Strategic. transformation. How the Best Companies for Leadership excel at both innovation and operational excellence

Transcription

1 Strategic trasformatio How the Best Compaies for Leadership excel at both iovatio ad operatioal excellece Strategic trasformatio is a ogoig state of beig for the world s best led compaies. Hay Group s 2013 Best Compaies for Leadership study reveals how those at the top simultaeously excel at both iovatig for the future ad their ogoig operatioal excellece. >>

2 2 Strategic trasformatio

3 Cotets Executive summary 4 Global Top 20 Best Compaies for Leadership 5 The era of cotiual strategic trasformatio 6 Differet idustries, idetical issues 8 The traps i eglectig ambidexterity 9 Doig thigs differetly 10 What the ambidextrous leader looks like 13

4 4 Strategic trasformatio Executive summary The Best Compaies for Leadership idetified i Hay Group s 2013 survey avoid itermittet revolutios that are ormally forged by periodic strategic reviews. The Best Compaies for Leadership operate at the top of their game ow ad build the future so that they maitai their preemiece. Istead, these compaies are as adept at iovatio as they are at operatioal excellece. These are the twi peaks they must asced simultaeously a feat that requires a uusual but crucial mix of leadership skills. Recogizig that strategy developmet is both ogoig ad subject to sudde seismic shifts, leaders must create a culture i which ew ideas are icubated safely util they ca be itegrated ito the orgaizatio (or termiated). Differetiatio of existig products or services is too subtle. Too icremetal. Whe the world is turbulet, whe the eviromet is disruptive, oly iovatio keeps the eterprise competitive. At the same time, orgaizatios must eable employees to reach the heights of operatioal excellece i all its facets customer service, product developmet, logistics, accoutig, marketig ad so o. They must operate at the top of their game ow ad build the future so that the orgaizatio maitais its preemiece. It is far from easy ad it requires a ew type of leader who possesses high levels of emotioal itelligece ad exceptioal cogitive ability Hay Group. All rights reserved

5 Global top 20 Best Compaies for Leadership TOP 20 GLOBAL L 1 Procter & Gamble 2 Microsoft 3 Geeral Electric 4 Coca-Cola 5 Uilever 6 IBM 7 Wal-Mart 8 McDoald s 9 Telefóica 10 Facebook 11 Itel 12 Samsug 13 3M 14 Nestlé 15 Siemes 16 Oracle 17 Citigroup 18 Caterpillar 19 Toyota 20 Ford Motor

6 6 Strategic trasformatio The era of cotiual strategic trasformatio Strategic trasformatio is ow a ogoig state of beig for the world s best led compaies. The top 20 Best Compaies for Leadership exhibit a ability to iovate while beig operatioally excellet I a turbulet world i which the rate of disruptio is quickeig, these compaies have developed the capability to trasform at will while growig their core busiess. It is o accidet that they are as adept at iovatio as they are at operatioal excellece. They have leaders with a uusual skill set. These are amog the key fidigs i Hay Group s eighth aual Best Compaies for Leadership survey. I the largest global survey project of its kid, more tha 18,000 qualified idividuals i 2,200 orgaizatios rated their ow compaies leadership practices ad the omiated three global firms they most admire i terms of leadership. From the research data, Hay Group has idetified the top 20 Best Compaies for Leadership i the world. This year s results highlight the dual impetus of iovatio ad operatioal excellece i a era that requires cotiuous strategic trasformatio. The top 20 Best Compaies for Leadership exhibit a ability to iovate while beig operatioally excellet, eve i tumultuous times whe they must steer the orgaizatio through a icreasigly disruptive busiess eviromet. Ureletig ad acceleratig chage, volatile world ecoomies, techological trasformatio, demads for greater corporate accoutability ad solvig complex global problem are just some of the challeges leaders today face. It makes leadership more complex tha ever ad demads skills that are very differet from those that CEOs have traditioally exhibited Hay Group. All rights reserved

7 These leaders exhibit exceptioal levels of emotioal itelligece ad cogitive competecies. They are able to flex their use of power, ifluece ad leadership style; makig istataeous switches i their approach so they ca atted to operatioal issues or areas of iovatio as the situatio demads. Shuig the traditioal commad-ad-cotrol style, they are chage agets; buildig the ecessary bridge betwee the core busiess ad the ew, emergig busiesses that will secure the orgaizatio s future. A ew type of leaders is emergig: people with exceptioal levels of emotioal itelligece combied with uparalleled cogitive competecies. The world is chagig fast ad we have to maage ambiguity i the midst of a complex global eviromet. Laurie Bevier Seior Huma Resources Maager Geeral Electric

8 8 Strategic trasformatio Differet idustries, idetical issues Whatever the busiess sector, ad wherever i the world orgaizatios operate, key issues arise time ad time agai. The 2013 Best Compaies for Leadership ituitively uderstad the issues ad orgaize themselves to take advatage of them. Customers are stormig the citadel. By creatig their ow experieces ad developig their ow products, customers icreasigly demad to be actively ivolved i product desig, delivery ad after-sales. Nike is the prime example. Commoditizatio i cosumer electroics meas compaies must create ew elemets withi the value chai, especially i services. Now it is affectig every idustry, ot least cosumer electroics. For example, Soy was oce a pioeerig gadgets compay, ow most profits i its Japaese home market come from isurace products. Access to iformatio reduces brad ifluece. Because customers ca read reviews olie, they are reassured whe buyig from compaies with low brad awareess. Ratigs matter. Sustaiability ad high evirometal stadards are ow critically importat. Corporate social resposibility is o loger somethig that ca be delegated to a departmet or idividual, or should the gree ageda be addressed through stadaloe projects or somethig that is just there to be maaged. Sustaiability must be part of corporate culture ad led from the top. Employees wat to be i cotrol of their ow destiies. At all levels, people wat ad deserve to reach their potetial, while balacig other parts of their lives. Icreasigly, employees ot just maagers expect to be trusted to work where they wat, whe they wat ad provided with the tools ad support that eable them to do so Hay Group. All rights reserved

9 The traps i eglectig ambidexterity Leadig a orgaizatio that is both highly iovative ad operatioally excellet requires a uusual skill set. Not every leader possesses the temperamet, outlook or emotioal itelligece to succeed whe strategic trasformatio is costat. Through its work with cliets across the world, Hay Group has see the traps ito which those who lack the ecessary ambidexterity fall. The lock-i leaders get trapped ito doig busiess i tried ad test ways util suddely they o loger work. It is ot sufficiet to relive successes of old. Overlookig sales iovatio for example, pharmaceutical compaies that rely o traditioal direct sales to cliicias ad hospitals overlook the criticality of iovatio i sales chaels. They must ope coversatios with ew gatekeepers to procuremet decisios. Believig techological iovatio lasts forever customers are ow much more likely to switch allegiaces oce techology is o loger a differetiator, so orgaizatios must become strategic busiess parters, ot simply techology providers. Sales directors have particular difficulty i makig this trasitio. The icubatio coudrum iovative products, services ad processes may eed icubatig. Whe icubatio remais separate from the mai busiess, itegratio is challegig ad less likely to succeed. We eed people who are adept at thikig through complex scearios, ad who are able to hadle ambiguity ad complexity. Richard Floersch Executive Vice Presidet ad Chief Huma Resources Officer McDoald s

10 10 Strategic trasformatio Doig thigs differetly The ambidextrous orgaizatio that excels at iovatio ad is simultaeously operatioally excellet is otably differet from its peer compaies i a umber of key areas. Moldig ad metorig The Best Compaies for Leadership pay particular attetio to employee egagemet. To mold leaders of the future, they create opportuities at all levels for people to develop their leadership capabilities, actively maagig a pool of successors for missio critical roles ad persoally spedig time coachig ad metorig others. While all compaies focus most of their developmet attetio o seior maagemet ad high potetial talet lower i the orgaizatio, the Best Compaies for Leadership go further. They give extra cosideratio to the middle maagemet pool, esurig that the emergig leadership pool ca simultaeously focus o iovatio ad operatioal excellece. The biggest differece betwee the top 20 compaies ad their peers is that the former are much more likely to provide web-based selfstudy leadership modules, have 360-degree feedback mechaisms ad provide metorig programs by seior executives. Rewardig strategically It s easy to say that collaboratio ad iovatio is importat, but harder to deliver especially whe may compaies still reward o results achieved, o hard umbers ow, ot softer cocepts like collaboratig for a brighter future. But the best compaies put their moey where their mouth is. They reiforce collaborative behaviors. Ad they do that through formal rewards ad recogitio programs. It is o surprise that these same compaies purposely drive iovatio. They uderstad that the iovative approaches they eed will ot magically happe uless the structures ad rewards are i place that esure people collaborate, such as rewardig collaboratio across busiess uits. They also reward operatioal excellece too, ad are much more likely tha their peers to icetivize operatioal efficiecy. Future focus Some of the most strikig differeces betwee the top 20 compaies ad their peers are based aroud cotemporary busiess issues, such as global awareess, leadership developmet ad evirometal sustaiability amog the megatreds idetified i Hay Group s Leadership 2030 research. Overwhelmigly, their leaders are chage agets for higher evirometal stadards, ot simply sposors of projects withi i the busiess. Sustaiability is of cocer to broad stakeholder groups, critical i the value chai ad icreasigly oted by customers whe they make purchasig decisios or employees whe they choose who they wish to work for. I short, staff care more about just their salary. Corporate ethics matter; to employees, customers ad stakeholders Hay Group. All rights reserved

11 Doig thigs differetly Top 20 All compaies We actively recruit from cultural miorities Everyoe at every level has the opportuity to develop ad practice the capabilities eeded to lead others We provide 360 degree feedback to assess ad provide feedback o leadership attributes, skills, ad traits We provide metorig by seior executives We view employees i ew start-up or iovatio areas as havig equal importace to those drivig operatioal improvemet We use rewards to stimulate collaboratio across busiess uits to develop ew lies of busiess We provide icetives to ecourage operatioal efficiecy Our leaders are advocates for evirometally resposible busiess practices Leaders are chage agets who iitiate chage towards higher evirometal stadards The compay uses corporate social resposibility to recruit employees

12 12 Strategic trasformatio Leaders are expected to both build the busiess ad also the people withi our orgaizatio it is the greatest part of our performace evaluatio. Mark Biegger Chief Huma Resources Officer Procter & Gamble 2013 Hay Group. All rights reserved

13 What the ambidextrous leader looks like Ambidextrous orgaizatios require post-heroic leaders; collaborators ot cotrollers for whom soft skills are as importat as hard umbers. This ecessitates a fudametal chage from the leadership types ad behaviors of old. Historically i a traditioal busiess eviromet, the orgaizatio searches for cost efficiecies, builds the sales fuel ad improves products icremetally. Here, quite possibly, established leadership styles may cotiue to work. Ideed commad ad cotrol may be effective for deliverig cost savigs, ad ispirig visioaries ca lead sales teams to greater successes. But either of these approaches ecessarily creates a eviromet coducive for iovatio. Coversely, visioary leaders who drive iovatio at the expese of cotiuig operatios risk the eterprise they are strivig to trasform. Whe iovatio leads to revolutio rather tha trasformatio the eterprise ca struggle to catch up. Ad while the leader with a defiig talet the smart operator, the turaroud specialist, the great motivator may work for a specific challege, today the cycle is so rapid that the specialist ca be out of date before the work has begu. A ew style of leadership The future calls for the ego-less leader; someoe who ca orchestrate ad get the best out of everyoe. The chage aget. The bridge builder. The perso with the emotioal itelligece to ifluece ot cotrol or bully ad who ca exert that ifluece simultaeously with people ad teams who may have coflictig agedas. As such, the post-heroic, ambidextrous leader requires a broader repertoire of skills tha those that would have bee the foudatio of their success i the past. These leaders caot just sit at the top of the orgaizatio. Their skills eed to be replicated; competecies developed. At some levels, it is a impossible task. Busiess uit heads ad the middle maagemet populatio caot ecessarily simultaeously iovate ad be operatioally excellet. While collaboratio is critical, these maagers have their ow objectives ad so istead must master complex post-heroic skills sequetially as their careers progress.

14 14 Strategic trasformatio What the ambidextrous leader looks like (cotiued) Leadig a ambidextrous orgaizatio focused simultaeously o iovatio ad operatioal excellece is fudametally differet from leadig o eterprise focused solely o oe or the other. It is imperative that: Seior maagemet articulates a clear visio ad strategy, icludig a commo set of values ad shared meaigs that provide a commo idetity. Attetio is paid to the behavioral itegratio of the top maagemet team, its uity of purpose ad its ability to sychroize actios. This determies successful ambidexterity ad subsequet performace. The seior team has a cosesus about both strategy ad the importace of ambidexterity; reflected, for example, i a commo icetive scheme. Geeral maagemet, which remais importat, is overlaid with a ability to maage chaos. Maagers must act cohesively ad decisively whe there is o stability, while explorig ew opportuities that arise from the chaos, despite the ucertaities. Leaders hadle volatility, ucertaity ad ambiguity, thereby creatig a eviromet that eables people to get thigs doe, while also icubatig ew ideas. This requires a thikig patter that is coceptual, strategic ad pragmatic. Resposibility for trasformatio sits at the very top of the orgaizatio: it caot be delegated.

15 Seior leaders eed to be able to coceptualize where they are takig their orgaizatio ad effectively commuicate that directio i order to make trasformatio happe. Mary Fotaie Global maagig director, key cliet accouts Hay Group

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