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Leadership Ensembles: Orchestrating the Global CompanyRobert J. Thomas, Joshua Bellin, Claudy Jules and Nandani Lynton Research ReportOctober 2012

Leadership Ensembles: Orchestrating the Global Company

2 | Accenture Institute for High Performance | Copyright 2012 Accenture. All rights reserved.

Contents

Foreword 3Introduction 4Disciplined Agility: The Secret Is in the Ensemble 6Foresight: One Foot in Today and One in Tomorrow 11Synthetic Intelligence: Exercising the Ensemble Mind 15Conclusion 17Appendix 18



Foreword

Steering the global enterprise is hard work. Gone are the days when corporate headquarters ruled, and local operations were relatively isolated pockets of activity around the world. Today, markets for talent, products and capital are both global and local. The same is true of customer relationships. As CEOs from long-established multinationals and rapidly expanding newcomers in high-growth markets repeatedly told the team at Accentures Institute for High Performance (AIHP), todays global enterprise needs to be in the worldcompeting, collaborating and learningand also needs to bring the world into the enterprise. Highly challenging tasks.

Fortunately, this study offers both practical and provocative insights about what it takes to lead the contemporary global enterprise. The teams interviews with senior leaders revealed an emerging model of top management organization what AIHP researchers call the ensemble approach. Unlike more rigid, fixed approaches dictated by the organizational chart, an ensemble approach deploys executives and managers in a network that can flexibly surge to address problems and opportunities as they arise.

Fashioning an ensemble approach to global management takes energy and dedication not least because it forces incumbent leaders (and chief leadership officers, like myself) to worry even more about how such a network can be established and sustained, and how a pipeline of future-ready leaders should be managed. My fellow steering committee members for this project David Smith, Accentures managing director for Talent and Organization, and Don Packham, former head of HR for BP and, more recently, for the FBI were struck by the importance attributed to discipline, agility and foresight by the 50-plus C-suite executives the research team interviewed. We certainly benefited from their words and the examples. I think readers will, too.

Adrian Lajtha

Chief Leadership Officer Accenture



Introduction

For companies deeply immersed in the global economythose that earn, say, a third or more of their revenue from commerce beyond their national boundariesbeing global means much more than being multinational. Akin to the contrast between digital and analog technology, being global offers far greater opportunities. It also raises more intricate challenges.

As global business leaders seek to oversee and manage their large complex organizations, the paradigm for effective leadership is changing. Companies can no longer rely on single individuals at the top to handle the complexity and uncertainty of the global environment. At the same time, even a team at the top is not always best suited to address each and every situation. Whats needed instead is an agile, future-focused and intelligent leadership ensemble at the top. This report explains what leadership ensembles are, what makes them necessary, and the attributes that make them most successful.

Chief among those is the variety and complexity of the choices that top-level decision-makers face. A decade ago, management was advised to think global and act local. Today, however, the challenge is how to be global or local at any point along the value chain where an opportunity arises to gain competitive advantage. The country head of India for a multinational consumer technology corporation puts it colorfully: You have to be able to move effortlessly along the scale between mindlessly local and hopelessly global. Indeed, global organizations need to perform effectively all along that scale (staying well clear of those extremes!).

Being global is not simply a matter of shifting the center of gravity (or decision-making) between the corporate center and the geographies; its about sustaining multiple centers of gravity and preventing them from crashing into one another.

Being global also puts an enormous strain on a leaders ability to keep the pieces of an increasingly fragmented whole connected. The growing physical



dispersion of company leaders and the increase in their cultural and linguistic diversity puts a premium on the ability of core managementthe top one to two percent of executivesto stitch the organization together across geographic, cultural, temporal and political boundaries. Decisions that might have been made in the hallways of corporate centers must now be carried out at a distance, asynchronously, or through media not suited to replicating the spontaneity of a live meetingwith many opportunities for error or misinterpretation.

In an effort to better understand these challenges, as well as the opportunities experienced by companies that have become truly global, researchers in Accentures Institute for High Performance interviewed 50 of the most senior and influential executives at 39 global companies from five continents (see the appendix entitled About the Research for more detail). Those interviews were revealing: While all of the individuals we spoke with confirmed that leading and governing a global organization is dramatically more complex than managing a multinational, and contributed to our understanding of why and how that is the case, few felt that their own companies were doing enough to cope with the complexity or to prepare a pipeline of global leaders with the skills they believed necessary for future competitive success.

Concretely, our research, which also included an extensive review of the management literature and our prior experiences with top leaders at global firms, surfaced three essential exam questions that CEOs must ask and answer if they and their top management are to be effective in a global environment:

Question 1: How do we create a top management tier that both reflects and capitalizes on the diversity in business, culture, geography and thought style? Answer: Through Disciplined agility in organization and decision-making.

Question 2: How will we keep one foot in today and another in tomorrow, i.e., how do we stay current with developments in different parts of the world while anticipating the implications of future trends? Answer: With Foresight, gained through disciplined efforts to bring both the future and the world into the room.

Question 3: How can we make smart decisionstaking into account the breadth of experiences and perspectives that come with being globalwithout sacrificing speed? Answer: With Synthetic intelligence, captured through a new combination of experience and analytics.

When a leadership group is agile, and able to use foresight and synthetic intelligence to look ahead effectively and leverage the wealth of experience and perspective that is present in a global enterprise, the rewards are tangible.1 Past studies have confirmed a link between top management effectiveness and company performance and, by extension, a top management groups readiness to face the

future may often be the best indicator of an organizations readiness to continually grow and redefine itself in the context of ever-changing surroundings.

In the sections that follow, we explain why these questions emerged as being critically important, and how the work being done by some of the CEOs and senior leaders we interviewed translate the answers from page to practice. Hopefully, their experiences will serve as a useful guide for their peers in other companiesthose with extensive global experience and those who are just starting to go global.



Disciplined Agility: The Secret Is in the Ensemble

Differences in language, custom, time zone, politics and taste divide marketsbut they also divide top management. Bridging those management differences, we were told, requires from senior leaders a level of agility more closely resembling that of a musical ensemble than the usual executive board composed of a CEO and his or her direct reports and the handful of standing committees that most companies maintain.2

Consider: The secret of a successful musical ensemble resides in the ability of musicians to perform equally well in the intimacy of a quartet, the relative formality of a chamber group or the tight structure of a symphony orchestra.3 An ensemble leader may be called upon to be strong and visible, as in the case of a symphony, but at other times, for example in a chamber orchestra, the conductor will lead while playing in the midst of the group. On occasion, there will be no conductor. Shared understandingcommonly forged through the experience of tackling difficult music piecesand a conviction to improve through practice give a musical ensemble the agility to operate under such widely varying conditions.

A top management ensemble, which may be thought of as the top one to two percent of executives and experts, similarly consists of the right people (irrespective of differences in their cultural, functional, or business backgrounds), in the right configurations (small group or task force, executive team or kitchen cabinet), who are best able to respond effectively to the variety of situations that a complex global world can churn up. As Herve Borensztejn, former executive vice president at Converteam (a French subsidiary of General Electric), put it: Sometimes we have to make decisions immediately in order to keep up with the speed and pace of our competitors even though not all of us are available at the same time. Other times, we need to gather a much larger group to thoroughly debate our options.

Ian Cheshire, CEO of Kingfisher (one of the worlds largest home-improvement retailers with stores in the European Union, Turkey, China and Russia), also illustrated the point, explaining that in order to get the scale benefits of being international and the diversity benefits of different eyes and different perspectives he ensures that key decision makers on specific issues are both representative and also relevant an approach that requires periodic calibration. The ensemble approach, according to Cheshire, helps the company operate as a collective and intelligent network rather than as a hierarchy, and creates a community that [brings] practices from one place to another.

By ensemble we mean: Executives, each with a distinctive expertise or perspective, who can be drawn together in combinations suited to specific decision situations or business contingencies and who, because they share common understandings and a common discipline, can be reconfigured without significant loss in effectiveness.



Figure 1: Configurations of the Top Management Ensemble

The four ensemble configurations we observed represent four different patterns of behavior and roles that can be taken on as needed for a specific purpose and a specific period of time.

Comfort with ambiguity; able to think and act

Decision- making

Unraveling complexity

Problem- solving

Speed of implementation

Avoiding groupthink

Implementing decisions once made

Improvising and innovating

Configuration

Creative, divergent thinkers

Small circle of trusted advisors

Team of rivals

Process and business experts

Tiger Team

Kitchen Cabinet

Advocates

Operators

Composition Strength Weakness

Beware a Static Understanding of the Word Team

Jos Lopez, COO of global giant Nestle, calls Nestles ensemble-oriented approach to management leading as a team. But he acknowledges that the meaning of the word team, at Nestle, has evolved. Many of our interviewees said the same of their own organizations, and when asked to name their companys top leadership team responded with a question: Do you mean the CEOs direct reports or the various committees we use to get things done? In most companies there are multiple top teams and many of those groups are not teams by any dictionary definition.4

Across the companies we studied, we found top leaders coming together in four distinctly different ways, each of which represents a pattern of behavior and roles that can be taken on as needed for a specific purpose and a specific period of time. The four ensemble configurations we observed (shown in Figure 1) are:

Tiger Team. Composed of experts and divergent thinkers, but tasked with an explicit goal, Tiger Teams are usually quite comfortable with unstructured tasks and ambiguity. They are seen to be most effective when given a challenging assignment, such as revisiting business strategy in the wake of disruptions in the market, or contemplating an acquisition with enterprise-wide implications. They are not, however, well suited to repetitive,

routine assignments. And although they are likely to commit themselves fully to the course of action they choose, they tend not to arrive at those big decisions quickly.

Kitchen Cabinet. Interviewees frequently described the Kitchen Cabinet, or the inner circle of trusted advisors, as the place where important decisions get made. With members nested in adjacent offices or dispersed globally but connected by video and voice, Kitchen Cabinets are usually chaired by the CEO. These ensembles



Figure 2: Configuring the Right Group for the Situation

Depending on the issue, two factors determine the best type of configuration for the ensemble: the type of output required of the group, and how committed that group must be to implementation.

2. Desired commitment:

What level of ownership is required for effective implementation?

Tiger Team

Kitchen Cabinet

Advocates

Operators

Divergence

Convergence

Owner Participant

1. Desired output:

Whats needed: multiple points of view or consensus?

which can then be presented to the ultimate decision-maker(s). Under these circumstances, divergent thinking works best; the configurations most suited for divergent thinking are Tiger Teams and Advocates.

When the complexity of the situation is relatively low (often when the situation is familiar or occurs fairly routinely), the desired output is a common view or one option out of many. Under these circumstances, Kitchen Cabinets (i.e., a small group of peers or trusted staff) and Operators generally work best.

When the situation is urgent (if time is of the essence) and resolution is going to be a challenge (possibly because of the level of change required), decision effectiveness depends heavily on the

Match the Configuration to the Situation.

tend to be good at recognizing familiar problems, in large measure because participants have a history together; theyre also good at moving quickly to action once a decision has been made. Where they tend to struggle is in avoiding groupthink, i.e., the kind of self-assured but insular mindset that comes from excessive familiarity and a desire to arrive at decisions quickly.

Advocates. Described in several instances as teams of rivals, advocates are usually groups of senior executives and experts assembled specifically to review a situation, and, through debate, reach a wider and deeper understanding of causes, consequences and options. The strength of the Advocate configuration is its ability to parse complex problems and arrive at a wide array of potential solutions. However, we were told, members of this type of group can easily get lost in the complexity

Depending on how the CEO and her staff read a situation, i.e., how they judge it along dimensions such as complexity, urgency and difficulty of resolution, the objective may be to frame, deliberate or reach a decision. Two factors are pertinent: the output desired, and the level of commitment necessary to carry the decision through to execution (See Figure 2).

When the complexity of the situation is high (such complex situations are almost always unfamiliar), the desired output is most often a great diversity of options,

commitment of a dedicated group. Under these circumstances, Tiger Teams and Kitchen Cabinets can be most effective because their members are comfortable acting in concert and are willing to make personal investments based on a strong feeling of mutual accountability.

When, by contrast, the situation is relatively less urgent and resolution will not greatly challenge the organizational status quo, then implementation is less likely to encounter opposition. Under these circumstances, Operators are the preferred choice, in large measure because they can be easily deployed.



Remember That it Takes Discipline to Be an Ensemble

In order to succeed, ensemble members need a common clarity of purpose. They also need a common level of expertise in areas such as decision-making and group process. Without those two dimensions of discipline, the ensemble may be able to solve a wide variety of problems yet find it next to impossible to realize the benefits of being global. This point was underscored in our interviews through repeated references to the importance of executives being, in the words of one CEO, plug compatible.

Clarity of purpose. The need to be aligned to a single goal or task might seem like awfully basic advice. However, the issue arose with some frequency in our interviewees comments. Also, it is not uncommon to encounter standing groups and committees in organizations that have been around so long that no one questions their raison dtre. Why do they exist? The answer is usually a variant on they exist because they always have.

Heres a case in point: We ran a workshop in 2010 on how to improve decision-making for the CEO of a global manufacturing company and 10 of his direct reports. At the very beginning of the session, we asked attendees, What do you do that no one else in the company has the responsibility to do? After 30 minutes of vigorous debate failed to produce any consensus, the CEO intervened and gave his team two hours to come up with a charter it could live with. Later, the group concluded that many of its difficulties with decision-making were linked to its collective inability to answer that one simple question.

of their debates and are prone to taking firm stands that do not yield to negotiation or compromise which sometimes results in a tournament of kings that makes it difficult to agree on and implement solutions.

Operators. The Operator configuration is often comprised of people occupying roles and executing responsibilities with regard to a specific function, process or geography. Most of the companies we studied had the equivalent of an Operating Committee, consisting of the COO and

business unit leads that coordinated and integrated operations along the principal value chain. Given that an activity is the focus for their existence, Operators are usually quite strong at analyzing problems in their area of responsibility and making decisions quickly; indeed, their decision rights are often explicitly defined. However, Operators tend to stick to their script; they may have difficulty thinking outside the box.

CEOs and senior executives were emphatic that agility ultimately resided in their ability to match the right ensemble configuration to any given situation, with a minimum of delay and maximum odds that the group in question will produce satisfactory results. (For more detail, see the sidebar entitled, Match the configuration to the situation.)



A clear sense of unique responsibilities reduces the duplication of effort and frustration that builds up in a diverse team whose constituents are scattered around the worldwhether those frustrations originate in communication roadblocks and linguistic barriers or in divergent perspectives. Sometimes, Kitchen Cabinets, Tiger Teams, and Operators find it useful to formulate a set of organizing principles or big rules to clarify both their charter and their preferred means for fulfilling that charter. For example, the Operator configuration of a global technology services company laid out its operating principles in both formal and informal terms (see Figure 3 Big Rules for a Global Technology Services Company).

Process competence. Plug compatibility bespeaks a level of familiarity among members of the ensemble or, failing that, a level of process competence that enables any given configuration to hit the ground running. Most important is individual familiarity and ease with the different behaviors that are central to different configurations.

Several of the companies we studied explicitly tailored executive training to equip leaders for the variety of different configurations in which they might find themselves. A country manager for one of the worlds leading manufacturers of major home appliances said that leaders need to be effective facilitators whether they are tasked with getting their groups to reflect and think through and internalize or to stop talking and start doing.

Figure 3: Big Rules for a Global Technology Services Company

As this actual example shows, operating principles can be laid out in both formal and informal terms

Equally important is their ability to monitor their collective values and behavior, especially when it comes to decision-making. Companies such as Nestle use group effectiveness questionnaires and other personality and behavioral data in a systematic approach to heightening collective awareness and ensuring the quality of overall performance as a group. Others, such as Mexican automotive company Nemak, strive to raise their ensembles awareness about default decision-making styles, even going so far as to create decision-making playbooks that encourage a shared language for decision-making.

Formal Informal

Put the organization ahead Solve for the enterprise of your own interests

Demonstrate mutual trust If youre good enough to get here, and respect you belong here

Cherish the good and shrug No drive-by comments off annoyances

Successful people ask for help No one gets fired for pulling the stop chord

Disciplined agility is not something that a top management ensemble can simply wish into being. In the words of global beverage giant Diageos head of human resources Gareth Williams, the achievement of agility through an ensemble does not require huge amounts of time, but it does require huge amounts of openness and candor.



Foresight: One Foot in Today and One in Tomorrow

An undeniable edge goes to global organizations that not only master creative tensions, but also detect changes in business conditions and act on them ahead of competitors. Top management needs to see both far and wide in order to form new insights and then convert those insights into executable strategies.

Many of the executives we spoke with, however, felt that although they and their organizations were acutely aware of the importance of having a foot in today and another in tomorrow they did not routinely set aside enough time to consider the future. Neither did they feel they invested sufficient effort in building a pipeline of leaders with the skills and the mindsets required to populate that future.

Figure 4: Elements of foresight

Foresight means that leaders cannot just adapt to change; they must actively preempt it by owning the future.

Bring the future into the room

Bring the world into the room

Develop future-ready global leaders

Exposure to unconventional perspectives

Solicit expert opinions

Simulation, testing, and scenario planning

Exploratory offsites

Geographic diversity among leaders

Geopolitical and cultural intelligence

Real time information exchange

Global communications technologies

Ownership of leadership development process

Focused attention on learning agility

Measureable, outcome-based global talent rotation

Global teams across the organization



Make Considering the Future an Integral Part of the Present

How can consideration of the future begin to become an integral part of the present? One way is by focusing groups of leaders more acutely on the future, whether they are acting as Advocates, Operators, or members of a Kitchen Cabinet or Tiger Team. Mike Eskew, former CEO of UPS, routinely brought unconventional thinkers of all sorts into top management meetings as a way to shake participants loose from present assumptions and inspire them to consider alternative futures for the company, its customers and their core technologies. He described that practice as a way to bring the future into the room and executives at UPS agreed with his assessment, crediting the dynamic in those meetings with helping them evolve from a package delivery company to a world-leader in logistics and supply chain management.9

Similarly, Satish Pradhan, who heads up leadership development for the Tata Group, described taking the extended leadership team at Tata Chemicals to global centers of expertise in biotech and nanotechnology in an effort to bring the future to life by engaging them in an exercise resembling options investing. And companies routinely move meetings of Tiger Teams and Operators to anticipated growth markets.

Nestle provides another example, encouraging executive board members to be active as top leaders in non-governmental organizations and as trustees in future-oriented foundations. And even

large government agencies, including the U.S. Federal Bureau of Investigation, adopt such private-sector practices in their ongoing efforts to recognize potential threats that might be global in nature.10

Another way to make the future an integral part of present considerations is through technology. Increasingly, well-known tools like scenario planning and strategy maps are being supplemented by analytical techniques that draw upon customer and transaction data sets to simulate different market conditions and competitor actions. These techniques not only allow companies to test multiple future scenarios at a low cost (and with a speed unheard of even ten years ago), but they also enable ensembles to live in multiple futures without ever leaving the present. The technology allows groups of leaders arrayed as Advocates to present their multiple visions, and allows Tiger Teams and Kitchen Cabinets to more thoroughly vet their assumptions. Global bankers at companies like Standard Chartered, for example, routinely hold collective management conferences featuring sessions on demographic and technological change as a way to future-proof (or at least forewarn) top management about developments on the horizon.11

Last but absolutely not least, shifting the companys approach to strategy is a powerful opportunity to build consideration of the future into present situations. And on this front, despite their impression that the future doesnt receive its due, many companies are already on the bandwagon. The majority of companies whose executives we interviewed have moved in the past five years from strategy as an institutionalized mechanism to strategy as a continuous processby way of an ensemble approach to global management. In the words of Hewlett-Packard CEO Meg Whitman, Companies used to have strategy meetings once a year. Now we

have them every two weeks.12 Tiger Teams are often used to address challenges that affect multiple businesses or geographies. Advocates are deployed to consider divergent scenarios in functional topics like the future of information technology. Operators are asked to consider the implications of investigations undertaken by both Tiger Teams and Advocates for their particular divisions. And Kitchen Cabinets are drawn into play when it comes to arriving at priorities for future funding and action.

Grow Future-ready Leaders

The scope of this challenge, and its importance, cannot be underestimated. As a board member of one of Europes largest energy groups told us, Of course we have industrial challenges like the future of nuclear in the world and finding the right balance between investment and development. But also we have challenges in terms of international culture, international mindset and recruiting and choosing the best talent. this mindset has to be open to opportunities in an international framework and able to understand diverse cultures and ways of thinking.

The country manager of a global manufacturing giant concurred, describing the ideal global leaders as individuals who could be uprooted from their comfort zone and be placed in an unfamiliar territory or function, and in a short period of time they are able to create a team, identify business opportunities and build strategic alliances resulting in differentiated value creation for the local consumer.



Yet although virtually every one of the CEOs and top executives we interviewed agreed that growing future-ready leaders was critical to a global companys ability to be effective, and each one also took a direct role in their companies succession planning process, few felt that they had enough policies in place to guarantee that the next generation of global leaders would be as diverse as their companys global footprint, would be global enough in mindset, and would be capable of leading collectively as an agile ensemble. (Accentures Institute for High Performance additionally surveyed 200 worldwide human resources executives. For highlights of the survey results, see the appendix entitled Survey: Growing Ensemble Leaders)

An ensemble approach to global management represents a viable way to expand the number and variety of candidates for future leadership roles. And some companies are already pursuing that path. Beyond conventional hi-po (high-potential) manager development programs, for example, companies as diverse as Four Seasons (hotels and resorts) and Sasol (energy) task promising managers with global projects in Tiger Teams and Advocacy groups as part of their development as global leaders.13 Far from make-work assignments, these projects require managers to collaborate by means of the latest web-based technologies on topics of strategic importance to the firm. They also make it imperative for

ensemble members to gain familiarity and trust with one another across culture, space and time. For example, Katie Taylor, CEO of Four Seasons, explained that her company employs Tiger Teams as part of transformational initiatives. For these, she notes, Weve tapped our most promising leaders so we have a chance to watch them in roles that are very cross-functional and where they have to interact with and influence a wide range of people.

Companies can also advance the formation of a global mindset in current and future top management by allowing future leaders to gain experience by working and living in multiple locations as ensemble members. Our interviewees said with one voice that growing succession-ready global leaders requires a linkage between business strategy and talent strategy to ensure that the right mix of skills are in the right places tomorrow.

At P&G, future leaders are developed in this way by participating in a program called Accelerator Experiences, which gives managers the experience of running a small business with huge strategic potential. As Global Human Resources Officer Moheet Nagrath explained, We continually move people across regions and countries. The more discontinuous the experience, the more you accelerate growth. We have to move people around businesses for them to become well-groomed.14

The South African energy company Sasol. provides another example. As Bill Graham, a global HR manager there, explained: We have short-term assignments where we send people for up to six months to another country to do a project or job. We also have people that are given global roles where they stay in their own country, but

they have to work, lead and interact with people from other countries. For example, they would manage a project, or have a permanent global job across countries, and then travel extensively to do that.

Part and parcel of the task is being purposeful about helping emerging leaders extract judgment from experience. Achieving real portability in members of the ensemble is not just a product of moving them around. It has to be cultivated. Put specifically, it is critical for these leaders to develop their abilities to ascend a steep learning curve quickly when participating as an ensemble member. They need to add value to the group and know how to adapt to different types of groups even as they learn how to master creative tensions, honing their capacity to draw from prior experiences to assess situations and make sound judgments in real time.

To facilitate that professional growth, some organizations keep a close eye on these leaders activities, and build mentoring, evaluation, and coaching into other leaders formal job expectations so that those activities are must haves rather than nice to haves. Tata Group has implemented two efforts in this direction. One is the Reflections process, which promotes individual and group learning as part of leadership development; the other is a unique classroom-based program called Captains to Coaches that trains senior line executives to be coaches to next-generation global leaders. That program focuses on self-reflection



exercises, and experiential learning through demonstration and practice of coaching skills by way of role plays, visualizations and team exercises.15

Former CEO of global toy maker Hasbro, Alan Hassenfeld, took another tack, explaining that it is imperative to create structured experiences inside or outside ones home country, such as the one he piloted at Hasbro in which emerging leaders were thoroughly immersed for a period of time in a new market such as China, even to the point of staying with local families.

One important caveat to all such training: A global resume and a well-traveled passporteven with directed developmentdoes not necessarily predict a global perspective. Equally important is something that the CEOs and other top executives variously referred to as learning agility, curiosity, openness to learning, and the ability to extract real insight from experience. Shiv Shivakumar, managing director of Nokia India put it neatly: Two characteristics tell me if someone has a global mindset. The first is learning ability the ability to learn and unlearn quickly. The second is a deep sense of empathy. And although the jury is out as to whether such qualities can be acquired, executives including Ronen Koehler of Israeli software company Check Point use it as a predictor for the likely success of a manager as a future leader in global business.16 Viewed from that perspective, learning agility may be the key to organizational agilitywith the ensemble as a bridge between individuals and the enterprise.



Synthetic Intelligence: Exercising the Ensemble Mind

Synthetic intelligence is what developmental psychologist Howard Gardner refers to as the ability to take information from disparate sources, understand and evaluate the information objectively, and put it together in ways that make sense as a prelude to action.17

Thought about in the context of ensemble leadership, then, synthetic intelligence means that many minds, properly focused, can solve problems that one mind alone cant solve or cant solve as quickly or efficiently.18 As Williams, head of human resources for Diageo, said when laying out his vision of how successful ensembles think together: Its that old adage that the sum of the parts is bound to be stronger than the individual components - and its the interaction between peoples thinking and behavior that creates a level of breakthrough.

Thats why synthetic intelligence is the answer to the third exam question: How can we make smart decisionstaking into account the breadth of experiences and perspectives that come with being globalwithout sacrificing speed? By harnessing many minds and minds in many configurations to embrace diversity and complexity and transcend it. As Mechtilde Maier, head of diversity for Deutsche Telekom, emphasized: We need different perspectives, different insights, and different methods to solve a problem. And in the end, sometimes there is not one answer - there are a few or many answers to one and the same question.

Why is synthetic intelligence so critical? Consider how Diageos leadership changes its mode of collective thinking depending on the groups objective. According to Williams, when the companys executive team gets together to assess the companys performance and operations, the agenda is often routine acting, as they are, as Operators. But when discussion turns to the question of future growth, and the composition of the group changes with the inclusion of regional executives, the new ensembles behavior more closely resembles an Advocate configuration, and the dynamic shifts accordingly. For example, a series of discussions which explored diverse quantitative and qualitative data, examined consumer and value creation dynamics, and challenged past assumptions, resulted in a shift in strategic intent and investment targeted at the emerging middle classes in the new high growth markets of the world.

The Diageo example is compelling. Yet thinking togethermaking the most of a groups diversity, reflecting views of multiple external stakeholders, and bringing the right minds and voices to bear on a question regardless of rank or structure or history is not easy to do, we discovered. Many of the leaders we spoke with felt they had smart individuals in their senior ranks, but few smart groups at the top.

They cited three reasons. First, incentives often get in the way. An individual leader might have a strong enterprise outlook, but performance objectives and bonuses tend to reward those who focus intently on their own business or functional portfolio. A top executive at a North American-based retailer reminded us that, People are managed based on results. As

a result, they are less willing to invest in something that is going to result in better long-term performance but might hurt them in the short term. Second, internal competition for scarce places at the pinnacle of an organization perpetuates the bias towards individual contributions and great or heroic leaders rather than focusing on effective collective thinking. Finally, and in turn, the skills, capabilities and personalities that often reach the top tier of management may bias against collective thought. Research into career paths at major corporations has shown that early promotions greatly enhance an individuals chances of reaching a senior level, while those who are knocked out of the competition at early stages can be locked out of any further advancement.19 The implication: Senior managers are drawn from a pool of individuals who succeeded early in areas of individual contribution such as efficiency, while those more adept at leading with or mobilizing peers may have been eliminated early in the competition.



Enabling Collective Thought

The ensemble approach cultivates synthetic intelligence in two ways. First, it actively incorporates diversity into the framing, deliberation and execution of decisions. Second, it encourages fast experimentation to test ideas and, thus, to reach better conclusions. (See Figure 5 A model of synthetic intelligence)

Bias for diversity. Ronen Koehler of Israeli software firm Check Point readily admitted that what binds his companys leadership cadre together is a unitary way of thinking that is often reinforced by strong friendships and similar backgrounds. The challenge, though, is that with sales offices in just about every region of the world, these leaders must work hard to accept and process local viewpoints and perceptions from many locales into a cohesive global perspective. By contrast, leaders at the Toronto-based global hotel chain Four Seasons deliberate often about the challenge of providing consistently high standards of service across regions where customer expectations themselves differ. These executives are therefore especially keen on maintaining an active bias for diversity. We cant just make decisions that seem right for us from where were sitting, noted Ellen DuBellay, vice president of learning and development. The cross-fertilization of ideas is key to our future success.

Effective global organizations embrace the challenges of harnessing diverse perspectives. When Kitchen Cabinets and Tiger Teams face situations where issues and their solutions seem contradictoryor clashes seem inevitablethey attentively analyze the different positions to understand their essential points of difference. Then, armed with better comprehension, they can alter their collective beliefs and behavior through

group reflection and questioning to have a good fight before arriving at a common direction. The benefit is a better decisionone that is more likely to be sustained.20

To get at the practicalities of embracing such diversity, consider what Rivera, the CEO of Nemak, shared about his strategy during meetings of one particularly critical group of leaders. At times, this group is called upon to be a Tiger Team, aiming to reach a broad consensus on the companys strengths and weaknesses. At other points, certain members are assembled as Advocates for their function or business unit. What makes it all work in either configuration, according to Rivera, is discussing lessons learned and sharing experiences across regions. The participants learn about the challenges in other regions and then collaborate on how best to offer support. The same ethos holds true when

groups of leaders meet for other purposes, whether they are tackling the issue of developing global leaders or balancing capacity shortfalls.

Ultimately, synthetic intelligence relies on more than just the traditional notion of intelligence as IQ; it rests on a foundation of emotional intelligence as well. Leaders in a group must be comfortable with dialogue, with suspending immediate judgments or prejudices, and individually and collectively seeking to wear multiple hats and considering multiple foundational assumptions. Ashim Khameni, chief leadership development officer for Canadian food retail Sobeys, has emphasized this point heavily amongst the companys leadership ensemble. There is an innate comfort in constructive debate and idea generation, he observed. On many occasions in an executive meeting

Figure 5: A model of synthetic intelligence

Great minds must come together in the right way to solve pressing global challenges. Synthetic intelligence incorporates both a bias for multiple perspectives as well as a means of choosing among alternatives through fast experimentation.

Courage to explore the white spaces

Capacity for dialogue and suspension of

judgment

Integrate irreconcilable perspectives

Active thought experiments

Prioritize right questions over right answers

Balance action with learning

Bias for Diversity

Synthetic intelligence

Fast experimentation

Greater tolerance for

complexity

Enchanced appreciation

of trade-offs

More complete coverage

of the unknown

Avoidance of

headquarter bias

Reinforce agility



one would be hard pressed to guess who may be an operator, a functional leader, or the CEO. In other words, leaders have to learn how to put aside their positions in the hierarchy and their own business or functional portfolios to see an issue from every relevant angle.

Fast experimentation. Fast experimentation means pursuing multiple paths of investigation in the interests of reaching a more refined conclusion. It can mean collective learning from actual field experiments, but it also refers to a mode of deliberation that employs thought exercises to better focus ideas and actions. The mode of conversation can itself be important, as MIT researchers discovered when studying the collective intelligence of groups; they found that the more even a conversation tended to be (that is, the less dominated by a single individual) the higher the group scored on tests of their combined smarts.21

To achieve that even dynamic, Satish Pradhan of the Tata Group asks executives to consider how each member of the ensemble will add value and why. He tells them to ask, hypothetically: [Am I] in this room because of my role as head of Asia, or as head of outsourcing, or as a functional leader of finance? Am I anchored in one role, or am I sharing the burdens, the responsibilities, the perspectives of the top leader and looking at the whole of the organization? What about the person to my left? What about the next person?

Other types of activities can prove useful for leadership groups as well: Playing devils advocate is one; another is explicitly spelling out the assumptions and evidence behind each contention made.

The goal is to move ensemble members, and by extension, the group as a whole, from what Chris Argyris and Donald Schn call single loop learningactions that are purely in response to unquestioned assumptionsto double loop learning, which involves the ability to reframe questions and better understand the underlying variables as part of tackling challenges and making decisions.22 Take, for instance, how the CEO of Brazilian airline Azul tasked a Tiger Team of senior leaders with answering the question: Why arent more Brazilians taking advantage of Azuls low fares? Questioning their assumptions, the group of leaders realized that taxis to the airport sometimes 40 to 50 percent the cost of the airfare were too expensive for the average customer, and transit services were too infrequent. The team therefore decided to implement free and frequent airport shuttles. As of 2012, passengers were booking more than 3,000 free bus rides per day to the airport, and Azul is the fastest-growing airline in Brazil.23

Outcomes of Thinking Together

Leadership ensembles that cultivate synthetic intelligence can expect five related outcomes. First, they will enjoy a greater tolerance for complexity, based on each members commitment to consider multiple perspectives and encourage a global mindset. Second, being able to engage directly with complexity will allow them to have an enhanced appreciation of trade-offs when deliberating about the future. Third, by asking the right questions, engaging in fast experimentation, and having the courage to explore white spaces, they are likely to capture a more complete picture of the unknown, yielding better decisions. Fourth, they will avoid the headquarters bias that so often prohibits

the kind of double loop learning24 that can enhance the long-run effectiveness of decision making organizations. Finally, ensembles that cultivate synthetic intelligence are actually strengthening their agility, because they will be refining an innate sense for what types of groups think together best, and under which circumstances. Without this ability, groups of leaders could hardly be expected to serially morph from Tiger Teams, to Advocates, to Operators, to Kitchen Cabinets, and back.

Conclusion The potential is real for global companies to achieve disciplined agility at the top, to claim foresight as a key management strength, and to use synthetic intelligence to access and leverage the breadth of insight that comes from being global without sacrificing speed. And, as the examples offered by the senior leaders we interviewed attest, some organizations are well on their way to achieving that potential. (See the diagnostic at the end of this report: How ready is your global leadership ensemble?)

To their credit, though, even the most advanced global organizations recognize that answering the exam questions is not a one-off proposition; they know that the answers themselves demand constant movement and evolution, and they approach the challenge with energy and resiliency.



Appendix

About the Research

Using existing management literature as a guide, and taking our prior experiences with top leaders at global firms into account, we interviewed 50 top leaders at 39 global companies across five continents in developed and emerging markets (see chart). The interviews, which were conducted both in-person and over the phone, allowed us to explore in depth the challenges that these individuals and their leadership groups face. The conversations also gave us insight into how these leadership groups respond to the challenges of heading up a global enterprise on three dimensions: composition (who is

Survey: Growing Ensemble Leaders

To further explore how companies grow ensemble leaders, Accentures Institute for High Performance surveyed 200 worldwide human resources executives at multinational companies about their leadership development practices today, their development plans for the next generation of leaders, and what they are doing with high potentials today to enable effective leadership ensembles in the future.

The results were striking: companies that reported the strongest confidence in their global leadership development practices were far more likely to have formal policies in place for developing collective leadership skills, in addition to policies that develop individual leadership talent. They were also more likely to expose their high potential managers early on to the types of activities that successful top leadership ensembles engage in around agility, foresight, and synthetic intelligence.

represented at the top and how that group may flex and change); cognition (senior managers individual and collective mindsets and patterns of thinking); and behaviors (how the top leaders make decisions and take action).

This report marks a milestone in our understanding of the complexities of leadership at global organizations. Our ongoing research into this area continues under the guidance of a steering committee that includes Accentures Chief Leadership Officer, Accentures global managing director for Talent and Organization, and the former head of Human Resources for a multinational energy company.

18%

5%

5%

5%

13%

23%

3%

10%

3%3%

8%5%

IndiaIsraelChinaSingaporeSouth KoreaMexicoFranceGermanySwitzerlandUnited KingdomCanadaUSA

Geographical distribution of companies interviewed

Grand Total

To a small extent

To a large extent

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

DISCIPLINED AGILITYWe practice assembling the right people to address to address each business issue irrespective of where they

are located geographically or what position they occupy in the organizational hierarchy

We actively adjust our behavior (language, meeting style, decision-making approach) in line with the urgency

and risk associated with a decision

We have agreed-upon operating principles about how decisions should be made

We make a point of speaking with one voice when it comes to communicating management decisions

Managers have the humility to take on diverse roles within a group independent of their rank or seniority

Our strong sense of common culture and objectives makes it possible for managers to be assembled from any

part of the organization and to quickly and effectively work together

FORESIGHT We treat strategy as a continuous activity not as an annual plan or report

We routinely invite people with unconventional ideas to challenge our assumptions about our business and the

environment in which we operate

We actively explore scenarios and simulations not only to mitigate risks but also to experiment with

alternative strategies and tactics

Top management rigorously adopts a global mindset when it comes to strategy and operations and encourages

middle and lower level management to do the same

We take primary responsibility for growing next generation leaders and top management compensation depends

on doing that well

We actively recruit (and reward people) who demonstrate an appetite for learning new things and a willingness

to discard practices that no longer work

SYNTHETIC INTELLIGENCE We consistently subject business decisions to multiple viewpoints and perspectives before arriving at a conclusion

Even in the midst of disagreements, we have the ability to suspend our individual judgments in order to take

into account opposing views

We strongly believe in the hypothesis that diversity yields innovation and new ideas and put that belief into

action wherever we can

We emphasize learning to the point where it takes equal precedence with action

We routinely engage in active thought experiments to more completely explore an issue

We regularly question the unstated assumptions behind our thoughts and opinions



Results

Total of 18 to 29 Your top leadership may be highly successful in mature, non-volatile markets but you may be caught off guard in new markets or as new contenders challenge you in your home market. Assess how leaders can come together with more agility to work in different ways when facing a diverse set of new and existing situations. Consider mapping your current and planned business areas against all the global knowledge your top leadership has at its disposal. Watch your standard way of interacting and practice more tolerance for multiple perspectives even soliciting

them when none are offered. These can all be done with intervention and/or practice. Your major risk is groupthink and missing developments that can catch you unaware.

Total of 30 to 59 Your top leadership is ready in some ways to tackle a complex and volatile global environment, but is missing some opportunities to raise its effectiveness. Consider whether individuals can routinely put aside notions of rank and seniority to engage in different types of groups in different ways. Practice new means of keeping your eyes on the future and considering new perspectives. For example, have the team meet

in new contexts to confront the reality of new markets and think about the future there. Your risk is staying in the mid-range while more agile and informed companies overtake you.

Total of 60 to 90 Your top leadership has most of the pieces in place to act as an effective ensemble at the top. Be aware of habits that may hinder agility. Continue to work on staying flexible and finding new ways of ensuring the future is in the room. You might focus more on understanding new competitors as their approaches and business models are most likely to produce something unexpected.

Global leadership ensemble diagnostic: How ready is your global leadership ensemble? This diagnostic will help you assess whether your top leadership the 2% most senior managers at your firm - exhibits the three attributes that are essential to an effective ensemble at the top.



Max. Leadership Jazz: The Essential Elements of a Great Leader. New York: Doubleday, 2008; Lieber, Ron. Leadership Ensemble. FastCompany, 30 Apr. 2000; Seifter, Harvey, and Peter Economy. Leadership Ensemble: Lessons in Collaborative Management from the Worlds Only Conductorless Orchestra. New York: Times, 2001; Zander, Rosamund Stone, and Benjamin Zander. The Art of Possibility. New York: Penguin, 2002; Kao, John J. Jamming: The Art and Discipline of Business Creativity. New York: HarperBusiness, 1997; Nierenberg, Roger. Maestro: A Surprising Story about Leading by Listening. New York: Portfolio, 2009 and Hackman, J. Richard. Leading Teams: Setting the Stage for Great Performances. Boston: Harvard Business School, 2002.

4 Bob Frisch argues emphatically that team is a misno mer when it comes to describing the behavior of top executive groups, especially the CEO and his/her direct reports often labeled something like the Executive Leadership Team in many companies. Frisch reports that few ELTs manifest the qualities of mutual accountability and shared work products that characterize other business teams like those found in new product development or marketing; moreover, he argues that teams (broadly defined) are notoriously slow and ineffective at arriving at decisions. Given that making decisions (tough choices in Frischs parlance) is one of the principal functions of the executive, insisting on teams at the top is, for Frisch, a recipe for disaster.

5 Hayes, Robert H., Steven C. Wheelwright, and Kim B. Clark. Dynamic Manufacturing: Creating the Learning Organization. New York: Free, 1988.

6 Directly referring to Doris Kearn Goodwins book of the same title chronicling US President Abraham Lincolns war-time cabinet. Goodwin, Doris Kearns. Team of Rivals: The Political Genius of Abraham Lincoln. New York: Simon & Schuster, 2005.

1 Recent studies have found a link between top management teams and such organization-level issues as strategic innovation and performance (Bantel & Jackson, 1989; Murray, 1989; Norburn & Birley, 1988; OReilly & Flatt, 1989). The notion that the characteristics of senior management, or the upper echelon of an organization, can influence the decisions made and practices adopted by an organization dates back to early upper echelon theory. Hambrick and Ma son (1984) argued that managers characteristics (e.g., demographic) influence the decisions that they make and therefore the actions adopted by the organiza-tions that they lead. They suggest that this occurs be cause demographic characteristics are associated with the many cognitive bases, values, and perceptions that influence the decision-making of managers. Several studies have supported the relationship between upper echelon characteristics and organizational strate gies and performance. See Hambrick, D.C., and P.A. Mason. Upper echelons: The organization as a reflection of its top managers. Academy of Management Review [AMR], 9, 1984, p. 193 206; Bantel, K.A. and S.E. Jackson. Top management and innovations in banking: Does the composition of the top team make a dif ference. Strategic Management Journal, 10(2), 1989; Murray, A.I. Top management group heterogeneity and firm performance. Strategic Management Journal, vol. 10, 1989, p. 125-141; Norburn, D. and S. Birley. The top management team and corporate perfor mance. Strategic Management Journal, Vol. 9, 1988, p. 225237; and OReilly, C. A., III., and S. Flatt.Executive team demography, organizational innovation, and firm performance. Working paper. U. C. Berkeley, 1989.

2 We wish to avoid sterile debate about whether top executives can or should be called a team we believe they can and should behave like teams in very specific circumstances but we feel the team vs. group debate overlooks what CEOs told us about the importance of agility, foresight and synthetic intelligence. See: Katzenbach, Jon R. Teams at the Top: Unleashing the Potential of Both Teams and Individual Leaders. Boston: Harvard Business School, 1998; Wageman, R. and Hackman, J. R. What Makes Teams of Leaders Leadable?. Boston: Harvard Business School Press, 2010; Finkelstein, Sydney, Donald Hambrick, and Albert A. Cannella. Strategic Leadership Theory and Research on Executives, Top Management Teams, and Boards. Oxford Univ., 2009; and Frisch, Bob. Whos in the Room?: How Great Leaders Structure and Manage the Teams around Them. San Francisco: Jossey-Bass, 2012.

3 Peter Drucker, one of the first writers to use the orchestra as a metaphor for organizational management, quite rightly emphasized the similarities between CEOs and conductors, particularly insofar as conductors are responsible for guiding the behavior of the different groups of instruments that make up the orchestra, i.e., to orchestrate. However, as Drucker himself acknowledged and as a stream of observers has since demonstrated empirically chamber orchestras, jazz combos, and other groups are also apt metaphors for management teams operating under different circumstances. From our perspective, the important distinction we hope to make is between a single form with fixed members and roles (be it an orchestra or a combo) and an ensemble capable of taking different forms by drawing on a large but still finite pool of members. See Drucker, Peter F. The Coming of the New Organization. Harvard Business Review on Knowledge Management. Boston: Harvard Business School Press, 1 September 1998, pp. 1-19; De, Pree

Notes



7 In very general terms, top management has three functions: to frame, to deliberate and to decide. While attention usually goes to decision-making in large measure because decision outcomes are easiest to describe and measure the other two are important because they directly influence the breadth of topics teed up for action (Frame) and the diversity of options considered (Deliberate) prior to decision. The reality of organizational life is, of course, that a choice may lead to reframing and another round of deliberation, to an indefinite delay to a more propitious time, or to an affirmative action (that may or may not be measurable in its consequences). See Tichy, Noel M. and Warren G. Bennis. Making Judgment Calls. Harvard Business Review, October 2007.

8 See Brown, Shona L., and Kathleen M. Eisenhardt, Competing on the Edge: Strategy as Structured Chaos. Boston, MA: Harvard Business School, 1998; , and Arun N. Maira and Robert J. Thomas. Organizing on the Edge: Meeting the Demand for Organization and Efficiency., Prism 3: 5-19, 1998.

9 Thomas, Robert J., Jane C. Linder and Chi T. Pham. UPS: Mastering the Tension between Continuity and Change. Accenture Institute for High Performance Business, 2006.

10 In a 2008 article entitled The FBIs Strategic Management Efforts: Helping a Tactically-Focused Workforce Think Big author and former HR Director of the FBI Tony Bladen makes a few points that nicely illustrate what we talk about in Foresight. For the Bureau to shift from being a largely reactive law enforcement agency to a proactive and preventative national security agency, it must excel at strategic thinking and action. (p.3) As an important first step, in mid-2006, in an effort to help the FBI manage more strategi-cally across the enterprise, Director Robert S. Mueller, III created a new senior executive position, Associate Deputy Director (ADD), to focus on strategic manage ment. The position is now the third highest ranking in the organization and is responsible

for personnel, budget, infrastructure, and strategic planning and execution. (p.3) See Bladen, Anthony M. The FBIs Strategic Man agement Efforts: Helping a Tactically-Focused Workforce Think Big. Federal Manager, 2008.

11 Ready, Douglas A., and Jay A. Conger. Make Your Company a Talent Factory. Harvard Business Review, June 2007; Stecker, Emily, and Ready, Doug. Purpose-Driven Enterprise Initiative. ICEDR, 10 May 2011

12 Sanghera, Sathnam. You Should Be Bonkers in a Bonkers Time!. Financial Times London Edition, 23 Sept. 2003, p16.

13 Bersin, Josh. The End of a Job as We Knew It. Forbes,, 31 January 2012.

14 OConnell, Patricia. How Companies Develop Great Leaders. Business Week, 16 February 2010.

15 Captain to Coach: A Practicum for Senior Tata Leaders, online: http://www.tmtctata.com/progs/news-and-media/CAPTAIN%20TO%20COACH%20%20-%20A%20PRACTICUM%20FOR%20SENIOR%20TATA%20LEADER.pdf, Accessed 25 June 2012.

16 See Cabrera, Angel, and Gregory Unruh. Being Global: How to Think, Act, and Lead in a Transformed World. Boston, MA: Harvard Business Review, 2012; House, Robert J., Paul J. Hanges, Mansour Javidan, Peter W. Dorfman, and Vipin Gupta. Culture, Leadership, and Organizations: The GLOBE Study of 62 Societies. United Kingdom: SAGE Publications, 2004.

17 See Perry, William G., Forms of Intellectual and Ethi cal Development in the College Years: A Scheme. New York: Holt, Rinehart and Winston, 1970. Perrys Integrative complexity allows groups to deal with the complexity inherent in many types of prob lems and issues. Perrys general view is that people tend to make sense, that is, to interpret experiences meaningfully. The meaning of experience consists of some sort of orderliness found in it, and the nature of this orderliness in a given persons experience can of ten be deduced by others from the forms of his or her behavior, including what he himself has to say on the matter

(p.42). The structure of this orderliness is the result of a complex set or prior experiences that the person begins to externalize. The degree to which this orderliness is expressed in a complex yet integrated manner describes its level of integrative complexity.

18 A recent experimental study by Tom Malone and his colleagues of 700 individuals tasked with solving problems as small teams confirms what many leaders may have long suspected: that a teams performance has little to do with the average intelligence of its members, and much more to do with how they solve problems together collectively. See Williams, Woolley Anita; Christopher F. Chabris; Alexander Pentland; Nada Hashmi, and Thomas W. Malone Performance of Human Groups: Evidence for a Collective Intelligence. Science Magazine, 29 October 2010.

19 Rosenbaum, James. Tournament Mobility: Career Patterns in a Corporation Administrative Science Quarterly, Vol. 24, No. 2, June 1979, pp. 220-241.

20 Rugman, Allan M. and Allan Verbeke. Subsidiary-Specific Advantages in Multinational Enterprises. Strategic Management Journal, 22(3), March 2001, pp. 237-250.

21 Williams et al (2010).22 See Argyris and Schns theory on

congruence and learning which assert that people hold maps in their heads about how to plan, implement and review their actions. Argyris, Chris, and Donald A. Schn. Theory in Practice: Increasing Professional Effectiveness. San Francisco: Jossey-Bass, 1974.

23 Hal Gregersen, Jeff Dyer and Clayton Christensen, Why ask Why? ChiefExecutive.Net, February 3, 2012

24 Argyris and Schn (1974).



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Accenture is a global management consulting, technology services and outsourcing company, with 257,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the worlds most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$27.9 billion for the fiscal year ended August 31, 2012. Its home page is www.accenture.com.

About the Accenture Institute for High Performance

The Accenture Institute for High Performance creates strategic insights into key management issues and macroeconomic and political trends through original research and analysis. Its management researchers combine world-class reputations with Accentures extensive consulting, technology and outsourcing experience to conduct innovative research and analysis into how organizations become and remain high-performance businesses.

About the Authors

Robert J. Thomas ([email protected]), the executive director of the Accenture Institute for High Performance, is the author of Crucibles of Leadership: How to Learn from Experience to Be a Great Leader (Harvard Business Press, 2008) and The Organizational Networks Fieldbook (Jossey-Bass, 2010).

Joshua Bellin ([email protected]) is a research fellow with the Accenture Institute for High Performance.

Claudy Jules ([email protected]) is a senior principal in Accentures Management Consulting practice.

Nandani Lynton is a professor at China Europe International Business School (CEIBS) in Shanghai.

Acknowledgements

The research team would like to acknowledge the following individuals for their significant contributions through their guidance and feedback, as well as their generous assistance with the logistics of our study: Pierre Nanterme, Adrian Lajtha, David Smith, Don Packham, Bob Frisch, Olly Benzecry, Deepak Malkani, Sandeep Biswas, Jayesh Pandey, John Lichtenstein, Doug Ready, Andrew Clarke, Geoff Deines, Yaniv Jember, Liliana Diaconu and Chi Pham.

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