PSO Report 2012

Leadership Run by Organization to

Enhance the Ability of Organization

Employees

ORGANIZATIONAL

BEHAVIOUR

Submitted To :

Dr.Fazal Khalidi

11-Dec-2012 Fall 2012

Submitted By:

Shehroz Ahmed Adil

ORGANIZATIONAL BEHAVIOUR

Organizational Behaviour – Fall 2012

LETTER OF TRANSMITTAL

DATE: December 12, 2011

TO: Mr. Fazal Khalidi

FROM: Shehroz Ahmed Adil

SUBJECT: Leadership By Organization (P.S.O) To Enhance The Ability Of Organization

Employees.

This is our term project chosen from one of the topics provided by the course instructor. We

are pleased to present our report on “Leadership by Organization to Enhance the Ability of

Organization Employees”. This research gave us a good opportunity to understand the concept

of how to train develop leadership to make the organization work for effective and its

applications in our chosen organization – PSO.

We would also like to thank all our respondents, who were kind enough to answer our

questionnaires and gave their valuable time in guiding and informing us about their perception

on our chosen topic. We acknowledge all of your help and support for this research.

This research is as per the instructions of Mr.Fazal Khalidi, containing all the relevant

information. We sincerely thank you for the reliability you showed in our capabilities and the

support you gave us throughout the semester. This research helped in our learning process and

also gave us first hand experience regarding research methodology.

Yours Sincerely,

Shehroz Ahmed Adil



Table of Contents

LETTER OF TRANSMITTAL

INTRODUCTION OF COMPANY

LITRATURE REVIEW

REPORT SUBJECT ANALYSIS

WEAKNESSES

RECOMMENDATIONS

CONCLUSION

ARTICLE’S REVIEW



COMPANY PROFILE

Pakistan State Oil Company Limited, namely PSO was found in 1976, as a result of

amalgamation of the formal three oil marketing companies i-e Pakistan National Oils Limited,

Premier Oil Company and Esso Undertakings in Pakistan. There is a chronology of events

leading to the formation of Pakistan State Oil Co. Ltd .

As the largest oil marketing company of Pakistan, PSO is engaged in the storage, import,

distribution and marketing of Petroleum products, petrochemicals, Aviation and Bunker fuels,

LPG and CNG dominates the country’s fuel and energy needs. Since its inception in 1976 the

company has been meeting more than 70% of the country’s fuel needs. PSO’s 3805 outlets all

across the country markets more than 12 million tons of fuel products annually. This network is

supported by PSO’s 28 storage facilities with a capacity of more than 800,000 tons . As a

manifestation of PSO’s greater customer focus PSO 24hr customer service has been launched

where customers can lodge their queries and suggestions about various PSO products and

services.

As the largest oil marketing company of Pakistan, PSO is engaged in the storage, import,

distribution and marketing of Petroleum products, petrochemicals, Aviation and Bunker fuels,

LPG and CNG dominates the country’s fuel and energy needs. Since its inception in 1976 the

company has been meeting more than 70% of the country’s fuel needs The company will

recruit, train and promote staff on the basis of their ability, according to relevant legislation and

company policies and request.

CONTINUOUS GROWTH

PSO continues to expand its physical, technical and marketing resources to meet the

requirements of the country .To keep pace with growth, PSO has maintained International

Collaborations to import latest technology. These are:

1. Castrol (UK) Blending and marketing of lubricants in Pakistan

2. Air Total (France) Technical and Commercial agreements in Aviation Services

3. Exxon Chemicals (Singapore) Petrochemical Business and Technology



MISSION STATEMENT

“To ensure availability and security of sustainable supply of oil and gas for economic

development and strategic requirements of Pakistan and to coordinate development of natural

resources of energy and minerals.”

STRATEGY TO ACHIEVE OBJECTIVES

To adopt an integrated approach for promoting exploration and fast track development

of oil, gas and mineral resources.

To deregulate and liberalize and privatize oil, gas and mineral sector through structured

reforms.

To attract private investment and to establish credible institutions for facilitating the

development of petroleum and mineral sector.

To develop technical professional human resources. To optimize existing energy delivery

infrastructure oil and gas pipelines.

To reduce imported fuel oil consumption with indigenous gas by optimally balancing the

gas availability and supplies from local and imported resources.

ORGANIZATIONAL STRUCTURE

The organization’s formal framework by job tasks is divided in groups but is coordinated. The

basis on which jobs are grouped in order to accomplish organizational goals is functional

departmentalization.

CHAIN OF COMMAND

It is an unbroken line of authority that extends from the upper levels of the organization to the

lowest levels and defines who reports to whom.

As PSO follows traditional objective setting decision are made totally by the top management.

The authority is given to the managers to give orders and employees are bound to follow them.

It is the responsibility of the employees to perform those duties assigned to them.



CENTRALIZATION

PSO is a highly centralized company i.e. decision-making is concentrated in the upper levels of

the organization. The Top management makes the company’s key decisions with little or no

input from the lower level employees. PSO is more centralized because the environment is

stable company is large and lower level managers are not as capable or experienced at making

decisions as upper level managers.

PSO is a mechanistic organization with a highly controlled structure. In the mechanistic

structure work specialization creates jobs that are simple routine and standardized. Extensive

departmentalization increases impersonality and the need for multiple layers of management

to coordinate these specialized departments. There is also a strict adherence to the unity of

command principle. As the distance between the top and the bottom of the organization is

wide, top managers tend to impose rules and regulations to control the employees’ behavior.

DECISION MAKING

Decision-making is an important aspect of the company, which needs to be thoroughly

evaluated before making a final and firm decision. The working of organization depends upon

top management; so good and firm decision in the organization will have a direct impact on the

working environment of such organizations. The manager is responsible for taking the decision

CHAIRMAN

MANAGING DIRECTOR

GENERAL MANAGER

DIVISIONAL MANAGER

SALES EXECUTIVE

SALES OFFICERS

Managing Director is answerable to

the Chairman. MD has 7 general

managers working under him. Every

G.M has 8 DMs working under him.

Every DM has a Sales executive and

under him there are 8-12 sales

officers.



of effected matter keeping in view the after effects. The decisions must be in the interests of

the organization.

CULTURE

According to the opinion of the PSO’s sales officer PSO is a sales oriented company. Strong

culture is a symbol of more profit more earning and sense of responsibility. It is also a

monument of well-disciplined enterprises in which every organ of that organization is well

concerned with the ultimate objective of the organization. As it’s a fundamental truth that

every individual from worker to top manager is aware of his rights privileges responsibilities

and outcome of efforts being invested.

APPRAISAL

During the performance appraisal for each employee is made after each quarterly. After

completion of a performance review is made and if the performance is satisfactory then the

employee is appointed to a leader designation i.e group leader, manager, head of department.

INFORMATIONAL NEED

COMPETENCY BASED MODEL

Competencies describe what is needed for each employee to perform his or her job successfully

regarding the expected knowledge, experience and capabilities . The Competency Model

defines the competencies that are required by PSO in various positions as the requirement of a

competency arises from one job to another. The form to be used in this connection is Training

Needs Analysis.

The PSO competency model forms the basis for assessing the training needs of the whole

organization. It is the responsibility of heads of al l organizational units to take account

of that specific knowledge and skills the jobs involve what the individuals a l re a d y p os s e s s ,

a nd wha t g a ps i n s uc h k no wl e dg e a n d s k i l l l e ve l s , t raining can fi ll . Guided

by bus iness targets /departmental objectives and evaluating employees on their

exis ting capabilities, with the help of the Training Needs Analysis document, the training

needs of each individual are determined.



LITRATURE REVIEW

ON

“EFFECTIVE LEADERSHIP”

Effective leadership is crucial to an organization’s success. There are several common

characteristics that effective organizational leaders share. Without these characteristics,

initiatives and change can fail. Leaders can take many different steps to help keep projects

from failing.

Leaders need to be self-aware of how their actions are perceived by those they manage

(Moment, 2007). Employees will sometimes mirror the behavior of managers. Aghdaei (2008)

talks about the philosophy of “shadow of a leader,” where the leader demonstrates the wanted

behavior (p. 16). Leaders should model hard work for employees (Weiss, 2000). Aghdaei (2008)

states that “when you repeatedly demonstrate meaningful, positive behavior, people are

motivated to follow” (p. 16).

Leaders must have enthusiasm for their work so that it spreads to those whom they supervise.

That involves leaders believing in the company in which they work. “The ability to inspire

loyalty and build relationships is a key component of leadership” (Newcomb, 2005, p. 35). “The

CEO who wants to be a true leader must be the most vivid example of the culture at work. Only

then can the CEO inspire passion in the rest of the team” (Hesselbein, Goldsmith, & Somerville,

2002, p. 124). To get the best out of workers, leaders need to be able to motivate them

(Moment, 2007). Leaders should look to all of their employees for new ideas and solutions

(Hesselbein, Goldsmith, & Somerville, 2002). Leaders should also “cultivate, champion, and

then support” new ideas and “provide an environment for the development and expression of

the entrepreneurial spirit (Hesselbein, Goldsmith, & Somerville, 2002, p. 88). Leaders create

the organizational climate to which followers react (Hrebiniak, 2005).

Strategic planning is crucial to guide leadership (Choen, 2008). Leaders must make clear and

specific goals and objectives, be able to communicate those, and make sure that the goals are

measurable. Planning and having a strategy are important in order to make initiatives succeed.

Managers have to move ideas and initiatives to executable steps that their team can implement

(Maddock & Viton, 2008). A leader has to clearly communicate what is needed (Weiss, 2000).

If the employee does not understand what to do, then the initiative is set up for failure.



Effective leaders must establish a culture of accountability. “Leaders need to be held

accountable to the organization for results, [a] plan must be accountable to the outcomes, and

the employees must be accountable for their actions” (Newcomb, 2005, p. 36). There needs to

be measurable goals for which everyone can be held responsible. “Without clear responsibility

and accountability, execution programs go nowhere” (Hrebiniak, 2005, p. 25).

Leaders also need to know how to handle and address failure. Hesselbein et al states that

“failure can become the next step of learning, the beginning of another new creative idea”

(Hesselbein, Goldsmith, & Somerville, 2002, p. 89). Failure can be a learning experience and

should not necessarily be punished. Also by punishing failure, employees may be more

reluctant to suggest innovative ideas for fear of failure.

Leaders must organize and manage employees. While innovation requires the organized efforts

of others to work (Hesselbein, Goldsmith, & Somerville, 2002), the result of not involving

everyone is that increased resistance to change can appear (Dooley & O’Sullivan, 2001).

Gratton and Erickson (2007) report that “a team’s success or failure at collaborating reflects the

philosophy of top executives in the organization. Teams do well when executives invest in

supporting social relationships, [and] demonstrate collaborative behavior themselves …” (p.

103). Lack of widespread company support can make initiatives fail (Strebel, 1996).

Leaders need to be able to adapt to “shifting circumstances” and cope with those changes

(Moment, 2007). “Every organization needs leaders who can change as fast as market

conditions do” (Newcomb, 2005, p. 34). Business needs can change rapidly and employees look

to their leaders to guide them through change. Uncertainty in leaders can lead to a lack of faith

by employees.

Leaders are important for promoting ethical standards and for modeling ethical behavior and

promoting it to employees (Stansbury, 2009). Leaders need to be honest and accountable for

their actions (Hesselbein, Goldsmith, & Somerville, 2002). For employees to practice ethical

behavior, “they must work in an environment where that behavior is encouraged and

supported” (Duncan, 2002, p. 685). Professionals are expected be truthful and “stand

accountable for their mistakes and in turn expect the same from their subordinates

(Hesselbein, Goldsmith, & Somerville, 2002, p. 63).

Employees should be treated equally. Managers should not ignore exemplary or poor behavior.

Rather, effective leaders should reinforce good behavior and negatively reinforce bad behavior,

and should avoid making blanket statements (Weiss, 2000). If employees see unequal

treatment and do not get rewarded for their extra effort, that extra effort may disappear.

Everyone should be treated the same (Weiss, 2000).



Failure of Organizational Initiatives

There are many causes that can contribute to the failure of organizational initiatives. “Research

in organizational development suggests that 90% of culture change initiatives fail in achieving

their objectives” (Atkinson, 2005, p. 1). Some of the failures are caused by leadership. Others

are caused by a lack of communication within the organization.

One of the causes of failure have been by organizations being too insular and not hiring outside

consultants, and looking for all of the ideas for change internally (Mirza, 2009, p. 31).

Sometimes the skills necessary for a project require outside assistance and organizations might

be reluctant to ask for outside help. Katzenback and Smith (2005) state that team members

need to be selected for skill potential and not personality; “no team succeeds without all the

skills needed to meet its purpose and performance goals” (p. 166).

Another cause of failure is when managers rely on over-optimistic projections when evaluating

strategy (Lovallo & Kahneman, 2003). Projects can be under-budgeted in both time and money,

which can cause the projects to fail when the projections are not met.

Employees can be also be the cause of failure. Sometimes there is a belief among employees

that change will mean more work (Atkinson, 2005). It can be difficult to modify the way

someone has always done something. Changes might be a perceived loss of control or job

security (Atkinson, 2005). Change can scare workers but by clearly communicating what

change really means and how it affects employees, some of the problems can be overcome.

However, leaders should expect a little hesitation for anything that goes against the status quo

(Strebel, 1996).

Rumors and gossip can also cause initiatives to fail. Effective leaders, however, respond to

rumors and eliminate gossip through clear communication of what the initiative entails. The

benefits of change also need to be communicated to the employees to head off gossip and

assumptions (Atkinson, 2005). Stopping gossip before it starts is ideal.

Some organizations are known for short-term commitment to projects. This can cause

employees not to work as hard on an initiative because they expect it is a fad and the company

will move on to something else (Atkinson, 2005). Abrupt change can make people turn passive

(Hesselbein, Goldsmith, & Somerville, 2002). Hesselbein et al. (2002) asks the question, “Why

bother working on anything new, or anything that will take time to develop, when the

organization could change direction unexpectedly at any moment, with no time to prepare for

it?” (p. 81). When an organization launches an initiative, it should make sure the initiative is



something that is important and to which the organization is committed. Otherwise,

employees might become skeptical of initiatives and not invest themselves.

Performance improvement in an organization can be accomplished in other ways as well.

Having the right focus can lead to success. Leaders need to make sure the focus of initiatives is

the end result and not be distracted toward developing recommendations, technology or

partial solutions (Matta & Ashkenas, 2003). Having a culture with employee buy-in is important

Organizational culture should reflect results orientation, employee commitment to task and

organizational commitment to coworkers (Hrebiniak, 2005).

There are many characteristics of effective leaders. These characteristics can help to improve

the success rate for new initiatives and improve the performance of an organization and its

employees.

Bibliography:

Atkinson, P. (2005, Spring). Managing Resistance to Change. Management Services , 14-19.

Choen, W. (2008, August). Effective Leadership. Leadership Excellence , 25 (8).

Dooley, L., & O’Sullivan, D. (2001). Structuring Innovation: A Conceptual Model and

Implementation

Methodology. Enterprise and Innovation Managment Studies , 2, No.3, 177-194.

Duncan, T. (2002). IMC: Using Advertising & Promotion to Build Brands. New York: McGraw-Hill.



REPORT SUBJECT ANALYSIS

In our survey and interview which we conducted from Mr.Ghulam Murtaza Shaikh, He’s the Manager of

Retail Business in PSO house HeadOffice. We had gone through some factual questions and the answers

were impressive enough as per PSO reputation in the Market. The Analysis questions on Leadership

were as follows:

Are there any leadership programs made for the employees in PSO?

On job training is one of the programs which PSO offers to their employees, widely around all

branches of Pakistan PSO keeps consistent training on job for their emloyees, the Line Manager

nominates the employees ahead for higher designation after evaluating the employees

performance and their abilities with enhance skill comparing with their previous skills compared

to their present. There are External Leadership training where it is possibility for the employees

to get shifted to other branches or cities noticing their abilities and skills that how they can be

better and under which kind of atmosphere would be suitable for them to enhance their

performance.

Aside from domestic PSO have been into a recently international leadership program which was

named as KATCOM, it includes the bulletproof leaders of the business, the ones who had been

the benchmarks of PSO in their performance.

The Top 20 employees were recognized by their skills of leadership and are selected by H.R

heads, and those top performers are then send under consecutive training to enhance and

polish their leadership skills and qualities, these programs have a duration of 1 year as

Mr.Murtaza was also into these Programs at the growing stage in his career in PSO.

The employees under these skills enhancement programs had are kept under continues

recognization of the heads if they kept grooming and enhancing their skills rapidly they are

offered promotions and incentives as the extrinsic motivators.

How do you evaluate the performance?

The leaderships performance can be evaluated under several factors as it varies from

environment to environment and from organization to organization, so apart from that the

other advantage of leadership in our organization is that when a leader perform well set as with

a pattern he/she make a role model for their sub-ordinates.

Do the leaders engage other employees (sub-Ordinates) in their decision making?

Obviously in a good leader there you will always find this quality to take the whole crew as a

unit and make decisions after taking all the input ideas from the subs and then finalizing one

decision.



In order to make the decision not only from himself but that decision stands as the decision of

the whole team/group/department that leader is leading. Exactly after taking all the inputs of

the subordinates because some times there are some very valuable advices made which in

crucial and urgent time are not considered and that is the loss of the organization as well as

employee’s interest in taking part in the organization’s decision and discussions.

As there are certain very important advantages when it comes to include your team in decision

making, first most important is that the individual from whom you ask for his/her

recommendation feels a bit of ownership which results increase in interest and loyalty of the

employee for his/her organization.

What are the certain methods of communication adopted by the leaders in PSO?

There are certain condition and circumstances which have there different ways to communicate

with the employees i.e as for internal meeting there are many ways to communicate in duration

of internal meeting, it has a lot of varieties, as it varies from leader to leader and organization to

organization.

There can be considerably said that there is a verbal way to communicate in with your team,

apart from that their can behaviour by which you can reflect the work/decision you want to

discuss or tell to your team by expressions, these ways helps to execute tasks, expected the

attitude required by the team from his leader.

How do you motivate the employees in your organization?

The superiors fill the evaluation forms of the company employees and the promotions pay raise

and pay for performance are given annually to the employees, apart from motivation, the

meetings and job enrichment and enhancement are offered by promotions, motivation is not

only resulted on monetary benefits.

Are there any weaknesses in the leadership programs of PSO?

There are some weaknesses as we are trying our best to increase the appraisal system, not only

the subordinates are being evaluated but also that the leaders can also evaluated by their sub-

ordinates, so that the weaknesses which are in a leader can be reflected and he/she can take

over that weakness, we are trying for such kind of an appraisal system.

The other most recognizable weakness of PSO firm is that there is not a running process of Job

Rotation it is very hard to get the rotation recognized because it is not being used in our firm

and we are trying to get it in PSO because it favor every employees as well as it increase the

experience and skills of every employee engaged in different activities inside his/her job time

which also makes up new challenges and challenges in major example increases the

performance of majority of the employees.



METHODOLOGY

TRAINING SESSIONS TO ENHANCE LEADERSHIP SKILLS AMONG

EMPLOYEES TO ENHANCE LEADERSHIP SKILLS AND FUTURE PLANING

OF EFFECTIVE WORK IN PSO

At Pakistan State Oil there training session and evaluations which are held every year and

Pakistan state Oil covers all the area where an employee needs to be trained and checked to

get the better output.

At Pakistan State Oil these are some training sessions which are held every year.

1. Leadership

2. Team Building

3. Decision making

4. Communication Skills

PSO

Leadership

Decision making

Communication Skills

Team Building



TRAINING PYRAMID The employee is evaluated in the five stages at Pakistan State Oil and those are mainly the

stages where the employee gets checked by the organization.

The five stages are :-

Employee at Pakistan State Oil is rated on scale of 1 to 5 (1 being lowest and 5 being highest))

on the HR scorecard. Above the are main stages where an employee gets checked and mainly

there are only four stages: Reaction, Learning, Transfer, Result.

A new study has been placed which has involved Return On Investment (ROI) which is an

extensive process stage as in PSO the employee appraisal is based on qualitative outcome and

not quantitative. Mostly, the organization doesn’t follow ROI but at times when it does the

organization corroborates the Return on Sales of an employee at Pakistan State Oil.

ANALYSIS

COMPARISON 2011 & 2012 Once training sessions are completed at PSO, the comparison is drawn between the previous

years’ and current years’ outcome. Comparing 2011 & 2012 results, growth of almost 11

percent is perceived. From 2011 to 2012, employee’s efficiency has grown from 67% to 78%.

Evaluation band set at PSO ranges from 12% to 18% upwards or downwards. By so far, PSO has

been able to drive its employee’s performance aloft.

Return on Investment

Result

Transfer Of Knowledge

Learning

Reaction



COST BENEFIT ANALYSIS Cost benefit analysis at Pakistan State Oil is not always preferred but to save the cost and to

give the best productivity that is the main stream of the organization and at Pakistan State Oil

the four main sessions are held every year they are Leadership, Team Building. Decision Making

& Communication Skills and if the organization sees that the employees does not require any

one of those sessions, so that is where the organization counts its benefit of the cost. From

2011 to 2012 Pakistan State Oil has got the benefit of 12%, In 2011 it was 30% and in 2012 it

has retain at 30% despite of 2010 decrease of 10% from 40-30%, this is how the organization

ascertains the benefit.

EFFICIENCY OF THE EMPLOYEES At Pakistan State Oil the efficiency of employees has grown up to 60% if we compare the year

2010 with 2011 the organization employees efficiency has improved. Every year the efficiency

bar rises. Whereas, in 2012 it is expected be more than 70%.

RECOMMENDATIONS

On the Job assessment and implementation is the responsibility of the department’s training

coordinator. They should provide, at a minimum, on-the-job training or work-related

instructions that prepare employees to perform their current jobs. These instructions should

include directions for adapting to technological change and to make new employees feel

comfortable.

The duration that an employee spends at an approved training program during normal work

hours should be considered as part of the employee's normal working hours and should not be

charged to his or her accumulated leave or considered leave without pay.

Training records and maintenance have to be kept by the coordinator where the records should

be maintained for the following three years after the completion of the training. Training

records should include, at a minimum:

Participant's age

Race

Gender

Course identification

Dates of training



When proper records will be available it will be easier to assess the change in an employee’s

performance and to compare performances. Also there is a need to eliminate nepotism. This

can be done by regular feedback taken by the HR department from employees about their

problems.

Additionally, PSO must develop a TNA model which is a mix of qualitative and quantitative

factors for a realistic picture of the training needs. It also needs to hire an external consultant

for Training & Development who also needs to hire an external consultant for Training &

Development who can impartially assess the flaws of the system. PSO must hire an

Organizational Psychologist who can perform these tasks well and coordinate all the things

within the company.

Employees working in rural areas should be given the opportunity to visit the head office for

training. Training is also helpful because it helps in filling the gaps that might arise because of

the lack of skills or abilities that are required to perform a particular job. By giving proper

training to employees, employees can acquire those skills and perform the jobs in an effective

and efficient manner.

CONCLUSION

The Leadership department of PSO is playing an important role in training and development of its

employees to be at competitive edge and to develop its potential employees to enrich their knowledge. PSO also wants to enhance their skills by training them with business related

courses available in the corporate sector

At PSO training usually starts from its orientation programs to manage trainees. They spend

millions of dollars each year to enhance the skills of its management and non-management employee’s through on the job, off job, apprenticeship and coaching training programs.

It can be concluded after the analysis, that, training and development of employees is an

investment rather than cost for the organizations. To retain employees, proper training and motivation are the basic tools. A well-trained group of employees result in the reduction of

costs, stress, turnover, and absenteeism and corresponding increase in efficiency and customer satisfaction.



ARTICLES

“Looking In The Mirror” When CEOs speak with Rob Kaplan looking for answers, he usually focuses them instead on

figuring out and discussing the right questions.

"Show me a company, nonprofit, or a government leader that is struggling, and almost

invariably you'll see someone who isn't sufficiently focused on asking the right questions,"

says Kaplan, a Professor of Management Practice at Harvard Business School. "Most leaders

spend a lot of their time looking for answers. Very often, they may feel isolated and alone. I

want to help them refocus their attention on framing and then discussing the key questions

that will help them regroup, mobilize their team, formulate a plan of action, and move

forward."

In his new book, What to Ask the Person in the Mirror , Kaplan argues against the notion

that great leadership is about having all the answers. He believes that leadership skills can

be learned--and that many of these skills require executives to rethink their conception of

what a superb leader actually does. Developing and practicing these skills requires hard

work and may demand that talented executives overcome some degree of discomfort and

even anxiety in order to raise their game.

The book discusses several key areas of inquiry that can help leaders improve the success

of their companies and nonprofit organizations including: vision and priorities, managing

your time, giving and getting feedback, succession planning and delegation, evaluation and

alignment, being a role model, and reaching your potential. "My objective is to help leaders

reach their potential by helping them realize that they don't need to have all the answers or

do this alone. I hope they will see that framing a question and listening can be enormously

powerful in leading to excellent decisions. A leader needs to master the use of inquiry and

reflection as well as advocacy in order to build his or her organization and career."

Have you developed a clear vision and key priorities for your enterprise?

"When I see a problem with a business or nonprofit, it often starts with a lack of clarity

about the organization's aspirations," Kaplan says. The leader may have a clear vision in his

or her head but has not communicated it effectively throughout the organization. "When

there is not a clearly articulated vision along with a manageable set of key priorities, you

may see an organization where employees are expending their energies in a number of

divergent and uncoordinated directions."



Leaders need to ask whether they articulate a clear vision and, just as importantly, whether

their key employees can rearticulate this vision in a consistent manner. For instance,

DuPont's vision is "to be the world's most dynamic science company, creating sustainable

solutions essential to a better, safer and healthier life for people everywh ere." This vision

helps DuPont employees better understand what (and why) they are spending their

professional energies trying to accomplish.

Once the vision is established, Kaplan advises leaders to come up with and communicate a

list of no more than three to five priorities that are critical to the organization in order to

achieve the vision. In his book, Kaplan describes various approaches to formulating and

adapting these priorities to each department and geographic region in order to better

achieve overall organization objectives. "When a leadership has this discipline, they focus

much more intently on what tasks they need to do superbly well in order to achieve their

goals. This also can help them to question certain activities where they are spending

substantial time and money yet not contributing to organizational goals and maybe they

shouldn't be pursuing."

Does the way you spend your time match your key priorities?

Many CEOs tell Kaplan that they don't have time to figure out their vision and priorities--

they're working 80-hour weeks! In his book, Kaplan discusses techniques for matching

available hours with key priorities, so executives can learn to do much more effective work

and better manage their time.

He recommends that executives track their time for a couple of weeks and then analyze

how it is being spent. If substantial time allocations do not match top priorities, he

discusses how these tasks should be either delegated or eliminated.

"When someone asks you to spend time on work that doesn't match your key priorities, the

right action is probably to say no," Kaplan says. "Once you have a better matching of your

time with priorities, you'll want to encourage your direct reports to do the same."

Do you coach and also solicit feedback from your key subordinates?

Most good leaders understand they need to coach key employees, but fewer realize the

importance of asking subordinates for coaching. The more senior you are in a company, the

fewer senior executives and peers are able to effectively observe and coach you. Kaplan

gives advice on several techniques that leaders can use to solicit coaching from their direct

reports.

"Ironically, the executives most in need of feedback in many organizations are very senior,"

he says. "They may have become isolated or not realize that their direct reports have



constructive advice regarding specific changes they need to make to improve their

leadership effectiveness."

The book describes various approaches for giving and receiving feedback. In particular, it

offers various techniques that should be implemented in advance of the year-end review,

which typically arrives too late for professionals to make changes that would improve their

compensation and/or promotion prospects in that year.

When senior leaders ultimately do cultivate junior coaches, they find that the criticism can

feel "devastating at first because you realize it is accurate and that it is probably a

widespread view within the organization. You have to thank the junior coach, and then go

out and work on what they've told you." Not sure the assessment is accurate? Call a few

close friends or loved ones and see what they think. Most likely, Kaplan says, they'll agree

with your subordinates.

"Leadership is a team game," he says. "You have to solicit help from others or you're likely

to under-achieve your potential."

Do you have a succession-planning process in place?

Kaplan stresses the importance of developing potential successors for key positions in your

company-including your own-and creating a confidential list. "Many great companies do

this but a surprising number don't," he says.

Senior leaders should leverage this depth chart information about up-and-comers by

delegating to them more extensively. This also allows senior leaders more time to achieve a

better match between their own time and key priorities. Leaders who fail to train

successors risk not only doing too much themselves but also losing these valuable

employees, who can become frustrated that they aren't being challenged to build their

skills and careers at the company.

If you had to design your company today with a clean sheet of paper, what would you

change?

The world doesn't stand still and it's natural for companies to fall out of alignment with

achievement of key objectives. Too often, leaders don't realize how off-track they are until

serious damage has been done to the business or the firm's reputation. Kaplan likens the

situation to realizing your health is at risk only after you're stricken with a heart attack.

He describes various approaches for reviewing your organization with a clean sheet of

paper. For example, one approach involves creating a task force of younger emerging

company leaders. "Emerging leaders, organized and mandated properly, can give you



fabulous strategic recommendations," he says. "Looking to up-and-comers is not only quite

effective in getting great strategic advice but also in motivating these future leaders."

Do you act as a role model?

Leaders don't always realize that their actions set an example for the peo ple who work for

them, especially if they have risen through the ranks of a company so quickly that they fail

to realize their influence as role models. Kaplan learned this from personal experience

during his tenure at the Goldman Sachs Group, where he worked in several capacities,

eventually serving as vice chairman before leaving the firm in 2005.

"I went from being a junior person to running a large business in what seemed like a

nanosecond," he says. "And suddenly more people were watching what I did, and I had to

adjust my actions because I wasn't quite ready for that." In his book, he discusses various

approaches that leaders should take in order to connect their behaviors with the me ssages

they want to be sending.

Are you reaching your potential and being true to yourself?

While much of this book is about tangible "blocking and tackling" to become a more

effective executive, Kaplan dedicates the last two chapters to methods of gaining

perspective and managing oneself more effectively.

"In the end, it's not about meeting everyone else's expectations," he says. "It's about

reaching your unique potential and developing your own leadership style.

“The Power of Conversational

Leadership” When a company is small, communication among employees is as simple as rolling a desk

chair around the room to talk to the president, the admin, or the chief engineer. But as a

company grows, communication becomes more difficult. And strategic direction can suffer

as a result, even if those at the top assume otherwise.

"Having communication that goes bottom-up is just as important as having communication

that goes top-down."

"In many cases you have an executive team that's so sure about company strategy, but then

you go inside the organization and find that nobody else has a clue," says Harvard Business



School Professor Boris Groysberg. "Nobody knows what strategic conversatio ns are

actually unfolding."

For that reason, many CEOs are reconsidering the classic command-and-control structure

in which a few people are sending all the directives from the top of the corporate hierarchy.

Instead, they are adopting a conversational approach. In their new book, Talk, Inc.: How

Trusted Leaders Use Conversation to Power Their Organizations, Groysberg and

communication professional Michael Slind show how several global companies are

adopting principles of face-to-face conversation, and why this approach positively affects a

company's bottom line.

"In many ways the book is not about communication as much as it is about performance,"

Groysberg says. "In an economic environment where there is so much uncertainty, the

senior management of a company might not know where the company should be going in

three years. But your frontline customer-facing people might. Having communication that

goes bottom-up is just as important as having communication that goes top-down."

To try to suss out best practices for communication, the authors interviewed

communications directors and CEOs at more than 100 companies. "We were struck by how

often that word 'conversation' kept popping up," Slind says. "CEOs, especially, expressed an

aspiration to promote a conversation in their organization. They talked about wanting

everyone to be on board with the conversation about what they want to do with the

company."

Borne of those interviews, the book advocates an approach called "organizational

conversation," which applies to all processes a company uses to circulate information

across the organization, rather than just from the top down. "It's about creating a culture in

which the communication function becomes something that more and more resembles the

way that two friends would talk," Slind says.

The properties of a good organizational conversation

The book divides good organizational conversation into four alliterative elements—

intimacy, interactivity, inclusion, and intentionality—each of which applies to a particular

attribute of an organization. "Intimacy is about leadership," Groysberg explains.

"Interactivity is about channels. Inclusion is about content. And intentionality is about

goals, vision, and the strategy of getting things done."

INTIMACY: The authors note that intimacy need not require physical proximity, which

would be impossible in a multinational company where employees are separated by

thousands of miles. Rather, it requires emotional or mental intimacy. "It's about trust, it's



about being authentic, it's about communicating your vision but also at the same time

listening to what employees have to say," Groysberg says.

Talk, Inc. highlights the case of the Indian company Hindustan Petroleum Corporation Ltd.,

which at the turn of the twenty-first century launched an effort to develop a new vision

statement. Rather than keeping the effort confined to the C-suite, Hindustan held an

extensive series of "vision workshops" where employees at all levels of the company were

invited to share their thoughts.

A typical vision workshop included about 20 people and lasted three days. HPCL is a

Fortune Global500 company employing more than 11,000 people, so it took years to

complete the workshops. But by the end of the process, "almost every person felt that the

company vision was his or her own vision," Groysberg says.

INTERACTIVITY: Once some intimacy is established, it's important to keep the

conversation flowing. "It's not just that one person is both talking and listening, it means

that there is a real sort of back and forth where the act of listening actually changes what

you think and say," Slind explains. "As your company gets larger, that gets more difficult.

But one of the ways to do it is by using technology."

The book provides a quick overview of the social technology that helps global corporate

communication mimic personal conversation: internal blogs (in which leaders share their

thoughts and employees have a chance to comment), wikis (which enable collaboration on

corporate databases), online communities (which help far-flung employees find like-

minded colleagues), Twitter (which lets employees broadcast information widely, both

internally and externally), networks such as Facebook and LinkedIn (which enable

information sharing among a particular group), video sharing (YouTube and the like), and

web-enabled video chat (which help to mimic in-person communication).

Global computer networking giant Cisco Systems, for example, uses its own TelePresence

videoconferencing technology to simulate in-person meetings among its ranks—more than

6,200 executives and some 72,000 employees in total. "You really forget that you're

speaking across a fiber-optic cable," says Slind, who has observed videoconferences at the

San Jose, California-based company. "You feel like you're sitting across from this person."

Slind hastens to add that technology is only as effective as those deploying it. "Interactivity

isn't just about technology," he says. "It's equally important to build an interactive culture."

INCLUSION: In organizational conversation, inclusion means giving employees a chance to

help tell a company's story. Ceding a measure of control over communication to employees

comes with the obvious risk of uncontrolled messaging, but the authors report that the

rewards of inclusion often outweigh the risks.



A traditional command-and-control company will filter a bunch of top-down messages

through the communications department. But the book recommends a more organic

approach. Sales teams can share success stories from the field via public video blogs, which

journalists and customers may consider more authentic and more useful than slick

marketing material. Furthermore, besides meeting with sales teams, customers might have

a chance to meet with the no-nonsense engineers who actually created the technology.

Talk, Inc. discusses a project at EMC, a Hopkinton, Massachusetts-based storage

networking company with more than 40,000 employees. In 2009, the company employees

produced a book about the lives of working mothers at the company, gathering personal

essays by 97 women at EMC (and one essay by a man). "It bubbled up organically,"

Groysberg says. "And in that way the message they created was more compelling than a

marketing campaign. It's helping the company to recruit women, which creates a great

competitive advantage. And internally, it has served to engage employees by letting them

become content creators. That's an example of being inclusive and allowing people to have

voice. And what we find is that that fundamentally will drive engagement. And engagement

will drive more effort. And effort will drive individual performance, and subsequently that

will drive organizational performance."

INTENTIONALITY: While the goal of organizational conversation is to draw on the

characteristics of a talk between friends, it must always have an agenda—and a leader

must always have a goal in mind. Otherwise it might take the form of talk just for the sake

of talking. The goal may be to ensure that all the employees understand the company's

competitive strategy, or it may be to ask every employee to help shape that strategy. But

there must be a goal, and the leader should use conversation to achieve that goal.

"Even if you can't control everything anymore you still are the leader," Slind says. "You still

have responsibility for setting the tone and setting the direction. And that's what

intentionality is about. As you're planning a conversation, you need to make sure that it's in

alignment with your company's strategic goals. And if it's done well, the power of

communication can support those goals."

"A productive conversation is a source of sustainable competitive advantage," Groysberg

says. "We find that if you can have good conversations in a company, you can actually

achieve a lot."



“Are You a Level-Six Leader?” The central, most telling question to ask a leader is, whom do you serve?

Some leaders will tell you, using a popular descriptor, that they aspire to be "servant

leaders." The question still remains, however, a servant to whom: to yourself, to your

group, or to society (to cite three of several options)?

"Opportunists are the people who always ask, 'What's in it for me?'"

Asking the question whom do you serve? is a powerful vector on which to build a useful

typology of leadership. Based on this idea, I have constructed a six-level Purpose-Driven

Model of Leadership informed by the work of Jean Piaget, Lawrence Kohlberg, and his

colleague, Robert Kegan (see table 1). The answer to the question whom do you serve often

reveals more about leaders than knowing their personality traits, level of achievement, or

whether they were "transformational" or "transactional" leaders.

Level One: Sociopath

At the base of the model is the person who literally serves no one: the Sociopath. The

Sociopath, afflicted with what the Diagnostic and Statistical Manual of Mental Disorders

(DSM-III) describes as antisocial personality disorder, exhibits abnormally low empathy

and destroys value, himself, and, ultimately, those who surround him as well. (I use the

male pronoun because the vast majority of Sociopaths and psychopaths are male.)

Fortunately, Sociopaths comprise less than 1 percent of the population. An excellent

current example is Muammar Gaddafi, who is destroying his country, his tribe, his family,

and, in time, himself. Indeed, he serves no one. The same was true of Adolf Hitler and

Saddam Hussein.

Level Two: Opportunist

The second level is the leader who serves only himself or herself, often at the expense of

others: the Opportunist. These are the people who always ask, "What's in it for me?" Their

moral compass is guided primarily by the accumulation of wealth and power, all else be

damned. Bernie Madoff, now in prison, is a poster boy for the Opportunists. While Madoff

enjoyed the luxuries of a life of wealth and power, hundreds if not thousands of retirees

saw their nest eggs evaporate because of their unwitting participation in a deliberately

contrived Ponzi scheme that, in time, became the largest ($50 billion) in Wall Street

history. By this measure, or in terms of the families brought to financial ruin, Madoff

remains one of the modern world's greatest Opportunists. Also of this genre, although

somewhat lesser known, is Jeffrey Skilling, the Enron CEO who sold off tens of millions of



dollars of stock just before Enron filed for bankruptcy, claiming he had no knowledge of the

scandal that would engulf his company. He was sentenced to 24 years and four months in

prison.

Level Three: Chameleon

At the next level sits Chameleons. These are the "leaders" who bend with the wind and

strive to please as many people as possible at all times. In some cases this could be the

group they work with; in other cases, the regional or national electorate. It is difficult to

find renowned corporate leaders who fit this category because in business, typically, the

Chameleons are weeded out before they reach the top. The world of politics is another

matter. Many politicians fall into this category. Those who follow presidential politics will

remember Senator John Kerry (D-MA), who was pilloried as a "flip-flopper" after explaining

a vote regarding the Iraq war: "I actually did vote for the [authorization bill] before I voted

against it." In Florida, former governor Charlie Crist changed colors so often that it was

difficult to know with precision where he stood on any given issue, from climate change to

which party, if any, he really belonged to.

There is a natural cleavage between the model's first three levels described above and the

next three levels. There is not much to celebrate about the first three levels, although

certainly levels two and three abound in organizations. There's much more to admire in

levels four, five, and six.

Level Four: Achiever

"Achievers often substitute the needs of the whole with their personal striving to succeed."

The level-four leader, the Achiever, fills the senior executive ranks. These leaders rarely fail

to achieve their goals and often exceed sales quotas, create generous profits, and are

frequent stars at merit-award dinners. The Achiever, to use Peter Drucker's felicitous

phrase, is often a "monomaniac with a mission" and is focused, energetic, results-oriented,

and highly prized by top management. Achievers pursue goals established by their bosses

or by themselves, in a single-minded manner. Therein lies the Achilles' heel of Achievers:

They drive toward a goal without giving much consideration to the broader mission.

Former Hewlett-Packard CEO Mark Hurd is an excellent example of a level-four leader.

Under his watch HP's stock price more than doubled, but he decimated the infrastructure

and intellectual seed corn (R&D) of the company to do so. By simply cutting R&D to a level

of about 2.5 percent of revenue, down from 6 percent during the 1990s, the Carly

Fiorina/Mark Hurd team "saved" HP about $4 billion—about the equivalent of half the

profits earned during Hurd's last year. HP's once formidable technological and product

strength was slowly sapped away. When I asked Dave Packard in the early 1980s what

accounted for HP's extraordinary run he modestly replied, "I guess we found a way to make



a better product." Where are those better products today? Referring to one of HP's most

visible new product initiatives, the TouchPad, a late entry into the iPad dominated tablet

space, a senior HP executive reportedly told the Wall Street Journal, "We know we're the

fifth man in a four-man race." In their drive towards a goal, Achievers often substitute the

needs of the whole with their personal striving to succeed.

Level Five: Builder

The level-five leader, the Builder, strives not to reach a goal but to build an institution.

Builders are legendary leaders such as IBM's Tom Watson Jr., GM's Alfred P. Sloan, and

Harpo's Oprah Winfrey. These people serve their institutions by managing for the long

term and not allowing themselves to be seduced by the twin mirages of short-term profit or

stock market valuations. They have a grand vision for the future of their organizations, and

they infect others with their energy, enthusiasm, and integrity. These are the leaders we

write books about, study, try to understand, and lionize.

Level Six: Transcendent

Builders are few and far between, but there is an even rarer type of leader who transcends

the Builder: the Transcendent. Level-six leaders transcend their political party, their ethnic

or racial group, and even their institutions. They focus on how to benefit all of society.

These are "global citizens," in the words of Howard Gardner's recent book, Truth, Beauty,

and Goodness Reframed, who watch out not only for numero uno but for the wider public

as well. There is no better example of what it really takes to be a Transcendent than the

first black president of South Africa, Nelson Mandela. He was able to soar above hatred for

his white jailers, the political tug of the African National Congress, the pull of his racial and

tribal group, and the rejection by the Afrikaners to build a South Africa for all South

Africans. Now in his 90s, he is perhaps the world's greatest living leader.

“What CEOs Do, and How They Can Do it

Better” Why did you come in late on Tuesday? Did you really need an hour and a half for lunch on

Wednesday? Why wasn't that report done by Thursday? For most of us, justifying our

schedules is an expected part of the job.

But what employee hasn't looked at the closed door of the corner office and wondered

what the boss is doing all day. For all of the minute-to-minute monitoring of employee



performance from the time of Henry Ford onward, it's amazing how little any of us really

know about how CEOs of major companies spend their time.

"Fundamentally, it's because no one knows what a CEO should do," says Harvard Business

School professor Raffaella Sadun. "Most of the time it's difficult to codify the qualities of a

good manager."

"We went in with the curiosity of trying to understand the life of a CEO"

Despite that difficulty, however, it's self-evident that the way a CEO chooses to spend his or

her time has much more of an effect on a company's success or failure than if a middle

manager spends a half hour more at lunch. With that in mind, Sadun and three colleagues -

Oriana Bandiera and Andrea Prat of the London School of Economics and Luigi Guiso of the

European University Institute—set out to get to the bottom of CEO time management by

following nearly 100 top managers in Italy, as reported in a recent paper with the

deceptively simple title, What Do CEOs Do?

"We had no way of knowing what we were going to find," says Sadun. "We went in with the

curiosity of trying to understand the life of a CEO."

But what they did discover should help CEOs learn to be more effective with their time, and

provide boards with a new tool to help assess the effectiveness of their chief executives.

Under a microscope

Of course, it's not so easy to codify all of the many actions a CEO could take during the

course of a day—attending meetings, reviewing a marketing campaign, schmoozing clients

on the golf course. So Sadun and her colleagues instead divided up activities with a much

simpler measure of looking at the people with whom a CEO spent time.

After all, the boss is in a unique position within a firm not only to spend time with

employees, but also with the outside world, making connections and gathering information.

However, not all of the time the boss spends with outsiders might help the firm, especially

if a CEO's and a company's interests are not aligned.

"CEOs should be working with both constituencies, insiders and outsiders," says Sadun.

"However, if there are governance issues, there might be the possibility that the CEO is in

the outside world more for his or her personal benefit than for the benefit of the firm."

In order to test whether this was true, the researchers enlisted 94 CEOs of major Italian

corporations who agreed to put their lives under the microscope for a period of a week at a

time. The CEO's personal assistant was asked to record every activity the boss engaged in

that lasted at least 15 minutes.



Tabulating the data, the researchers discovered that the vast majority of a CEO's time, some

85 percent, was spent working with other people through meetings, phone calls, and public

appearances, while only 15 percent was spent working alone. Of the time spent with

others, chief execs spent on average 42 percent with only "insiders" (employees or

directors of the CEO's firm); 25 percent with insiders and outsiders together; and 16

percent with only outsiders. (Exact numbers varied dramatically among the sample, with

some CEOs spending more than 20 hours a week outside the office, while others spent

almost none.)

Next, the researchers crunched a number of factors measuring company performance —for

example, profits per employee—in order to see which CEOs were more productively using

their time.

Better on the inside

Their first finding, which might seem unsurprising, was that the top managers who spent

more time at work were more productive than those who spent less time at work. In fact,

Sadun and company found, for every 1 percent increase in hours worked, there was a 2.14

percent increase in productivity. "That's never been shown before, so that was reassuring,"

Sadun says.

Likewise, time spent with insiders was strongly correlated with productivity increases. For

every 1 percent gain in time spent with at least one insider, productivity advanced 1.23

percent. Less reassuring, however, was that the time CEOs spent with outsiders had no

measurable correlation with firm performance.

"It's a way to monitor where the efforts of the CEO are going"

In a final measure of CEO's performance, the researchers rated firms based on the quality

of governance, measuring a variety of factors such as the size of the board, the presence of

at least one woman on the board, ownership, whether the company was based in another

country, and if so, the general level of governance in that country. Again they found a clear

correlation: in companies with stronger governance, CEOs spent more time with insiders

and less time with outsiders, and at the same time were more productive.

"There are some industries where a CEO really needs to be outside, so we don't need to be

proscriptive, but if you were taking these results literally it would tell you that since a

CEO's time is constrained, he should be mindful of the time spent with his own employees,"

says Sadun.

In extrapolating from the data, Sadun cautions the sample size used in the study was

relatively small (though exponentially bigger than any past research on the topic), and that

the results of the study (especially when it comes to the link between CEO time use and



firm performance) should for the moment be interpreted as suggestive correlations rather

than firm causality statements. Even so, encouraged by the results of the initial study, the

group is planning to continue along this line of research by expanding the data collection in

other countries (India, China, and the US) in order to increase the sample as well as to take

cultural differences into account.

Sadun says that the group has received nothing but positive feedback from the anon ymous

CEOs who participated in the study. In keeping with the adage that "it's lonely at the top,"

many of the managers studied had little idea of how they could make their time more

productive. Sadun hopes that the information will be equally helpful for boards in

evaluating the performance of their CEOs.

"It's a way to monitor where the efforts of the CEO are going, and to get them

understanding that perhaps spending too much time on the outside might not be as

beneficial as they might think," she says.

If nothing else, next time employees ask the question "What is the boss doing with all of his

time?" at least they'll have an answer.

“Developing the Global Leader” What skills do today's executives need to develop to become effective global leaders of

tomorrow? And how do corporations teach these skills to their own leaders?

"The shift from a country-centric corporation to one that is more global in its outlook will

have a radical impact on leadership development," says Professor of Management Practice

William George, the former chairman and chief executive officer of Medtronic.

"We're looking to companies to create a global cadre of people who are comfortable

operating anywhere in the world."

George developed and taught for many years the popular second-year MBA course

Authentic Leadership Development (ALD), which he has compressed into a five-day

Executive Education program at Harvard Business School.

"The most successful leaders will not necessarily be those with the highest IQ," he says. "Of

course, they will need to be intelligent. But they'll also need to have a high level of cultur al

and emotional intelligence."

According to George, additional characteristics of a successful global leade r include:

An intellectual understanding of the global business context—in other words, an ability to

comprehend just how complex it can be to do business around the world.



The capacity to simultaneously develop a global and local perspective. "This is much easier

said than done," George says. "And it's almost impossible to achieve without a great deal of

experience living in different parts of the world."

Being able to overcome the dominant thinking at headquarters. "Leadership has to lean in

favor of nondominant thinking," says George. "That requires a tremendous amount of

intercultural empathy and a passion for diversity in life experiences." In other words: "An

insatiable need to learn about other cultures."

A knack for cross-boundary partnering. "You need to feel comfortable engaging a team in

India and giving them as much power as a team in Germany or the United States. There's a

certain level of executive leadership maturity involved in having the respect and capacity to

pull the best out of each area of the corporation."

A self-awareness and self-assurance when it comes to one's values and sense of purpose. At

the same time, however, "you need to be flexible in learning from and empowering others."

The ability to develop networks that are internal and external to the organization. "It's a

process of shifting from vertical management to horizontal collaboration. One's title and

role are far less important than the capacity to get things done."

How should one cultivate these qualities? One of George's first recommendations for

would-be global leaders is to live in a country where the language spoken is different from

that in one's home country.

"When my wife and I lived in Japan we had a two-year-old child, which meant we had to

dive in and learn very quickly," he recalls. "Doing this gives you a heightened sensitivity to

cultural differences, and how those differences are tied up in language."

After 60 or so hours of Japanese language instruction, George could more or less carry on a

conversation, and did so with a retired chairman of Mitsubishi—who gently informed him

that he was speaking "female Japanese."

Get lost

"These are great learning experiences," he says. "The first weekend after I had moved to

Belgium, I asked someone how I should explore and get to know the place. I was told to go

get lost, which is great advice. It's about really engaging in the culture and learning to be

vulnerable."

Accepting one's vulnerabilities is a primary objective of ALD, which requires participants to

work together in six-person groups.



"It's more than a knowledge transfer from HBS to individuals; it's also an exchange

between people and a process of understanding who I am, what I desire, what is my

purpose, and what are my values," says George, who notes that this year the number of

participants who can enroll in ALD has doubled to 240 people.

Also coming next July is The Global Enterprise Leader, a course developed with Professor

Krishna Palepu that will extend ALD's objectives to include cultivating a greater capacity

for cultural intelligence. "It's not so much about understanding geopolitics," George says.

"The characteristics that I've cited above are far more important."

Aligning employees across a diversity of geographies and experiences is easier said than

done, George concedes, although he does highlight a few standouts, including Coca-Cola

(which has had five non-American CEOs), Nestlé, Unilever, Siemens, IBM, and Novartis,

among others.

"Ultimately, a global organization is measured by how well the diversity of its leadership

reflects the diversity of its customer base and how well that leadership can leverage the

skills of teams working around the world," he says, adding that Medtronic's CEO is Omar

Ishrak, a native of Bangladesh who was educated in London and has worked in the United

States for nearly 20 years.

"We're looking to companies to create a global cadre of people who are comfortable

operating anywhere in the world," George concludes. "That's where we're heading."

PSO Report 2012

Recruiting & HR

Transcript of PSO Report 2012