If New Zealand wants to expand its economy, maintain or enhance its standard of living and stem the brain drain of its most talented young executives, its business leaders must become more global in both their outlook and their capacity. And business needs to spend more on developing its leadership talent. The alternative to more aggressive international approach to doing and thinking about business is not attractive. We could find ourselves locked into low-wage activities like tourism or remain forever exposed to the price vagaries of agriculture-based commodities.
Surviving as small country in an increasingly competitive global marketplace is, of itself, difficult. Saddle it with stubbornly small-minded approach to going global and we risk slipping further down the OECD’s economic ranking.
But what is involved in thinking and acting global? And how do we grow globally focused and capable executive talent? David Tessmann-Keys, senior vice president international operations of US-based global leadership and talent development consultancy Development Dimensions International (DDI), Christien Winter, managing director of Auckland-based executive search and recruitment consultancy, Sheffield, and Clayton Kimpton, chairman of Auckland-based law firm, Kensington Swan, talked with Reg Birchfield about New Zealand’s global leadership challenge.
“New Zealand’s small size and geographic remoteness present economic growth challenges but, if ever there was time when the country could reconsider its offshore opportunities, now is it,” says David Tessmann-Keys. “But business will need talented leaders to deliver the strategies.”
Research suggests that New Zealanders, like Australians and the Dutch, have cultural, societal and other individual attributes which enhance their ability to adapt and operate on global stage, he adds. How to go about developing that potential is another story.
The research might suggest certain personal characteristics and attributes predispose us to working well in global environment but, says Tessmann-Keys “organisations need to develop cadre of talented leaders to help take their businesses offshore and into those global marketplaces”.
The individual characteristics, the DNA of global leadership if you like, include what he calls “intellectual grunt”, the ability to deal with ambiguity and complexity; “global explorer” tendencies, high levels of inquisitiveness and passion to understand things, and liberal sprinkling of emotional intelligence. The importance of emotional intelligence is, says Tessmann-Keys, magnified in global environment. Global leaders need to understand what motivates people from different cultures and understand what engages them.
He concedes all these things are important in any leadership role but they assume even greater importance in global leadership. “It is like general management on steroids. Organisations don’t need large numbers of these people but, to maximise global expansion success, they need select group of these folks to enhance their chances.”
Tessmann-Keys also concedes that, while global expansion provides important new business opportunities, it also delivers some organisational risk. Choosing or developing the right people mitigates the risks that come with the increased operational complexity of global growth.
How then do organisations build individual global leadership capability? DDI suggests giving talented executives offshore assignments and projects. It also suggests employing them in many different roles within business, giving them more generalist management experience.
Generalist management experience is more often than not the norm in New Zealand. “Multinationals frequently send their promising mid level managers to New Zealand for just that kind of broad management experience,” says Kimpton.
There are, says Tessmann-Keys, similarities between the New Zealand and Australian experience of finding talented young managers successfully transplanting themselves in larger economies like the United States and Europe. “Australian and New Zealand expats run some of the largest companies in the world.”
So what is holding New Zealand back from operating more expansively on the global stage?
Christien Winter thinks the answer lies, at least in part, with lack of more widespread commitment to leadership development. “While many of New Zealand’s largest organisations embrace best practice principles of leadership development, there is disconnect around senior management’s accountability for ensuring that leadership development is picked up and implemented within the organisation. But we are not unique there. That is global challenge,” she adds.
Companies often invest in leadership development, but then fail to put the right structures in place or ensure that senior leaders are held accountable for it. “We are following that pattern,” says Winter.
Kimpton thinks tailored, rather than generic, talent development is one answer. But because most New Zealand businesses are small, the concept of tailored programmes is “just too big for them to get their head around”, he says. “The challenge is to tailor something for small key group within some of our organisations which isn’t cost prohibitive.”
Expenditure on leadership development pays dividends, even in small enterprise economy like New Zealand says Tessmann-Keys. Research proves the link between talent development and enhanced organisational performance but, he adds, smart leaders don’t need research to convince them of the relationship. “Ask any number of New Zealand business leaders if relationship exists between committed development of talent and enhanced business performance and nine out of 10 will agree that it does. They know intuitively that there is real and tangible relationship,” he adds.
“Good people deliver the best results. Everyone knows the cost of churn and having to constantly develop and train new people,” says Kimpton. “Consequently, business leaders now give lot of thought to appointing and retaining the right people.”
Global research undertaken jointly by The Economist Intelligence Unit and DDI, suggests disconnect between intent and action. Senior business leaders globally accept the link between talent and results, but they also think it is too hard to effectively measure that correlation. The lack of easy-to-gather, supporting data undermines efforts to implement and sustain leadership development programmes.
But, says Winter, it is not as difficult to generate supporting evidence of the link as some organisations think. “They can prove the link between talent and business performance and have it fit the [performance] matrix. You can measure what people are doing and how the organisation is tracking on whole array of HR initiatives. Some, though not enough, of our clients are already doing this.”
Tessmann-Keys doesn’t advocate building or developing leadership talent simply for its own sake. Talent development must be linked to company’s business direction and strategic intent.
“If, for example, New Zealand company wants to take product idea offshore then that should become key business driver,” he says. “The next question is: do we have the talent to successfully deliver it to the world. If not, the business must either build or buy that leadership capability.
“Without crystal clarity of strategic intent, company’s talent development activities will always be generic. successful business knows exactly where it is going and ties its developmental strategies to that intent. The commitment to taking an idea to the world must be matched with an equal commitment to find or develop the right management and leadership talent to execute the strategy.”
The same approach could, of course, be applied to New Zealand’s global economic strategy. Until the nation knows where it is going, efforts to build specific talent capability are generally misdirected.
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