A Global C-Suite Study - Amrop · A Global C-Suite Study ... 4 Managerial and cultural capacity for globalization are top -ranking ,critical issues. ... Strength Pitfall
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Welcome to the Flight Deck »
Welcome to the
Flight Deck
A Global C-Suite Study The Human Dimension of
Globalizing Mid-Caps - as Seen by their Leaders
Chapter 6 – Becoming the Carrier of Choice – A Culture of Innovation
Welcome to the Flight Deck »
Introduction
This study is a deep exploration of the world of
globalizing mid-caps. It draws upon 83 interviews
conducted exclusively face-to-face with C-suite
leaders from every continent. Lasting up to two
hours, the interviews were conducted by Amrop
Partners over the Summer and Fall of 2013, using
a structured framework designed by researchers
at IMD, the top-ranked global business school
based in Lausanne, Switzerland.
Our focus: the human element:
Talent Management at Top Levels
Culture and its Implications for Performance
Board Governance
This is your personal invitation to enter the Flight
Deck of today’s globalizing mid-caps - a place
beyond public declarations or annual reports - to
hear what C-suite leaders are confidentially, and
often spontaneously, revealing - in their own
words.
Welcome On Board.
Welcome to the Flight Deck »
On behalf of IMD
Foreword Maury Peiperl
Professor of Leadership and
Strategic Change,
IMD
@MauryPeiperl
Welcome to the Flight Deck »
On behalf of the Amrop Partnership
Foreword Ulrich Dade
Chairman of the
Executive Board,
The Amrop Partnership
Welcome to the Flight Deck »
Welcome to the Flight Deck: Headlines
1 Successful mid-caps take an ambitious, long-term view.
2 79% were studying the successes (and failures) of other companies:
3 If many mid-caps already have a successful international business, only 9% felt truly ready
for globalization.
4 Managerial and cultural capacity for globalization are top-ranking, critical issues.
5 Three main factors are positioning successful mid-caps to win the war for customers and
talent.
6 Successful mid-caps strike a compelling balance between local autonomy and corporate
influence.
7 Globalizing mid-caps have powerful employer branding to attract leadership talent:
8 Many mid-caps are ideally positioned to be innovation and entrepreneurship champions.
9 Mid-cap Boards are tailoring themselves for globalization.
Welcome to the Flight Deck »
Contents
View From 30.000 Feet
1 Introducing the High-flying Mid-Caps
2 Global Trade Winds
3 Key On-Board Conditions for a Successful Flight
4 Piloting Skills: Agility and Consistency
Closer to the Terrain
5 The Flight to Leadership
6 Becoming the Carrier of the Future: A Culture of Innovation
8
7 The Flight Controllers: Board Governance
8 What’s Next? 20
9 Appendix
32
Welcome to the Flight Deck »
Introducing the High-Flying Mid-Caps
Capturing the notion of a ‘globalizing mid-cap’
Welcome to the Flight Deck »
6
Becoming the Carrier of
Choice: a Culture of
Innovation
Mid-caps are ideally positioned to be innovation
and entrepreneurship champions.
In this chapter, we discover that the innovation
spectrum is wide, moving from product, to
process, involving employees beyond the ‘usual
suspects’ or dedicated divisions, to the most
operational levels
The freedom to experiment and
fail as we have seen is a cultural
feature, with top managers
taking a personal interest in
employee initiatives. In this
chapter we examine underlying
systems and motivational
mechanisms.
While creativity is flourishing,
resources may be lower than
those of larger rivals. We will see
how mid-caps prioritize new
ideas.
We also ask, could mid-caps risk
losing innovative vitality with
growth and globalization?
Welcome to the Flight Deck »
Innovation and Entrepreneurship Are
Closely Associated Concepts for Several
Mid-Cap Leaders
Innovation is More Than an Attitude –
it is an Imperative
“The resources obtained
by going public allowed
us to invest in
innovation and to
strategically develop
from a manufacturer into
a retail chain.” - CEO, South America
Welcome to the Flight Deck »
“Every year we target
around three hundred
new SMEs - new
entrepreneurs or new
members that need help
to grow… We help them
to do micro-financing to
support themselves. The
impact is not only
improvement on the
wealth of the people but
also, surprisingly, we
could unite the migrants
from Java with the local
people.” - President, Asia Pacific
Welcome to the Flight Deck »
“We have installed a
yearly engineering
meeting where our top
300 managers are
invited to listen to our
top engineers and get
educated on the best
innovations. The best
will be awarded with an
extra R&D budget of
€700,000, the second
with €500,000 and the
third with €300,000.” - CEO, Northern Europe
Extrinsic Motivation backs
Intrinsic Motivation
1
Welcome to the Flight Deck »
Focus is Essential in Challenging
Environments – and Mid-Caps are
Finding Ways
“It has been working the
pool of talent with a mix
of madness, conviction,
survival instinct, and
commitment to the
project.” - CEO, Asia
Welcome to the Flight Deck »
Some Mid-Caps Are Experiencing
‘Growing Pains’ “The promoter and
children are very
entrepreneurial. Below
that at operating level
CEO's [and] business
leaders, we fall short.” - CEO, Asia
Welcome to the Flight Deck »
“It is more and more
difficult to be an
entrepreneur. Of course
we can use the word
‘entrepreneur’ but with
two controls a day, it is
impossible. It becomes a
fight when you are
bigger. We are listed, we
have a lot of internal
control. Entrepreneurship
is not so natural any
more.” - CEO, Northern Europe
Mid-caps Risk Losing Innovative Vitality
as they Grow and Globalize
Welcome to the Flight Deck »
“We created an
innovation committee,
chaired by a specialist
brought in from the USA,
whose job was to
broaden our view on
innovation. An example
of this is the creation of
a Strategic Planning and
New Businesses area,
with its own Director. - CEO, South America
Welcome to the Flight Deck »
Finally, Innovation is Not a
Universal Imperative
“In this industry it’s a bit
difficult to be classical
entrepreneur in really
making revolutions. I
would more call it
innovation driven. So it is
in our DNA to be
innovation driven.” - CEO, Northern Europe
Welcome to the Flight Deck »
6
Becoming the
Carrier of the
Future: a Culture of
Innovation
Leading
Questions
?
4
4
?
4
4
?
4
4
?
4
4
?
4
4
?
4
4
Welcome to the Flight Deck »
What’s Next? Towards a Leadership profile and strategies for globalizing
mid-caps: the Amrop view.
Who are the mid-caps? 4 distinctive features emerge as key traits.
Interestingly, these are ‘geographically agnostic.’
Could globalizing mid-caps inhabit a ‘vitality zone’?
Preety Kumar Member of the
Executive Board,
The Amrop Partnership
8
Welcome to the Flight Deck »
Implications and recommendations
What pitfalls could these positive mid-cap characteristics contain? What counter-strategies
are successful mid-caps finding? What leadership profiling and related initiatives do we
recommend?
1 - Successful mid-caps take an ambitious, long-term view.
An ambitious, long-term view
Strength Pitfall
Risk
What’s Next: Inspiring and visionary ambitions matched by managerial and cultural capacity.
Welcome to the Flight Deck »
Organization design
must allow for
upscaling whilst
preserving the vital
DNA of
entrepreneurship
and connectivity.
Welcome to the Flight Deck »
Preparing Boards for
globalization must
embrace not only
current realities and
resources, but
ambitions. A context
driven evaluation is
an essential first
step. Yet the results
may confront
embedded
perceptions, lead to
tough decisions
regarding existing
members and a
need to build
consensus.
Welcome to the Flight Deck »
2 - Freedom is a further feature of successful mid-caps.
Freedom
Strength Pitfall
Risk
What’s Next: it’s all about balance. Freedom balanced by self-governance, management
infrastructure, clarity and connectivity.
Welcome to the Flight Deck »
Connectivity – a distinctive feature of mid-caps – balances
freedom
Leveraging the value
of independent
Directors must
transcend ‘box
ticking’ and
regulatory
compliance.
Furthermore, should
your independent
Directors have a seat
on the Boards of
other organizations,
do check their
commitment to
yours.
Welcome to the Flight Deck »
More than
competent
practitioners in their
domain, talent in
globalizing mid-caps
must be skilled and
‘ego-free’ teachers
and coaches.
Welcome to the Flight Deck »
3 - C-Suite Stewardship is a feature of successful mid-caps.
C-Suite Stewardship
Strength Pitfall
Risk
What’s Next: Preserving the ‘owner attitude’ in an expanding and virtualizing world.
Welcome to the Flight Deck »
4 - Many mid-caps are positioned to be innovation and entrepreneurship champions.
Innovation and Entrepreneurship
Strength Pitfall
Risk
What’s Next: Preserving the innovative spirit whilst engineering focus and relevance.
Welcome to the Flight Deck »
Acknowledgements Interviewees from the following organizations have given formal permission for their organizations’
names to be published in the report. We sincerely thank them, and all interviewees whose
organization names have been withheld to respect confidentiality, for their invaluable contribution to
our study.
Welcome to the Flight Deck »
About the Authors
About IMD
About Amrop
Contact IMD Contact Amrop Secretariat
We thank Panteia B.V.
Welcome to the Flight Deck »
Amrop Offices
ARGENTINA
GERMANY
AUSTRIA
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GREECE
CANADA
HUNGARY
INDIA
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INDONESIA
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CZECH REPUBLIC
LATVIA
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Welcome to the Flight Deck »
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