Striving for Global Leadership

While more organizations are addressing global leadership—either within a distinct global leadership development (GLD) program or embedded within a general leadership development curriculum—the effectiveness of such programs has declined over the last four years, according to the fifth annual Global Leadership Development Survey of 1,030 organizations conducted by Training magazine, the American Management Association (AMA), and the Institute for Corporate Productivity (i4cp).

Companies developing leaders with global skills and competencies increased from 31 percent in 2010 to 44 percent in 2014. Some 23 percent had dedicated GLD programs (up from 19 percent in 2013), while 30 percent had general leadership development programs that included curriculum targeted at global skills and competencies (up slightly from 29 percent in 2013). In 2010, 42 percent considered their GLD effectiveness to be high/ very high; in 2014, that figure dropped to 19 percent, overall. This was higher among large employers, but just barely (21 percent).

This year’s study shows that to move the effectiveness needle in a meaningful way, organizations need to ratchet up their efforts in developing leaders with global skills and competencies— preferably within a distinct GLD program but at least by including such a curriculum within a general leadership development program. Four key findings from the survey include:

1. Subjective selection yields sub-par results. Nearly two-thirds of respondents—from high-performing organizations (HPOs) and low-performing organizations (LPOs) alike—rely on recommendations by senior leadership to select participants for the development of global leadership skills and competencies. Similarly, about half of both look to the recommendation of the employee’s direct supervisor.

But GLD selection is best made based on documented evidence of skills, competencies, and performance by less subjective and more objective means that take GLD participation out of the realm of politics and gut reaction. Each of these demonstrates correlations to the Market Performance Index (MPI) and even higher correlations to GLD effectiveness (GLDE):

• Recommendation by mentor, sponsor, or coach: .13 GLDE (HPOs with 1,000+ employees: 32.3 percent vs. LPOs: 23.8 percent)
• Individual’s performance history: .13 GLDE (1,000+ HPOs: 42.4 percent vs. LPOs: 35.7 percent)
• Skills or behavioral assessments: .12 GLDE (1,000+ HPOs: 33.3 percent vs. LPOs: 23.8 percent)

2. Looking longer-term pays off. The 2013 GLD survey revealed that competency gaps identified through the strategic workforce planning process was a key driver of GLD processes that distinguished HPOs from LPOs. This year’s data reveals several additional future-focused practices for developing GLD curriculum that have strong correlations both to MPI and GLDE:

• Determining future-focused critical roles (those that will be core to the business’ longer-term success but difficult to fill): .34 GLDE; .14 MPI (1000+ HPOs: 46.1 percent vs. LPOs: 24.1 percent)
• Identifying the specific skills needed in future-focused critical roles: .34 GLDE; .12 MPI (1,000+ HPOs: 44.7 percent vs. LPOs: 20.7 percent)
• Conducting an internal skills inventory to determine the longer-term gaps in critical roles: .23 GLDE; .18 MPI (1,000+ HPOs: 46.1 percent vs. LPOs: 27.6 percent)
• Conducting environmental scanning to determine external skill shortages in future-focused key markets: .38 GLDE; .20 MPI (1,000+ HPOs: 25 percent vs. LPOs: 0 percent)

3. Collaboration and influence define the new global leader. Among the competencies taught to develop more effective global leaders, two with strong correlations to GLDE speak directly to developing collaborative, influential leaders:

• Ability to teach/coach individuals with diverse learning styles: .29 GLDE (1,000+ HPOs: 56.6 percent vs. LPOs: 41.4 percent)
• Addressing/resolving performance issues of virtual/remote team members: .21 GLDE (1,000+ HPOs: 48.7 percent vs. LPOs: 34.5 percent)

4. Global leaders require local knowledge. A key finding from 2013 was that there was virtually nothing global being taught in GLD programs. This year, survey results indicated that ensuring local perspectives specific to key markets makes a big difference in developing GLD curriculum.

• Interviews with most successful global leaders to determine common behaviors/traits: .13 MPI; .35 GLDE (1,000+ HPOs: 31.6 percent vs. LPOs: 13.8 percent)
• Consulting with in-country resources to determine regionspecific needs: .12 MPI; .35 GLDE (1,000+ HPOs: 36.8 percent vs. LPOs: 20.7 percent)

Including competencies that reflect knowledge immersion in culture and markets also is reflected in GLD effectiveness:

• Knowledge of cultures/customs in specific markets: .23 GLDE
• Ability to be conversational or fluent in prominent languages within specific markets: .16 GLDE
• Knowledge about customers and/or prospective customers in specific markets: .12 GLDE

While aligning the GLD curriculum with long-term leadership needs of the business was noted as the top factor, another set of factors was found to be correlated to GLDE:

• Consistency with program delivery on a global basis: .15 GLDE. This also was found to have a .14 correlation to MPI, showing a seven times differentiation between HPOs of 1,000+ employees (27.9 percent) and LPOs (3.7 percent)
• Enlisting local organizational resources in the development and delivery of GLD curriculum: .13 GLDE (1,000+ HPOs: 7.4 percent vs. LPOs: 3.7 percent)

GLD Best Practices

• Leverage cultural liaisons: Investigate regional resources to help develop learning about global markets, customers, and labor forces. Tap local sources—corporate, academic, and civic—to build cultural and market knowledge of specific regions. Include these cultural liaisons in learning delivery.
• Create a sustainable GLD process: Design a global development cycle that remedies current shortfalls, strengthens core global competencies, and identifies future-focused critical skills. Perfect the selection process by moving toward evidence-based approaches for focusing GLD on the right individuals.
• Involve leaders: Schedule a dedicated session for the executive team to address how global learning can impact the achievement of long-term corporate goals. Use these learning points to guide the GLD curriculum. Invite leaders to participate in delivering learning modules, supplemented with stories.
• Grow collaboration and influence: Seek first to understand, then to be understood. Adopt these collaboration and influence competencies enterprise-wide. Teach managers how to recognize collaboration and influence in action—even virtually—and how to coach for it, how to evaluate its effectiveness, and how to reward it.

To request the full report, contact: info@amaenterprise.org. 

About This Study
The survey participants for the 2014 study were drawn from three sources: subscribers to Training g magazine, the American Management Association (AMA) and its global affiliates, and the Institute for Corporate Productivity’s (i4cp) global survey panel. The total respondent population was 1,030, and results focus on 642 organizations with 1,000 employees or more. Terms are defined as follows:

Global Leadership Development (GLD) is defined 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 organization has operations in other countries.

Market Performance Index (MPI) is based on self-reported ratings of organizational performance in four key areas—market share, revenue growth, profitability, and customer satisfaction—as compared to the levels achieved five years previously. The average of the four ratings determines MPI score. Organizations in the top one-quartile of MPI scores are designated High- Performing Organizations (HPOs). Organizations in the lower one-quartile of MPI scores are designated Low-Performing Organizations (LPOs).

Global Leadership Development Effectiveness (GLDE) is based on survey participants’ responses (on a five-point Likert scale) to the question, “To what extent is your organization effective at building leaders with global skills and competencies?” Organizations with responses of “high” or “very high extent” are highly effective at GLD; those with responses of “moderate extent,” “small extent,” or “not at all” are less effective.