  • A growing risk aversion
  • Sticking to old success formulas
  • Lack of clarity among managers and employees about the vision and strategy of the company
  • High level of resistance to change
  • Decreasing self-confidence of people because it is costing more and more energy to get the same results
  • Incremental improvements creating mediocre results
  • Becoming known in the market place for being old-fashioned and not innovative compared to the competition
  • Decreasing customer satisfaction and loyalty

This is a vicious circle that can create serious problems if leaders are not capable of breaking it.

Successful leaders don’t follow the ‘one-dimensional financial growth focus’. They approach financial growth differently. Their companies use the following principles:

  • Growth is much more than financial growth alone
  • Creating added value towards customers, colleagues, shareholders is the focus, and this has as much to do with quality as with quantity
  • If we deliver added value, financial growth is one of the logical outcomes
  • Having a good understanding throughout the organization on each level (divisions, departments, teams, individuals) of what our added value is, how and where we deliver it, is therefore a critical success factor 
  • Striving for excellence has everything to do with increasing our ability to increase our added value
  • Challenging our way of working is a continuous process and is crucial to be able to adjust our added value to changing expectations and needs around us
  • Performance management should stimulate innovation, not only incremental improvements 

Take a look around you. It is inspiring to spot these successful leaders and the companies they create.

Feel free to join the discussion by sharing your ideas and experiences below. I look forward to reading your comments. Thanks for stopping by!

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Photo: alancleaver_2000/Flickr (Creative Commons)

___________________

As international business consultant, change leader, leadership facilitator and executive coach Aad supports executives and leadership teams of multinational companies. Over more than 20 years he has acquired a vast experience and expertise in leading complex change, cross-cultural leadership, post-merger integration, and amplifying business performance. If you are interested, find out more about Aad and his services. If you would like to hire Aad, don’t hesitate to contact him here.

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Leading Change: What About the Coaching Skills of Senior Leaders?

Road sign with the words The Coach Houses written on it

Senior leaders are confronted with an increasing rate of change and complexity and need to find ways to deal with it. Leading your company through change has become different from how it was ten to twenty years ago. Mobilizing employees, engaging them successfully, motivating them, informing them, using the talent and potential of people and teams, it all is crucial. But these days more and more leaders are confronted with change fatigue in their organization. Leaders need to find ways to support their line management and employees to cope with this change fatigue effectively.

Senior leaders play a crucial role here. How do they think their company should deal with this increased rate of change and complexity? What do they see the priorities for the company? How do they want everybody in the organization to understand these priorities and focus their energy on it? What types of behavior do they expect from their managers and employees? How do they see their own role as senior leadership in this? What support do their line managers need from them?

Leading change has become much more a continuous process with less clarity on the exact outcomes. It is no longer an ‘on top’ activity that can be ‘managed’ by separate teams in parallel with the ‘normal’ business. Change completed: people go back to their normal business. No, today’s change ìs the normal business. Initiating and leading projects/task forces/new initiatives, and the related mindset and skills, have become a much more integrated part of the daily operating mode of successful organizations. And this requires for senior leaders to also change their operating mode.

Funnily enough, senior leaders are often not aware of their changing role. They tend to see their role in defining the strategy and priorities, in clarifying the decisions taken, but for the execution they expect their line management to take over. And maybe that is exactly why companies today are struggling with change fatigue? Maybe senior leaders expect too much from line managers as the key responsible for the execution of change? Maybe they underestimate the fact that leading change today requires a different relationship between senior and middle management?

What are the key characteristics of this changed relationship?:

  • The need for shorter lines between senior and middle management

Changes and complexity trigger a need for clarity. People want to control the change, want to create peace of mind by being able to understand and overlook what is happening. This applies to both senior leaders, line managers, and employees. It requires senior leaders to be close to their management. Close in terms of explaining the change, discussing potential ways to manage it successfully, initiating the right focus and right actions, guiding the desired behavior and results.

Successful leaders create more visibility on the things they are doing, more clarity on the topics they are discussing, more information on what is happening at the top. They do spend a lot of time together as senior leadership in defining strategy and focus, but they create a direct link with their management teams and keep up a high level of openness and frequent communication. Rather than keeping distance and radio silence until they are able to show white smoke.

  • The importance of ‘leading by coaching’

Of course senior leaders need to ‘lead by example’, especially in times of turbulence. But leading by example requires more than showing what you do to others and expect them to take over. Today’s leaders need to be able to coach their managers. Coaching in terms of understanding the challenges, strengths and weaknesses of the manager, investing time together to explore areas for improvement, support the manager to find answers and take decisions that improve effectiveness and motivation.

Successful leaders invest more time than ever before in coaching their managers, on individual level, as well as in team. They pay explicit attention to their own role as coach and the support their managers need to be able to lead the company through today’s challenges. They reflect on their own effectiveness as coach, they seek feedback or coaching from others without hesitation. And they never confuse coaching with micro-managing.

Do you recognize these changes? Do you experience the changed role of senior leaders? How do you coach your managers? What challenges do you face in this? Please share your comments.  

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Photo: ell brown/Flickr (Creative Commons)

___________________

As international business consultant, change leader, alignment facilitator and executive coach Aad supports executives and leadership teams of multinational companies. Over the past 25 years he has acquired a vast experience and expertise in leading complex change, cross-cultural leadership, and post-merger integration. If you are interested, find more about Aad and his services here.

Cross-Cultural Leadership: How Will China Influence The World?

City view on the Chinese city of Xian

Recently I had the pleasure to travel around in China for a few weeks. Visiting a fair deal of the country, north and south, the big cities and a part of the country side. I came back with a truck load of impressions! Experiencing China from within … being confronted with the almost incredible speed in which it is changing itself, in many ways. And yet, how at the same time it seems to remain attached to its roots, history and cultural heritage. There were many moments of wonder and admiration and also moments of confusion. China’s growth influences the world significantly and will continue to do so in the coming decades. It looks like China is adopting certain Western aspects, but without losing its Chinese roots. It will very likely not develop itself into a ‘westernized’ China. So, how will China influence the world? How will Chinese and ‘Western’ cultures engage each other in the coming years? Questions to which nobody knows the real answers these days. But some of the impressions I collected during my journey (impressions, not conclusions or judgments) shine an interesting light on these questions. The least you can say is that 21st century leaders (Chinese and Western leaders) are facing an interesting challenge to understand the differences in culture and history and to develop ways to create successful cooperation.

The first impression (it left me speechless on several occasions) was the substantial knowledge many Chinese have of the West (let’s say USA and Europe). Asking me where I came from, answering “Brussels”, and than receiving a reaction “Brussels? But you say you are Dutch, so you left your country?” Or “In what part of Holland did you grow up, the west side with the cities or the east side where less people live?” Knowing geography on such a detailed level. But also knowing a lot about our history, about how Europe evolved, being able to name important events and dates in history, and describing differences between the US and Europe. This knowledge did not come from Chinese people that lived or studied in the West, but from Chinese that never left China in their entire lives. I asked how they knew all this, and they replied “at school, we learn a lot about Europe and the USA at school”.

It made me think: What do we in the West really teach our children about China? About its geography? About its history and the defining events and people in its existence? What if the Chinese would know much more about us than we do about them? How would that influence our relationships?

Another profound impression was the importance Chinese attach to having / establishing / keeping harmony in almost everything. In human relations; in what and how to eat; in the way the Chinese approach health and medical issues; in the way they design houses, gardens, buildings; in the way they use the public space together. Even when observing the chaotic traffic, where nobody seems to pay any attention to any rule, you begin to see the harmony after a while (e.g. everybody is more or less moving with the same speed, and the honk is used to warn each other rather then to scare each other off). In general (I know, I’m generalizing here) Chinese seem to put harmony and balance above individual needs and aspirations. Showing yourself by openly sharing a blunt personal opinion will probably not be seen as being brave or honest, but as being reckless, naive or even stupid.

It made me think: What if we in the West have the tendency to engage the Chinese with an individualistic orientation? What if we implicitly value the individual more than the group? What could we learn from China in this respect? And does the new generation in China (coming from ‘one child’ families) also value this concept of harmony as much as their parents? Are we in the West sufficiently aware of these differences and potential evolutions?

A third impression was the way Chinese stay goal oriented, with a kind of stubbornness, and without showing emotions, in almost all circumstances. And how it often turns out they know much more than they show. When I asked a business man about this he replied: “We believe that the worst thing that can happen to you is losing face. Therefore we carefully define our objectives upfront. Once defined we will not easily let go. We will always look for ways to guarantee both parties win something, so nobody will lose face. But we will only do that if we respect our opponent. If not, we will not hesitate to take what we want without taking into consideration the other. (He gently smiled at me.) And we never show our emotions in public, like Westerns often do. By doing that you reap nothing but contempt from your opponent.“

It made me think: What if we in the West have the tendency to expect openness too soon? What if we too quickly believe there is a relationship we can rely on? How easily can we underestimate our Chinese counterparts by thinking we understand what they want? How easily would we confuse lack of openness with dishonesty or lack of integrity? How would all this influence our relationships?

The overriding impression I got while visiting this fascinating country was the extraordinary way China is dealing with change. Sure, it is struggling with a variety of challenges; for instance the increasing gap between rich and poor, the gap between the new and the older generations, environmental challenges that come with its growth, etc. But through this all I witnessed people that are creating, building, moving forward, improving, lifting themselves. This is not change forced by a crisis. This is change driven by a passion to create progress.

It made me think: What if we in the West are busier with trying not to lose what we have than with trying to create our future in this changing world? What if we are more occupied with ourselves than with what is happening around us? What if we are hindered by a cynicism that is triggered by a fear of letting go (see previous article on this). If so, how crucial would the role of today’s leaders be in changing this? 

If you are interested in more about how China is influencing the world I refer with pleasure to this TEDx video with Martin Jacques explaining facts and assumptions about China (click photo to play video).

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Photo: Julian Mason/Flickr (Creative Commons)

___________________

As international business consultant, change leader, alignment facilitator and executive coach Aad supports multinational companies, their executives and leadership teams in increasing their business success. He works with his clients on leading complex change, cross-cultural leadership, post-merger integration, and amplifying business performance. Find out more about Aad and his services.

Leading Change: How Great Leaders Deal with Criticism

Barometer

We live in times of change. Shifting powers between West and East, technological evolutions, emerging countries and changing economic landscapes, financial systems that are under severe pressure, new innovative companies that change market places. As I described in an earlier post these times demand from leaders to be able to deal with exponential change. Also interesting to read is John Kotter’s recent article in Forbes “Can you handle an exponential rate of change?” . As part of my work I am especially interested in observing how leaders nowadays behave, communicate, make decisions, inspire and motivate others under these circumstances. A variety of successful and less successful behaviors can be witnessed. Several qualities distinguish the ‘great leaders’ from the ‘not so great leaders’, but there is one specific quality that is often overlooked or underestimated, and that is how great leaders deal with criticism.

I was triggered to write this piece by a press conference I saw on TV the other day. The journalists were asking difficult questions and the more they were hoping to get clear answers the more they got excuses and finger pointing at others. The more the journalists pushed for real answers, the more emotional the ‘leader’ got. The whole setting was turning into an open battle instead of an enlightening discussion. It ended in a shameful retreat of the ‘leader’. Somehow he had not been able to control his ego and his emotions. He had turned this all into a big ‘Me, Myself and I’ show, believing he was right and they were wrong, convinced that ‘he did his best and could not help the consequences, but these vultures still dared to attack him’. It was a huge disaster. Personally for him: the press was merciless in their reporting on his leadership. And even worse: nobody had any clarity on causes or any prospect on solutions. His impact on improving the situation was absolutely zero. On the contrary, the situation deteriorated because of his behavior.

Today’s leaders are dealing with an exponential change rate, and with information and communication channels that are easier accessible, faster and more widespread than ever before. Leaders are exposed to external influences and pressures that are less predictable and more quickly come and go. Leading change requires leaders to cope with this higher level of complexity. It also means that they, as part of their job, will almost inevitably face criticism in many occasions. Great leaders are aware of this and deal with criticism constructively. They see it as a normal part of their role and they approach it with an open mind. They have a fundamental and positive impact on the change, precisely because they deal with criticism effectively.

Look around you and you see numerous examples of leaders dealing with criticism. Maybe yourself are facing criticism. Observe closely how great leaders show some specific leadership traits when dealing with criticism. I made a list of 6 specific traits that stick out:

  • Don’t take it personally

Great leaders do take the situation seriously, however! They do feel they are part of the situation. They fully acknowledge their responsibility to create / facilitate / encourage / initiate solutions. But they do not let their ego come into play. They control emotions like ‘feelings of being attacked’, ‘feelings of not being treated fairly’, or ‘being hunted’. They also control these kinds of emotions even when they know it is the intention of the other party to attack them. They understand it is part of a leader’s role to face these situations and to show leadership.

  • Use criticism as fuel for improvement

When leading change it is normal to encounter resistance. It proofs that change is taking place. Criticism is just one of the ways in which resistance expresses itself. That doesn’t make it pleasant, but it is ‘normal’ in situations of change. Great leaders see criticism as an opportunity. They embrace it and use it to engage people, to create awareness for change, to facilitate dialogue. They use it as fuel for change. Not in a manipulative way, but with an open mind and a willingness to change views and perspectives.

  • Make complexity understandable to others

As described above leaders have to deal with an exponential rate of change and are confronted with a higher level of complexity. More and more resistance and criticism is related to misunderstandings and misinterpretations caused by this complexity. Great leaders are aware of this and put extra energy and focus on communicating and explaining the complexity to those who are affected by it. They don’t make the mistake of pretending as if there is no complexity, as if things are seemingly simple. They don’t deliberately communicate about the reality in simple generalizations and in black and white terms. Nor do they use the complexity as justification for their actions. As if they are the only ones that truly understand what needs to be done. As if the critics do not understand it and are ignorant and wrong. Great leaders don’t want to make it look simple when it is not, but they don’t want to hide themselves behind the argument of complexity either. They don’t pretend they know the full scope of the complexity and all its consequences, when they do not. Instead they focus on explaining openly and honestly what they believe is the essence of the complexity and its potential consequences, what they believe should be done to create change, and why this is important. They invite the critics to exchange perceptions, experience, knowledge and ideas together, and to create a shared view on the complexity and on what to do to overcome its challenges.

  • Communicate clear values

Great leaders are persistent when it comes to their values. They see values as one of the fundamentals on which successful change is built. They pay special attention to communicating values, even when they deal with criticism. They don’t try to counter criticism by losing themselves in technical arguments and details, by showing their knowledge and expertise. Instead they explain the values on which they based their decisions and actions, and the importance of these values. By doing this they align people around these values and build a case for their decisions, especially when these decisions have unpleasant consequences.

  • Admit your mistakes

Great leaders are not too proud to admit mistakes. When the criticism is valid they are willing to adjust their decisions and actions. They show courage and are willing to take a risk while leading complex change, even when it turns out to be a wrong decision. In that case they explain why they did it and what they (as well as the critics) learned from it. But they never base their actions and decisions on a fear of failure.

  • Engage critics and keep them informed

Great leaders engage their critics actively in the change process. They challenge them to come up with ideas and alternative scenarios. They don’t necessarily change their decisions and actions based on the criticism, but they invite the critics to ‘step on the train’ and to add value. In case it is not possible to actively engage critics in the change process they pro-actively keep them informed on the progress and the results, and invite them to give feedback.

“Great leaders don’t push away critics, they pull them aboard.”

Please leave your comments. Do you have specific examples of great leaders dealing with criticism? Or maybe you want to add points to the list? You are invited to share your thoughts below!

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Photo: ell brown/Flickr (Creative Commons)

___________________

As international business consultant, change leader, alignment facilitator and executive coach Aad supports multinational companies, their executives and leadership teams in increasing their business success. He works with his clients on leading complex change, cross-cultural leadership, post-merger integration, and amplifying business performance. Find out more about Aad and his services.

Leaders Who Create Alignment: Two Historical Examples

Thomas Jefferson

Yesterday it was Independence Day – 4th of July. An important day for America. I was reading mails and tweets from American friends and got inspired by it to write this short piece. I am not American, but maybe my Dutch ancestry plays a role here. The desire for independence has always been important in our history and culture. What inspires me particularly is how a group of remarkable leaders can create such a level of ‘relatedness’ or ‘alignment’ that they inspire a whole nation to follow and to take their future in their own hands.

Just read the Declaration of Independence and imagine the times and the context in which it was drafted by Thomas Jefferson in 1776 together with John Adams, Benjamin Franklin, Roger Sherman and Robert R. Livingston. The Declaration of Independence is more than just a document. It emerged not only from anger and from a desire to free itself from the British yoke for the sake of becoming independent. It is a declaration of will, of vision and of values for a better society. The ones who wrote it were not so much trying to get rid of Britain, they wanted to create something new and better. They took charge over their destination. They could only do this by showing real leadership together and by being strongly aligned on what they wanted to create. Their message inspired a nation to arise, and it still inspires people today.

“The purpose is not to find out new principles, or new arguments, never before thought of, not merely to say things which had never been said before; but to place before mankind the common sense of the subject, in terms so plain and firm as to command their assent.” – Thomas Jefferson (Made in America, Bill Bryson, 1994)

Another historic example of leaders who created alignment took place in May 1950 in Paris. World War Two was still very fresh in everybody’s memory. Europe was rebuilding itself. It was in those days that Robert Schuman (foreign minister of France) and Konrad Adenauer (Chancellor of postwar West-Germany) inspired by Jean Monnet (senior French diplomat) launched an ambitious, and in the eyes of many an impossible plan: put the Franco-German production of coal and steel under a common High Authority (whose decisions will bind France and Germany), within the framework of an organization open to the participation of the other countries of Europe. This was not just about increasing economical revenues, this was about creating a foundation for a European federation that would exchange a history of enmity for a future of friendship. It was an example of great leadership courage and strong alignment. It was the foundation on which the European Union is built.Post stamp with picture of Jean Monnet

“It is not feelings of friendship that create a community, but conversely, that working together creates friendship.” – Jean Monnet (The 50 Days that Changed Europe, Hanneke Siebelink, 2011)

What I take away from these two examples: Creating alignment is creating a sense of relatedness based on the strengths of the individual qualities. It is about being able to act as one just because we respect our mutual uniqueness.

Photo (top): Cliff1066/Flickr (Creative Commons)

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As international business consultant, change leader, alignment facilitator and executive coach Aad supports companies, their executives and leadership teams to increase their business success. He works with his clients on leading complex change, cross-cultural leadership, post-merger integration, and amplifying business performance. Find out more about Aad and his services.

Post Merger Integration: Cultural Alignment is a Prerequisite for Value Creation

LeadershipWatch Aad Boot

Post Merger Integration research over the past decades has shown that a great deal of mergers and acquisitions did not yield the desired value as was previously stated. Although success rates are difficult to compare, most surveys point to a success rate of around 30%. Approximately 70% of mergers and acquisitions fail to achieve expectations and more than 50% destroy value (read for instance Booz Allen Hamilton ‘Merger Integration: Delivering on the Promise, 2001′; KPMG Consulting ‘M&A Study Report, 1999’). Many of the surveys mention insufficient attention to the people and cultural aspects of the integration as one of the causes of failure. Overlooking or underestimating the effect of cultural differences can seriously hinder the integration process and can destroy value.

Here is the thing: this was important for mergers and acquisitions in the past, but it will be even more crucial for mergers and acquisitions in the future. Mergers are taking place in globalized multinational and multicultural markets. Corporate cultures, but also national cultures play an increasingly important role.

Leaders who embark on the acquisition path need to be fully aware of this. They should reflect critically on the objective of the takeover. What do they really want to achieve? Secure bonuses for the executives, creating short-term shareholder value, becoming the biggest? Or is the goal to use and combine the qualities of both companies and creating sustainable value (for shareholders, employees and customers) by building synergies, complementaries and economies of scale? If it’s the latter, then creating cultural alignment is an indispensable part of the integration process.

Paying attention to cultural aspects needs to start early in the M&A process. A focus on financial, legal, technical, and procedural aspects alone will not guarantee success. Already in the pre-deal phase sufficient time and energy needs to be spent on cultural topics. This means that especially the C-suite has an important role to play because they are primarily the architects of the deal and of the integration strategy.

I have encountered many cases where C-suite members tend to underestimate the importance of the people and culture side of the merger. They put it on the list of things that need to be addressed, but often they postpone it to the post-deal phase. Why? Because it is too complex and intangible, and they rather deal with it when all the financial and legal stuff is finished successfully and the deal is closed. I’ve even once heard a CEO argue that including cultural differences in the pre-deal phase could complicate things and might be a risk to the successful closing of the deal. Unfortunately he was wrong! Without sufficient awareness in the C-suite of the cultural differences between the companies and the potential impact it can have on the integration process, the chance is high that expected objectives of the merger will not be reached. It is inevitable for the C-suite to have a clear view on cultural differences, and on the integration strategy it wants to follow to address these topics effectively. I’m not talking about having all the answers upfront, but about having enough information to be able to define an appropriate integration approach.

What kind of key questions should be on the pre-deal agenda of the C-suite? I list a few:

  • What key characteristics of our company’s culture create our success?
  • What key cultural characteristics of the other company create their success?
  • How will our managers and employees perceive a merger of both companies?
  • How will their managers and employees perceive a merger of both companies?
  • What cultural differences will play a role in the integration of the two companies?
  • What could be the potential impact of these cultural differences on the integration process?
  • In what way could it affect the value creation objectives that we want to achieve?
  • How can we prevent that these cultural differences will lead to the loss of key people, the lack of synergies and to not creating value?
  • What integration strategy would address these potential issues adequately?
  • What type of integration process do we want to follow?

Of course the way the C-suite will use and communicate this list will vary depending on the kind of merger and of the role of the C-suite in the deal (take over versus being taken over, companies of similar size or not, etc.), but spending time by both companies on these type of questions can significantly increase the chance of a successful post-deal integration. Performing a cultural due diligence could be a very helpful instrument and can offer very useful information to the C-suite in the pre-deal phase.

And here’s another thing, do not expect cultures to change or integrate easily!  It requires more than attention and time alone. It requires the right mindset.

Fons Trompenaars and Maarten Nijhoff Asser describe in their book ‘The Global M&A Tango’ five interesting categorical types of leadership behaviors in mergers:

1.     Mergers where leaders stick to their own values and proclaim: ‘My values first!’ and ‘I win, you lose!’ The result is creating winners and losers. An open door to destroying value.

2.     The second type is to abandon your own orientation and to go native. A ‘When in Rome, do as the Romans do’ approach is adopted. Result: other cultures will mistrust you and you won’t be able to offer your own strengths to the merger.

3.     Denial, avoiding and ignoring value dilemmas by operating at arm’s length and assuming the synergy will take care of itself. Guess what, it won’t.

4.     Compromise between values. Sometimes adopting the acquirer’s way of doing things, and sometimes that of the organization being acquired. In the end synergies are not really or only partially achieved.

5.     Focusing on reconciling cultural differences. Trompenaars and Nijhoff Asser: “Both sides improve beyond themselves and synergize into a new entity, with a higher value than the sum of their former parts.”

If you really want to create value, the last type of leadership behavior is required. It will not work if we believe we can simply change the other culture. Leaders will have to build cultural alignment instead: taking the strengths of both sides and turn it into something new that is even stronger. And this applies to the leaders of both companies. For the acquirer it is crucial to have respect for the culture of the other and not to believe our own culture is better. For those being acquired it is crucial to being open to the other’s culture and not to join in our defense (see my earlier post ‘Post merger integration: Who is your enemy?’), but to believe the other’s culture can offer new perspectives to our benefit.

If you are interested to read more about cultural alignment I gladly refer you to the e-book ‘Return on Culture’ by the Sustainable Business Forum (download free copy).

How do you deal with post merger integration? What cultural differences do you encounter? How do you create value by reconciling cultural differences? Feel free to leave your comments below.

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As international business consultant, change leader and executive coach Aad supports companies, their executives and leadership teams to deal effectively with post merger integration challenges. He works with his clients on accelerating the integration process, cross-cultural issues, creating leadership alignment, and amplifying business performance. Find out more about Aad and his services.

Leading Change in the 21st Century: The Power of Letting Go

Painting of apples

The story goes that the hunters put an apple in a glass jar with a narrow opening and leave the jar deep into the jungle under a tree. In the evening the monkeys come out of the trees triggered by the alluring fragrance of the apple. They find the jar by following their noses. As soon as a monkey sees the apple in the jar it doesn’t hesitate and puts a hand in and grabs the apple. But when it tries to pull the hand out it gets stuck in the neck of the jar because holding the apple makes the hand too big for the neck. The monkey is caught in an agonizing dilemma: letting go of the apple and having its hand back, or trying over and over to pull the hand and the apple out of the jar. The desire for the apple wins … In the morning when the hunters return they find the jar with the monkey next to it on the ground, exhausted.  Its hand still stuck in the jar. Too exhausted to fight the hunters, too tired to flee. An easy prey.

When I heard this story I was struck by the simplicity of the hunting technique, but even more by the power of its message: how not being able to let go of certain things can have serious consequences.

What does this have to do with leading change? Everything. In my working with leaders and their teams I often witness how successful change, transformation and innovation are hindered by the inability of letting go of what we have or who we are. Not seeing what is possible, what is in front of us, because we are too busy with holding on to what is behind us. Not being able to describe what our vision, our desired future is, other than an extension of our current situation.

Today’s leaders are confronted with a world that is in transformation; with new economies that are emerging; with markets that are rapidly changing; with new technologies that generate new products, services, communication means; with revolutionary changes in connectivity (between societies, market places, companies, and people). The powers between ‘West’ and ‘East’ are shifting and we are much more than before confronted with new cultures. It has a strong impact on companies and their leaders.

As I described in an earlier post What does Change Mean to You? I witness many leaders struggle with this reality. Whether they are involved in mergers and acquisitions, or in global expansion and are coping with other cultural behaviors, rules and values. Whether they are dealing with customers that are becoming much more informed, aware and demanding with respect to topics like customer service, quality, corporate responsibility and sustainability. Whether they are confronted with new generations of talented employees that have totally different views on job, workplace, and work/life balance. What I experience when working with leaders and leadership teams is that, when confronted with these changes, leaders tend to try hard to stick to success formulas of the past. And the more explicit the change presents itself, the stronger this reflex tends to be. They try to extend the current situation as much as possible. They let themselves be dazzled by ‘positive results’ and avoid looking at negative signals. They regard the change as negative or dangerous. Sometimes they even start to cherish followers around them who are not contradictory and silence those who are less accommodating. They block critical thinking. They ignore facts. And it becomes worse when they are led by ego. 

The consequences of this type of blindness can be serious. I remember an example of a sales director of an organization that was acquired by a foreign company. Since the acquisition the sales figures had stagnated and did not meet the objectives of the new owner.  The board sent in its Chief Commercial Officer to analyze the problem and to offer support to the local sales director. I saw how the meeting ended up in a tense debate. The CCO was trying to understand the problems of the sales director, was explaining the support the local team could get from their experienced colleagues from abroad, and he was trying to offer support. The local sales director was mainly explaining that the CCO did not understand their market and their way of working and that his suggestions would not solve the problem. He was convinced of his own way of working because it had always worked in the past and had created their success. The targets and approach of ‘them outsiders’ was just not fitting his team. He only needed some extra time and some patience from the holding and it would turn out fine. The meeting ended with the CCO believing that the sales director was not up for the job and he installed a reporting and supervising procedure to closely follow up on the local operation on a weekly basis. The sales director felt misunderstood, micro-managed, even insulted and he realized he was gradually losing his grip and influence.

The sales director did not see the opportunity this merger offered to him and his team. He did not see that these foreigners had a lot of valuable experience and a broader view on the changes in the market place. He didn’t see the knowledge and expertise they brought in. He did not see the potential synergies. He only saw an interference that was ‘dangerous’ for him and his team. Dangerous for the way of working he was used to and couldn’t let go of.

The bottom line: Not being able to let go of your past, of your past success, of clinging on to it, almost always creates Win-Lose situations! It is blocking the opportunity to develop and grow. The power of successful leaders is that they recognize well in advance when change is going to take place and innovation is needed. They explicitly open up to the unknown, to new influences and cultures. They lead the way in letting go of what was. They focus on creating Win-Win situations. They do this by following three principles:

1.     Being Open – stimulate yourself always to look for the unknown; it will create awareness for changes and opportunities that are coming your way; it will sharpen your view on what is going on in and around your company.

2.     Build Understanding – never reject or judge anything new before you understand it enough; your open mindset will help you find the right questions; it creates respect between people and takes away the fear of the unknown.

3.     Look for Connections / Synergies – always aim at finding and exploiting potential synergies, this is opening the door for win-win situations; it generates motivation and positive energy; it builds trust between people, and generates actions that turn change into sustainable success.

Do you recognize these principles? Which one is most challenging for you? What are the things that your organization should let go of? How do you coach your team in letting go? I’m interested in your view.

Photo: gingerpig2000/Flickr (Creative Commons)

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As international business consultant, change leader and executive coach Aad supports companies, their leaders and leadership teams in turning complex change into sustainable results. He works with his clients on topics about business transformation, cross-cultural leadership, post-merger integration, and amplifying business performance. Find out more about Aad and his services.

Leading Change: Breaking Through the Fear of Mistakes

The word fear ingraved in a white background

“The team is already four months involved in this change process. They are informed in detail about the reasons for the change and the objectives that were set by the executive board. The phase of ‘not knowing’ or ‘not understanding’ has passed long time ago. There is full and total awareness of the ‘why’ of the change, of the plan, of the steps to follow and of the goals. But still they are not really progressing. They work so slowly. Always reporting delays. Taking so much time to finish simple activities. They do not show any sense of urgency!”

“We just do not have enough resources and time to achieve this change successfully. Everybody is under extreme pressure and is slowly coming to the point of breaking down. We can just not do it like this.”

“It is not our fault! They are the ones that gave us the wrong input. How could we know that it was wrong? Don’t blame us, blame them.”

“You know how easily upset he gets when you say something about his work. That is why I tell you now outside the meeting so you can take it up with him. I didn’t mention it in the meeting because I don’t want to come across as if I’m criticizing him. But you agree with me that he could do a better job, don’t you?”

These are four examples of situations that can occur when you are leading change. At first sight they might look different and not related. Just four types of behavior that have a negative impact on the change process and that need leadership attention. But if you take a closer look at the mechanisms that take place behind these behaviors you might find an underlying root cause. And this root cause is seriously hindering or even blocking successful change to happen.

One of the most underestimated reasons for change to fail is the fear of failure.  Fear of failure can be deeply embedded in the organization. In the way targets are set, in the way performance and success is managed, in the way people are empowered, in the way people and teams deal with responsibility. And many organizations are not aware of this fear and its consequences.

Quote of Winston Churchill

Throughout our lives we are ‘trained’ to avoid mistakes. If you want to do something good you do it right. If you make a mistake it goes wrong. So you avoid making mistakes. These ‘training’ starts already at school where the teacher very clearly shows us with his red marker what mistakes we made (Ouch, don’t do it again). Of course, if you can choose between making a mistake and doing it right you probably choose the latter. That is normal. For instance, when we are talking about situations that affect our safety or our health we definitely want to avoid mistakes. When we talk about situations that have a clear one-dimensional distinction between right and wrong and when we have the opportunity to choose upfront, of course we want to avoid mistakes.

But what if we are confronted with potential changes that we cannot predict upfront? What if we encounter challenges that we never met before and do not know exactly how to deal with? What if we are part of 21st century organizations that operate in globalized market places that are more complex and fast changing than ever before? What if we can only find out what works well and what doesn’t by exploring and through ‘learning by doing’?

If people perceive making mistakes as a failure. If they perceive the feedback they receive on their work as an indication of personal failure, and if they hesitate to give feedback to others because next time they could be the one under fire. In that case it is very likely that situations as described at the top can occur.

Successful leaders understand that leading change in today’s organizations depends to a large extent on the ability to learn quickly from new situations, on creating resilience and flexibility in dealing with changes, on being ready to expect the next change. They are focused on supporting people to learn to expand their comfort zones and to grow. They pay attention to preparation and planning, but even more to creating a culture where teams and individuals learn how to react effectively to unforeseen circumstances and to uncertainties.

These leaders understand that making mistakes is a normal part of learning and growing. They do not think about failure when people make mistakes in the process of learning. They expect their people to explore and to try new ways. They know mistakes can happen, that it’s not always pleasant, but that it is the vital fuel for growth and for reaching excellence.

Imagine how these leaders react to the examples at the top:

  • They do not react disappointed, instead they show confidence in the team;
  • They do not put more pressure on the existing planning and the targets, instead they stimulate people to analyze the problem and look for the facts so they can learn from it;
  • They do not blame people for what they should have done differently in the past, instead they encourage people to find out what they learned and what they will do differently in the future;
  • They do not jump in and start to take over actions themselves, instead they bring people together and coach them to find out together what they will do with the situation;
  • They do not automatically believe that lack of time and resources are the problem, instead they believe that learning how to improve our teamwork and collaboration will solve a great deal if not all the problem;
  • They do not think that planning and targets are holy and that failure is no option, instead they know planning and targets are prerequisites, but that coaching people to be able to adjust quickly to new situations is crucial and that learning from mistakes is an essential part of creating successful change. They don’t think in terms of failure.

The negative effects of fear of failure are described in various books and articles. Still many companies suffer from having a culture where making mistakes is easily related with failure. Its leaders play a dominant role in changing or sustaining this culture. Jim Collins describes in his article ‘Hitting the wall: Realizing that vertical limits aren’t’ the difference between what he calls ‘fallure’ versus failure (more specifically in tip #1). It is still one of my favorite reads on this topic and I warmly recommend it to you.

What do mistakes mean to you? How does your organization deal with mistakes? How do you turn mistakes into sustainable learning experiences? How do you coach your team in breaking the fear of failure?

Photo: hang_in_there/Flickr (Creative Commons)

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As international business consultant, change leader and executive coach Aad supports companies, their leaders and leadership teams in turning complex change into sustainable results. He works with his clients on topics concerning leading change, cross-cultural leadership, post-merger integration, and amplifying business performance. Find out more about Aad and his services.

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