The Global Leadership Challenge

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<ul><li> 1. Leaders and their boards are facing one The Globalof the toughest and most challengingperiods of economic uncertainty inhistory. Although the overwhelming Leadershipmajority of CEOs and chairmen havelived and worked through previousdownturns, this is possibly the fastest Challengeand most global recession that ourcurrent heads of commerce, industry andgovernment have ever had to rectify. The sheer pace of the downturn hasbeen a shock to many. New technologiesand communications tools, whichprojected businesses to overwhelminglevels of success in the boom years,have now been instrumental in thespeed of their decline. However, despitethe difficulties of the current market,the new world in which leaders findthemselves presents a whole host ofopportunities for growth and success. The new worldIn many ways, the downturn hasemphasised how far globalisationhas come. Its increasingly clear thatbusinesses now operate in a worldeconomy and cant act in isolation. By Matthew Blagg, CEO, Criticaleye This globalisation is not only obviousto business leaders feeling the effectsof the recession through global supplychains and the movement of businessto emerging markets like India andChina, but also those individuals losingtheir jobs and feeling the pinch ofreduced spending power due to whatsplaying out on a global stage. Weneed only look at the issues discussedat this years G20 summit in Londonto understand that governments,businesses and financial systemsare interconnected and now haveto take a synchronised approach towhat could be the first truly globalrecession we have ever 01 </li></ul> <p> 2. Multinational businesses in the US have completely American boards whereasin Europe and the UK, boards have become more globalised. Youve got tostart at the top. Members must be multicultural whose careers include periodsliving in other countries. The challenges of running or being on a boardhave got to encompass that. - Alison Carnwath, Chairman, Land Securities So what have been the most significanttake another look at their core competencies that the world was crumbling before our changes to business both as a resultand decide exactly what their specialismsvery eyes. Indeed, you could be forgiven for of operating in an increasingly globalor key capabilities are. Companies are not getting out of bed in the morning at all environment and the downturn? Clearly the asking themselves if there are better homesif you believed the exaggerated hyperbole lack of access to funding and credit is having afor assets which no longer fit within theirthat was fed through the media machine major impact. Banks are not lending and so it strategy and this unbundling process has on a daily basis and which, some might say, is very difficult for even solid companies to get created great opportunity on the M&amp;A had a role to play in the downward spiralling the credit lines they need. Companies havemarket. Indeed, for those with money toof consumer confidence and panic which had to prioritise cash and capital over long- spend, there has never been a better time to accentuated the speed and scale of the term growth and profitability because, rightlyshop for assets, and even companies, which problem. It would, of course, be wrong to or wrongly, investors are more concernedwould previously have been out of reach. deny that it was, and still is, a very difficult with an organisations capital position andtime, but this sensationalist approach from whether the business has sufficient liquidity New strategies and acquisitions clearlyjournalists chooses not to acknowledge to cope with the downturn. The old adagerequire new management skills. Althoughthat the downturn also presented cash is king has never been so true.the role of a leader in setting the vision executives with significant opportunities and driving high performance will remain for growth, change and innovation. Indeed, the way that organisations financelargely the same, the recession has created themselves, both now and in the future, has the need for experienced managementIt is clear that success in the current been severely disrupted by the economic and companies will be looking to bring climate will depend heavily on the strength downturn. More traditional means of specific skills onto the board. There is anof a companys balance sheet and their financing, especially debt financing, are obvious need for executives and NEDs ability to adapt quickly to change. But if now far less attractive. Companies arewith global understanding as boardsorganisations are in this position, and can going to need to recapitalise with higher should have knowledge of business in align their business models with customer quality, longer-term sources of finance tomany different regions in order to behaviour swiftly and flexibly, they are be successful and raise investor perception.readily face the challenges of more likely to prosper and put themselves Equity finance will be particularly soughtglobalisation and the interconnectivityin excellent stead for the upturn. after provided that organisations can raise of national economies. it through markets that are well regulated,Again, the recession has offered some dream very liquid and transparent. Whats clear isTurning ThreaTs inTo M&amp;A opportunities. Buying distressed assets that in the world emerging from instances opporTuniTieshas allowed some organisations to expand like the collapse of Lehman Brothers,and strengthen their expertise, product range sources of finance are going to be much The media have been keen to accentuate the and human capital capabilities. In terms of the more readily scrutinised and will play anegative throughout this economic decline. people, it is offering the chance for leaders to part on how companies are perceived.In the period following Lehmans failure, it re-engage with key staff, those individuals who The lack of investment and access towas impossible to pick up a paper or turnare core to the strategic goals and direction of funding is forcing many organisations toon the television without reading or hearing the company. Now is a great time to remind Chairmen will need broader experience as a purely domestic chair will struggle in a truly global environment. The chairman will have to spend more time thinking about culture and set a tone around corruption. The need for tougher, clearer governance is also going to grow quite significantly. - Donald Brydon, Chairman, Royal 02 3. Those countries that devote long-term investment to research, development,technology and building intellectual capability will be most successful.The trend of investing in the future and building core capabilities, whichwe have seen in the West but not so much in Asian countries, is going tobecome much more important so that countries can differentiate themselvesin the same way that companies do. - Graham Love, CEO, QinetiQ your people what business their company is Companies that had become lazy fromand leaders will have to decide how best to in, the role and purpose of that company and continued success in a market which hasleverage that strategy on a global scale. the difference it can make in the world. Whenfailed to stretch their intuition and drive. When we look back on the current recession, times are good, its easy to forget that winning The formidable array of companies coming we will certainly remember how tough it business depends almost entirely on gettingout of emerging markets is proving a was but we also need to capture the lessons people excited and believing in the vision and significant threat to business in the Westernthat we are taking from it. This economic strategy of the company they are working due to their ability to learn and adaptcrisis is like no other in history. We haveto the changing face of the market. Now is never experienced how the interlocking Some might say that the downturn has beenthe time for organisations in older, moreinterests of banks, financial institutions, an important wake up call for organisationsestablished economies to learn from thesegovernments and businesses could be so that needed to make cuts and innovate. new companies so that the threat theydamaging in such a short space of time. Butpose can be turned into opportunity. the interconnections of these industries and institutions could now serve to rebuild the Key TaKe-aways: QuesTionsThese new organisations are taking the global economy as quickly as it crashed. for a global leaderlessons learned over decades by business Instant communications and technology willin the developed world and are applyingallow us to take action in a way that would Yes, its a tough new world for both them extremely rapidly, and flexibly, to their not have been possible even 10 years ago. commercial and non-commercialown business models. Most have a number organisations but, have youof advantages including highly motivated By taking advantage of this, the new really looked into where there are opportunities for growth and success?workforces made up of individuals who really leadership challenge is to rebuild a stronger,believe in the vision of the company and the more effective and mutually beneficial The downturn has emphasisedconfidence to challenge and innovate the economic environment than ever before. how far globalisation has come way things are done. These organisations not least through global supplyare not burdened by a this is the way its Criticaleye 2009 chains and the rise of emerging markets what does this mean foralways been done mentality and, as a result, your organisation in terms of newcan adapt and innovate more effectively. competitors and your supply chain?Matthew BlaggThe fuTure CEO, Criticaleye The way that companies finance themselves will have to be reassessed, have you thought about your existing The downturn has shown that we must and future sources? They will need toprepare organisations for the realities of A true entrepreneur, Matthews experiences be much more readily scrutinised globalisation more effectively. Competingsetting up businesses, advising firms onin a world market and keeping up withstrategy and corporate development and The need for a global board has sourcing senior executives for boards havethe innovations that new and emerging never been greater. Do your shaped his role as CEO. Previously, Mattheworganisations are deploying will be the key executives and non-executives founded a strategic consulting firm where he have a deep understanding of the to survival. Companies will need a globaladvised firms across a diverse range of sectors, challenges of globalisation? capability, a presence and understanding offrom venture capital to telecommunications,how different cultures work, how to sell toand took responsibility for the international We have a lot to learn from thethese cultures and, ultimately, how to partner operations of a UK listed business services ethos and cultures of emergingcompany, establishing and maintaining itswith them. Now more than ever, organisations market organisations. How can relationships across Europe, the Middle-East, your organisation replicate theirin the Western world should be looking tobuild partnerships in other countries whichCentral Asia, North and Latin America. In 1990, flexibility and ability to change? he founded a successful mail order businesswill allow them to assimilate the local culture. Leaders need to leverage their global which he sold in 1995. He is also a Member of capability to be successful whatthe London Chamber Orchestra Advisory Board.The leadership role will be crucial to success can you do to learn more and better position yourself as a global leader?in the new world. There will need to be aContact Matthew through www.criticaleye.netgreater focus on strategy than ever 03 </p>


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