“Leader” no longer someone with supervisor title only

The term “leader” no longer applies exclusively to those with big titles or offices. Companies are defining leaders by their influence and impact and not by hierarchy. And higher-performing companies are more apt to identify a leader as a top performer, regardless of that employee’s position on the organisational chart.

That’s the key takeaway from a report by the American Management Association, which queried senior business and HR executives from more than 40 countries. Fifty-three per cent consider individuals to be leaders based on impact and high performance. That amount grows to 58% among high-performing companies and 70% among those considered to have highly effective global leadership development.

“With flatter, more matrixed organisations, individuals are discovering the need for leadership skills while collaborating with colleagues in another business unit, sharing expertise with peers in a different geographic location, or working on ad-hoc projects,” the report said.

The study defines “Global Leadership Development” as “building global skills and competencies (in employees at any level) that are needed to operate in a global business environment (worldwide customers, suppliers, employees, distributors, etc.) regardless of whether or not the organisation has operations in other countries.”

Having a culture that more loosely defines leaders can help empower employees and lead to more innovation. McCormick, the multinational spice company, for instance, fosters innovation from its workers by using self-governing employee boards to identify business process improvements.

Other findings from the report:

• The most common obstacle to implementing global leadership development is money. Lack of a budget or budget constraints were cited by 45.4% of respondents. The second most-cited obstacle was buy-in from management, at 33.9%.
• Global leadership development is offered most often to “high potential” employees (44.3%), followed by managers who have been identified as potential C-suite successors (43.3%) and existing members of the C-suite (37.5%).
• The top four competencies that are missing from global leadership development, yet are considered important, were increased comfort with virtual technology, social network technology, creativity, and building a culture of innovation.

In addition to adopting a broader definition of leadership, here are other ways companies can better develop global leaders, according to the AMA report:

Offer more hard and soft skills: Companies should offer training on topics such as change management and problem-solving and also on topics such as managing virtual teams and social-networking skills.

Look beyond the classroom: Millennials learn differently than previous generations, requiring the need for more adaptive teaching methods. Yet, old-school mentoring shouldn’t be forgotten. The more methods offered, the more the training will appeal to a broader section of your workforce.

Tune in to global cultures and markets: Leaders should be exposed to other cultures as they are more likely to be effective if they can interact with co-workers, customers and vendors all over the world.

Invite the best minds: Ask for best practices and anecdotes from senior management, or outside thought leaders, to assist in structuring global leadership initiatives.

Top ten competencies, rank overall and rank among HPOs

Source: American Management Association.

Related CGMA Magazine content:

“How High-Performing Companies Plan to Globalise the Finance Function”: Many leading multinational companies, including Dutch electronics company Philips and German consumer and industrial products company Henkel, have begun to globalise their finance functions.

“Innovation: Five Key Questions Organisations Should Ask Themselves”: Visionary leadership and a culture that supports innovation are the two most important ingredients for successful innovation at a company, according to a PwC survey of CEOs.

“Five Ways for Finance to Become an Innovation Partner”: The finance function isn’t just for approving or monitoring strategic initiatives; it’s becoming part of the decision-making team. A CGMA report shows how CFOs and other finance professionals can be partners to successful innovation.

—Neil Amato (namato@aicpa.org) is a CGMA Magazine senior editor.