The Power of Global Teams

Driving Growth and Innovation in a Fast Changing World

E. Marx

• Publisher: Palgrave Macmillan
• Year: 2013
• Print ISBN: 9781137008114
• eBook ISBN: 9781137008121
• Topic: Business
• Subtopic: Business generale
• Index: Business

This highly practical book explains how executive teams in global companies can work together to successfully drive change, enable fast growth or restructure the business. It demonstrates a clear correlation between team development and business results and even deals with special issues for teams in the not-for-profit sector and emerging markets.

1 The Mix at the Top – The Power of Psychological Diversity

The mix at the top – why is it important? Is the success of organizations dependent on a single leader or is leadership at the top a team endeavor? For too many years, we bought in to the hero model of leaders: the CEO as the “white knight” parachuted in to the company when it hit troubled times or the internally groomed CEO in companies with less turbulence and longer foresight. Examples like Hewlett Packard’s high-profile revolving doors cycle of CEOs should raise the question whether we have an outdated and simply inadequate idea of leadership. Equally, the economic crisis has shown that the exclusive focus on the CEO as the hero does not work. When Barclays ran into a major crisis in June 2012, the Chairman had to resign, followed by the CEO and several members of his top team. Shareholders and the public are holding entire boards of companies responsible – and not just in the financial sector – for their inability to assess risks, and the executive management teams in troubled companies are taking the blame for reckless decisions and the failure to consider the long-term consequences of decisions and the insufficient discussion of “systemic risk”.

Although academics may not always be the first to spot future trends, they have questioned the “hero” leadership model for many years. Sessions at the American Management Association (one of the largest international conferences of business school academics and practitioners) targeted this issue convincingly in 2005: is our notion of hero leadership at CEO level outdated and shouldn’t we look at leadership at the top in a different way, particularly at the leadership trio of Chief Executive, Chief Financial Officer (CFO) and Chief Operating Officer (COO) – or the leadership of the entire executive team. This idea does not neglect the importance of strong individual leadership of a CEO but expands leadership to the whole executive team and focuses on the ability of the CEO to select and build high-performing teams at the top. Given the complexity of today’s business through globalization and the fast pace of change, the best leaders intuitively understand the need to get the right mix of talent at the top to create a competitive advantage.

Belbin was one of the first writers to focus on the mix and the complementarity of management teams. He showed that our innate preference to recruit “people like us” is fatal in teams as it results in a group of clones that is ineffective at solving complex problems. This is nowhere more evident than in the so-called Apollo syndrome (Belbin, 1993), when a group of similar, highly intelligent experts get together: the result is a group that debates forever, engages in intellectual upmanship and does not agree on anything or get anything done. Belbin’s recommendation was to put a team together comprising of people with complementary preferences, skills and behaviors. His eight team styles ranged from Chairman to Innovator to Resource Investigator. His idea was that some people like to take charge straight away whereas others like to develop new ideas and use their creativity, whilst others again love networking and are best placed to think about external and internal networks they can establish to help the team with resources, connections and alliances. Manfred Kets de Vries, the well-known leadership guru and founder of the IGLC (INSEAD’s Global Leadership Centre), developed this idea of complementarity further and also differentiated eight team types, easily identifiable as “needed” capabilities at the top of organizations.

Kets de Vries’ Eight Team Types (2006):

1. Strategist
2. Turnaround specialist
3. Deal-maker and negotiator
4. Business builder/entrepreneur
5. Innovator
6. Efficiency expert
7. People developer
8. Communicator/stage manager.

Of course, very few of us fall neatly into one or the other category, as most of us have preferences for two or three styles and hopefully also abilities and skills in different areas.

In essence, business leaders have to ask themselves whether they have enough strategists and lateral thinkers on the team, supported by executives with strong operational excellence, networking and marketing skills. As many studies have shown, it is the mix of different backgrounds, skills, thinking and behavior that marks a high-performance team.

And it is this diversity in the broadest sense that characterizes effective global teams, as we will see in research studies and practical examples throughout this book.

However, diverse teams do not always perform better than less diverse or homogenous teams. It entirely depends on the complexity of the challenge. For example, with non-complex problems, homogenous teams perform better. Here, a diverse team may simply get distracted by too much lateral thinking. In complex challenges, however, as in most international business situations, diverse or heterogeneous teams produce much better solutions than homogenous teams, as shown by Gratton and Erickson (2007). In their study, teams consisting of men and women developed more creative solutions than all-male or all-female teams. The positive effect of diversity also applies to company boards. In a study on board diversity, I found that the boards of the Most Admired Companies in the UK’s FTSE 100 group (as evaluated and ranked by the magazine Management Today) had more diverse boards in the broadest sense: they had more board directors with international experience, greater functional diversity, a broader diversity in age and more women on their boards (Marx, 1998). If we just look at the very topical issue of gender diversity, we are receiving more and more data showing that gender-diverse boards and the performance of companies are positively correlated.

Commenting on the topic in Britain, one UK Chairman remarked: “We were an all-male board – typical of the ‘stale, pale and male’ category. Once the first women joined, the dynamics of the board clearly changed; not only were we more polite with each other but, more importantly, we started to discuss things more.” The argument at board level is similar to the argument in teams: we need different experiences and skills, and to have psychologically or cognitively diverse boards that can analyze complex business scenarios, challenge one another and develop productive strategies to deal with the massive challenges most businesses face today and in future.

The economic crisis has sparked an important question about effective leadership for the future.

Global Leadership

Through my search and consulting activities, I have a privileged insight into the challenges of leaders. Day to day, I see the complexity of having the right talent in the right roles, matching talent to the culture and strategy of the organization and managing the dynamics of a team. I will address all these aspects of developing executive teams using case studies as examples. But before understanding a whole group of individual leaders representing functions or business divisions, we need to understand what the “new” leadership characteristics look like – what capabilities are necessary to be successful in adapting to the global volatility in a resilient way? The criteria applied in the search for a Divisional CEO of a conglomerate are given in Table 1.1 and illustrate some of these “new” attributes. This is just a snapshot of the entire list of “wanted characteristics” and shows that most companies expect superman or superwomen at the top.

Table 1.1 Criteria in a CEO search

• Excellent industry track record in a well-established international business

• Proven ability as a strategic business builder, with entrepreneurial orientation and substantial record in growing businesses

• Strong negotiation skills

• Excellent operational experience, combined with progressive customer service strategies

• High numeracy and comfortable with risk-taking to take advantage of business opportunities

• Substantial international work experience, ideally also in emerging markets

• Experience in international acquisitions and their integration

• Excellent leadership skills, ability to motivate, professionalism, influence, judgement, integrity and emotional intelligence

• Sophisticated and culturally sensitive interpersonal skills

• High drive and motivation to grow a business, proactive and positive approach.

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The differentiation between prior experience and success, business competencies and psychological leadership characteristics is obvious – an effective taxonomy to understand and manage these is less so. The number of boards failing to make the right selection decisions testifies to this. In consulting, one often focuses on the following skills or competencies:

• Strategic thinking ability
• Operational effectiveness (turnaround, growth, experience)
• Team leadership
• Customer and client orientation
• International capability
• Problem-solving
• Creativity
• Stakeholder management
• Relationship skills
• Motivation and drive
• Emotional resilience.

We can calibrate these business competencies through structured interviews and, in searches, through careful references. The above candidate specification also shows how the demographic variables of leaders have changed over the last decade. We find more and more global CEOs at the top of large organizations.

International Literacy

Samir Brikho is the Chief Executive of AMEC plc, one of the world’s largest engineering, project management and consultancy companies, with over 29 000 employees, and offices and projects in over 40 countries. AMEC has major operating centres in the UK and the Americas and is one of the largest British companies and part of the FTSE 100 Index.

Samir Brikho’s profile is a good example of the “new” leader: Lebanese by birth, his family moved to Sweden, where he was brought up and educated. He has an engineering degree and a Master of Science in Thermal Technology from the Royal Institute of Technology in Stockholm, with Advanced Leadership Courses at several international business schools (INSEAD and Stanford); he held a succession of senior executive positions with ABB, including becoming a member of their executive team, before being appointed Chief Executive of AMEC in 2006. He has lived and worked in numerous countries, including Sweden, UAE, Saudi Arabia, Switzerland, Germany, Belgium, France and, since 2006, the UK. He also speaks five languages fluently: Swedish, Arabic, English, German and French.

International literacy is one of the key features of the new leader. International literacy is the ability to move between cultures, understand and work with the differences in cultures and deal with customers and business partners effectively. This shift towards greater international capability is nowhere more evident than in the career profiles of CEOs at the top of large multinationals. Having considered the career profiles of the largest 100 UK companies by market capitalization (FTSE 100 companies) over the last 15 years, the pattern is pretty clear cut. Whereas in 1996, 42 percent of CEOs of the FTSE 100 companies had international experience, by 2007 this figure had jumped to 67 percent (Marx, 1997, 2008). And we see another jump in this figure post-economic crisis. When I analyzed the profiles of CEOs appointed to FTSE 100 companies between 2008 and 2010, as many as 75 percent had, as in Samir Brikho’s case, spent considerable time working abroad.

This picture is completely different on the other side of the Atlantic. My transatlantic comparison of chief executives showed that Fortune 100 CEOs had significantly less overseas experience compared to their UK counterparts: only 33 percent of Fortune 100 CEOs had international experience earlier in their career.

British companies also are often led by foreign-born chief executives; for example, Marjorie Scardino, the now outgoing US-born CEO of Pearson plc and the first woman CEO of a FTSE 100 company, or Paul Polman, the Dutch CEO of Unilever. A similar internationalization is taking place in boards, as we will see in Chapter 6.

The transatlantic comparison of chief executives’ profiles raised a debate on both sides of the Atlantic about whether international experience – defined in my research as having lived or worked abroad for a minimum of one year – is necessary to develop international literacy and to run a global company.

So what determines the ability to understand global economic factors, operate in different geographic regions, and understand the cultural differences of employees and customers? In other words, what makes a global leader?

In my book Breaking Through Culture Shock: What you need to succeed in international business (2001), I argued that international effectiveness requires a deeper understanding, exposure and “confrontation” with the “other” culture. It is part of a longer term personal development rather than the number of airmiles one clocks up on international flights.

Succession management in multinationals focuses on senior executives’ international experience and capability, their understanding of global business and of global clients. Many organ...

Table of contents

• Cover
• Title
• Copyright
• Contents
• List of Figures and Tables
• Acknowledgements
• Introduction
• 1 The Mix at the Top – The Power of Psychological Diversity
• 2 Team Effectiveness – Linking Up Psychology, Culture and Strategy
• 3 Global Teams
• 4 Driving Change, Growth and Innovation
• 5 Talent Over Structure
• 6 Boards as Teams?
• Bibliography
• Index