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

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


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.


On behalf of IMD

Foreword Maury Peiperl

Professor of Leadership and

Strategic Change,

IMD

@MauryPeiperl


On behalf of the Amrop Partnership

Foreword Ulrich Dade

Chairman of the

Executive Board,

The Amrop Partnership


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.


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


Introducing the High-Flying Mid-Caps

Capturing the notion of a ‘globalizing mid-cap’


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?


Culture - the Story So Far

Connectivity

Freedom

C-suite stewardship

6


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


“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


“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


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


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


“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


“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


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


6

Becoming the

Carrier of the

Future:

a Culture of

Innovation

Summary

`


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


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


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.


Organization design

must allow for

upscaling whilst

preserving the vital

DNA of

entrepreneurship

and connectivity.


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.


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.


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.


More than

competent

practitioners in their

domain, talent in

globalizing mid-caps

must be skilled and

‘ego-free’ teachers

and coaches.


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.


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.



5 In summary



Appendix


Methodology

Sampling

Interviewing process

Analysis


Demographics



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.


About the Authors

About IMD

About Amrop

Contact IMD Contact Amrop Secretariat

We thank Panteia B.V.


Amrop Offices

ARGENTINA

GERMANY

AUSTRIA

BELGIUM

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GREECE

CANADA

HUNGARY

INDIA

CHILE

INDONESIA

CHINA

IRELAND

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ITALY

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CZECH REPUBLIC

LATVIA

DENMARK

LITHUANIA

ECUADOR

MEXICO

ESTONIA

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FINLAND

NETHERLANDS

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PANAMA

UNITED STATES

PERU

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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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