Global leadership development,strategic alignment and CEOs

commitmentJordi Canals

IESE Business School, University of Navarra, Barcelona, Spain

Abstract

Purpose – Global corporate strategy has moved faster than global leadership development in manycompanies. This outcome has created some leadership problems: global companies may not haveenough leaders in their growth markets or leaders with the required global competencies in theirheadquarters. The purpose of this paper is to offer some concepts that may help companies tacklethose problems.Design/methodology/approach – This paper has a conceptual basis. It draws on previoustheoretical knowledge on global leadership development and the experience of some leadershipprograms in global companies.Findings – The first is that global leadership competencies should be based on the functions thatglobal leaders need to perform and their specific context, not on some theoretical notions isolated fromthe business context. The second is the need for alignment of global leadership development with thefirm’s purpose and strategy. The third is that CEOs’ commitment is a key factor in making globalleadership initiatives successful.Research limitations/implications – This is a conceptual paper based on business experience.It needs to be complemented with additional empirical work.Practical implications – Global leadership development should be based on real global businessfunctions. Global leadership development should be aligned with the firm’s purpose and strategy andits success depends on CEOs’ commitment.Originality/value – The study of global capabilities needs to observe what happens in companiesthat have global leadership programs. Global leadership development takes place in specificorganizations. This paper gets theory closer to the practice of global leadership development.

Keywords Leadership development, Globalization, Chief executives

Paper type Conceptual paper

1. IntroductionThe thirst for good leadership in today’s global world is very deep. Poor leadership hasbecome the explanation for organizations that do not work well or have ended infailure. The diminishing role of power in contemporary society (Naim, 2013) makes therole of leaders even less effective, since without the traditional levers of power thatleaders used to have, they need to find new ways to engage people and convince themabout the things that need to be done.

This is particularly true in the business world. The combination of new political,social and economic forces make business leadership more complex (Thomas et al.,2013). The acceleration of global economic integration, shifting economic and politicalpower from the West to the East, changing social attitudes and behavior of newgenerations, or the spread of digital technologies that disrupt industries and maketraditional companies obsolete – among other forces – are creating a global business

The current issue and full text archive of this journal is available atwww.emeraldinsight.com/0262-1711.htm

Received 11 January 2014Revised 21 January 2014

Accepted 3 February 2014

Journal of Management DevelopmentVol. 33 No. 5, 2014

pp. 487-502r Emerald Group Publishing Limited

0262-1711DOI 10.1108/JMD-02-2014-0014The author thanks Howard Thomas for his very useful comments on this paper.

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context very different from the world that shaped businesses and companies over thelast century. In this context, good leadership is indispensable.

In the business world, employees, shareholders and other stakeholders expectthat business leaders offer meaning and purpose, provide long-term orientationand make things happen, so that the organization can survive and be successfulin the long term. It is easy to see that the role of business leaders in the new contextis different from the role that they had in the past. Some functions have notchanged, but leaders face today an increasing complexity – often related with cross-cultural dimensions – that adds to the uncertainty that surrounds organizationaldecision making.

Global leaders face today another complex challenge, related with the role ofcompanies in society. After the Second World War, western companies enjoyedlegitimacy in society because they were mostly seen as institutions that pursuedeconomic profit, but were committed to the common good of society by investing,creating jobs and helping society achieve higher levels of material prosperity, whilepromoting opportunities for most citizens.

Financial deregulation in the late 1980s and the emergence of investment banksoperating in unbounded financial markets brought about a new type of capitalism thatbroke the connection between profits and the common good of society. For listed firms,shareholder value became the only indicator of performance, most analysts in financialinstitutions became only interested in short-term financial indicators, boards ofdirectors aligned senior executives’ behavior through financial incentives linked upwith financial performance, and all of them started to focus on the short term,and forgot how the firm could be successful in the long term. It is already easy tounderstand that this type of behavior in financial institutions was key in the origins ofthe recent financial crisis. Other effects include employees’ diminishing commitmenttoward their companies and a society’s growing mistrust toward companies andbusiness leaders.

These phenomena are related with global leadership. Good leadership is necessaryfor companies to regain the reputation that they have lost in society over the pastyears. Firms need courageous, sensitive and intelligent leaders who understand thatthe business world cannot survive by leaving aside the needs of human beingsand societies. Moreover, good leaders understand that companies need to show adeep respect for each person and society. In particular, a better understandingof the cultural context where global companies operate and learning from it willhelp leaders make wiser decisions. It is interesting to observe that the development ofeffective global leaders is very much related with the need that those leadershave to understand countries and societies with respect, humility and prudencenecessary to make wise decisions for their companies. This not only requiresthat business leaders need to go through a change; it also involves a new set ofcapabilities, skills and attitudes, that need to be aligned with a firm’s purpose, cultureand strategy.

The structure of this paper is as follows. In Section 2, I discuss what makes globalleadership unique. In Section 3, an integrated framework to understand the dimensionsof global leaders’ functions and competencies is discussed; some implications forexecutive education are also highlighted. In Section 4, I will argue why globalleadership development programs need to be aligned with the firm’ s mission andstrategy. In Section 5, I discuss the need for CEOs’ commitment supporting globalleadership development programs.

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2. The uniqueness of global leadershipGlobal leaders are senior managers who have responsibilities regarding businessdecisions – not only technical decisions – in an international context. Originally, globalleadership concepts and frameworks borrowed its notions from traditional definitionsof leadership (Yeung and Ready, 1995; Osland et al., 2009). Adler (2001, p. 77) points outthat “Global leaders, unlike domestic leaders, address people worldwide. Globalleadership theory, unlike its domestic counterpart, is concerned with the interactionof people and ideas across cultures, rather than with the efficacy of particularleadership styles within the leader’s home country or with the comparison of leadershipapproaches among leaders from various countries.”

The defining functions and required qualities of a global leader come from theirparticipation in business decisions and the fact that those decisions take place in aninternational context. Global leaders, as leaders in domestic firms, make thingshappen, contributing to move an organization from stage A to stage B, and mobilizingfor this purpose people and resources. Leadership requires the ability to make the rightdecisions at the right time and place. Nevertheless, global leaders need to do so in aninternational context. McCall and Hollenbeck (2002) define global leaders as those whodo global work; and global work has two dimensions: business complexity and culturalcomplexity. They assume that what global leaders do is the same as local ones, which,as we have discussed before, is not always the case; they also argue that whatseparates them from local leaders is not what they do, but how they do things.Although global leaders carry out functions and activities within an organization thatshare many qualities with business leaders in domestic firms, their identity is different.This leads some authors to claim that cross-cultural factors are the differential factorin global leadership.

Cross-cultural factors are one of the main attributes of global business, as theyshape people’s attitudes, team work and organizational behavior (Lee, 2012; S�anchez-Runde et al., 2011). But their importance does not exclude the relevance of other factorsin international business. Together with global economic, social and behavioralfactors, cross-cultural factors shape a different type of context for companies operatinginternationally – away from the simplicity of domestic contexts. They create anenvironment dominated by interdependency, ambiguity, complexity and uncertainty.This context has an impact both on the definition and expectations of what leaders doand what their competencies should be. Nevertheless, cross-cultural factors are not theonly difference between local and global leadership. It is the way that additionalcomplexity, uncertainty, diversity and heterogeneity enter into the decision-makingprocess that makes global leadership unique.

The complexity, diversity and uncertainty that working across borders bringsto the leaders’ job make it different. Complexity and uncertainty arise from a variety offactors: diversity of cultures, societies and individuals; heterogeneity of companies,clients and suppliers; different governments and public policies; diversity of colleagues,employees and bosses; bigger economic and political uncertainty; a close interdependenceamong businesses and countries; and feedback effects and learning processes generatedfrom operating in diverse countries.

3. The identity of global leadership: from functions to competenciesGlobal leaders’ functionsIn the global leadership development literature, there are some assumptions widelyspread that need some clarification, because they are important in defining both global

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leaders’ functions and competencies. The first assumption is that cross-culturaldifferences are the dominant explanatory factor in international business and globalleadership. Those cultural factors are important to explain the nature of globalleadership, not in the exclusive way that some of the authors suggest, but in the processby which they generate complexity, ambiguity and uncertainty in decision making.

A second assumption around global leadership development is what competenciesglobal leaders should have, and which ones are different from leaders operating in amore local context. This approach has many advantages, but may be misleading.The required competencies should start with the definition of functions that helpidentify the nature of global leaders’ work. In this regard, I will describe first thefunctions that define what a leader does and make the assumption that both globaland domestic leaders do the same essential things; what differs is the context,complexity and uncertainty surrounding decision making.

The third assumption stems from the debate on whether leadership functionschange across countries. Some authors assume – more or less explicitly – the idea thatthe main tasks that leaders carry out can be generalized across cultures (Kanter, 2010).They follow some authors who consider that leadership and the main leadership traitsare valid across cultures (Bass, 1995). But other authors think that leadershipcompetencies are not universal, because they consist of traits that are culturallyembedded, as many GLOBE studies have shown ( Javidan et al., 2006; Osland, 2008provide useful overviews on these issues). Moreover, in global business, what reallymatters is the work of local leaders getting things done (S�anchez-Runde et al., 2011).

The experience of several international companies with impactful global leadershipdevelopment programs – like BBVA, BMW, Danone, L’ Oreal, Siemens or Telefonica,just to mention a few I have been involved with recently – suggests that many ofthe broad tasks of leaders are valid across cultures. It is true that cultural variableshave a very important role in defining leadership and what leaders do, and that certainpersonal leadership styles are more accepted in some countries than others.The capabilities needed also have a different importance depending on the country.Regardless of the geographical scope of the firm, we observe some basic functions thatdefine the nature of global leadership in terms of the tasks and responsibilitiesthat they should deploy.

The framework discussed here was first presented in Canals (2010, 2012). It isbased on some classic leadership models (Andrews, 1971; Drucker, 1974; Conger andBenjamin, 1999; Kanter, 2010; Nohria and Khurana, 2010b). It also includes other keyfunctions – like integration across geographies – or traditional functions with a widerscope that global leaders need to perform in a global context – like execution andorganizational design in global organizations – see the list below:

Global leaders’ function:

. mission and meaning;

. strategy;

. execution;

. integration; and

. leadership development.

The first function of a global leader is to offer meaning on what the company stands forand its purpose is. In more traditional terms, this is the definition of the firm’s mission.

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This is a universal task for leaders, one that becomes more relevant whenorganizations are spread round the world, and the different firm’s units need to sticktogether. The firm’s mission provides meaning (Podolny et al., 2010; Nohria andKhurana, 2010b) by describing the reason why a company exists and the typeof impact the organization wants to have.

The second function that leaders perform is strategic thinking. Global leaders needto develop a point of view about the future of the firm, one that can be clear, rationaland that balances high expectations with the capabilities that the firm has. Strategymeans choices and global leaders face more choices than domestic leaders, simplybecause the options they have in front of them are more numerous. Even if globalcompanies need great flexibility to adapt, they also require a point of view about thefuture on how to compete and to create economic and social value in the long term.

The third key function of a leader is execution. Leaders are action-oriented andmake things happen according to the point of view that they have about the future andby offering this in a consistent way with the mission of the company. By meeting goals,expectations and standards that stakeholders have about the firm – including financialand non-financial performance – leaders make sure that companies attain theirgoals and fulfill their mission. Execution involves organizational design – who doeswhat and in which geography, formal and informal incentive systems, andmanagement control systems.

Integration is the fourth major function that leaders do. In designing globalorganizations, integration of people from different backgrounds – mainly, culturalbackgrounds – and across business, functions and geographies is indispensable.Leaders need to help global firms come together and work together as a team.Cross-disciplinary teams that understand differences and are able to work with peoplefrom different countries are more important in global firms than in domestic ones.This is and additional reason why creating meaning and sharing a purpose arerelevant factors, but even more relevant in global firms, for which culture offers a trulycohesive factor for people working in different countries.

The fifth function is to develop people across the organization and, in particular,future leaders. There is a widespread experience in global companies on how muchmore complex it is to grow future global leaders that can eventually work in differentgeographies and assume global functions. This is key to make sure that the firm’s topmanagement includes people who are not only cultural-savvy, but also who haveworked and know first-hand the uniqueness of making a company grow in a specificdomestic market, away from headquarters.

Global leaders’ competenciesFrom the experience of the companies mentioned above and other organizations,I observe that leaders’ competencies follow functions. Leaders need to developcompetencies that are defined by the functions that they are expected to perform.Leadership development programs should not forget that the main goal of learning anddevelopment is to improve the leaders’ professional performance. Unfortunately, this isa view that is not always assumed by some authors, who prefer to focus more on anotion of global leadership competencies more than the functions that help define thenature of their job.

There are two broad types of contributions to define global leaders’ competencies.The first one highlights the notion of the global mindset (Osland et al., 2009), which isconsidered as a cognitive structure that articulates a special understanding of

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complexity and an openness to the others and the world (Levy et al., 2007). Otherauthors describe a global mindset as the expert mind that a global leader needs todevelop to be effective (Osland and Bird, 2006). The global mindset seems to be asimple concept to define; nevertheless the implementation and the development ofa global mindset in leadership development programs is complex.

The second set of contributions highlights some key global leadershipcompetencies. Authors in this group consider the competencies needed to be aneffective global leader (Adler, 2001; McCall and Hollenbeck, 2002; Gundling et al.,2011),instead of describing a global mindset. Jokinen (2005) presents an integratedframework of global leadership, made up of three layers of competencies. The firstis a fundamental core, including self-awareness, personal transformation andinquisitiveness. The second is a set of capabilities that help leaders approachproblems, and includes qualities such as optimism, self-control, empathy, motivationand the acceptance of complexity. The third is behavioral and includes socialskills, networking skills and knowledge.

Javidan et al. (2006) explain that global leaders need intellectual capital that includesglobal business savvy and cognitive complexity; psychological capital, thatincludes diversity, self-knowledge and spirit of adventure; and social capital,that includes empathy, interpersonal skills and diversity.

Osland (2008) proposes the pyramid model of global competencies, which includesfive different levels. Level 1, the foundation level, includes global knowledge ina variety of forms: know what, know who, know how, know when and know why.Level 2 includes some threshold traits: integrity, humility, inquisitiveness and resilience.Level 3 is composed of attitudes that help global leaders see and interpret the world, andincludes a global mindset, cognitive complexity and cosmopolitanism. Level 4 includesinterpersonal skills necessary to work across cultures: communication to develop trustand work in multi-cultural teams. Finally, Level 5 includes systems skills, or meta-skillsnecessary for global work, such as building communities, ethical behavior, creatinga vision or leading change.

Both approaches provide important concepts that help understand competenciesthat global leaders require. They also offer useful information on what globalcompanies say about the capabilities they want to develop. Nevertheless, thereare some conceptual problems with these studies. The first is that the structure ofleadership development programs around those concepts is not easy: they look likealmost perfect descriptions of good qualities that global leaders should have, but do notalways provide – with some good exceptions – the balance among those factors, andwhich should be emphasized and in which contexts. The second problem is that – inmost of those papers – the set of competencies are not connected with the basicfunctions that global leaders need to perform in a direct way. The main effect of thissituation is that those competencies look like qualities that are nice to have and thatmay help develop more rounded leaders, but the right combination, balance andintensity of each one of them are neither there, nor connected with the basic natureof global leaders’ work.

The framework presented here tries to overcome those problems. It is organizedaround what a global leader is and what she does in the real world (Canals, 2012):a person who knows, who does things and who becomes a more balanced personthrough leadership (Perez-L�opez, 1993; Datar et al., 2010; Nohria and Khurana, 2010b).Based on those ideas, I present a model of global leaders’ competencies with four majorelements: knowledge, capabilities, inter-personal skills and attitudes. I distinguish

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basic capabilities – like decision making, or dealing with complexity – frominter-personal (relational) skills that focus more on how one person deals with othersin different contexts.

These competencies are connected with what a global leader does and how it makesdecisions: knowing, doing, working with others and being. Moreover, those competenciesare related with the five basic functions – presented above – that global leaders needto perform: offer meaning, strategic thinking, execution, integration and leadershipdevelopment.

An attribute of this framework is that the four leadership competenciesare indispensable in developing global leaders (see Figure 1). In other words,knowledge is important not only in strategy design and development: it is also veryrelevant in offering meaning – meaning also includes a rational dimension: whya person does what she does –, execution, integration or leadership development.Capabilities that help leaders get things done are also indispensable for thefive leaders’ functions. Interpersonal skills are necessary not only for execution ordeveloping other leaders: they are also key in offering meaning, designing strategyin a collaborative way or integrating people across different geographies.Finally, attitudes are the linchpin of a leader when performing any of those basicfunctions.

Global leaders’ knowledge includes the information, notions, models and ideasthat global leaders need to have or acquire: the basic business functions and thepolitical, economic, social and cultural models to understand the global world andbecome familiar – even if it takes time and effort – with specific countries marked bysome political, social and economic systems different from others.

KNOWLEDGE

INTERPERSONALSKILLS CAPABILITIES

ATTITUDESSDFSD

MISSION

EXECUTION

LEADERS’DEVELOPM.INTEGRATION

STRATEGY

Figure 1.Global leaders’ functions

and competencies

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Leaders’ capabilities express the capacity to do things and get things done withpeople. The set of capabilities include problem analysis and synthesis, problem-solving, decision making under uncertainty, action orientation, lead people, deal withcomplexity and ambiguity, and organizational design.

Global leaders’ interpersonal skills help leaders manage, engage and motivatepeople, and include, among others, fairness, respect, communication, team work,personal empathy, openness, cultural sensitivity and appreciation for diversity.

Attitudes stem directly from the classical notion of virtue (Aristotle, 1980 edition).They are solid dispositions of the character of a person that shape her conduct andbehavior, and defines the foundations of her relations with others. Global leaders’attitudes includes those that are of the highest value in our relation with others: integrity,humility, self-awareness, self-control, strength and temperance. These basic attitudesstem from the classical virtues – like prudence, fairness, temperance – or personal habitsthat help us do good, and aim at goodness and excellence. Attitudes shape the beingdimension of the leader and are the linchpin of the other competencies. Without attitudes,strongly founded on personal virtues, the potential impact of the other competencies willbe limited. Attitudes have an effect in the way we work with others (relational skills),we do things (capabilities) and the way we get to know things (knowledge).

Cross-cultural factors involved in global business play heavily in each one of thosecompetencies, by introducing new challenges and, more important, by making thedevelopment of some of them more arduous and complex. As in the case of global leaders’tasks and functions, cross-cultural elements are not the only dimension that make globalbusiness different, but they certainly introduce additional complexity and uncertainty.

In my experience in working in leadership development projects with companiesoperating in different emerging regions, this framework of leaders’ competencies canbe articulated in a diversity of geographical and cultural contexts. In all those regions,knowledge, capabilities and attitudes are of high importance. It is true that somecultures may emphasize some attitudes more than others, but in all of them there isa strong demand for some attitudes. It may be interesting to note that what sometimesis referred as a cultural difference – for instance, whether leadership is more top-downin some western countries or more collaborative in some Asian countries – is more amatter of style and accumulated practical behavior.

This framework includes a strong internal dynamism, by which each set ofcompetencies influences the rest of them. The more and better we know, the bigger thepositive impact on attitudes. By doing things better or relating with others in a morepositive way, we can improve the quality of our personal attitudes. The reason is verysimple. Behind attitudes there are some key human virtues (prudence or justice) thatare dynamic by nature. The more one trains them, the better and stronger they grow.And, as they grow, other competencies also flourish.

This framework’s consistency is provided by its development around the leader asan individual person, and what she does. The main differences with the modelsdescribed in the previous section are two. The first is that it combines the intellectualand cognitive side, with the cultural, social, psychological and moral capabilities thatglobal leaders need. The second is that they relate very easily with cross-culturalleadership work and with the functions that leaders need to execute.

Global leaders’ competencies and the role of business schoolsThis competencies’ framework and its connection with the global leaders’ functionshas some implications for both companies and business schools. The focus of this

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paper is on how firms’ top management should think about global leadershipdevelopment. Nevertheless, I would like to briefly highlight some implications forbusiness schools and their global leadership development programs. The firstimplication is that their curricula – both in the MBA and Executive Programs – shouldreflect a coherent model of leadership development. In other words: it is not enoughto offer business courses or leadership courses. Business schools should offer in theirprograms a more comprehensive view on how they think about leadership developmentand how they implement it in executive programs. This is an important reflection bothfor universities that highlight the importance of knowledge at the expense ofother competencies, and for universities that highlight the importance of soft andinter-personal skills at the expense of other competencies. Global leaders need to developthe four types of competencies described above in a balanced way.

Global leadership programs should also be integrative. Integration means theinclusion of both global business issues, organizational challenges, strategy executionand people’s development. The separation of conceptual issues – like geo-politics orglobal strategy – from organizational design or execution in a global company is aserious danger for top managers, like the divide between strategy and implementation.This integration requires a special faculty with the right competencies to lead thattype of courses; it also requires excellent teaching materials that present participantswith these challenges as they are in the real world.

An implication related with this integrative approach is the need to infuse the wholecurriculum with cross-border issues. It is not enough to have some modules or courseson global business, but to consider those issues in every single business functionor module.

Global leadership development should also consider some innovative methodologies,but fully integrated in the program. A case in point is the growth in programs withglobal treks. This methodology based on field work is relevant as far as it is integrated inthe purpose of the program –with specific work before, during and after the trek.Its design should include work on four basic competencies: knowledge, capabilities,interpersonal skills and attitudes. Otherwise, those treks and other field projects may beinteresting, but below its real potential.

4. Global leadership development: the need for alignmentLeadership development in a global context is a challenging task. It is more difficult toarticulate the concept in terms of specific goals and policies, since it depends on theculture and values of the firm, involves different people with a diverse perspective onwhat leadership development is and what should achieve. Moreover, it involves a hugeinvestment of resources, needs alignment with the firm’s mission and global strategy,and, for these reasons, requires sustained support from the top management.

Alignment with the firm’ s mission and strategy requires the CEOs’ commitment tothis process. Nevertheless, this is more than getting support from the top. We canidentify at least four major areas that are key in global leadership programs, and withwhich leadership development programs’ alignment is indispensable. The first area isthe mission and purpose of the firm and how this impacts leadership development.One of the main functions of leaders is to offer meaning and context to people in theorganization; for this reason, leadership development should be connected withthe firm’s mission. An essential factor in leadership development success is making theorganization better equipped and its leaders better prepared to boost and strengthenthe mission of the firm. This goal requires not only top management support for

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leadership development programs, but alignment of those programs in terms of goalsand content with the firm’s mission.

Leadership development programs should either have a clear purpose in terms oftheir design and goals or may end up in an expensive and sometimes useless initiativethat consumes people’s time and resources, and may generate a cynical view of thediverging pathways between the firms’ mission and the real life in the organization.Moreover, leadership programs should also help participants understand better theimplications of the firm’s mission on the different corporate policies and decisionsregarding customers, people, shareholders and other stakeholders, and the corporateculture and values that should be present in making those decisions.

In this context, an intrinsic and healthy element of the firm’s mission is itscontribution to society. This includes the normal business activities that a companyperforms, like offering goods and services to its customers, investing, creating jobs andbeing a responsible citizen. Today, innovative companies like Danone, Henkel, IBM,GE, Nestle, Siemens or Unilever, just to name a few of them, think about ways ofinvolving the company in the future of society and contribute to solve some of its long-term problems. At the same time, they try to make sure that these opportunitiesbecome part of a sustainable business model. In the contemporary society of thetwenty-first century, companies are not only considered as providers of goods andservices; society expects from them other ways of contributing to it, while preservingthe nature of enterprise. In other words, companies need to rethink their role in societyand how they contribute to its common good. As we described before, the lack ofconnection between companies and society’s needs in the western world has broughtabout a growing skepticism about the firm’s purpose and a fall in its reputation. This isone of the main challenges that CEOs are facing today as they try to make theirorganizations successful in the long term. The reasons for this decline are different(Canals, 2010, 2011), but the reputational decline is clearly evident and top managersshould do something about it or their companies will suffer from consumers’ rejection,brand erosion and excessive government intervention.

Frameworks like the stakeholder model (Freeman, 1984), conscious capitalism(Mackey and Sisodia, 2012) or shared value (Porter and Cramer, 2011) are usefulreferences on the importance of this issue and the need to include purpose in a widerfirm’ s strategic orientation. And this is even more important for global leadersoperating in emerging countries where the needs and aspirations of their citizens arehigher than in western societies, simply because they need to catch up in terms ofstandards of living. Irrespective of the way companies tackle this challenge, topmanagers should include these reflections as an element of the mission of the company.The new generation of global leaders needs to be more aware of these growingrequirements, be offered a frame to integrate them within the activities of the firm anddevelop the competencies to tackle those challenges and implement the potentialsolutions in a variety of cultural contexts. For this reason, global leadership programsshould be based on the firm’s mission, incorporate its essential elements and provideexecutives the opportunity to develop the competencies necessary to help develop themission in a global context. As it happens with other strategic initiatives, thealignment with and the support from the top management is an indispensable key forthe success of those programs.

The second area is the relevance of corporate culture and values in a global firm,because they define specific ways of doing things and achieving its goals, but alsobecause these values provide a powerful integration tool for international companies

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with people and assets spread throughout the world. This very nature of global firmsrequires top management’s involvement in leadership development programs.

Corporate culture is a powerful glue that helps define the identity of a company,shapes the way it pursues its mission and strategic goals, and helps keep theorganization together, in particular, large organizations.

In global firms, the challenge of operating as one firm, with the same corporatepolicies, and with one culture may look like a contradiction. Is it possible to expectfrom a firm that needs to adapt and adjust to a variety of cultures, each onewith different ways of connecting with customers and employees, and relating withdifferent governments and societies, to operate with one culture? This is certainlya difficult requirement. Nevertheless, companies should think about what makesthem different. CEOs answer this question with a variety of answers: its products, itstechnology, its customer service, or its people, among others. One way or another, eachone of those factors involves a certain way of doing things. They involve some valuesthat, when they are well established, are widely recognized by employees as somethingthat belongs to the organization.

Further, a global firm has some values and principles, with which it operates acrossgeographies. The stronger they are defined, the deeper the impact that they havethroughout the organization. It is true that when those principles and values are not incoherence either with the firm’ s mission or with the external context, their usefulnesswill be smaller, or they may even become obstacles when there is a need for change.Nevertheless, a global company also has an important advantage that stems from itsgeographic scope. It is the fact that the whole company may benefit from good anduseful values and principles that come from the different parts of the company. In thesame way as a global company can benefit from reverse innovation (Govindarajan,2012), a global firm can also benefit from reverse values, those that can make thecompany stronger from a strategic and operational perspective, and that have emergedin different parts of the firm’s network.

Good leadership development programs should provide learning contexts whereleaders learn not only about well-defined norms and values, but also discover new onesthat have been shaped, more or less spontaneously in different parts of the network,but that have all the qualities to become universal within the firm, because they helpthe organization become stronger.

The third area is the firm’s global strategy. CEOs and the top management teamreflect on the strategic challenges and opportunities that the company faces, develop acertain point of view about how to better serve customers in the future and adopta strategic framework within which they make decisions and define resource allocationpriorities. It is obvious that those strategic initiatives should be generated, developedand implemented by leaders and executives at all levels within the organization. Thelack of leaders’ competencies to tackle the new strategic challenges and cope withuncertainty and change inevitably means the failure of the strategic initiative. Strategicchange must go hand-in-hand with leaders with the right competencies.

In the same way as there is not a feasible definition of global leaders competencieswithout describing the functions that they should perform, there is not a feasible globalleadership development program without its alignment with the company’s long-termstrategic orientation and initiatives. It is always accepted that any major strategicchange involves some investment in new products, assets, markets or customerrelationships. It is also accepted that those investments will be managed by people whoneed to have the competencies to do it in the right context. Leadership development

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programs should aim at developing the competencies that leaders need to tackle thefirm’s long-term strategic challenges and implement policies and actions plans that arecoherent with the firm’s mission.

The fourth area is to promote diversity in senior management teams. Internationalcompanies have today many opportunities in emerging markets round the world.For many of them, the major constraint is not capital, products or technology. It isleaders with the understanding of the local culture and with a technical expertise whocan assume leadership positions. This weakness is also reflected in the fact that manyinternational companies lack cultural diversity in their headquarters that are stilldominated by senior executives coming from the same cultural background and withlimited international experience.

With the growing importance of corporate governance in contemporary society, thefocus has been on making boards of directors more diverse in terms of gender, businessexperience and cultural contexts. This is a move in the right direction. Nevertheless,the need is even more urgent in top management teams, because they make most of therelevant business decisions and, more important, they shape corporate culture withtheir decisions and example, and are the reference for thousands of employees roundthe world.

Without solid and sustained global leadership initiatives that help companiesinternally develop most of the future leaders that they need, it will be increasinglydifficult for a company to sustainably operate in a wide range of geographies andcultures. The difficulty of getting the right teams of local managers will grow forforeign companies operating in distant markets. Cultural distances will become bigger,not smaller, the need of global leaders with overall responsibilities will increase and thepipeline of candidates in emerging markets ready to move to those functions will notgrow at the same pace.

CEOs are concerned about and aware of this leadership challenge, but the answer isnot always comprehensive enough. The natural reaction has been either hiring localtalent outside, which has the high risk of lack of fit and commitment over the longterm, or moving local leaders who are not yet prepared up to global executivefunctions. The outcome in both cases is frustrated expectations and organizationalparalysis. Some companies’ poor performance in emerging markets has more to dowith the lack of strong local teams than the competitors’ resources, strategy or thesuperior quality of their products.

5. Global leadership and CEOs’ commitmentGlobal leadership development is one of the top requirements for global companies’long-term success and should be high on the CEO’s agenda. For this reason, CEOsshould reflect on some of global leadership development’s critical issues.

The first is the need to make sure that all leadership development initiatives arealigned with the firm’ s mission, culture and strategy. This looks like an obviousimplication, but widespread experience shows that CEOs are not always the leading orhidden hand in those programs; too often, the responsibility is delegated to other seniormanagers, who can manage them very professionally, but do not have the influence tospread the impact of those programs to the upper levels.

The second implication is defining the aspiration that a company has in terms ofleadership development and the notion of the person behind a global leader. Without apositive notion of the person, and the respect that she deserves in all circumstancesbecause of her intrinsic dignity (Canals, 2011), it is difficult to build the notion of a

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leader. The alignment between mission and strategy and leadership developmentrequires a formal framework, but it also demands a reference, a model of global leaderthat the company wants to develop and promote (Ghemawat, 2012). In the same way aswe speak today about business models and business model competition, we need toassume a model of global leadership that helps develop the competencies required bythe company’s strategy. This framework demands an overall understanding of thefirm’s mission and strategy, its strategic challenges and opportunities, and howleadership could add value to the company in specific businesses and geographies.The adoption of frameworks on global leadership competencies as the ones describedin Section 3 requires some coordinated work between HR directors, businessunits’ directors and the CEO that should end up with a framework accepted bythe top management team. This is the outcome of a process that should be led bythe CEO.

The third implication is the CEO’s commitment in terms of time and presence inthose leadership initiatives. CEOs should delegate many functions, but should alsosend clear signals about the importance of those programs, their relevance for thefuture of the firm and their connection with the firm’s strategy. But this is not enough.These programs should be an opportunity for CEOs to engage in a dialogue with thosefuture business leaders about the firm’s purpose, and reflect with them on the strategicchallenges that the firm faces and the actions that the firm is adopting to tackle them.

CEO’s commitment to those programs is not just about presence. It is also abouttheir contribution to its design and, eventually, their assessment. The failure of someglobal leadership development initiatives is not due to lack of resources or mediocredesign and implementation; it is related with the fact that there is no overallassessment of those programs in terms of the new capabilities that participantsdevelop through them or the opportunities given to those participants after theprogram. CEOs should make clear their commitment to involve those future leaders inoverall strategic projects within the firm, so that those programs are connected withthe firms’ challenges and initiatives. In this way, program participants’ consider theirinvolvement in the program not as a privilege but as a professional opportunity toserve the firm in new ways with some additional responsibilities.

As it happens with major strategic decisions, CEOs should also know about thespecific impact of those programs. CEOs should spend time reviewing future leaders’progress and performance, competencies developed, opportunities that they have beengiven and next steps to be taken.

6. Final reflectionsGlobal leadership development initiatives in international companies are moreimportant than ever, because the lack of global leaders is one of the major constraintsin the firm’s future growth. But they are also relevant because of the impact that goodglobal leadership has on companies, both in subsidiaries and global business units,and, eventually, in the perception that society has about companies. Differentleadership styles have different impacts inside and outside of a company, includinga certain perception on corporate reputation.

This observation is crucial for setting up solid foundations for the study of globalleadership development. Traditionally, global leadership has been an academic arenadominated by the need to define global leaders and describe the capabilities that theyneed. Most of those frameworks are based on the assumption that cross-culturaldifferences are the essential quality in studying global leadership.

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In this paper we assume some alternative views. Global companies have some clearneeds and face some specific challenges. Global leaders need to develop some functionsso that companies can survive and be successful in the long term, while they operate inmore diverse geographical contexts. The functions that global leaders need to developshape the competencies that they need to be able to work effectively. Competenciesfollow functions; it is true that some competencies may also have a feedback effect onfunctions, but it is the nature of the job to be done what helps define leadershipcompetencies.

The second view is that global leadership development initiatives should be alignedand connected with the firm’s mission, culture and strategy. Good leadership programscannot operate in the vacuum, irrespective of what the company is doing. This isespecially true when considering the role that companies want to play in society andhow they want to be perceived. Reputation is a precious asset difficult to grow intoday’s context, incredibly important in winning people, customers and investors,but also one that evaporates quickly when the right ingredients are not present. Goodglobal leadership programs today need to help future leaders understand howcompanies should interact with different groups of stakeholders and society in general.This also means that those programs should be evaluated constantly and see howmuch value they add to the long-term success of the firm.

The third view is that program’s success is highly dependent on the topmanagement commitment, starting with the CEO. It is not only the time and resourcesallocated to those projects. It is the example that they set, the message that they sendthroughout the firm, the influence to make those programs successful, and thewillingness to give those people new opportunities to tackle some strategic challenges.

With global leadership programs, CEOs have an opportunity to show that theyvalue investment in people at least as much as investment in assets or businesses.This would be a healthy message that many companies need to send inside andoutside. If done properly, it could have deep, positive effects on the long-term success ofthe firm, beyond the boost that they will give to its reputation.

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Bhagat, R.S. and Steers, R.M. (2009), Culture, Organizations and Work, Cambridge UniversityPress, Cambridge.

Nohria, N. and Khurana, R. (2010a), Handbook of Leadership Theory and Practice, HarvardBusiness School Publishing, Boston, MA.

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About the author

Dr Jordi Canals is the Dean and a Professor of General Management of the IESE Business School(University of Navarra). Dr Jordi Canals can be contacted at: jcanals@iese.edu

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