global economy and global managers - philippe pierre · 2018-12-30 · david ogilvy checking the...

OCTOBER 2008 EFFECTIVE EXECUTIVE3

Volume XI, No. 10 October 2008

P L A T F O R M

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Editor

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Dr. Nagendra V Chowdary

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Art Department

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ISSN 0972-5172

Dr. Nagendra V Chowdary

Global Economy and Global ManagersIf the last century can largely be interpreted as a Century of Con-

glomerates and a Century of Corporate Imperialism, can this century beinterpreted as a Century of Emerging Markets? Did the end of Cold Warmean the arrival of Corporate War? A lot has changed in the last hun-dred years of corporate history. There were many strategic inflectionpoints. Globalization champions advocated borderless trade and thathas led in some way to global economic imbalances. The first eightyears of this century (2001-2008) would definitely go down the historyas watershed years for global economy and global businesses. First itwas colossal fall of Enron, Arthur Anderson, Tyco and WorldCom. Thenthe September 11 attacks put countries on high alert. 2007 saw theworld getting engulfed in subprime mortgage crisis and with that acomplete washout of trillions of dollars of shareholder wealth; and2008 has seen the global banking crisis, oil price shocks and food pricerises. Amidst all these, the Central Banks have been put in a quandary.And that quandary has compounded the exchange rate risks and com-panies across the globe seem out of place and clueless. What do allthese events signify? Should they be looked at in isolation or are thereany powerful lessons for future managers and CEOs when they connectthe dots? Is the world integrated for an inimitable disintegration?

This is an era of a new economic consensus and business order.Competition existed long before modern economies and businesseswere born. It began with life itself. Gauseís Principle of CompetitiveExclusion illustrated that no two species can coexist that make theirliving in the identical way. What would be the new frontiers of compe-tition? Who are likely to be the major winners in these frontiers? Whatwould be the new differentiating (when the competitors are closing inon the gaps) factors for companies?

Do you foresee an increasingly decreasing role of multilateral in-ternational bodies like, WTO (with the rise of regional and bilateraltrade agreements and perennial showdown at recent meetings, includ-ing the impasse at Doha round of talks), UNO (with private sector as-suming a great role at humanitarian activitiesófor instance, Bill andMelinda Gates Foundation, Clinton Global Initiative, etc and increasingrole of Social Entrepreneurship Initiatives and Microfinance Initia-tives), the IMF and the World Bank? The rise of business diplomacy?

What do these trends mean for the organizational preparedness?Should companies invest heavily in 4Psó people, processes, platformsand programsóto be at the forefront of innovation in the new businessorder? What would be the critical success factors for global firms in thenew business order and what should be key result areas for the execu-tives in the new economic and business order? What should be a CEOísagenda in the new economic and business order? What factors woulddominate a CEOís agenda? According to a recent McKinsey Global Sur-vey, almost 70% of executives around the world say that global social,environmental and business trends are increasingly important to cor-porate strategy. Yet relatively few companies act on the global trendsthey think will affect them most; among those that do act, only 17%report significant benefits. Why is there such a disparity between needand action?


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Globalization, as defined by richpeople like us, is a very nice thing...you are talking about the Internet, youare talking about cell phones, you aretalking about computers. This doesnítaffect two-thirds of the people of theworld.

Jimmy Carter

It has been said that arguingagainst globalization is like arguingagainst the laws of gravity.

Kofi Annan

Globalization is not something wecan hold off or turn off . . . it is theeconomic equivalent of a force of na-tureólike wind or water.

Bill Clinton

If we allow the celebrity rock-starmodel of leadership to triumph, wewill see the decline of corporationsand institutions of all types. The twen-tieth century was a century of great-ness, but we face the very real pros-pect that the next century will see veryfew enduring great institutions.

Jim Collins

In the modern world of business,it is useless to be a creative originalthinker unless you can also sell whatyou create. Management cannot beexpected to recognize a good idea un-less it is presented to them by a goodsalesman.

David Ogilvy

Checking the results of a decisionagainst its expectations shows execu-tives what their strengths are, wherethey need to improve, and where theylack knowledge or information.

Peter Drucker

Management is nothing more thanmotivating other people.

Lee Iacocca

Every company has two organiza-tional structures: the formal one iswritten on the charts; the other is theeveryday relationship of the men andwomen in the organization.

Harold S Geneen

Good business leaders create a vi-sion, articulate the vision, passion-ately own the vision, and relentlesslydrive it to completion.

Jack Welch

The art of choosing men is notnearly so difficult as the art of enablingthose one has chosen to attain theirfull worth.

Napoleon Bonaparte

The quality of a manís life is in di-rect proportion to his commitment toexcellence, regardless of his chosenfield of endeavor.

Vince Lombardi

People are definitely a companyísgreatest asset. It doesnít make any dif-ference whether the product is cars orcosmetics. A company is only as goodas the people it keeps.

Mary Kay

First comes thought; then organiza-tion of that thought into ideas and plans;then transformation of those plans intoreality. The beginning, as you will ob-serve, is in your imagination.

Napoleon Hill

The five essential entrepreneurialskills for success are concentration,discrimination, organization, innova-tion and communication.

Michael Faraday

Quality is the result of a carefullyconstructed cultural environment. Ithas to be the fabric of the organization,not part of the fabric.

Philip Crosby


C O N T E N T S

Prof. Bala Chakravarthy

28

56

Prof. David Ahlstrom

Dr Jittu Singh

82

Platform .................................... 3

Quotes ..................................... 4

Executive Brief .......................... 6

INTERVIEW WITH

Features

Culture and Management

The UncommonCommonsense ................ 10

The Figure of DiversityManager in FrenchBusiness

Towards a Typology ......... 16

Effective Antidotes forInnovation Antibodies

Staying Ahead ................. 33

Work EngagementAmong Managers andProfessionals in the

Turkish ManufacturingSector

Potential Antecedentsand Consequences ......... 42

The Interaction Economy

Gaining CompetitiveEdge ................................ 63

How to Lead in

Soul-calling Moments

Creating ‘Crisis Heroes’ ... 72

LEADERSHIPEmotional IntelligenceMust Leaders Have It? .... 86


NEWSEXECUTIVE

Why Cuil is No Threat to Google

The much-hyped new search engine Cuil (pronouncedëcoolí), purports to index more Web pages than any of

its rivals. But based on its debut, the new site poses littleimmediate threat to industry leader Google, or even itsnearest competitors, Yahoo and Microsoft, in either rel-evance or breadth of results it delivers.

ìAnybody who thought (Cuil) was this Google killer canreally see now that no, thatís not going to happen todayóand the likelihood is thatís not going to happen a year fromnow,î says Danny Sullivan, internet search guru and editor-in-chief of SearchEngineLand.

Despite its lackluster performance, Cuil (which meanswisdom or knowledge in Gaelic) got so many visitors onMonday, that its servers crashed around 3 p.m. E.T. ìDue toexcessive load, our servers didnít return results. Please tryyour search again,î the site read intermittently throughoutthe afternoon. But even when it was working, the resultswere fair, at best. Enter a keyword such as ëmintí and thefirst result that comes up isnít the herb or flavor but the USMint. Type in ëObamaí, and one of the sub-categories Cuilsuggests is ìHispanic-American Politiciansî. And Cuil lacksthe special tabs for news, video, local and image resultsused by the leading sites.

The hype over Cuil, in fact, may be testament to thepower of a great back story. Cuil is the brainchild of ex-Google staffer Anna Pattersonówho developed theTeraGoogle indexing system that Google still uses todayóand her husband Tom Costello, who developed search en-gines at Stanford and IBM. Cuil indexes some120 billion Web pages. (Google, on the otherhand, claims to scan more than a trillion pages,but only indexes those that are useful, accord-ing to the company.) The Cuil team generatedso much buzz for its venture that it managed toraise some $33 mn in financing. But the acidtest of any search site is the results it generates,and for now, anyway, Cuil falls way short ofthe industryís leaders, and even for that matter,of many startups.

Cuilís distinctive design, in which results appear inthree columns across the page, also allows for longer pre-views of each siteís content. But other search sites makebetter use of page real estate. SearchMe, which launchedearlier this year, offers full-page snapshots in its results,through which you can flip like the album covers oniTunes. And the number 4-ranked search engine, Ask, alsouses a wider layout to display both images and sub-catego-ries for refining oneís search.

Cuil has a distinctive, if old-fashioned, approach to in-dexing websites. Instead of ranking them based on popular-ity, as Google does, it focuses on the content of each page.That may make sense in theory ó after all, the most popularrestaurants, for example, rarely serve the best food ó but it isprecisely the model that Google broke away from in order to

China Surpasses US inNumber of Internet Users

The number of Internet users jumped more than 50%,or by about 90 million people, during the last year, said

the center, which operates under the government-con-trolled Chinese Academy of Sciences. The new estimaterepresents only about 19% of Chinaís population, under-

scoring the potential for growth.By contrast, about 220 million Americans

are online, or 70% of the population, accordingto the Nielsen Company. Japan and South Koreahave similarly high percentages.

Political content on websites inside China isheavily censored, and foreign sites operatinghere have faced restrictions. But online gaming,blogs, and social networking and entertainmentsites are extremely popular among young peoplein China.

The survey found that nearly 70% of Chinaís Internetusers were aged 30 or even younger, and that in the first halfof this year, high school students were, by far, the fastest-growing segment of new users, accounting for 39 million ofthe 43 million new users in that period.

With Internet use booming, so is Web advertising. Theinvestment firm Morgan Stanley says online advertising inChina is growing by 60 to 70% a year, and forecasts that bythe end of this year, it could be a $1.7 bn market.

Chinaís biggest Internet companies, including Baidu,Sina, Tencent and Alibaba, are thriving, and in many casesare outperforming the China-based operations of AmericanInternet giants like Google, Yahoo and eBay.

ìThe Internet market is the fastest-growing consumermarket sector in China,î said Richard Ji, an Internet analyst

give users more relevant results. That could explain why aCuil search on ëinsomniaí directs the user to the AmericanInsomnia Association rather than to the Wikipedia entry onthe subject pulled up first by most other search engines.

The one area where Cuil excels, however, is user pri-vacy. Whereas Google stores user-specific searches for up to18 months, Cuil never stores personally identifiable infor-mation or search histories. Privacy has become a growingconcern among users of search sites ever since AmericaOnline inadvertently released the searches of 658,000 of itsusers in 2006. But thatís unlikely to be enough to persuademost users to switch from their search engine of choice.ìAnybody who thinks the next Google killer is going tocome along is banking on something thatís unlikely,î saysSearchEngineLandís Sullivan. But if the Cuil story is anyindication, that wonít stop people spending fortunes onbeating the odds.

Source: http://www.time.com



NEWSEXECUTIVE

The Weather Channel’s Real Worth

The sky was apparently the limit when media conglom-erate NBC Universal, along with private equity firms

Bain Capital and the Blackstone Group, agreed to pay theenormous $3.5 bn price tag for The Weather Channel.Available in some 96 million American homes, TheWeather Channel is the countryís third most widely distrib-uted cable channel as well as being the 14th most popularwebsite. But observers are already questioning whetherNBC, which is owned by General Electric, overpaid for theproperty. NBC, after all, only paid $1.25 bn for the cablechannel Bravo in 2002, while CBS acquired tech news siteCNET for $1.8 bn last May.

When the channel first went up for sale early this year,there were several bidders, including Time Warner (the par-ent company of TIME), but by last month there was just onesuitor left. ìI think that part of the reason the other stations

backed out is because they couldnít justify paying thatmuch,î says David Trainer of New Constructs, a businessvaluation company in Franklin, Tenn. ìIf it doesnít makefinancial sense, the next reason to buy is ego. ëI got a newtoy. My kingdom is larger.í î

But NBC may have other motivations for its new acqui-sition ó particularly on the Web and in digital broadcasts.While consumers have little reason to type nbc.com intotheir browsers, The Weather Channelís site attracts some 40million unique monthly visitors, according to NielsenOnline. The merger could help drive new traffic to NBCísother digital content. Whatís more, The Weather Channel,which is currently owned by Landmark Communications,has a brand-new $60 mn state-of-the-art, high-definition re-cording studio in Atlanta, from which it can produce digitalbroadcasts both for television and the Web. Viewers canalso look forward to long-form programming, like weatherdocumentaries and dramas, that meld Weather Channelcontent with NBC talent.

With rumors running rife about GeneralElectric planning to unload NBC Universal al-together, some analysts think The WeatherChannel acquisition was an effort to spruce upNBCís online portfolio (which also includesMSNBC.com and CNBC.com) before selling theentertainment arm to a digital media companysuch as Google (which owns YouTube) orApple. ìThe Weather Channel would add someicing to the cake,î says Nicholas Heymann, ananalyst for Sterne Agee & Leach. As syndication

fees have evaporated and profit margins have thinned, TVcompanies have become less attractive assets. GE ìhas tostart lighting a fire under its stock,î notes Heymann.

Although $3.5 bn is a huge sum, NBC will foot only afraction of the total bill. The Blackstone Group, Bain Capi-tal, and NBC, will reportedly will pay just $600 mn eachupfront, and finance the balance. The Weather Channelísestimated $175 mn annual earnings should help defray thedebt.

While the forecast is still murky on exactly how NBCwill leverage its new acquisition, all watchers agree that thesellers got a sweet deal. ìWe feel it is a very fair price,î saysDecker Anstrom, President of Landmark Communications,who called the sale a ìbittersweet momentî for the privatelyowned family business, which launched the cable channelback in 1982. Initially derided as the brunt of jokes, the fore-cast focused channel became profitable within four yearsand soon had established itself as a media category killer.Sheryl Crow named a song after it in 2002, and today it hasan estimated 85 million viewers, many of whom are morethan happy to tune in numerous times each day. It has alsosuccessfully adapted with the times: the channelís free, ad-supported weather service for cell phones is currently itsfastest growing business, according to Anstrom.

Source: http://www.time.com

at Morgan Stanley. ìWe are still far from saturation. So thenext three to five years, weíre still going to see hyper-growthin this market.î

Baidu, for instance, said that its second-quarter netprofit had jumped 81%. During that period, Baidu had a63% share of Chinaís search engine market, while Googlehad about 26%, with Yahoo trailing far behind, according toiResearch, a market research firm based in Beijing. Tencent,a popular site for social networking and gaming, now has astock market value of $15 bn, making it one of the worldísmost valuable Internet companies. In comparison,Amazon.com is valued at about $30 bn.

One measure of the growth of the Internet here, and itssocial and entertainment functions, is the popularity of blogs.

The site of Chinaís most popular blogger, the actress XuJinglei, has attracted more than 174 million visitors over thelast few years, according to Sina.com, the popular Web por-tal, which posts a live tally. According to Sina, 11 otherbloggers have also attracted more than 100 million visitorsin recent years.

The Internetís popularity often poses seriouschallenges to the government. Online gambling,pornography, videos of protests and addictionhave led to regular campaigns to crack down onwhat the government views as vices. ButInternet users have also used the Web for nation-alist campaigns to criticize the Western newsmedia or foreign companies, as was the case af-ter riots broke out in Tibet this year.

While several organizations had projectedthat China would surpass the US in Internet users this year,the new survey results were the first time a governmentagency had released figures showing Chinaís market to belarger than that of the US.

Source: http://www.nytimes.com



NEWSEXECUTIVE

Reference # 03M-2008-10-01-10

The primary goal of thisknowledge paper is to identifyareas for further services tradeand investment betweenCanada and India. Accordingly,it aims to highlight the emerg-ing investment, business andservice opportunities in sectorssuch as food processing, ani-mation and gaming, auto andauto ancillary, banking and fi-nancial services, infrastruc-ture, mining and minerals,pharmaceutical, and biotechnology, renewable energyand power, telecom, vocational education and trainingand climate change.

Source: http://www.in.kpmg.com/Home/Home.asp

India Calling 2008

The global economy is un-der siege. A near perfectstorm of troubling eventshave conspired to create achallenging and, moreworryingly, uncertain envi-ronment for the worldísbusinesses. The collapse ofthe US housing market, the resulting change in the glo-bal market for credit, and rising food and energy priceshave led to economic slowdown, rising inflation, and amore difficult framework for policymakers.

Starting with this publication, Deloitte researchhopes to address these issues in quarterly updates onthe state of the global economy. While many financialinstitutions offer frequent economic forecasts, the pur-pose here is to offer quantitative forecasts of asset prices,with the goal of providing clients with a more strategicperspective. Deloitteís global economists, based in fourcountries on three continents, have endeavored to ex-plain the major issues facing the global economy andoffer a meaningful and actionable point of view.

Source: http://www.deloitte.com/

Global Economic OutlookSummer 2008


Ext_AD-1


Managers are continually instructed that they should takespecial care with respect to cultural differences among theircustomers and employees. This article argues that althoughproblems do occur, the difficulties are easily exaggerated andgreat resources need not be committed to solving them.Culture is a vague and changeable concept which is too easilyused to represent grievances or justify protection for specialinterests. In reality, the issues can be understood and solvedwithout special training.

The Uncommon Commonsense


A student once defined the Mas-ters of Business Administra-tion degree to me as ëcommon

sense, with a dash of pseudoscience.íWhether he was correct or not is amatter of opinion, but an area wherecriticism does strike home relates tothe way culture is presented to aspir-ing managers. It is presented as farmore concrete, explanatory and

threatening than is usually the case.Culture, after all, is highly visible inmany of its aspects, which readilyleads to ëattribution biasíóto attribut-ing to it behavior that probably hasquite different causes.

The mindset that thinks in termsof cultural explanation is very com-mon, even among academics. Someexperts of multi-country studies are

actually asked why they have notcited culture as an explanation of thedifferences reported in the course oftheir research, even when they havediscovered that differences are greaterfrom person to person than whenpeople are grouped by nationality.Furthermore, cultural exceptionalismsprings readily to the minds of manyin politics, who make claims for theantiquity and significance of a cul-ture that they wish to see protected.Since sets of behavior that can be la-beled cultural are so numerous andtheir characteristics apparently so ob-vious, it is easy to label any given setas distinct and claim a privileged sta-tus for it.

There is virtually an industrychurning out assertions about howimportant it is for businesses to payattention to cultural differencesamong their customers and indeed ev-eryone else with whom they have todeal. Some of this insistence pertainsto etiquette and the need to take intoaccount the fact that people of othernationalities, races and religions maymisunderstand or be offended by cer-tain behaviors which would pass un-noticed in oneís own country. Beyondthis, there are endless surveys, writtenin an excessively formal social sciencemode, that seem to reveal genuine dif-ferences in expectations from nationto nation. Managers, it seems, mustgrasp all the varied categories of be-havior and make allowances for eachand every one of them.

There is, of course, something inthis. At any one moment, cultural be-havior does differ. The fact is easy todemonstrate from a million anecdotes.I will give only one: it was always diffi-cult to acquire the sort of mains pres-sure shower in English bathrooms thatNorth Americans or Australians takefor granted. Water comes at low pres-


Professor Eric

Jones is

D i s t i n g u i s h e d

Fellow, Centre for

Business & Public

Policy, Melbourne

Business School,

University of Melbourne, Australia. He holds an

advanced doctoral degree, D. Litt., from the

University of Oxford, and has held many

academic positions. He has consulted widely

for businesses and governmental institutions.

Among his publications is Cultures Merging: AHistorical and Economic Critique of Culture.

sure from a tank or cistern in the roofof English houses, not directly fromthe water mains outside in the street.When the tap is turned on, water isdrawn from the cistern in only a feeblestream. What began to change thissituation, so I am told, was the insis-tence of British Indians whose culture(actually their Hindu religion) forbadethem to bathe in ëstagnantí water likethat stored in the cistern.

Special cases like this where cul-ture makes a difference can be foundeverywhere. Far larger issues alsoseem to hinge on cultural differences,such as the incompatible structures ofAsian and Western firms, though howfar that corporate divide actuallystems from culture rather than fromdifferent political and legal contexts isa moot point. The problem is thereforenot that culture does not exist but thatits influence may not run very deepand may be quite flexible. The realproblem is that the public, includingmanagers and management educators,is constantly told that the behavioralfeatures around them are evidence ofcultural fixity that ought to be re-spected and treated as highly signifi-cant for successful business dealings.

Some Western IT firms have evenbeen persuaded to hire the so-calledëethnomethodologistsí to investigatethe divergent attitudes of their clients.These people visit workplaces and al-legedly undertake to observe ëwithoutpreconceptionsí. This is of course im-possibleówe all have preconcep-

tions. The point I wish to make is that,while we should allow for our own bi-ases, we should guard against over-stating their significance.

In this case, culture is being used asthe justification for paid and dubiouslynecessary, ëethnomethodologicalí re-search and consultation. Similarly,managers need to be aware just howfar ëcultureí may be used as a blind orcamouflage for political interests,which typically means the interests ofa particular group of producers. Ap-peals are commonly made to the pub-lic on cultural grounds, with the aimof securing electoral support for a spe-cial interest which seeks subsidies ortariff protection. The approach playson our immediate identification withthe special interest group by makingits position seem shared by all. Themeans used is allusion to a suppos-edly common history, the same locallanguage, or some alternative form ofsymbolism. Veiled, or not so veiled,reference is made to the threat to na-tional or cultural concerns from for-eign competitors. The result, which isoften successful, is to ensure that thereis a transfer payment to the group pro-moting its product or activity behind acultural facade.

Culture in the specialized form ofthe artsómusic, painting, literature,filmsóis especially prone to this typeof special pleading. It is difficult to re-sist without seeming anti-intellectualor uncultured, while the costs are gen-erally spread so widely that they donot seem heavy to the individual voteror business. The costs of rejecting orresisting cultural appeals are, how-ever, likely to be high and may inviteretaliation from the lobby groups in-volved. The late Mancur Olson wasthe prime authority who exposed thetendency of special interests to try totake more out of societyís common potthan they put in. This was in his 1982classic, The Rise and Decline of Na-tion, where he goes so far as to statethat special interests will accept abso-lutely no limit on their demands.Equivalent demands from their com-petitors may checkmate them, other-wise only the political system can pro-tect the majority of the population

from the burdens that interest groupswill seek to impose.

The globalization of the modernworld clearly intensifies the incentiveto turn to protectionism. Despite theoverall social benefits, industries andcultural producers are increasinglybrought into competition with thosein distant regions and foreign coun-tries. A brash appeal to national inter-ests, often citing the threat to the exist-ing culture, offers shelter to the af-fected groups. Sectional, economicmotives rather than genuinely culturalones are often present. Protectionismis an easier option than struggling tomeet the competition by reducing thecosts of production.

During the 1990s, industrial lob-bies and trade unions in Westerncountries found that the politicalmood was turning against measures ofproduct protection (though the moodin the present downturn may onceagain be moving that way). In that de-cade, the benefits of trade were obvi-ous from the rapid growth of so manyless-developed countries, especiallyin East Asia. Western producers weretempted to turn to soliciting protec-tion against cheap imports from Asia.The threat to cultural nationalism wasoften cited, in line with structuralchanges in developed economies,where manufactured goods were in-creasingly being imported and econo-mies were shifting to services and cul-tural products. The share of employ-ment and output attributable to a widerange of cultural activities was risingsteeply in Western countries, a ten-dency which continues even todayand heightens the importance of cul-ture in the special meaning of the arts.

The public purse is expected tosupport all sorts of novel cultural ven-tures. The progress of internationaleconomic integrationóglobalizationin common parlanceóis continuing,despite the forces starting to be rangedagainst it. Ironically, this creates thewealth that can be diverted throughtax systems to support and protect mi-nority cultural efforts. How the usualformula operates is: the benefits ofprotectionism are reaped by the activefew while the costs are spread too dif-



fusely among the remainder of thepopulation to make the resistanceseem worthwhile.

Globalization is very apparent inthe sphere of languages, where many atongue with only a handful of nativespeakers (and little literature or mod-ern vocabulary) is dying off. Figureson ëlanguage deathí are extremely un-reliable, but about the direction ofchange towards fewer and fewer liv-ing languages, there can be no argu-ment. ìEnglish is not a foreign lan-guage,î declares the Director of Sci-ences Po, the leading university insti-tution in (of all places) ultra-Protec-tionist France, ìit has become theworldís professional language.î Theultimate dominance of World Stan-dard English, including Business En-glish, may or may not be assured, butthere is certainly a consolidation intolanguages that have had large numberof speakers to start withóEnglish,Mandarin, Hindi and Spanish. Lesserlanguages may seem to be in relativelyweak positions in a globalizedeconomy.

At the extreme, special interestshave sought not merely to pump taxmoney into a defence of minority lan-guages but actually to revive some thatwere ëdeadí, in the sense of having noliving speakers. In the UK, the regionallanguage called Cornish, whose lastnative speaker died as long ago as theeighteenth century, has been revivedin tune with the hope that Cornwallmay acquire some degree of politicalindependence. Some people inCornwall can see the benefits of hav-ing a language of their own, howeverexpensive this may be to the tax-payer, because (as is notoriously thecase in Quebec or Wales) public sec-tor jobs can be reserved for peoplewho speak Cornish as well as En-glish. Ordinary speakers of Englishneed not apply! Cornish has alreadybeen established as a school exami-nation subject, behind a barrage ofrhetoric about the intangible merits ofregional culture.

A last example of this cultural frac-turing is even more bizarre and somemight say even more divisive andwasteful. Again in the UK, £25,000

has been granted to teach eleven-yearold pupils in ten schools in the countyof Norfolk how to speak with the localaccent and use dialect words. This isexplicitly to save them from globaliza-tion and the linguistic influence ofLondon!

These moves may be seen as play-acting and of limited business signifi-cance. The rescued or revived lan-guages may be merely add-ons tomainstream ones, i.e. little more thanhobbies for anyone, except the rent-seekers who get jobs teaching them.But they hint at a ground swell of pro-tectionist, regional and national opin-ion that would happily fragment theworld in the name of any and everyminority culture.

Alongside globalization, andsometimes generated by it, comes an-other major shift in world distribu-tionsóimmigration. Part of this is fu-elled from a different source, theworldís conflicts, which send refugeesover many borders and risk breedingantagonism among host populations.The other part of immigration is eco-nomic migration, spurred by an out-flow of workers and their familiesfrom poor countries or a positive de-mand for imported labor in richerones. However much the incomersmay be needed to staff workplaces, theordinary inhabitants of the receivingcountries are likely to fear for theirjobs and sense a threat of change totheir way of life. Notice how clever itis to resist immigrationówhen itcomes to the dilution of a local cul-ture, formal refutation is difficult, be-cause culture is too vague to pindown.

Never mind that every culture isultimately syncretic and compoundedof elements borrowed or importedfrom many other places; it will not beviewed, and may not even be under-stood, in that light. Chances are it willbe perceived by those who grew upwith it as the ancient, honourable andpermanent way of their forefathers.Added to this, immigrants (apart froma relatively small number of skilledmigrants) are customarily poor. Theyare disproportionately young menwilling to work at jobs of the type the

Japanese called the three Ks, or in En-glish the three Ds, meaning essentiallyjobs that are dirty, dangerous and dull.

Jobs of this type do not appeal tothe inhabitants of even quite poorcountries, if cheaper labor can be hadfrom a country that is poorer still. Theimmigrant workers are paid low, rela-tive to the average of the host coun-tryóthere would be little point in im-porting them if this were not the case.Such men, often from peasant back-grounds, speaking what are heard asbarbarous languages or dialects, willseem to lack anything and everythingthe inhabitants of the host country re-gard as ëculture.í Complaints of thatsort have been heard literally since thetime of the Roman Empire. Some ofthe locals may even feel that the jobswhich they do have are likely to betaken away from them by cheaper im-migrant workers.

Slightly higher up the employ-ment ladder are factory workforces.Factory managers will doubtless feel itis vital to prevent conflicts amongworkers of different origins and differ-ent personal habits. Promoting indi-viduals of one origin to positions ofauthority over quite different types ofpeople may incite jealousy, not tomention the misunderstanding aboutthe tasks that are assigned. Moderatelyheavy costs may be incurred in turn-ing a varied labor force into a function-ing whole, something that is not madeeasier by the lack of education, experi-ence and appropriate language amongworkers drawn from rural areas, evenif they come from the same country.

Notice, however, that by and large,these problems become easier to man-age with skilled and educatedworkforces of the type that high value-added industries need to hire. Therewill still be initial differences in ex-pectations, jealousies, and some occa-sion for making sure that all workersare aware of the mindset of others. Atruly international workforce willhave problems of communicationwhere there is no common languageor different levels of competence inthe language used on the shop floor.Nevertheless, the more intelligent,better educated and more widely ex-



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perienced the workers, the less the dif-ficulty.

As was stated in a letter from ahighly experienced Cambridge lin-guist to the (London) Financial Timeson September 12, 2006, knowing sev-eral languages is helpful to anyoneworking in a global organization butócontrary to the wishful thinking thatprevails among language teachersóitis by no means essential. The opportu-nity cost of acquiring extra languagesis in any case high. Intelligent peoplelearn to cope with their cultural differ-ences, as may be seen in the compa-nies all around the world; Japanesefirms for instance, which haveadopted English as the language ofmanagement.

In any case, what is a manager ex-pected to do? Change is so rapid inmany countries and many industriesthat it draws in staff from previouslyunheard-of sources. The workplacebecomes polyglot and the variety oftongues spoken changes over time.The costs of preparing managers tocope with this or to work in foreigncountries are highóAsian languagesin particular take much longer for na-tive English speakers to learn than theother European languages do. If theindividual manager, or his or her firm,invests years in learning another lan-guage really well, he or she may be re-luctant to take on a further task of thesame typeóthere are just too manylanguages to learn.

For this reason I am strongly of theopinion that learning Business En-glish is the appropriate solution. In thereal world, people are responding pre-cisely in this way; in other words, thisis the chief solution adopted by themarket. A native English speaker likeme is certain to find this highly conve-nient but that is not a fair point. Inprinciple, it would not have matteredwhich language was selected as theWorld Standard, but once the markethas made its decision, there are net-work advantages to adopting which-ever language has indeed been cho-sen. In the current circumstances,learning English means gaining accessto the largest single pool of prospec-tive customers and employees, and to

the largest single body of knowledgeabout the sciences and technologiesuseful in business. More problems aresolved through the medium of Englishthan by any other.

In truth, cultures are numberlessand overlapping. They are sometimessticky, but at other times, they changesurprisingly freely, if there is a reasonfor them to do so. They continuallymutate, often so gradually that no onenotices (but is your culture reallyidentical to that of your parents orgrandparents?). Occasionally, how-ever, change comes about with im-mense rapidity. Even in the academicworld, this is not fully recognized andthe tendency is to think that culturesare fixed, with every individual borninto a culture which remains his orhers for life. This is simply not thecase, as the new lives that many immi-grants make for themselves clearlyshow.

Religion, language and values varyamong the native-born inhabitants ofany given country, and all these fea-tures are ordinarily taken as compo-nents of culture. Amartya Sen hasbeen foremost in pointing out thecruel absurdity of typecasting peopleon only a single dimension, as if (say)the individualís religious adherencedominates everything about a person,regardless of other characteristics orthe individualís choice. In practice,people are many-sided. Culture ismultidimensional, vague and change-able; it is too easy to treat it as a fixedquantity, read off from some singlecharacteristic like race, nation, reli-gion or language. We know, of course,that change does happen but lack ageneral theory to explain culturalchange over time. The fashionabletypologies that pass as theories in thisfield list elements that are too insub-stantial to define sharply and certainlytoo misty to measure.

The harassed manager may wellsay that these intellectual consider-ations are beside the point. The practi-cal world of management must betaken at face value. Employees, cus-tomers and competitors identify them-selves as belonging to one culture orthe other; they have matching expec-

tations and sensitivities; and all thesethings must be lived with. Yet the atti-tude that culture is fixed and central toa personís identity (identity is anotherseemingly self-evident but rarely de-fined quality) accords it a greater sig-nificance than is warranted.

Culture and identity are politicalattributes and as such may be used bythe self-seeking to demand separatetreatment. Moreover, cultural charac-teristics may seem to influence thequality of the workforce and (secretly)legitimize discrimination, despite thefact that, adjusted for levels of educa-tion, health status and proper training,worker productivity will not system-atically differ among people of differ-ent backgrounds, except in the short-est of short runs. There will of coursebe start-up costs when hiring workersfrom origins unlike those of the exist-ing staff. Genuine cases of friction willhave to be smoothed over. But theproblems are not bound to persist.

My point is therefore not to denythe short-term validity of cultural dif-ferences, but only to insist that, whereculture itself is so hard to define op-erationally, managers should not grantit the first importance. Treating differ-ent cultures as incompatible becauseof initial differences in behaviormeans failing to hire people who areunlike oneself, but who neverthelessmay be just as productive once givenan equal chance. There is plenty of lit-erature pressing the point that teamsof mixed origins bring valuable differ-ences in perception to the workplace,or perhaps more accurately, performbetter than unmixed teams after work-ing together for twelve months or so,during which time they learn to bondtogether.

This is seen in the performance ofmixed teams of business school stu-dentsóthe managers of the future.Typically they make adjustments to fitin with each otherís practices andmanners. They fit in, too, with inter-national practice over the Internet,where common standards are readilyadopted by people from most coun-tries in the world. The Internet, in-deed, is a prime example of how cul-tural differences can be negotiated



Just as culture achieves a solidity in people’s minds that the factsabout it do not support, the true extent of cultural merging seems toperform a vanishing act. This means that managers in general donot need to worry quite as much about cultural issues as they are

constantly told to do

Reference # 03M-2008-10-02-01

without much apparent pain. Any re-sidual cultural disagreements in theworld of computer programmers aretrivial compared with the whole bodyof IT work that gets done. The researchteams in Silicon Valley are notablymulticultural, with very large represen-tations of Indians and Chinese.

The media, on the other hand,play up instances of cultural discordand conflict, of which admittedly toomany are generated in a fast-changingworld. First-generation immigrantsare insecure people but so are plentyamong the population of the coun-tries in which they have settled. Im-migrants alter the behavior of hostpopulations besides altering theirown: a quick way to see this is to con-

sider how far cuisines have changed.Diet is usually regarded as somethingvery central to ëidentityí. The moderndiet in Australia, which is a countrywith an exceptional percentage of theforeign born among its residents, hasfor example been termedëMediterrAsianí. This is testimony tothe fusion of Mediterranean cookingbrought in by Italians and Greekswith Asian cooking, largely importedby the overseas Chinese.

But the media overlooks this, or atleast get the direction of changewrong. They dwell on cases of cul-tural misfit, without considering howquickly the bulk of immigrants adaptto host countries. The media speakas though the present will persist forever. Young people who grow up in acountry other than that of their par-ents and forebears are more likely tofind themselves at odds with theirfamilies than with the other childrenaround them. They take on new fash-ions and new manners, which par-ents do not like. Most young peopleare eager to make an accommodationwith the host culture, often to the ex-tent of marrying someone of another

descent. As an example, there hasbeen public alarm in the US duringthe past few years that Hispanic im-migrants will not adapt to preexistingAmerican values, whereas studies ac-tually indicate a pattern of assimila-tion like that of previous groups ofimmigrants, whose cultures werealso suspect in their day.

Taking a slightly longer perspec-tive, and the deeper thinking that aca-demic research is meant to involve,research at Manchester Universitycomes to surprisingly healthy con-clusions about cultural mixing inLondon. News about the UK con-stantly speaks of communal discordand violence, but the predominantsituation is very different. During the

1990s, neighborhoods with mixedresidents increased by one quarter.Inter-ethnic couples and children ofmixed ethnic parentage rose 20% inten years. There are four times morechildren of mixed ethnicity thanthere are adults. The census of 2001reveals that, as they prosper, non-white families move from the innercity to the suburbs. This pattern isalso familiar in Australian and Cana-dian scenario.

Just as culture achieves a solidityin peopleís minds that the facts aboutit do not support, the true extent ofcultural merging seems to perform avanishing act. This means that man-agers in general do not need to worryquite as much about cultural issuesas they are constantly told to do. Twostudies reported in the FinancialTimes Magazine (January 13, 2007)sum the matter up. A survey of 104interns and their mentors at anAmerican company showed that ra-cial similarity or dissimilarity had nodiscernable impact on how satisfiedthe interns were with the help andadvice given to them. There was nodifference in the support they re-

ceived. The second study confirmedthese findings.

As I have argued with respect tolanguages, all differences cannot beattended to and no manager can learnevery language; the opportunity costof learning even one additional lan-guage is high enough as it is. Like-wise, there are simply too many cul-tures to learn their every idiosyn-crasy. Managers should do the bestthey can, but not pander to griev-ances where these seem trivial or im-probable.

When managers have to traveloverseas to negotiate deals withpeople of other nationalities, theyshould certainly be aware of culturalsensitivities. There are well-known in-stances of misunderstandings (butthey are few relative to the vast num-ber of cross-border deals that aremade) and a few instances where of-fence is simulated in order to attain abargaining advantage. Yet this doesnot demand more than ordinary cour-tesy and awareness of foreign expecta-tions. It does not require that manag-ers speak every language, learn toadopt every foreign habit, and under-take enormous preparation. Sensiblepeople, of the type who could anyhowbe trusted in a deal, would not expectmuch more than a reasonably alert,low-key approach to negotiating.

When it comes to managing staff,devoting resources to familiarizationcourses or providing separate facili-ties may interfere with building a co-herent workforce. It may actively en-courage a sensitivity to differencesthat would fade away if attentionwere not drawn to them. The ap-proach is best left informal. The bet-ter the quality of the workers hired,the less time they have to worry aboutsuperficial differences on the part oftheir colleagues and the more readilythey get on with the task in hand. Agood general education, as opposedto a single-minded focus on technicalstudies, will lead to as much culturalawareness as is needed by eitherworkers or managers.



This article explores five original types of Diversity Manager,which our research has led us to define as mysterious,apparent, exclusive, unsuspected and hidden.

its content and the practical details ofits execution, then it must be stated thatthese vary considerably from one com-pany to the next in the case of diversitymanagers. In effect, often linked tofunctions within the competence ofhuman resources, they can, as is thecase with an energy company, alsocome under the umbrella of sustain-able development. Moreover, they canalso have as their raison díÍtre 2 the es-tablishment of HR Management Diver-sity Policy at group level (a cosmeticsgroup), or the implementation of agree-ments on diversity and social cohesion(a car company), disability and/or pro-fessional equality (post and telecommu-nications). With regard to the practicaldetails of the job itself, the differencesare legion: their roles may include mobi-lizing in the field (a cement company),coordinating (a tyre manufacturer) andinfluencing (a railway group). Observ-ing all these variations reveals, in effect,considerable ëdiversityí even amongthese posts of diversity managers. Overand above simple surprise, this hypoth-esis has given rise to numerous ques-tions on our part: what factors might liebehind the differences we have ob-served between these posts? And arethey merely temporary?

First answer might be the choicemade by each of the companies wehave studied to define the post accord-ing to their needs, and independentlyof the person holding itóas strategicand operational issues of diversity ap-parently vary from one company to an-

Towards a Typology

The Figure of DiversityManager in French Business

We are currently witnessing aproliferation of ëDiversityManagersí in French compa-

nies. But what are the responsibilitiesof the holders of these new posts, andwhat is their field of operation? Whatprocesses are taking place in the com-pany to legitimize the post of DiversityManager?

Linked to the historical develop-ment of business and its international-ization, Diversity Policies in Frenchcompanies have been characterizedby a varied and often inflated inven-tory of the parameters of the problem,and the criteria according to whichprogress in the matter is to be as-sessed. Some stem from an increasingdiversity at both the client and sup-plier level; others from the sources oflabor itself (age, the presence ofwomen, social origins, qualifications);some are more logical in terms of evi-dent anti-discrimination (people com-ing from ëvisible minoritiesí, victims ofexclusion on the grounds of religion,sexual orientation, weight or disabil-ity...); while others are linked to theperformance of diversified teams attimes developed from a distance, thestated objective being to promoteunexploited skills within the com-pany and favor the exchange of knowl-edge and expertise in organizationsthat seek to develop as a network.

This article explores five originaltypes of Diversity Manager, which ourresearch has led us to define as mysteri-ous, apparent, exclusive, unsuspectedand hidden.

ëManager in Charge of Diversityí,ëDiversity and Inclusion Managerí andëDirector of Social Innovation and Di-versityí are all titles that testify to theproliferation of a new kind of post inFrench companies, under the generalheading, ëDiversity Managerí. But whatis the scope of the post of DiversityManager? Is it simply a question ofmentioning the word in the job title?Apparently not, since certain posts des-ignated and presented as DiversityManagers by their companies havetitles in which the word diversity itselfdoes not appear (e.g. ëAssociate HumanResources Managerí in the French sub-sidiary of a washing powder company,ëAdvisor to the President on Equal Op-portunity Issuesí in a railway group).What characteristics do these positionshave in common that might allow themto be grouped together under the nameëDiversity Managersí?

Answering this question is by nomeans easy: if the characteristics of apost1 simply refer to the place of work,

1 J M PERETTI. Dictionnaire des Ressources Humaines, Vuibert, 2005, p. 186. ìPost: Working SituationEntirely Defined by the Organization Regarding Place of Work, Content and Methods of Execution, Inde-pendently of the Holder of the Post.î

2 ìRaison díÍtre : description of the entirety of the missions of a post and its global objectives.î


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other, it seems evident that the postsshould not encompass the same reali-ties. Far more than a consequence oforganizational choice, however, thisfragmentation seems to have beenbrought about both by the newness ofthe field of diversity in France and thecontroversial character of the debate ithas led to. It was not until recently, in2004, that the subject of diversity en-tered the public domain with the publi-cation of a report by the InstitutMontaigne entitled Les oubliÈs delíÈgalitÈ des chances (Overlooked by

Equal Opportunity)3, which eventuallyled to the ëDiversity Within BusinessCharterí, subsequently signed up bythe directors of 35 large groups, whoundertook better to reflect in theirworkforces the social, cultural and eth-nic make-up of French society andmake non-discrimination and diversitya strategic theme of their Human Re-sources Management.

Bringing diversity into the publicdomain opened up a new field of ac-tion for French business. But while theCharter might have set the wheels inmotion, it provided no regulatory con-straint in the matter due to its non-binding and declarative character. Ac-cordingly, in what was effectively un-charted territory, each company, in-cluding those that had signed up tothe Charter, was free to take whateveraction it liked in favor of diversity (iso-lated actions or integrated diversitystrategy, short or long term, etc.) andcreate, if they so desired, a post of Di-versity Manager to oversee the pro-cess. The issue has since gained addedsignificance due to the controversythis new field of action has given riseto. Given that it is a question of actingin favor of the (supposed) diversity ofFrench society, the question of howthis is to be done has been raised, anddiscussed in the context of a republicwhere the French citizen is an indi-vidual whose sex, religion and skincolor should play no role in the way s/he participates in the ëcommunity ofcitizensí4. In persuading companies topay particular attention to differencesand minorities, the Diversity Charterhas focused the debate on the questionof ëpositive discriminationí, provokinga veritable ëquarrel between the ëforíand ëagainstí5. If they create posts ofDiversity Managers, signatories to theCharter remain free to choose what-ever actions they choose to assignthem in order to make real their com-mitment. Some do not hesitate to setprecise internal recruitment targets,unofficially, leaving their HR manag-ers to establish the criteria regarding

those populations identified as dis-criminated against.

Accordingly, we shall formulate thehypothesis that organizational, contex-tual and also ideological factors may beinvoked to explain the ëdiversity of Di-versity Managersí. Because the field ofdiversity is new, we have to recognizethat ëDiversity Managerí is the termmost frequently employed by the me-dia to designate such posts, but whatand who do we mean when we speakof a Diversity Manager? What are theoutlines of the post and its scope of ac-tivity? What legitimizing processes arein operation within the company, andwith regard to what set of values? Be-yond what seems to be the ëdiversity ofDiversity Managersí, what characteris-tics could there be that might allow usto group together under a commonname these men and women whosetask it is to reflect the diversity of theFrench society?

Owing to its vague character, theconcept of diversity is open to severaldifferent interpretations, all inextrica-bly linked to the notion of CorportateSocial Responsibility (CSR, which weshall hereafter also refer to in its Frenchabbreviated form as RSE:ëResponsabilitÈ Sociale desEntreprisesí). Although this concept it-self is a construct largely emanatingfrom the Diversity Charter, it has neverbeen clearly defined, and is interpretedin different ways by companies, withthe result that the field of action andnature of the Diversity Manager poststhey create are by no means identical.An analysis of these posts has allowedus to reveal four working modes in Di-versity ManagementóGeneric,Complementary, Restrictive and onewe shall call Evicted. According tothese modes we have established fivetypes of Diversity Manageróthe mys-terious, the apparent, the exclusive, theunsuspected and the hidden.

This analysis is based on a studycarried out in 2006 during whichabout thirty formally or informallydesignated Diversity Managers (desig-

Evalde Mutabazi is currently a professor of

Sociology and Intercultural Management at EM

LYON(France). Of French and Rwandan

nationality, he currently teaches courses in Social

Science, the sociology of Business, Human

Resource Management and Cross-cultural

Management. He is also a researcher with the

Laboratoire de Sociologie de la Création

Institutionnelle (LSCI) of National Centre for

Scientific Reasearch (CNRS) in Paris. He holds

a Ph.D. in sociology from the Institut d’Etudes

Politiques de Paris and practices in companies,

devoting most of his research to intercultural

management and Change Management post

international mergers, acquisitions and alliances.

His research and consulting activities are

developed for several international companies

in Europe (Belgium, France, Denmark, GB and

Switzerland) and in Africa ( Benin, Burundi, Ivory

Cost, Morocco, Niger, Senegal, Congo,

Rwanda).

His article, “Preparing African Leaders” has

been published in Cross-Cultural Approachesto Leadership Development by C Brooklyn Derr

& others.

3 L MEHAIGNERIE et Y SABEG, Les OubliÈs de líÈgalitÈ des Chances, Institut Montaigne, 2004.4 D SCHNAPPER, La CommunautÈ des citoyens, Gallimard ñ Folio Essais, 2003.5 Y SABEG et Y SABEG Discrimination positive, pourquoi la France ne peut y Èchapper, Calmann-LÈvy,

October 2004 p. 9.

The Figure of Diversity Manager in French Business


nated as such both within their re-spective companies and externally)were questioned. It is also the result ofobservations in the field in thosegroups that have signed up to the Di-versity Charter, and in networkswhose Diversity Managers meet be-yond the confines of their companies.

A) From Vague Concept toa Diversity of DiversityManagers in FranceAs stated above, the concept of diver-sity, due to its vague character, seemsto be open to different interpretations,which account for the ëdiversity of Di-versity Managersí.

In the current context, French citi-zens are all equal in accordance withthe republican principle of integrationand may not be deemed as being differ-ent for legal reasons of non-discrimina-tion. Referring to ëdiversity of theFrenchí then is somewhat paradoxical,insofar as it is a question of ëdiversitywithout differenceí. It also recalls theparadox of ëracism without raceí justi-fied by the republican tradition: ìthereis no race [in France]î6 since the Frenchcitizen, in the eyes of the Republic, isan individual like any other.

French universalism aspires to freethe individual from all determinism.In France one is first and foremost one-self, what one has decided to be, givenoneís background and oneís aspira-tions and not a representative of anyparticular cultural community thatwould to a large extent determine indi-vidual choice. Sex, religion and skincolor have no role to play in the waythe French participate in the ëcommu-nity of citizensí.7 And yet, diversity isthe word companies are using today tocharacterize our society.

What do they mean by the diversityof French society? We must concludethat it is the Diversity Charter itself thathas enshrined the notion of diversity inFrench culture, notably in a culture oftrade unionism that has hithertopreached the gospel of (social and eco-nomic) equality. ëDiversityí appears as aconstruct drawn up to a large extent bythose who drafted the Charter to charac-terize French society, the result of theirobservation being that the French Re-public has been somehow unable toguarantee equal opportunity, equalitybetween women and men and fightagainst discrimination. We should notethat in the mind of the Charterís authorsthis construct does not conflict with therepublican ideal. The Charter may betaken to mean that equality and differ-ence can go hand in hand, but there isno question of its signatories imple-menting a policy of positive discrimina-tion. Indeed, the promoters of the Char-ter maintain that ëethnic origin shallnever be the criterion for obtaining em-ploymentí.8

Nevertheless, the concept of diver-sity remains vague: the Charter pro-vides no clear definition of the term,despite undertaking to work on thethree forms of diversityósocial, cul-tural and so-called ethnic origin. Eachsignatory is therefore free to provide itsown definition of diversity. In a cosmet-ics group, for example, the conceptionis global, allied to a mosaic of visibleand invisible differences,9 similaritiesand interactions which influence theattitudes, behavior, values and strate-gies of men and women in their profes-sional environment. In other compa-nies, the approach to diversity is moretargeted: for a high-tech group, for ex-ample, diversity is above all cultural

and social. Effectively, the one suchgroup has undertaken to favor the in-sertion of young people from deprivedareas, hire the disabled and ensure sexequality between men and women.10

Due to the declarative character of theCharter, any signatory to it is also freenot to deal with all the three forms ofdiversity it proposes, or to deal withone or more according to its particularrequirements and priorities. In theaforementioned cosmetics group, nofewer than six forms of diversity wereidentifiedógender, nationality, ethnicorigin, social origin, disability andageówhile the high-tech group re-tained only threeósocial origin, dis-ability and gender.11

The scope of operation of the signa-tory companies with regard to theCharter also allows them to choose anomenclature which best conveystheir particular convictions, history,commitment and management. For ex-ample, although the expression ëcul-tural and ethnic diversityí is a constructdrawn up by the authors of the Charterto designate French citizens of immi-grant origin, some signatories prefer theterm ëvisible minoritiesí to underlinetheir attachment to Franceís republicanheritage. In effect, this expression,which originates in Canada,12 ex-presses the visible diversity of a societywithout recognizing distinctive identi-ties. Is the danger one of ìa society inwhich individuals will not fear dis-crimination on the grounds of their cul-tural differences since they will nolonger constitute a hindrance to theirdevelopmentî?13

To take another example: a railwaycompany which, due to the strongethno-cultural connotations of the termëdiversityí, has preferred to replace itwith the expression ëequal opportu-nityí. Mr. A, the advisor to the Presidenton Equal Opportunity Issues in thegroup tells us that he ìwanted an inclu-sive, federal term to avoid exclusionand define people without any deter-minism whatsoeveríí. With equal op-portunity we can unite several ambi-tions: to reflect our client base, employmore women, affirm our intention tovalue legislation linked to the disabled,and be closer to both deprived and ru-

6 G CALVES, Il níy a pas de race ici, Le modËle franÁais, Critique Internationale, n∞ October 17, 2002.7 D SCHNAPPER, La CommunautÈ des citoyens, Gallimard ñ Folio Essais, 2003.8 Diversity Charter Press Release. Explanation of Motives: Une Charte de la DiversitÈ, pour quoi faire? 2004.9 Visible differences : ethnic origin, gender, disability, physical appearance, age. Invisible differences: cul-

tural origin, socioeconomic origin, education, experience, religious persuasion, political or philosophicalconvictions, sexual orientation, values, etc.

10 Press Release, Groupe de haute technologie, May 15, 2006.11 Press Release, Groupe de haute technologie, May 15, 2006.12 According to the law on employment equity, visible minorities include ìpersons, other than natives not

of the Caucasian race or not white-skinned.î The population of visible minorities includes the followinggroups: Chinese, South Asian, Black, Filipino, Latino-American, South-East Asian, Arab, Western Asian,Japanese, Korean and Polynesian.

13 K AMELLAL, Discriminez-moi ! EnquÍte sur nos inÈgalitÈs, Flammarion, 2005, p. 33.



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ral areas. I also wanted to avoid givingworkers the feeling that their childrenwould have no place in the company,conveying a genuine desire to maintainsocial equilibrium.î The use of the termëequal opportunityí here reveals a reso-lutely ideological stance.

The concept of diversity as pre-sented in the Charter, then, is vague incharacter: there is no clear definition ofit and we do not know if it is exclu-sively three-dimensional (social, eth-nic, cultural origins...) or not. Eachcompany interprets the concept as itsees fit, its freedom of interpretation re-inforced by the Diversity Charterís ownnon-binding nature. Companies canalso choose not to use the term diver-sity at all, for at least two reasons: itsassociation with Anglo-Saxon prac-tices of positive discrimination per-ceived as negative (even if such prac-tices exist in France at national level),14

and its clear reference to ethno-racialminorities. Taking such interpretativelicence is also the prerogative of thosecompanies who have entered the fieldof diversity without signing up to theCharter. Multiple interpretations of theconcept of diversity help account forthe diversity of Diversity Managers.

By definition, a Diversity Managertakes in charge various diversity-re-lated missions within the company.But what kind of diversity do wemean? We understand that the defini-

tion of diversity that the company itselfchooses is crucial in determining thescope of the post of ìDiversity Man-agerî, defining the way in which s/hecomprehends the field of action andthe dimensions of the diversity s/he hasto deal with. Consider the example ofthe large cosmetics group again: Ms. B,its Diversity and Inclusion Manager,adopts an approach to diversity de-fined within the company, namely aglobal approach. Effectively, her princi-pal mission is to take in charge allprojects linked to diversity, which im-plies that her field of action officiallyincludes all the forms of diversity out-lined by the group. On the other hand,Ms. C, the Diversity Manager in a high-tech group, has a more targeted ap-proach: she deals exclusively with gen-der and disability, insofar as they arethe current priorities. ìToday thereís areal desire to act in favor of disability inFrance at group level. Professionalequality is also one of our concerns, butless so than disability at the moment,îshe declares.

In addition, different interpreta-tions of the concept of diversity leadcompanies to choose the nomenclaturethey feel most appropriate to best ex-press their convictions. The range ofterms is especially noticeable amongholders of Diversity Manager posts. In acar manufacturing group, Mr. D is ìInCharge of Innovation and Social

Watchî, while Mr. E is ìDirector of In-novation in Social Responsibilityî in amobile telecommunications companyand Mr.F ìSustainable DevelopmentManagerî in an insurance company.The choice of titles communicates anapproach to diversity which is as muchan ideological stance on the part of thecompany involved. For a car manufac-turer, diversity is perceived as socialprogress, and as such an integral part ofthe groupís social discourse.15 This isnot yet the case in the mobile telecom-munications company, yet diversitydoes lie within the province of RSE. Inthe insurance company, it depends to alarge extent on sustainable develop-ment, so much so that Mr.Fís mission isìto promote diversity as an issue forpresent and future generations, andquestion how the Groupís actions inthis domain might integrate themî.

Different interpretations of theconcept of diversity itself account forthe diversity in approaches, missions,scope of activities and even titles of Di-versity Managers. For greater clarity, wemay consider that diversity takes sevenprincipal formsósocial origin, disabil-ity, nationality, gender, supposed orreal ethnic origin, age and religion.16

However, since the companies wequestioned declared that they did notinclude the last one among their crite-ria, our study will limit itself to the sixothers. Although all six haveprogessively come under the umbrellaof RSE, we have noticed that not all ofthem been retained and dealt with bycompanies openly committed to diver-sity. It would appear that they do nothave the same notion of RSE; to whatextent then might their different con-ceptions of RSE explain the diversity ofDiversity Managers?

B) Progressive Integrationof Diversity in the Field ofCorporate SocialResponsibilityCompanies do not consider diversity inthe same way insofar as they do nothave the same conception of Social Re-sponsibility. Their individual interpre-tations of Social Responsibility alsoseem to account not only for the diver-sity of posts under the heading of ëDi-

14 ìZEPs [Zones díEducation Prioritaires], housing aid, educational grants and scholarships, the fiscal statusaccorded to Corsica by virtue of its ëinsularityí, hiring incentives... are essentially examples of so-calledëpositive discriminationí, i.e., measures taken with the aim of seeking to correct social and or economicinequalities.î (K.AMELLAL, Discriminez-moi ! EnquÍte sur nos inÈgalitÈs, Flammarion, 2005, p. 353).

15 This policy of diversity and non-discrimination has been extended throughout the world with the signa-ture of the worldwide managerial agreement on social responsibility (...) [The group] seeks to apply andpromote, beyond the provisions of existing law, best practices and combat racism, sexism, xenophobiaand intolerance with regard to difference, and to guarantee the respect of private life.î Groupe Automo-bile Social Report 2005, pp : 6-7.

16 At this stage in our development, we can note that Diversity Management policy in business consists ofstrategic acts of management that seek to create competitive advantage by meeting the challenge of anever more diversified workforce. It deliberately emphasizes differences rather than similitudes withinthe team, with a view to gaining efficiency. It deliberately stresses difference rather than similarity inworking teams and seeks gains in efficiency. By concerted action outside the usual breeding grounds ofrecruitment, it introduces an element of difference into an ensemble hitherto perceived as homogeneous.It seeks to value the contribution of each individual to the organization by recognizing and acknowledg-ing his/her skills. Diversity Management policy seeks to fight discrimination, promote equal opportunityas the norm, reduce the dysfunctions that are likely to create diversity, respond to inevitable resistancesuch measures provoke, calculate the distance travelled and yet to be travelled in order to pilot progress,increase diversity in teams as they develop and eventually recognize unexploited internal skills, ultimatelyvaluing the particularities of each member of staff. A ëproactiveí Diversity Management policy seeks tocapitalize on the intercultural dynamics of diversified teams. Through constant comparison with the localand regional employment pools in which it is implanted, it presupposes the establishment of a managerialculture that favors integration and considers as assets differences between employees in terms of age,gender, real or supposed belonging to a particular ethnic group, nation, race, political orientation, member-ship of a trade union, family situation, social and cultural origin, physical aptitude, disability, sexual orien-tation and religious persuasion. This policy is likely to affect work organization, HR management andcorporate culture as well as the understanding and conquest of markets (clients and users).



Philippe Pierre is a consultant specializing in

cross-cultural management. He is also a

researcher with the Laboratoire Interdisciplinairepour la Sociologie Economique (CNRS) in Paris.

He holds a Ph.D. in sociology from the Institutd’Études Politiques de Paris. He was Human

Resource Manager at L’Oréal and has developed

expertise in managing international mobility and

diversity management. He is member of the

editorial board of Sociologies Pratiquespublished by Presses Universitaires de France,

APSE and IEP Paris. He teaches at Sciences-poParis (France), ESSEC (France), HEC Genève(Switzerland) and Sorbonne (France).

He has authored more than 40 scientific articles

and is also co-author, of Les métamorphosesdu monde. Sociologie de la mondialisation.

versity Managerí but also for the verycriteria that define diversity as a sphereof activity.

Reflecting the social, cultural andethnic make-up of the French society isconsidered today as part and parcel ofRSE. But what is RSE? The green paperpublished by the European Commis-sion in July 2001 defined it as ëvolun-tary integration on the part of compa-nies of social and environmental con-cerns into their commercial activitiesand their relations with stakeholdersí.In effect, this RSE is an imported ver-sion of Corporate Social Responsibilityaccording to which an economicallyviable company should, through dia-logue with stakeholders, manage thesocial, societal and environmental im-pact of its activities. American in ori-gin, the concept of CSR was introducedinto the European Union primarily as aresponse to the social crisis of the1990s, and subsequently to the effectsof globalization.

It was at this time that social originwas included in the field of RSE,through the problem of integration ofcommunities in difficulty. The law ofDecember 1, 1988 stipulated that socialand professional integration of peoplein difficulty constitutes a national im-perative,17 and companies accordinglybecame partners in an economic inte-gration policy put in place by the au-thorities, whose provisions includedprocedures to facilitate entry into thejob market for young people(professionalization and apprentice-ship contracts) and organize the returnto work of the long-term unemployed.Even if companies took part somewhatunder duress, at times to take advan-

tage of tax exemption, reflecting themake-up of French society was consid-ered to fall within the limits of RSE.

The problem of integrating disabledworkers18 led to disability becoming thesecond form of diversity to be broughtunder the umbrella of RSE;19 since 1987,companies with more than 20 employ-ees are legally bound to employ morethan 6% of disabled workers, failingwhich the law allows the firm to meetits obligations by paying a contributionproportional to the number of disabledworkers employed, (a contribution, nota tax) payable to the AGEFIPH.20 Thelaw of February 11, 2005 on equalrights, opportunities, participation andcitizenship for disabled persons main-tained the 6% threshold but modifiedthe calculation rate more in line withcompany practice.

The notion of sex equality is moreambitious in scope than the rather diag-nostic gender diversity; but it wasthrough the implementation of sexequality legislation that gender wasbrought into the domain of RSE. Since1983, the Roudy Law21 has enshrinedthe principle of non-discrimination be-tween the sexes in HR procedures andeven a certain form of positive dis-crimination in favor of women to re-dress the balance of existing inequality.Even so, sex equality did not appear tobe much of a priority to stakeholdersduring the social crisis of the 1990s,and it was not until the Genisson Law22

of May 9, 2001 and the National Inter-Professional Agreement of March 1,2004 that gender was included in thedomain of RSE.

As these examples of social origin,disability and gender illustrate, bring-

ing the different forms of diversity intothe domain of RSE has been a gradualprocess. But has this been the case forall companies, and what are the conse-quences at Diversity Manager level?

Integrating the forms of diversityhas not been undertaken in the samemanner in every company, which hashad consequences on the level of in-volvement of the diversity managers,calling into question their field of ac-tion. Should social integration, disabil-ity and sex equality be consideredseparately from other forms of diver-sity? Some companies, like the cosmet-ics group we studied, say they should,and maintain posts dedicated to deal-ing with one or more of these forms. Itseems that other companies prefer theconcept of Sustainable Development tothat of RSE, hence their attachment ofdiversity manager posts to their Sus-tainable Development divisions, a situ-ation explained by the semantic confu-sion that exists between the concepts of

17 By insertion ñ as opposed to assimilation ñ we understand ìhaving an individual enter into a group whilerespecting his/her differences.î

18 A disabled worker being defined as ìany person whose chances of obtaining and maintaining employ-ment are effectively reduced as a result of a lack or loss of physical or mental ability.î In J. M. PERETTI,Tous diffÈrents!, Editions díOrganisation, 2006, p. 165.

19 According to G. BERTHELEME, ìtaking an interest in disability by suggesting an approach [inspired bythe RSE] means considering the interests of and risks incurred by each interested party, emphasising thefact that disability, like any characteristic concerning a specific population, can become a lever for perfor-mance for the company and facilitate the implementation of a creative dynamic whose value transcendsthe relations between the disabled employee and his/her employer.î In J. M. PERETTI, Tous diffÈrents! /, Editions díOrganisation, 2006, p. 100.

20 A national association managing the funding of professional insertion for disabled employees. Going onestep further, some companies have drafted written agreements at company or group level with this asso-ciation to decide together on how to share costs and expenses related to disability.

21 Y. Roudy, Minister for Womenís Rights from 1981 to 1986.22 C. GENISSON, Socialist Member of Parliament for Pas-de-Calais since 1987 and author of the report

ìFemmes-hommes. Quelle ÈgalitÈ professionnelle. La mixitÈ professionnelle pour plus díÈgalitÈ.î



Ext_AD-4


Aude Seurrat pursues Ph.D in communication studies at Sorbonne University

and belongs to the GRIPIC (Interdisciplinary Research Group on Information and

Communication Processes). Her thesis deals with the promotion of diversity in

medias. She teaches semiotics and communication analysis at the Sorbonne

University. She has published articles on management of diversity, intercultural

education and also on the cartoons of Mahomet.

George-Axelle Broussillon holds a Master in communication from Sorbonne University (Paris) and an

MBA from ESCP-EAP (Paris). She has developed expertise in diversity management and has published

articles on intercultural communication and cross-cultural management.

RSE and sustainable developmentthemselves. Bringing the various formsof diversity into the domain of RSE isone explanation for the diversity of Di-versity Managers, and the integrationof the diversity into the domain of sus-tainable development might explainwhy certain diversity manager postshave been linked to sustainable devel-opment. Even so, on the basis of our re-search in the field and closer study ofthe concepts of diversity and responsi-bility, we have been able to outline thefollowing different types of diversitymanager.

C) Towards a Typology ofthe Diversity ManagerCentred Around theConcept of DiversityStarting out from the premise that thetitles of diversity manager posts con-vey approaches to diversity and issuesspecific to each company, our firstarea of study concentrated on theprincipal defining modes of diversity,with the regard to the way in whichthe term appears in the titles of theposts in our sample.

Firstly, we identified three groupsof titlesóthose where the word ëdiver-sityí is mentioned alone, those inwhich it is attached to another term,and those in which it does not appearat all. Further scrutiny of these threegroups allows us to postulate four de-fining modes of diversityógeneric,complementary, restrictive andevicted. It is according to these modesthat we subsequently outline five typesof diversity managers.

Among those posts whose titlesmake mention of the word ëdiversityíalone, we note that nobody really knowswhat the term relates to, even though itsuse conveys an explicit commitment onthe part of the company in favor of di-versity. The question remains as to whatdiversity is, so much so that we can callthis a generic defining mode. We shalldescribe those diversity managerswhose posts present such generic titlesas mysterious, insofar as we are unableto determine what their missions relateto, or believe they are supposed to coverthe entire field of diversity. But this firstlevel of analysis must be subtle: despite

the generic character of the term em-ployed, not all the forms of diversitymaintained and dealt with by the com-panies are the same. For instance, whilstin a large French bank, Mr. G works offi-cially on sex equality, nationality andsocial/ethnic origins through the imple-mentation of an equal opportunitypolicy, Mr. C in the high-tech group con-centrates on disability and sex equality.This is explained by the fact that theconcerns and stakes of each companyregarding diversity are completely dif-ferent, in a large part due to the nature oftheir business. As such it is clear that, inthe mysterious category, diversity man-agers do not all comprehend diversity inthe same way. Nevertheless, in the inter-ests of clarity, we have chosen not todeal with the form of diversity variablefor the time being.

The second group of titles is that inwhich the term ëdiversityí is attached toanother term, such as ësocial innova-tioní (oil company), ëinclusioní (cosmet-ics group), ëethicsí (cosmetics group),ëchangeí (telecommunications group)or ëmixityí (postal group). Here, we seethe expression of two defining modesof diversityóthe complementary andthe restrictive. The complementarymode is perceived in cases where theterm diversity is attached to anotherterm that makes no reference to theform of diversity. As such, diversity re-tains its generic character, but its asso-ciation with another term allows us todefine it (diversity), by negating thedefinition of the second term. For ex-ample, diversity as such is neither eth-ics nor inclusion in the cosmeticsgroup. What, then, is it? This first levelof analysis does not allows us to an-swer that question, but it does revealthe position of the company. What is

discernible in the cosmetics group isthe swing from one position to an-otheróin 2004, ethics and diversitywent hand in hand, but in 2005, withthe creation of the post of Diversity andInclusion Manager, diversity and inclu-sion were to be thought of as going to-gether. It also reveals that certain diver-sity managers wear two hats. We shalldescribe those posts of diversity man-agers whose titles are constructed thisway as apparent, since we measure thecontent of their diversity-related mis-sions by the yardstick of what is not di-versity as such. The restrictive mode isperceived in those titles where the termëdiversityí is accompanied by anotherterm that refers to at least one of theforms of diversity, and as a result losesits generic character. Diversity is definedby what it is not; but this negation is dis-tinctive in that it is restricted to one par-ticular form (of diversity). As in thecomplementary mode, this definingmode also reveals a company position.In the postal group, for example, diver-sity is not mixity. Sex equality thereforeis excluded as a form of diversity assuch, to be dealt with separately by thediversity manager, a distinction ex-plained by the fact that the group beganto work historically on sex equality wellbefore the other forms of diversity (in aSex Equality Agreement in 2004 and aMajority Agreement the following year).The restrictive mode is characteristic ofthe diversity manager posts we shall callexclusive, insofar as at least one form ofdiversity is removed from the list andgiven special attention.

In the third group of titles the wordëdiversityí is not present whatsoever,the company (deliberately or not as thecase may be) choosing not to employ it.Upon reading the titles we do not know



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if they are diversity manager posts ornot. This is the evicted mode; the evic-tion of the word diversity is said to beinvoluntary if no diversity managerpost has been created. Diversity-re-lated missions are undertaken, infor-mally (a food group) or formally (ce-ment company) by people alreadyworking on other problems, who weshall describe as unsuspected. If, how-ever, a diversity manager post hasbeen created and the word ëdiversityíhas been deliberately ousted, we shallcall these incumbents hidden.

Accordingly, five types of diversitymanagers can be defined in view ofthe principal defining modes of diver-sityóthe mysterious, the apparent,the exclusive, the unsuspected andthe hidden.

We propose to classify the diversitymanagers according to the number offorms of diversity that they officiallydeal with in their respective compa-nies. This allows us to define the scopeof diversity that each is responsible for.Generally, a maximum of six forms ofdiversity are recognized by compa-niesósocial origin, disability, gender,nationality, ethnic origin and age. Wenote that some companies, such as thelarge French bank, the mobile phonecompany and the railway group, bringsocial and ethnic origin together underthe heading ëequal opportunityí, andthat only 10% of diversity managers inour sample take a global approach to di-versity (the Diversity and InclusionManager in the cosmetics group andthe Innovation and Social Watch Man-ager in the car company).

Forty five per cent of these managershave a bidimensional approach to diver-sity, linking either disability and gender(due to company agreements regardingdisability and sex equality), or social andethnic origin. We should, however,qualify our comments by emphasizing

that 45% of the diversity managers stud-ied officially, take into consideration nofewer than three forms of diversity.

Nevertheless we also note that thereis often a discrepancy between theforms that have to be dealt with andthose present in the field, notably due tooverlapping responsibilities. To take oneparticular case, although the diversityand inclusion manager of the cosmeticsgroup officially takes a global approachto diversity, she does not take into con-sideration social origin and disability,which come under the remit of the coor-dinator of apprenticeship and insertion,and have done so for more than a de-cade. Our observations in the field haveallowed us to analyze the missions andactivities of diversity managers in oursample to define the forms of diversitythey deal with in an effective manner. Infact, only one diversity manager takes aglobal approach to diversity. Slightlyover 50% the diversity managers take abidimensional approach, and 75% ofthem deal with fewer than three formsin the field!

We sought to go further in our analy-sis and suggested an analysis based noton number but of the nature of the formsof diversity dealt with by these manag-ers. In order to measure qualitativelytheir involvement in the field, we con-centrated on the various stages of theprocess of integrating forms of diversityinto the domain of RSE. The classifica-tion resulting from this chronologicalanalysis is therefore not a moral gradingof the diversity managers. Three levels,each coupling two of the forms, were es-tablishedólevel 1 refers to social originand disability, level 2 to gender and na-tionality, and level 3 to ethnic origin andage. We observe that there are DiversityManagers who are involved exclusivelyon one level. For instance, DiversityManagers K and B, respectively in awashing powder company and a cos-

metics group, are on level 1. Other diver-sity managers are involved on the firsttwo levels but do not yet work on ethnicorigin and age. Conversely, we note that70% of diversity managers work onlevel 3, which is explained by thetrendiness inspired by the diversitycharter, which invites companies to payspecial attention to the ethnic and cul-tural make-up of the French society.Only 36% of the diversity managerswork on all three levels.

Diversity managers can be classifiedaccording to the number of forms of di-versity they officially deal within thefield, both globally as well asunidimensionally. According to the na-ture of the forms of diversity and thechronology of their incorporation intothe domain of RSE, they can also be clas-sified according to three levels of in-volvement. But seen through this prism,what are the issues of diversity manage-ment?

According to IMS-Entreprendrepour la CitÈ, they are of several or-ders23óeconomic, social/societal, legaland image-related. These are balancedby the strategic and operational issues ofeach company. We notice that there is acorrespondence between a predomi-nant issue of diversity management for agiven company and the profile of the di-versity manager it employs. When eco-nomic issues prevail, companies callupon an expert often specialized in deal-ing with one particular form of diversityor in project management, whereas theyfrequently have recourse to a militant todefend social and societal issues of di-versity. If optimizing their HR manage-ment is a priority, they call upon some-one from the HR domain, while com-municators and lawyers are often cho-sen by companies when it is a questionof anticipating eventual legal and image-related risks concerning discriminationand the promotion of diversity inter-nally, externally and in social dialogue.

D) For a Typology ofDiversity Managers Basedon Responsibility 24

There seem to be three principal mo-tives behind the progressive integrationof diversity into RSE, namely the socialshifts of the 1990s, the promotion of di-

23 Economic issues refer to the improvement of company performance. From an organizational perspective,it is a question of optimizing HR management with respect to forthcoming retirement. The social andsocietal stakes are also high, given that integrating fringe groups within the company improves socialcohesion and testifies to an engagement of social responsibility on the part of the company. Managingdiversity also allows, to a lesser extent, to foresee legal and image-related risks related to discrimination.IMS-Entreprendre pour la CitÈ, Non-discrimination et gestion de la diversitÈ dans les entreprises enFrance, 2004.

24 A typology developed in BROUSSILLON (George-Axelle), La figure du Responsable DiversitÈ dans lesentreprises en France. De la symbolique ‡ líaction de conduite du changement en Gestion des RessourcesHumaines, Dissertation for HR Management, Communication and Negotiation Masters degree (Paris IV /Sorbonne-Celsa), December 2006.



Reference # 03M-2008-10-03-01

versity issues since the signature of theDiversity Charter in October 2004, andthe integration of the theme of diversityinto social dialogue. Further analysis ofour interviews indicates firstly that theposts created before the first signatureson the Diversity Charter were a directconsequence of the opening up of busi-ness to the social changes that took placein the early 1990s. Secondly, it seemsthat many posts were created after Octo-ber 2004 to promote diversity issues,which would indicate the Charter was acommon motive underlying their cre-ation. And thirdly, in view of theCharterís declarative nature, some com-panies (including even signatories to theCharter) preferred to create diversitymanager posts pursuant to agreementsat company level. As a result, we seethat the motives for creating diversitymanager posts are the same as those be-hind the integration of diversity intoRSE.

Three types of diversity managerposts can therefore be outlinedópostsadapting to social changes, posts to pro-mote diversity issues and posts negotiat-ing agreements on social progress.

We can also classify diversity man-agers according to the degree of respon-sibility of the individual holding thepost. To do so, we analyzed the status ofthe posts in our sample. Five could beidentifiedóthe Operational Director,the Functional Director, the Manager InCharge (of a specific division), theProject Leader/Manager and the Advisorto the President.

In such a manner, our study has re-vealed different types of posts and pro-files of diversity managers testifying to awide range of remits and fields of opera-tion. However, despite the many inter-pretations of the term ëDiversity Man-ageríówhich account for the diversityof the postsóit is employed by all andsundry as if there were a commonmeaning and thought process beyondthis fragmented reality.

ConclusionAs has been stated, different interpreta-tions of the concept of diversity are atthe origin of the diversity of approaches,missions, fields of activity and eventitles of the diversity managers, that tak-

ing into consideration the overarchingnature of discourse on diversity. This di-versity of posts is reinforced by anotherfactor, the different ways in which eachcompany integrates the various forms ofdiversity into its RSE. We have definedsix principal forms of diversity in thefield of operation of a diversity man-agerósocial origin, disability, national-ity, gender, ethnic origin and age. Al-though these have progressively beenbrought under the umbrella of RSE, theyare not all dealt within the same mannerby companies committed to promotingdiversity, a situation explained by thefact that the companies themselves donot all have the same conception ofwhat their social responsibility is. Someprefer to integrate the theme of diversityinto the field of sustainable develop-ment, which explains why several di-versity manager posts are linked to thisdepartment. There are, then, several in-terpretations of what a diversity man-ager is, in the view of what is originallyunderstood by diversity and the formsof diversity considered as belonging tocompaniesí RSE; and these interpreta-tions have led to the typology formal-ized above.

Even so, despite the vague nature ofthe term ëDiversity Managerí, the major-ity of companies continue to employ it,in the sense that it carries meaning, im-plicitly evoking the existence of a com-mon projectóto represent the diversityof the French society, a project that isleading to a convergence, even a mutu-alization of certain practices on theground. It is principally a question of di-versification of sourcing put in place toërepresent diversity in the companyí,both in internal communication andpublic relations by which the diversitymanagers position themselves as repre-sentatives of diversity both inside andoutside the company. This convergenceof practices, especially the difficultiesthat the diversity managers encounter inseeking to change both working meth-

25 Concretely, we can cite several initiatives on thepart of companies, including programs to accom-pany parenthood, the development of specificservices for workers and the adaptation of opera-tional rules to favor the balance between profes-sional and private life.

26 D, In charge of Innovation and Social Watch,Automobile Group.

ods and attitudes, show that pushing forchange at HRM level is a common goalfor the diversity manager, which servesto legitimize the function in the eyes oftheir superiors. This process of changefinds its most accomplished form in anew way of team managementóopenlydeclared diversity management.

One might wonder moreoverwhether, in progressively transformingsome of their HR practices into DiversityManagement, some French companiesare not pursuing a more inclusiveAnglo-Saxon business ideal questioningthe limits between professional and pri-vate space,25 making the workplace anopen and harmonious place where eachindividual, regardless of sex, age, origin,disability or religion might cultivatetheir differences and develop their po-tential without surrendering their iden-tity. We see the first signs of this in a carcompany where there is no longer ëa dif-ference in terms of remuneration be-tween men and women, where changesare perceptible in results and behaviorí.In effect, ëthe social climate is changing(...), older women and men are on theproduction line. (...) Itís become habití.26

We note that favoring inclusion isoften perceived as a means of makingthe companyís diversity policy apply tothe largest number of its employees. In-deed, the development of services forworkers, or the balance between pri-vate and professional life, concerns ev-eryone. As such, the diversity managerin charge of deploying a diversity man-agement policy cannot afford to cutcorners on inclusion policy, howeverneglible it might seem, all the more soconsidering that putting into place a di-versity policy involves a dynamic evo-lution of business culture towards evergreater inclusion. Whatever his/her sta-tus, the Diversity Manager will have tomobilize and coordinate internal re-sources in order to have the necessarytime to lead change in Human Re-sources Management, and will have tobe sufficiently legitimate within thecompany to steer different diversity-re-lated projects and position himself/her-self as a veritable project manager driv-ing forward change.



I N E R E WIVT

Moral leadership and smart strategy go hand in hand. Performance

is enhanced when both are present and it degenerates precipitouslywhen both are missing.

– Prof. Bala Chakravarthy



and capabilities that will be neededfor competing successfully in the fu-ture, the firmís performance willeventually suffer. Without continu-ous strategic renewal a firm cannotshow sustained excellence in perfor-mance.� The first eight years of this cen-

tury (2001-2008) would defi-nitely go down in history as wa-tershed years for global busi-nesses. First it was colossal fallof Enron, Arthur Anderson,Tyco, WorldCom, etc., Septem-ber 11, attacks put countries on

high alert. 2007 saw the worldgetting engulfed in subprimemortgage crisis and with that acomplete washout of trillions ofdollars of shareholder wealthand 2008, has seen the globalbanking crisis, oil price shocksand Food price rises, etc. What doall these events signify? Shouldthey be looked at isolation or arethere any powerful lessons for fu-ture managers and CEOs whenthey connect the dots?

You ask two different questions here.The first has to do with shocks to theeconomy and the other is about cor-porate failures.

Let me talk about environmentalshocks first. These are not new.Managers have had to deal withthem for years. There are two typesof shocks though, one that can beanticipated and the other a total sur-prise. For example, some would ar-gue that the spike in oil pricesshould have been anticipated. Withthe soaring demand for energy, thepoor track record on conservationand oil supply being controlled to asignificant degree by the oil cartelOPEC, oil price had to spike sooneror later. Managers simply have to get

better at scenario planning and learnto formulate strategies that can dealrobustly with multiple scenarios.The days of pin point forecasting areover.

Then there is the other type ofshock, like the terror attacks of Sep-tember 11. This is perhaps a sce-nario that nobody could have antici-pated in advance. Nevertheless,firms that had lean organizationsand low break even points could ab-sorb the sudden loss in demand bet-ter than others that were not as effi-cient. Building resilience is anotherimportant response to dealing withenvironmental shocks.

� What important lessons do thelast hundred years of businesshistory offer us today?

One of the important lessons of thepast century is that sustaining supe-rior performance is not just aboutgreat execution but also about con-tinuous strategic renewal. Other-wise, excellence will be fleeting. Wehave all had our frustrations with anever-changing list of ëexcellentí andëgreatí companies from one decade tothe next. In my own study of over6000 publicly listed companiesaround the globe, only 1 in 4achieved sustained profitability andgrowth over a 5-year period that wasbetter than the average for their in-dustry. That proportion drops to 1in 20 over a 10-year period and 1 in a100 over a 15-year period. Sustain-ing superior performance over thelong haul is hard. Here is why.

Pursuing growth requires explor-ing for new opportunities and com-petencies. It calls for entrepreneur-ship and risk-taking. Profitability onthe other hand, is helped by exploit-ing the opportunities and competen-cies that are already available to thefirm. Systems and processes that arefine-tuned over time to maximizeprofitability cannot nurture entre-preneurship. But then a firmís mar-ket opportunities get depletedsteadily both through market satura-tion and the actions of competitors.Its competencies lose their distinc-tion through imitation and substitu-tion. Unless there is a continuouspush to explore new opportunities

Pursuing growth requires exploring for new opportunities and

competencies. It calls for entrepreneurship and risk-taking. Profit-

ability on the other hand, is helped by exploiting the opportunities

and competencies that are already available to the firm

Bala Chakravarthy is Professor of Strategy and International Management. He holds the Shell Chair in Sustainable Business Growth at IMD. Prof.

Chakravarthy’s research, teaching and consulting interests cover three related areas: managing the global enterprise (with a focus on companies from

BRIC countries), strategy processes for sustainable business growth, and mastering leadership dilemmas. He has published four books, several case

studies and numerous articles on these topics in top international journals. His latest book, Profit or Growth? Why you don’t have to choose was published

in 2007, by Wharton School Publishing.

Bala is a qualified mechanical engineer and has worked as an executive at Tata Motors in India before taking his doctorate at the Harvard Business School.

He has taught at the Wharton School and INSEAD, where he was the director of its corporate renewal initiative from 1993-94. Most recently, Bala held the

Edson Spencer Chair in Technological Leadership at the Carlson School of Management, University of Minnesota.

Bala is an active top management consultant and executive education specialist. He has worked with a number of leading multinationals around the world

and has won numerous awards for excellence in teaching throughout his career.

He has served or currently serves on the editorial boards of the Management Science, Strategic Management Journal, Long Range Planning Journal and

Strategy and Leadership. Bala is an inaugural Fellow of the International Strategic Management Society (ISMS). He also served as a member of the Board

of Directors of that society from 1999-2004.

INTERVIEW



Companies in a number of industries, such as pharmaceuticals,medical devices, aerospace, information and communications,

are increasingly using external networks to build missingcompetencies or to enter new markets. There is a lot of uncertainty

in these industries as to which competencies, especiallytechnology platforms, will be the winners in the future

The other question you raise isabout corporate failures. You refer toEnron, Arthur Anderson, Tyco andWorldCom. All these case studiespoint to lack of ethics. In the case ofTyco and Arthur Anderson, it wasthe moral failure of its leaders. Thatwas also the case at Enron andWorldCom, but with an importanttwist.

I talked about continuous re-newal earlier. If a firm fails to renewits opportunity space and capabili-

ties, it will soon face performancepressures that it cannot handle. In-deed, companies like Enron andWorldCom faced such a pressure.Their leaders had promised the fi-nancial community more than whatthey could deliver. They did nothave an underlying strategy to backtheir promise. So they began takingshortcuts; which soon transgressedinto illegal activities. Jeff Skilling ofEnron and Bernie Ebbers ofWorldCom are in jail today, con-victed for their roles in this saddrama. It is important to rememberthough that what started it all was aflawed strategy.

The root causes underlying thesubprime crisis are similar: stalestrategies that could not support theperformance commitments thatwere being made by these firms;combined with weak ethical stan-dards that did not question themeans that were then used to artifi-cially boost firm performance.

Moral leadership and smart strat-egy go hand in hand. Performance isenhanced when both are presentand it degenerates precipitouslywhen both are missing.� Corporate R&D labs used to be the

key for companies to create com-

petitive advantage. But in the 21st

century, innovation is moving outof the lab and across the globe.The research indicates that a realsource of competitive advantageis skill in managing innovationpartnerships. For instance,Boeingís unique assets and skillsare increasingly tied to the waythe firm orchestrates, manages,and coordinates its network ofhundreds of global partners. In-novation is increasingly driven

through collaborative teams dueto product complexity, availabil-ity of low-cost but highly skilledlabor pool and advances in devel-opment tools. At a macro level,whatís driving this trend? Is thisgoing to be a competitive necessityor a competitive choice? What arethe advantages to companies thatdo it well?

True, the boundary of innovativefirms is fast extending beyond theirorganizations to include its partners.Companies in a number of indus-tries, such as pharmaceuticals,medical devices, aerospace, infor-mation and communications, are in-creasingly using external networksto build missing competencies or toenter new markets. There is a lot ofuncertainty in these industries as towhich competencies, especiallytechnology platforms, will be thewinners in the future. Building newcompetencies is both expensive andrisky as is entry into new markets inemerging economies. Besides, com-petencies can become obsolete veryquickly. Therefore, partnering andvirtual networks are a competitivenecessity.

Not just Boeing, but several oth-ers have pursued such a strategy of

distributed innovation. For example,P&G has created an extended R&Dorganization connecting its own7500 researchers and engineers withthe vast external pool through a per-meable boundary. Its R&D produc-tivity and innovation success ratehave nearly doubled, while the costof innovation has fallen. This is thekind of advantage that others are try-ing to replicate.� According a recent McKinsey

Global Survey, almost 70% of ex-ecutives around the world saythat global, social, environmen-tal, and business trends are in-creasingly important to corpo-rate strategy. Yet relatively fewcompanies act on the globaltrends they think will affectthem most; among those that doact, only 17% report significantbenefits. Why is there such adisparity between need andaction?

Great question! I hope you will askMcKinsey for a response. Let metake a crack at it though. Recall, Inoted earlier how it is very hard for afirm to sustain profitable growth. If afirmís financial performance is poor,it is hard for its leaders to justify in-vestments in a firmís social and envi-ronmental performanceóeventhough these investments may benecessary to sustain financial perfor-mance over the long run. This preoc-cupation with financial performancein the short term may explain whythere is a major disconnect betweenawareness and action. Unless socialor environmental performance be-comes important to financial ana-lysts, there will only be lip servicepaid to them, especially in firms thatare in financial trouble.

Also, there is a tendency to mea-sure benefits from business initia-tives that deal with the social andenvironmental responsibilities of afirm only in terms of improvementsto its financial performance. Theymay guarantee a firmís license to op-erate or minimize the risks of disrup-tions to its operations. Both offer sig-nificant benefits to the firm. Butthese are not always easy to quantify.

INTERVIEW



Ext_AD-6


Reference # 03M-2008-10-04-06

The interview was conducted byDr. Nagendra V Chowdary,

Consulting Editor, Effective Executive,Dean, The Icfai Business School

Case Development Center, Hyderabad.

Hence these benefits tend to be sys-tematically understated.� Do you foresee a decreasing role

for multilateral internationalbodies like, WTO (with the riseof regional and bilateral tradeagreements and perennial show-down at recent meetings, includ-ing impasse at Doha round oftalks), UNO (with private sectorassuming a great role at hu-manitarian activities for in-stance, Bill and Melinda GatesFoundation, Clinton Global Ini-tiative, etcóand increasing roleof Social Entrepreneurship Ini-tiatives and Microfinance Initia-tives, etc), the IMF and theWorld Bank?

I wish this were not the case but I amafraid you point to a growing reality.Nation states have a natural ten-dency to be self-centered and com-petitive. While cooperative institu-tions like, the European Union arerefreshing exceptions, the EU too ishaving its fair share of problems inagreeing to a common constitutionor defense strategy. The UN bodiesare far more heterogeneous by con-trast. There are too many vested in-terests and shifting alliances. Find-ing a multilateral win-win solutionin such a setting is very difficult. Weare left, therefore, with the less am-bitious arrangement of regional oreven bilateral treaties.

Multilateral international bodiesare taking a backseat today becausewe have very few world leaders whoare both popular at home and wellrespected abroadóleaders who canmake the gutsy first selfless move.

Without such an action it is hard toget others to yield.When public gover-nance fails we have to lookto the generosity of individuals; buttheirs is just a drop in the bucket,given the enormity of the challengesthat confront the world community.� What according to you are the

important trends that are goingto shape the way global businesswill be carried out and what ad-vice would you offer to the topmanagers operating those busi-nesses?

There are many important trends.Let me just focus on three here:� Globalization will accelerate,

despite the current difficultiesDespite the problems with theWTO, world trade is getting freer.Goods, services, human and fi-nancial capital are moving acrossnational borders more easilythan before. The opening up ofChina and more recently Indiaand others has contributed tothis cause. Firms from the oldTRIAD countries and the newBRIC countries are chasing simi-lar dreams. Competition is inten-sifying. The firmís leaders haveto look for ways to standardize itsoperations across the globe evenas they encourage adaptation tosuit local market needs; theymust create a sense of identityand pride among the firmís em-ployees even as they recruit amore diverse work force; theymust encourage speedy decision-making and yet maintain control;and they must seek top businessperformance and yet ensurestrict adherence to the firmís val-ues. Top management must mas-ter these and other dilemmas inorder for the firm to succeed.

� Social and environmentalperformances will grow inimportanceThe firmís stakeholders are gettingbetter organized and getting morevocal. Awareness of climatechange and industryís contribu-tion to this problem are growing.In addition to financial perfor-mance, top management must payattention to a firmís social and en-vironmental performance. Theseare important for earning andmaintaining the ëlicense to oper-ate.í But actions that enhance fi-nancial performance need not al-ways help the other two. In factthere can be serious contentions. Itis not enough for a CEO to merelydecree that all three performancedimensions are important. TheCEO must be a walking example ofhow the underlying dilemmas canbe managed.

Besides the substantive tradeoffsthat have to be made, there is theadded burden of communicatingthe firmís position to the media.Media bandwidth has explodedexponentially over the past de-cade. Channels are chasingscarce content. Factual reportingand quality analyses have givenway to sensationalism. News isnot just reported but increasinglymanufactured to fill the airways.The growing popularity of theInternet has led to instant diffu-sion of news, both facts and ru-mors, verified and speculative.Large companies and their lead-ers are especially vulnerable tar-gets. One misspoken word can beruthlessly exploited again andagain on a global stage. Topmanagement has to learn, tocommunicate effectively withthe media.

� Business, Government partner-ships will growTake major business sectors likeenergy, financial services, healthcare, transportation or food. Allof these have national securityconcerns. Governments will getinvolved. Businesses will alsoneed to partner with govern-ments to establish fair social andenvironmental regulations. Ingeneral, the interplay betweengovernment and business is onthe rise. World Trade is a case inpoint. Issues of war, terrorism,environmental regulation, trade,currency movements, and taxa-tion are all matters that are sa-lient to business but need politi-cal intervention. The role of topmanagement will grow from be-ing just a business head to alsobecoming an able ambassador forthe firm vis-a-vis its politicalpartners.

INTERVIEW



This article surveys ways to recognize innovation antibodies,interpret their goals and purposes, realize the danger theypose to companies, and steps to take so that they areeffectively neutralized.

first. Youíve got to out-innovate the in-novators.î Through intentional orga-nizational changes, staff training, andworldwide partnerships, companiesgo to great lengths to develop acuteìperipheral visionî to detect competi-tors just beyond the horizon. AsHarvard University Professor GeorgeDay said, ìGood peripheral vision ismuch more than sensing; it is know-ing where to look more carefully,knowing how to interpret the weaksignals, and knowing how to act whenthe signals are still ambiguous.î

No matter how tightly woven theprotection from outside competitors,organizations often fail to consider anenemy from within, usually referredto as an innovation antibody, organiza-tional antibody, or devilís advocate. Re-gardless of the soundness of a corpo-rate and its products, one well-placedinnovation antibody can quietly rein-terpret corporate strategies to co-work-ers and ultimately wreak havoc on thecorporationís future.

The Need for ìWild DucksîFirst, it is essential to emphasize thatjust because a person, who has an un-usual personality or disagrees withcompany policies or methodologies,is not necessarily an ìinnovation an-tibody.î To encourage the innovationthat determines corporate viability,companies absolutely need those em-ployees. As Stanford University Pro-fessor Robert Sutton noted, ìYourcompanyóor more likely parts of itóneeds to be a place that generatesmany disparate ideas. It should be anarena, a constant and constructivecontest, where the best ideas win.î

Staying Ahead

Effective Antidotes forInnovation Antibodies

To achieve innovation success, acompany must overcome the organi-zational ëantibodiesí that inevitablycome out to attack and defeat innova-tions.

ñ Tony Davila

Every enterprise engaged inbusiness in the frenzied globalmarketplace fights an hour-by-

hour battle for viability. Menacing

competitors rapidly appear from do-mestic and international environ-ments, often wielding new and power-ful technologies that obviate the needfor the special product, service, or ideadeveloped and long-nurtured by thecompany. As strategist Gary Hamelnoted, ìOut there in some garage is anentrepreneur whoís forg-ing a bulletwith your companyís name on it.Youíve got one option nowóto shoot


Int_AD-2


British inventor James Dyson ex-tolled the necessity of thinking ìdif-ferentlyî: ìYou are just as likely tosolve a problem by being unconven-tional and determined as by beingbrilliant. And if you canít be uncon-ventional, be obtuse. Be deliberatelyobtuse, because there are five billionpeople out there thinking in traintracks, and thinking that they havebeen taught to think.î Human re-sources expert Francis Horibeshowed that even traditionally staidIBM needed ìunusualî employees tosucceed: ìTJ Watson shows us theway. He coined the term ëwildducksíóquirky, individualistic,highly intelligent employees who ig-nore procedures, shun set schedules,and resist attempts to make themmore efficient. Because they were of-ten very creative, he warned againsttaming them, for once tamed, theycan never be made wild again.î Lead-ership expert Warren Bennis noted,ìIf not out-and-out rebels, partici-pants may lack traditional credentialsor exist on the margins of their profes-sions,î and, ìGreat Groups are prob-ably more tolerant of personal idio-syncrasies than are ordinary ones, ifonly because the members are so in-tensely focused on the work itself. îAs Horibe said, ìOn the one hand, wewant innovatorsí creativity and pas-sion. On the other hand, innovatorsíinability to build coalitions or evenfollow normally accepted rules makesthem a challenge to fit into anorganizationÖ.The very qualities thatmake for great innovationópassion,drive, out-of-the-box thinkingóareviewed as arrogance, unreasonable-ness, and uncompromising behaviorby organizations bent on efficiency.îOnly by accepting and harnessing thepower of these divergent viewpointsmay corporations find the remarkableideas so essential in the competitivemodern marketplace. As Nissan De-sign International CEO JerryHirschberg said, ìRather than trying toreduce the friction that naturallyarises between people working to-gether by diluting or compromisingpositions, creative abrasion calls forthe development of leadership styles

that focus on first identifying and thenincorporating polarized viewpoints.î

ìCorporate antibodiesî does notinclude employees who seem way-ward but actually have not receivedappropriate training or clear instruc-tions. Noted human resources expertFerdinand Fournies noted, ìAs amaz-ing as this may sound, the most com-mon reason managers give as to whypeople at work donít do what they aresupposed to do is, ëThey donít knowwhat they are supposed to do.í At itsworse, this means literally thatpeople do not know there is a specifictask they should perform.î

In addition, ìcorporate antibod-iesî does not refer to those wholoudly and dramatically disrupt com-pany operations. They are often re-ferred to as a ìsaboteur,î from theFrench ìsabot,î a wooden sandalworn by workers and intentionallythrown into machinery to wreck itsfunctionality.

Characteristics of TrueInnovation AntibodiesWhether termed innovation antibody,organizational antibody, or devilís ad-vocate, the malcontent employee mayeffectively shortstop corporate inno-vation. As Tom Kelley of IDEO said,ìThe devilís advocate may be the big-gest innovation killer in AmericatodayÖThe devilís advocate encour-ages idea-wreckers to assume themost negative possible perspective,one that sees only the downside, theproblems, the disasters-in-waiting.Once those floodgates are open, theycan drown a new initiative in negativ-ity.î Tony Davila similarly noted,ìTypically, the more radical the inno-vation and the more it challenges thestatus quo, the more and stronger arethe antibodies. Also, the greater thepast successes of the company, thegreater are the organizational anti-bodies,î and, ìAs complacencygrows, organizational antibodies be-come more prevalent. Good ideas areattacked because they would requiremore change, and the organization iscomplacentóso complacent that itencourages rather than fights organi-zational antibodies.î

Although innovation antibodiesmay have numerous motivations andmyriad methods for squelching cor-porate plans, they seem to focus theirenergies on five key activities:� Derail Change

The fundamental descriptor of aninnovation antibody is that theycan instantly spell out dozens ofreasons why a new idea or cor-porate action will fail, but they areuniformly unable to provide anyalternatives that might help themto succeed. Like a perpetually un-happy two-year-old child, theyare ìnaysayersî with a highly lim-ited vocabulary. New ideas forproducts, procedures, or organi-zational configurations areharshly met with historical talesof how the same thing was triedbefore, and the untimely demiseof those who tried it. Innovationantibodies vehemently attackideas in their most rough conceptor prototype stage to ensure that

Dr. Gary W Oster joined the faculty of the Regent

University School of Global Leadership &

Entrepreneurship in the Summer of 2007 after

working for more than two years as Associate

Dean for Academics in the Regent University

School of Undergraduate Studies and a decade

in senior administrative roles at William Tyndale

College. He has served as a classroom and

online instructor since 1994.

Prior to his academic endeavors, Gary was an

executive in high-technology corporations, both

domestically and overseas, focusing primarily

upon the computer, electronics, and automotive

industries.

Effective Antidotes for Innovation Antibodies


they never garner enough supportto reach viability. One successfulmethod for innovation antibodiesis to push for the absolute elimi-nation of the possibility of failure:before something new is tried itsultimate success must be provenbeyond a shadow of a doubt. Foran innovation antibody, corporaterisk is the penultimate straw man:they continually encourage peersto seek safety and worry about theworst that can happen. Unfortu-nately, their favored innovationantibody terms like ìpredictabil-ity,î ìperfection,î ìharmony,î andìsamenessî are never hallmarksof successful companies with in-novative ideas continually bub-bling to the surface.

� Quietly Erode Corporate Com-municationsInnovation antibodies are so in-sidious because they always workìoff radar.î As Horibe noted, ìUn-derground dissent among youremployees may be hard to pickup. It may be evident in projectsthat are not done on time, aredone poorly, or have to be redone.It is there in those who donít sharetheir knowledge or sit in silencein staff meetings. It may be feltwhen you know you are the onlyone who cares whether the unitmeets its goals,î and, ìUnder-ground dissent, as the name im-plies, is disagreement that is notexpressed openly. This is wheresabotage and subversion kick in.îTheir power comes from not be-ing noticed by superiors. In fact,innovation antibodies often currythe favor of superiors, even ea-gerly publically volunteering forthe very projects they effectivelysecretly thwart. Innovation anti-bodies donít ever publicly sayìno.î Instead, they publically sayìmaybe,î but then privately rein-terpret the instructions of superi-ors to peers and subordinates. Fo-cused corporate strategy soon dis-appears into a cloud of intentionalobfuscation. Innovation antibod-ies eagerly mentor and manipu-late new employees (especially

ìhigh potentialsî) to win themover to ìtheir team.î One favoredaction is to continually demand alowering of the emotional tem-perature of peers and subordi-nates: the contagious emotion thatnormally accompanies the new,unique, or special must be damp-ened at all costs. By quashing theexcitement for new ideas, the pos-sibility of their successfulcompletion rapidly dwindles.Innovation antibodies are particu-larly adept at ìmalicious obedi-ence.î As the term implies, mali-cious obedience occurs when pre-liminary plans for a new product,strategy, or program is unveiledby corporate leadership, and theinnovation antibody possesses in-formation necessary to makethose plans effective. By with-holding that information, quietlyadvising peers and subordinatesof the likely forthcoming failure ofthe program, and participating inthe plan ìby the book,î the inno-vation antibody gains substantivestrength when the plan ultimatelyfails and they can gleefully (butquietly) tell others, ìI told youso!î.

� Proceduralize ProgressInnovation antibodies never pub-licly challenge innovation effortsìhead-on.î Instead, their pre-ferred method to slow inno-vationprogress to a crawl is to quietlyinfluence and take control of thedevelopment of corporate policiesand procedures surrounding in-novation practices. Few brightemployees volunteer to reviewand update procedures manuals,but wily innovation antibodies re-alize that burying innovationpractices in convoluted policiesand procedures effectively killsthem. Once policies and proce-dures are formulated, innovationantibodies delight in developingand initiating virtually continu-ous training sessions to make surethat employees uniformly followthe newly complex and utterly in-comprehensible policies and pro-cedures related to innovation. If

unchecked, the underground con-trol of corporate innovation poli-cies and procedures by corporateantibodies will slow innovationso that it finally experiences deathby inertia.

� Ignore Customer NeedsThe focus of a corporate antibodyis ever inward to the internalmachinations of the organization.Their purported purpose is ìforthe good of the company,î theyare convinced that they ìsee moreclearlyî than other employees,and they continually speak of anill-defined ìhigher callingî for thecompany. According to innova-tion antibodies, contemporary de-cisions related to innovation mustperfectly align with the historicaltrajectory of the company, regard-less of current changes in cus-tomer needs, the competitive en-vironment, or economic market-place. For the innovation anti-body, the company will exist in itspresent state forever and the ex-ternal environment (includingcurrent and prospective custom-ers) is completely irrelevant. AsSutton noted, ìCompanies wherepeople want to do things inproven ways are wise to drive outvariation. This mostly means do-ing old things in time-tested ways.This is why total quality manage-ment experts emphasize that driv-ing out errors, reducing costs, andincreasing efficiency of existingproducts and services requiresdriving out variation in whatpeople and machines do.î Out-side influence is anathema: ìTheNot Invented Here (NIH) syn-dromeówhere a company rou-tinely rejects external ideas be-cause they were not created in-side the companyóis a sign of ar-rogant culture, and where there isarrogance, strong organizationalantibodies exist,î as shown byDavila.

� Evade Objective MetricsInnovation antibodies despisecorporate metrics because objec-tive facts serve as a constant hin-drance to internal political ma-



Ext_AD-7


While both the development of internal innovation capabilities and a

process of protracted innovation success are essential to the

survival of every modern corporation, it is the lifework of every

innovation antibody to thwart that effort

nipulation. Innovation antibodiesseemingly live in a fantasy worldwhere costing and revenue areunimportant and customer inti-macy confounds the goals of theinnovation antibody. Most inter-esting is the application of metricsthat innovation antibodies use forthemselves. Because they are in-evitably ìlong-termers,î the ìim-portantî company metrics featuretenure and rank. Innovation anti-bodies routinely describe theirimmense personal workload, yetthey never exert extra personalenergy for the organizationís goodwithout receipt of additional com-pensation. They are inevitablythe first to exit the building at theend of the workday.

Why are InnovationAntibodies So Injurious?Never in world history has innova-tion been so important than in thepresent hyper-competitive globaleconomic environment. CEOs are in-creasingly hearing the innovationmandate from their corporate Boardof Directors, and their personal com-pensation and tenure are often di-rectly tied to the development of aconsistently innovative organization.Why do boards consider innovationto be so important? General ElectricCEO Jeffrey Immelt noted, ìThe onlylong-term source of profit, and theonly reason to invest in a company, isyour confidence in its ability to inno-vate.î Davila similarly noted, ìIn thelong run, the only reliable security forany company is the ability to inno-vate better and longer than competi-tors,î and author StanleyGryskiewicz said, ìCreativity and in-novation have been found to be thecornerstones of healthy organizationsthat are ready for reinventing them-selves.î

The foundation of innovation isthe new, the unusual, the uniqueideas developed by employees, cus-tomers, and others. As strategist GaryHamel said, ìIn an increasingly non-linear world, only nonlinear ideas arelikely to create new wealthîÖonlystupid questions create new

wealthÖonly by pushing the pedal tothe metal, by reaching for the seem-ingly impossible, is it possible to es-cape the limits of current processesand discover new possibilities.îWhile both the development of inter-nal innovation capabilities and a pro-cess of protracted innovation successare essential to the survival of everymodern corporation, it is the lifeworkof every innovation antibody tothwart that effort. Their success in-timidates other employees. Consult-ant Elaine Dundon noted, ìManypeople hide their new ideas for fearthat others might judge them tooharshly and potentially reject themfrom the group. Insecurities prevent

people from asking questions and of-fering new insights.î As Gryskiewiczshowed, the results in corporationsmay be fatal: ìBut squashing newideas because they seem strange, orsetting up barriers to protect againstthe ëdisruptioní of outside forces, putsthe organization at immediate risk ofbecoming outdated and left behind inthe marketplace.î

How is The Growth ofInnovation AntibodiesPromoted?Innovation antibodies thrive in anenvironment of uncertainty, weak-ness, and fear. As Curtis Carlson,CEO of SRI International, said,ìChange brings resistance. There arefamiliar behaviors that are played outas people move to a new vision. Theyinclude skepticism and FUDófear,uncertainty, doubt, andmisperceptions and red herrings.îLawrence Bossidy, CEO of HoneywellCorporation, noted that innovationantibodies stealthily move in such anenvironment to accomplish theirown goals: ìFor all the information

thatís exchanged in business, itís sur-prising how often people miss thecritical facts that could make all thedifferenceÖthe information may bedistorted by people governed by theirown biases and pursuing their ownagendas.î As futurist Jim Taylor said,ìBy its very nature, the future desta-bilizes the present. By its very na-ture, the present resists the future.î

Harvard University Professor Jef-frey Pfeffer noted that corporationsaid and abet innovation antibodies byrewarding employees for their alle-giance to the historical past of thecompany: ìCommitment to past deci-sions signals consistency and persis-tence. These are often considered to

be desirable traits. And commitmentto past decisions ensures that thosepast decisions are not easily ques-tioned. Commitment to the past alsoreaffirms the companyís social iden-tity. By carrying the past into the fu-ture, managers reaffirm the value ofthat history and, by implication, theworth and the cultural values that areimbedded in that history. In addition,the threat of change may actuallycause organizations to cling evenmore tightly to old ways of doingthings.î Griskiewicz also said, ìAt theother extreme are those who are resis-tant to change, often because the fa-miliar is so comfortable and doingthings differently from how theyhave always done them is confusingand threatening.î Sutton noted thatthose who engage in innovative prac-tices and thereby step outside thesmothering embrace of the corpora-tion are often publically sanctioned:ìBut people who defy authority oftenreap punishments instead of re-wards, even when they have greatideas.î Consultant Scott Berkunnoted that personal rejection has of-



Innovation is fueled by innovative ideas, more likely to be achieved

from a diverse workforce

ten been the reward for innovativepeople throughout history: ìEverygreat idea in history has the fat redstamp of rejection on its face. Itís hardto see today because once ideas gainacceptance, we gloss over the hardpaths they took to get thereÖBigideas in all fields endure dismissals,mockeries, and persecutions (forthem and their creators) on their wayto changing the world.î

Perhaps the most common sup-port network for innovation antibod-ies is weak and unfocused corporateleadership. Leaders who consider in-novation as inefficient and a waste of

corporate resources often providetepid support to those who innovate.Their commitment to the innovationprocess may be temporary, and theinternal corporate market for creativ-ity and innovation may be opaque ornon-existent. Failure may be rou-tinely sanctioned and no mechanismfor the implementation of fresh ideasmay exist. Innovation antibodiesthrive in such an environment andquickly overrun all new innovationinitiatives.

Limiting the Future Spreadof Innovation AntibodiesThe responsibility belongs to corpo-rate leadership for neutralizing inno-vation antibodies and focusing theirenergy on efforts that help progresswithin the corporation. As WarrenBennis noted, ìVirtually every GreatGroup has a strong and visionaryhead,î echoed by Davila: ìChangingthe innovation results requires proac-tive managementîÖThe CEO and se-nior management team must makedecisions on the innovation strategy,level of risk, amount of investment,and the balance of the innovationportfolio. These decisions must becommunicated throughout the orga-

nization to enable managers andmembers of the innovation networkto executeÖwe mean day-to-dayleadership, a type of leadership thathappens through commitment, ex-ample, and solid decisions ratherthan grand statements.î Whatspecificactions should be taken byexecutive leadership to hinder the de-velopment of future innovation anti-bodies?� Intentionally Hire a Diverse Em-

ployee GroupInnovation is fueled by innova-tive ideas, more likely to beachieved from a diverse

workforce. That diversity mustextend far beyond race and gen-der. As Robert Sutton said, ìWheninnovation is the goal, organiza-tions need variation in whatpeople do, think about, and pro-duce. What might be called errorsand mutations in a system meantto do old things in old ways arethe lifeblood of innova-tion.îJames Andrew of The BostonConsulting Group similarlynoted, ìThe right person in theright place with the right skill setand motivation and approach canmake all the differenceÖ Whenleaders undertake the task of im-proving the performance of theirinnovation activities, the effortfrequently involves the identifica-tion and closing of capabilitiesgaps.î

� Develop a Culture of Honesty andTransparencyHonesty and transparency diffusethe actions of innovation antibod-ies. As Max DePree, Chairman ofHerman Miller, Inc. said, ìThefirst responsibility of a leader is todefine reality,î echoed by LarryBossidy: ìUltimately, the organi-zations that work most effectively

will be those in which leadershipdemands reality and developssystems of rewards and penaltiesthat put a premium onrealismÖRealism starts with yourown behavior, using the businessmodel as your primary tool forteaching people to confront therealities that affect their area andorganizational levels.î Bossidysimilarly noted that corporatetruthtelling requires that leadersand subordinates alike must re-member, ìTo confront reality is torecognize the world as it is, not asyou wish it to be, and have thecourage to do what must be done,not what youíd like to do.î

� Initiate Frequent and Varied In-ternal CommunicationsWhen corporate leaders use mul-tiple formats to communicate di-rectly with employees, such astown hall meetings, speeches,blogs, etc., it lessens the ability ofinnovation antibodies to reinter-pret their words. At the sametime, corporate leaders must beopen to many different forms ofcommunications from employees(including innovation antibod-ies).

� Enunciate Aggressive ObjectivesMeasured By Meaningful MetricsGary Hamel noted, ìAlthough abold aspiration wonít by itself pro-duce a multitude of nonconform-ist strategies, its absence alwaysyields bland, me-too strategies.Whether the objective is growthin revenue, earnings, or effi-ciency, nonlinear innovation be-gins with unreasonable goals.îThose ìunreasonable goalsîshould nonetheless be alignedwith the values, vision, strategy,and tactics of the corporation, andshould be continually monitoredusing a small number of simple,meaningful, objective metrics.

� Clearly Differentiate ìGoodî andBadî FailureFailure is a crucial source of in-novation information in success-ful corporations. As EvanSchwartz of the MIT TechnologyReview said, ìFailure is the rule



Reference # 03M-2008-10-05-01

In every organization, there are people who want to tell you whenyou are wrong. They are the troublemakers, the visionaries, the

dissenters. One of the most important ways to start your organiza-tion down the innovation road is to honor those who naturally want

to speak truth to power, even if they feel infuriating to deal with

rather than the exception, andevery failure contains informa-tionÖ Perseverance must be ac-companied by the embrace offailure. Failure is what movesyou forward. Listen to failure.îThis is especially importantwhen developing and usingearly, inexpensive prototypes.ìGoodî failure adds knowledgeto the corporation, while ìbadîfailure does not. Bennis showedthat over the decades, companieslike Disney have learned as much

from their failures as their suc-cesses: ìThe group at Disney wasable to generate and developmany more ideas than any indi-vidual could. One of Waltís mostimportant jobs was to nix the badones and get the project back ontrack,î and, ìAt Disney, Eisnersays, adding an important ca-veat, ëFailing is good, as long as itdoesnít become a habit.íî Davilaalso noted that training is cru-cial to failure differentiation:ìLearning is one of the most im-portant elements in combatingorganizational antibodies. Pre-venting the antibodies requireslearning systems and activitiesthat allow the organization todifferentiate good change frombad change. Otherwise, the orga-nizational antibodies becomeunselective and they attack anddisrupt all change. In that state,innovation is dead.î

� Encourage Hospitable DissentOne successful method for dif-fusing the corrosive strength ofinnovation antibodies is to ac-cept and encourage hospitabledissent in the company. AsBennis said, ìGreat Groups alsotend to be places where dissent is

encouraged, if only because itserves the spirit of discovery thatis at the heart of these enter-prises.î In addition, author Rich-ard Luecke noted, ìFor creativeconflict to work, team membersmust listen to each other, be will-ing to understand different view-points, and question each otherísassumptions. At the same time,managers must prevent that con-flict from becoming personal orfrom going underground whereresentment can simmer. The best

antidote to destructive conflict isa set of group norms for dealingwith it.î As Francis Horibe wiselysummarized, ìIn every organiza-tion, there are people who wantto tell you when you are wrong.They are the troublemakers, thevisionaries, the dissenters. Oneof the most important ways tostart your organization down theinnovation road is to honor thosewho naturally want to speaktruth to power, even if they feelinfuriating to deal with.î

Prune RecalcitrantInnovation AntibodiesStrategos CEO Peter Skarzynskinoted that leadership must continu-ally review corporate innovationreadiness if they are to compete inthe dynamic global economic mar-ketplace: ìTo make the transitionfrom initiative to enterprise capabil-ity, your company needs to iden-tifyóobjectivelyóthe enablers ofand impediments to innovation thatexist within your organizationÖStart by asking a simple question:what thing in this organization arelimiting our capacity forinnovation?...Your goal is to identifythe things that are hindering new

thinking and innovation, the thingsthat are frustrating exper-imentation, the things that are stop-ping talent and capital from flowingto the best ideas. Try to understandexactly which things would need tobe changed in your company in or-der to make innovation a sustain-able, corporate-wide capability.î

Unfortunately, despite monthsor years of effort to win them over,there are innovation antibodies inmany organizations who refuse toend their quiet guerrilla war with thecompany leaders for power. As War-ren Bennis noted, ìNot every tal-ented person can workcollaboratively, and some can do soonly when their contributions areproperly acknowledged. And sometalented people are simply disrup-tive.î When that is the case, it is theobligation of senior leadership to actswiftly and surely to permanentlyre-move the corporate antibody fromthe organization.

ConclusionTo remain an active and successfulparticipant in the global economy,companies require an unendingstream of innovative ideas from theiremployees, customers, partners andexternal contacts. Employees whoare ìunusualî or ìquirky,î or whoroutinely dissent and bring alter-native ideas to the table, are vitallyimportant to that innovative pro-cess. As Davila noted, ìThe organi-zation needs to move forward, andonly challenges and surprises willmove the company forward.î Con-versely, innovation antibodies aredetermined to slow or eliminate in-novation and change in the organi-zation. It is an important role ofcorporate leadership to help corpo-rate antibodies successfully inte-grate into the productive fabric ofthe company, or to be abruptlyexcised from the organization.Ultimately, corporate viability isat stake. As Gryskiewicz said,ìIgnoring the inevitability of changecan be fatal.î



Ext_AD-8


This article examines the potential antecedents andconsequences of work engagement in a sample of male andfemale managers and professionals employed in themanufacturing sector in Turkey.

sures of work satisfaction and psycho-logical well-being.

FindingsThe following results were observed.First, both need for achievement andworkaholic job behaviors were foundto predict all three engagement mea-sures. Second, engagement, particu-larly dedication, predicted variouswork outcomes (e.g., job satisfaction,intent to quit). Third, engagement,again, particularly dedication, pre-dicted various psychological well-be-ing outcomes but less strongly thanthese predicted work outcomes.

Research LimitationsQuestions of causality cannot be ad-dressed since data were collected atonly one point in time. Longitudinalstudies are needed to determine theeffects of work life experiences on en-gagement.

ImplicationsOrganizations can increase levels ofwork engagement by creating support-ive work experiences (e.g., control, re-wards and recognition) consistentwith effective human resource man-agement practices. But caution mustbe exercised before employing NorthAmerican practices in the Turkishcontext.

Current ScenarioOrganizations today are grappling withnew challenges as they strive to remaincompetitive. These include increased

Potential Antecedentsand Consequences

Work Engagement AmongManagers and Professionals inthe Turkish Manufacturing Sector

This article contributes to ourunderstanding of work engage-ment among managers and pro-

fessionals in Turkey which is a largesecular Muslim country.

Design/Methodology/ApproachData collected from 877 respondentshad a 58% response rate, using anony-

mously completed questionnaires. En-gagement was assessed by three scalesdeveloped by Schaufeli, Salanova,Gonzalez-Roma, and Bakker (2002) toassess vigor, dedication and absorp-tion. Antecedents included personaldemographic and work situation char-acteristics as well as measures of needfor achievement and workaholic be-haviors; consequences included mea-


financial turbulence, heightened per-formance pressures, new technology,an increasingly diverse workforce, andthe globalization of business (Burke &Cooper, 2004; OíToole & Lawler, 2006;Sisodia, Wolfe & Sheth, 2007). Organi-zational leaders are increasingly con-cluding that a unique competitive ad-vantage resides in their human re-sources; all other potential competitiveadvantages (e.g. technology, capital,products) can be either bought or cop-ied (Gratton, 2000; Lawler, 2003; 2008;Pfeffer, 1994, 1998; Burke & Cooper,2005).

Organizations need to unleash thetalents and motivations of all theiremployees if they are to achieve peakperformance (Burke & Cooper, 2007a;Katzenbach, 2000; Ulrich, 1997).There is considerable evidence how-ever, that many organizations are fall-ing short (Burke & Cooper, 2008a;Sirota, Mischkind & Meltzer, 2005).Recent efforts to improve organiza-tional performance have begun to em-phasize positive organizational behav-ior concepts and positive emotions(Cameron, Dutton & Quinn, 2003;May, Gilson & Harter, 2004; Bakker &Schaufeli, 2008). This includes con-cepts such as optimism, trust, and en-gagement. Much of the earlier organi-zational behavior research has fo-cused on negative concepts and emo-tions such as job dissatisfaction, alien-ation, burnout and intent to quit.

Work engagement has emerged asthe most prominent positive organiza-tional concept, particularly among or-ganizational consultants (Schaufeli &Salanova, 2007, 2008a). In fact, practi-cal interest in work engagement hasoutstripped the currently available re-search evidence. Issues such as whatwork engagement is, why it matters,how and why it benefits individualsand organizations, and if and how itcan be increased, still need to be ad-dressed.

Work Engagement:Definition, Measures andResearch EvidenceWork engagement has received in-creasing research attention over thepast ten years, reflecting this empha-

sis (Kahn, 1992; Leiter, 2005;Schaufeli & Bakker, 2004a; Schaufeli,Martinez, Marques-Pinto, Salanova &Bakker, 2003). Engaged workers areenergetic, are positively connected totheir work and feel they are doingtheir jobs effectively. It is a persistentand broad affective-cognitive state.Schaufeli, Salanova, Gonzalez-Romaand Bakker (2002) view it as a posi-tive, fulfilling work-related state ofmind that is characterized by vigor,dedication and absorption. Vigor ischaracterized by high levels of en-ergy, the willingness to invest energyin oneís work and persistence in diffi-cult times; Dedication is character-ized by high levels of work involve-ment and feelings of pride and chal-lenge from oneís work; and Absorp-tion is characterized by deep concen-tration in oneís work, the sense thattime passes quickly and one is reluc-tant to leave their work. Others havedefined work engagement in slightlydifferent but generally consistentways (e.g., Harter, Schmidt & Hayes,2002; May, Gilson & Harter, 2004;Sirota, Mischkind & Meltzer, 2005).

The most commonly used mea-sure of work engagement was devel-oped by Schaufeli and his colleaguesand comprises three components:vigor, dedication and absorption(Schaufeli, Salanova, Gonzalez-Roma& Bakker, 2002). The accumulatingresearch findings have shown thatthe measures of the three engagement

concepts developed by Schaufeli andhis colleagues (2002) are reliable,stable and valid (also see Schaufeli,Bakker & Salanova, 2006, Schaufeli &Salanova, 2007, 2008a).

Organizational behavior research-ers have considered work engage-ment as independent, dependent andmoderator variables in various stud-ies.

Engagement as anIndependent VariableHarter, Schmidt and Hayes (2002)found that levels of engagement werepositively correlated with business-unit performance (e.g., customer sat-isfaction and loyalty, unit profitabil-ity, unit productivity, turnover levelsand safety) in almost 8,000 businessunits within 36 organizations. En-gagement correlated 0.22 with a com-posite measure of performance,which increased to 0.38 when mea-surement error and restriction ofrange were taken into account.Salanova, Agot and Peiro (2005), in astudy of front line service workersand their customers, reported thatwork engagement predicted serviceclimate which in turn predicted em-ployee performance and then cus-tomer loyalty. Schaufeli andSalanova (2007, 2008), based on theirreview of the work engagement litera-ture, concluded that engagement isassociated with positive employee at-titudes, proactive job behaviors,higher levels of employee psycho-logical well-being, and increased in-dividual job and organizational per-formance.

Engagement as aDependent VariableIn a multi-sample study, Schaufeli andBakker (2004b) found support for thejob demands-resources model. Struc-tural equation modeling revealed thatjob demands (workload, emotional de-mands) were positively related toburnout, but not to engagement, andjob resources (social support, supervi-sor coaching, feedback) were posi-tively related to engagement and nega-tively related to burnout. In addition,burnout fully mediated the impact of

Ronald J Burke is Professor

of Organizational Behavior,

Schulich school of Business,

York University in Toronto. His

research interests include the

use of human resource

management research to

improve individual and organizational health.

Mustafa Koyuncu is a

Professor at Nevsehir

University in Turkey. His

research interests are in

hospitality and tourism

management.

Work Engagement Among Managers and Professionals in the Turkish Manufacturing Sector


Lisa Fiksenbaum is currently

a doctoral candidate in the

Depar tment of Psychology,

York University in Toronto,

Canada. Her work focuses on

the work-family interface, stress and health, and

research methods.

Ufuk Durna is a professor

at Nigde Unviersity. He

teaches and conducts

research in management in

the hospitality and tourism

sector.

While there is some consensus on the workplace antecedents of

engagement and consequences of work engagement, there is less

agreement on personal characteristics associated with levels of

work engagement

job resources on health problems, andengagement mediated the effect of jobresources on turnover intention. Twounderlying processes can explainthese results, an effort-driven high de-mand process leading to burnout,which then leads to health problems,and a motivational process in whichavailable job resources foster engage-ment and affect behavioral work out-comes.

Mauno, Kinnunen, Makikangasand Netti (2005) in a study of subjec-tive job insecurity among permanentor fixed-term employees, reportedlower work engagement among per-manent employees. Mauno, Pykko

and Hakanen (2005) also found differ-ent predictors of work engagement indifferent organization sectors.

Demerouti, Bakker, deJonge,Janssen and Schaufeli (2001), in astudy of employees from an insurancecompany reported that high work de-mands and high control were associ-ated with higher engagement. Mauno,Pykko and Hakanen (2005) also re-ported an association of high timepressures with higher levels of engage-ment.

Engagement as a ModeratorVariableLeiter and Harvie (1998), in a study ofa large scale organizational change in ahospital setting, reported that workengagement moderated the relation-ship of supportive supervision, confi-dence in management, effective com-munication and work meaningfulnessand acceptance of the change.

In a study of the correspondencebetween supervisors and staff mem-bers during major organizationalchanges, Leiter and Harvie (1997)demonstrated supervisorsí confidencein the organization, their work engage-ment and assessment of work hazards,

contributed to predicting staff mem-bersí engagement, and supervisorcynicism and exhaustion contributedto staff member cynicism and lack ofprofessional efficacy.

Salanova and Schaufeli (2008b),in two large samples of Spanish andDutch managers and employees, re-ported that engagement (vigor, dedi-cation) fully mediated the relation-ship of job resources (job control,feedback, variety) and proactive workbehaviors.

It is important to study engage-ment because it is linked to positiveindividual and work-related out-comes (Schaufeli & Salanova, 2007,

2008a). This study examines poten-tial predictors and consequences ofwork engagement in a sample of menand women managers and profes-sionals working in the manufacturingsector in Turkey. While there is someconsensus on the workplace anteced-ents of engagement (e.g., support,feedback, coaching) and conse-quences of work engagement (e.g,commitment, satisfaction), there isless agreement on personal character-istics (e.g., demographics and person-ality factors) associated with levels ofwork engagement. The question of

who are engaged workers thereforeneeds additional attention. Schaufeliand Salanova (2007, 2008a) found in-consistent or at best small effects dueto demographic characteristics, andamong personality factors, some evi-dence that individuals high on extra-version and low on neuroticism re-ported higher levels of work engage-ment. In addition, occupation typeand organizational level had some ef-fects on engagement; managers, ex-ecutives and entrepreneurs scorerelatively high on engagement whileblue- collar workers, police officersand home care staff score relativelylow on engagement.

Who are your engaged workers?Two lines of previous research arelikely to shed some light on this ques-tion. First, there is a considerablebody of work examining the relation-ship of need for achievement andpositive individual contributions(McClelland, 1985; Steers &Braunstein, 1976). Individuals scor-ing high on McClellandís need forachievement strive to excel; they seekout feedback on how they are per-forming; they are more concernedwith reaching their objectives thanwith whatever rewards might followfrom this success; they set challeng-ing but realistic goals; and they spendlots of time thinking about how theymight do things better. Second, anemerging stream of research hasshown relationships of workaholicbehaviors and work engagement-typeoutcomes (see Burke 2007, Burke &Cooper, 2008b). Workaholism is gen-erally seen as a stable individual dif-ference characteristic. Mudrack(2007), for example, has developedmeasures of two workaholic behav-ior patterns (Non-required work,Control of others) that were likelyto be associated with levels of workengagement.The following general hypotheses,building on the reviews of Schaufeliand Salanova (2007, 2008) were con-sidered:1. Personal demographic characteris-

tics such as age and gender wouldbe unrelated or only weakly re-lated to levels of work engagement.



Exhibit IDemographic Characteristics of Sample

Gender N % Age N %

Male 637 77.4 25 or younger 79 9.7Female 186 22.6 26 – 35 382 46.7

36 – 45 254 31.0Marital Status 46 – 55 93 11.4Single 234 28.4 56 or older 10 1.2Married 591 71.6

Parental Status

Length of Marriage Children 511 73.65 years or less 177 29.8 No children 183 26.4 6 – 10 137 23.211 – 15 102 17.2 Number of children

16 – 20 85 14.3 1 157 30.421 or more 92 15.5 2 229 44.4

3 97 18.8Education 4 or more 33 6.4Elementary 38 4.6High school 208 25.3 Hours worked

College 521 63.3 40 or less 92 11.3Masters/PhD 56 6.7 41 – 50 401 49.3

51 – 60 211 26.0Supervision 61 or more 109 13.4Yes 662 82.4No 141 17.6 Income

$9,999 or less 179 21.7Organizational Tenure $10,000 - $14,999 197 23.95 years or less 393 48.3 $15,000 - $19,999 147 17.86 – 10 232 28.5 $20,000 - $24,999 115 14.011 – 15 89 10.9 $25,000 - $29,999 53 6.416 or more 100 12.3 $30,000 or more 133 16.1

Job Tenure Department

2 years or less 245 29.8 Production 252 29.83 – 5 265 32.8 Marketing 133 15.76 – 10 199 24.0 Human Resources 72 8.511 years or more 113 13.7 Research & Develop. 32 3.8

Account. & Finance 234 27.7Organizational Size Information Systems 14 1.850 or less 318 39.0 Management 109 12.951 – 250 311 38.2251 or more 186 22.8

2. Particular stable individual differ-ence characteristics (e.g.,workaholic behaviors, need forachievement) would be positivelyrelated to levels of work engage-ment.

3. Work engagement would in turnbe positively associated with bothwork outcomes such as job and ca-reer satisfaction and indicators ofpsychological well-being such aslow levels of exhaustion and psy-chosomatic symptoms.

Method

ProcedureData were collected from organiza-tions in 16 Turkish cities (e.g., Denizli,Mersin, NevsehirÖ). Members of theresearch team contacted organizationsin the manufacturing sector in thesecities requesting their participation inthe research. Cooperating organiza-tions then provided a list of their man-agers and professionals. Approxi-mately 1500 managers and profession-als were contacted, 945 returned ques-tionnaires to the research team ofwhich 877 provided reasonably com-plete data, indicating a 58% responserate. Questionnaires were completedanonymously. Measures initially de-veloped in English were translatedinto Turkish using the back translationmethod.

Organizations fell into a variety ofindustries including agricultural ma-chinery, textiles, health products,construction, food processing, furni-ture, metal, carpet production, andelectrical products. The respondentsare best described as a large sampleof Turkish managers and profession-als working in the manufacturingsector.

RespondentsExhibit I presents the demographiccharacteristics of the sample. Most re-spondents were male (77%); married(72%); were between 26 and 35 yearsof age (47%); had children (74%); had2 children (44%); were college/univer-sity graduates (63%); held supervisoryjobs (82%); worked between 41-50hours per week (49%); earned be-

tween US$10,000-US$14,999 income(24%); had 5 years of less of organiza-tional tenure (4%); and 5 years or lessof job tenure (62%); worked in organi-zations having 250 or fewer employ-ees (77%); and worked in production,or accounting and finance (30% and28%, respectively). There was a ten-dency for a higher proportion of malesto work in production and manage-ment and a lower percentage of males

to work in marketing or accountingand finance.

Measures

Work EngagementAs already stated, three aspects ofwork engagement were measured us-ing scales developed by Schaufeli andhis colleagues (2002) and Schaufeliand Bakker (2004a).



NMDCExt_AD-9


NMDCExt_AD-10


NMDCExt_AD-11


Need for Achievement (nAch) was measured by a five-item scale

(á=0.66) developed by Steers and Braunstein (1976). One item was

“I try very hard to improve on my past performance at work”

Vigor was measured by six items (�= 0.76); ìAt my work I feel burstingwith energyî. Dedication was as-sessed by five items (�=0.83); ìI amproud of the work that I doî. Absorp-tion was measured by six items(�=0.83); ìI am immersed in myworkî. Respondents indicated theiragreement with each item on a five-point Likert scale (1 = Strongly dis-agree, 3 = Neither agree nor disagree;5 = Strongly agree).

Personal Demographics and WorkSituation CharacteristicsA number of personal demographics(e.g., age, gender, education, maritaland parental status) and work situa-

tion characteristics (e.g. organizationallevel, job and organization tenure)were measured by single items (seeExhibit I).

Stable Individual DifferenceCharacteristics

Need for AchievementNeed for Achievement (nAch) wasmeasured by a five-item scale(�=0.66) developed by Steers andBraunstein (1976). One item was ìItry very hard to improve on my pastperformance at workî.

Workaholic BehaviorsTwo workaholic behavior scales devel-oped by Mudrack (2007) were in-cluded. One, non-required work, had4 items (�=0.85). An item wasìThinking of ways to improve thequality of work provided to customersand/or coworkersî. The other, controlof others, also had 4 items (�=0.76).One item was ìFixing problems cre-ated by other peopleî. A wide range ofoutcome variables were included inthis study covering both work and ex-tra-work domains. These variables

were consistent with those typicallyused in studies of work and well-beingmore generally (Barling, Kelloway &Frone, 2005; Schabracq, Winnubst &Cooper, 2003).

Work O utcomes� Job Satisfaction was measured by a

seven-item scale (�=0.81) devel-oped by Kofodimos (1993). An itemwas ìI feel challenged by my workî.Respondents indicated their levelsof satisfaction on a five-point Likertscale (1 = very dissatisfied, 3 = Neu-tral, 5 = Very satisfied).

� Career Satisfaction was measuredby a five-item scale (�=0.86) devel-oped by Greenhaus, Parasuraman

and Wormley (1990). One itemwas ìI am satisfied with the suc-cess I have achieved in my careerî.Respondents indicated their levelsof satisfaction on a five-pointLikert scale (1 = Very satisfied, 3 =Neither satisfied nor dissatisfied, 5= Very dissatisfied).

� Job Stress was measured by anine-item scale (�=0.59) devel-oped by Spence and Robbins(1992). An item was ìSometimes Ifeel like my work is going to over-whelm meî.

� Intent to Quit (a= 0.66) was mea-sured by two items (e.g., ìAre youcurrently looking for a different jobin a different organization?î) usinga yes/no format. This scale hadbeen used previously by Burke(1991).

Psychological Well-being� Psychosomatic Symptoms were

measured by nineteen items (a=0.88) developed by Quinn andShepard (1974). Respondents indi-cated how often they experiencedeach physical condition (e.g.,headaches) in the past year on a

four-point frequency scale (1 =Never, 4 = Often).

� Emotional exhaustion was mea-sured by a scale from the MaslachBurnout Inventory (Maslach, Jack-son & Leiter, 1996). The scale hadnine items (a = 0.86). One itemwas ìI feel emotionally drainedfrom my work.î Responses weremade on a seven-point frequencyscale (1 = Never, 7 = Daily).

� Work-Family Conflict was mea-sured by a 9-item scale (�=0.85)developed and validated byCarlson, Kacmar and Williams(2000). Three forms of conflict,time-based, strain-based and be-havior-based were each measuredby 3 items. One item was ìMywork keeps me from my familyactivities more than I would likeî.

� Life Satisfaction was assessed by a5-item scale (�=-0.84) developedby Diener, (1985). One item was ìIam satisfied with my lifeî.

Results

Descriptive StatisticsThe three work engagement measureswere significantly positive and inter-cor-related (p<0.001: vigor and dedication,0.67, vigor and absorption, 0.51, anddedication and absorption, 0.54). Thesevalues were consistent with those re-ported by Schaufeli and Salanova(2007) who found these to be typicallyabout 0.65. The mean values for the en-gagement scales were also typical of em-ployed populationsóvigor, 3.8; dedica-tion, 3.9 and absorption, 3.5.

Hierarchical RegressionAnalyses

Predictors of Work Engagement

Hierarchical regression analyseswere first undertaken in which thethree measures of work engagementwere regressed on three blocks of pre-dictors. The first block of predictors(N = 5) consisted of personal demo-graphic characteristics (e.g., age,marital status, level of education).The second block of predictors (N =6) consisted of work situation charac-teristics (e.g., organizational level, or-



Exhibit IIPredictors of Work Engagement – nAch

Work Engagement R R2 ΔΔΔΔΔR2 P

Vigor (N=651)Personal Demographics 0.13 0.02 0.02 0.05Work situation 0.28 0.08 0.06 0.001

Organizational level (0.17)Nach (0.40) 0.48 0.24 0.16 0.001

Dedication (N=651)Personal Demographics 0.13 0.02 0.02 0.05Work situation 0.29 0.08 0.06 0.001

Organizational level (0.18)Nach (.39) 0.47 0.22 0.14 0.001

Absorption(N=650)Personal demographics 0.06 0 0 NSWork situation 0.16 0.02 0.02 0.01

Organizational level (0.09)Nach (0.25) 0.29 0.08 0.06 0.001

Exhibit IIIPredictors of Work Engagement – Workaholic Job Behaviors

Vigor (N=637) R R2 ΔΔΔΔΔR2 P

Personal Demographics 0.14 0.02 0.02 0.05Work situation 0.28 0.08 0.06 0.001

Organizational Level (0.13)Workaholic job Behavior 0.51 0.26 0.18 0.001

Non-required work (0.39)Control of others (0.10)

Dedication (N=637)Personal demographics 0.14 0.02 0.02 0.05

Age (-.10)Work situation 0.29 0.08 0.06 0.001

Organizational level (.13)Workaholic job behaviors 0.50 0.26 0.18 0.001

Non-required work (.39)

Absorption (N=639)Personal demographics 0.06 0.00 0.00 NSWork Situation 0.15 0.02 0.02 0.05Workaholic job behaviors 0.39 0.15 0.13 0.001

Non-required work (0.26)Control of others (0.18)

ganizational and job tenure).Thethird block of predictors consisted ofthe measure on Nach in one case, andthe two workaholic job behaviors in asecond. When a block of predictorsaccounted for a significant amounton increment in explained varianceon a given outcome variable (p <0.05), all measures within suchblocks having significant and inde-pendent relationships with this out-come (p < 0.05) were identified. Ex-hibits II and III show the results ofthese analyses.

Need for AchievementExhibit II presents the results of hier-archical regression analysis in whichnAch was entered following the per-sonal demographics and the worksituation characteristics.

The following comments are of-fered in summary: first, the block ofpersonal demographics accounted fora significant amount of variance ononly one of the engagement measures(dedication) but no item had a signifi-cant and independent relationshipwith dedication; second, work situa-tion characteristics accounted for asignificant increment in explainedvariance on all the three engagementmeasures; managers at higher organi-zational levels reported more vigor,dedication and absorption (Bs=0.12,

0.18 and 0.09, respectively). Finally,managers scoring higher on nAch alsoreported higher levels of vigor, dedica-tion and absorption (Bs=0.40, 0.39and 0.25, respectively).

Workaholic Job BehaviorsExhibit III presents the results of hier-archical regression analyses in which

the two workaholic job behaviors (nor-required work, control of others)were entered following the personaldemographics and work situationcharacteristics. The following com-ments are offered in summary: first,younger managers reported higherlevels of Dedication (B=-0.10); sec-ond, managers at higher organiza-tional levels reported more vigor anddedication (Bs=0.13 and 0.13, respec-tively); finally, the workaholic job be-haviors accounted for a significant in-crement in explained variance on allthree work engagement measures.Managers scoring higher on non-re-quired work indicated higher levelson all three (Bs=0.39, 0.39 and 0.256,respectively); managers scoring higheron control of others scored higher onvigor and absorption (Bs=0.10 and0.18, respectively).

Two general observations areworth noting. First, managers athigher organizational levels indicatedhigher levels of work engagement.This was consistent with the conclu-sions of Schaufeli and Salanova (2007)who found that managers, executivesand entrepreneurs scored higher onthe engagement measures than blue-



Exhibit IVWork Engagement and Work Outcomes

Work Outcomes R R2 ΔΔΔΔΔR2 PJob Satisfaction (N=649) Personal Demographics 0.18 0.03 0.03 0.001 Work Situation 0.29 0.09 0.06 0.001 Organizational level (0.07) Engagement 0.65 0.43 0.36 0.001 Dedication (0.38) Vigor (0.25)

Career Satisfaction (N=640) Personal Demographics 0.25 0.06 0.06 0.001 Age (0.12) Work Situation 0.35 0.12 0.06 0.001 Organizational Level (0.16) Organizational Tenure (0.15)Engagement 0.41 0.17 0.05 0.001 Dedication (0.17)

Job Stress (N=659) Personal Demographics 0.07 0 0 NS Work Situation 0.16 0.03 0.03 0.01 Organizational level (-0.11) Organizational tenure (0.12) Engagement 0.22 0.05 0.02 0.01 Dedication (-0.17) Absorption (0.16)

Intent to Quit (N=648) Personal Demographics 0.15 0.02 0.02 0.05 Parental Status (-0.12) Work Situation 0.2 0.04 0.02 0.05 Job Tenure (0.16) Organizational Tenure (-0.16) Engagement 0.27 0.07 0.03 0.001 Dedication (0.14) Vigor (0.11) Absorption (-0.08)

collar workers. Second, both nAchand workaholic job behaviors weresignificant predictors of work engage-ment. These findings address thequestion of ìWho are your engagedemployees?î

Consequences of WorkEngagementConsistent with previous research onthe consequences of work engage-ment, indicators of both work out-comes and psychological well-beingwere included.

Predictors of Work OutcomesExhibit IV presents the results of hier-

archical regression analyses in whichfour work outcomes were regressed onthree blocks of predictors (personaldemographics, work situation charac-teristics, and measures of work en-gagement). Work engagement ac-counted for a significant increment inexplained variance in all cases.

Let us first consider job satisfac-tion. All three blocks of predictors ac-counted for a significant amount or in-crement in explained variance. Man-agers at higher organizational levels,managers scoring higher on dedica-tion, and managers scoring higher onvigor indicated more job satisfaction(Bs=0.07, 0.38 and 0.25, respectively).

All three blocks of predictors alsoaccounted for a significant amount orincrement in explained variance oncareer satisfaction. Older managers,managers at higher organizational lev-els, managers having longer organiza-tional tenure, and those scoring higheron dedication indicated greater careersatisfaction (Bs=0.12, 0.16, 0.l5 and0.1l7, respectively).

Two blocks of predictors ac-counted for significant increments inexplained variance on job stress notpersonal demographics). Managers athigher organizational levels indicatedlower levels of job stress; those havinglonger organizational tenure indicatedmore job stress; managers scoringhigher on dedication reported lowerlevels of job stress; and those scoringhigher on absorption reported higherlevels of job stress (Bs=-0.11, 0.12, -0.17 and 0.16, respectively).

Finally, all three blocks of predic-tors indicated a significant amount orincrement in explained variance onintent to quit. Managers with childrenwere less likely to intend to quit; thosewith longer job tenure were morelikely to intend to quit; those havinglonger organizational tenure were lesslikely to intend to quit, managers scor-ing higher on dedication, and on vigorwere less likely to intend to quit, andmanagers scoring higher on absorp-tion were more likely to intend to quit(Bs=-0.12, -0.10, 0.10, 0.14, 0.11, and -0.08, respectively). More research isneeded to determine whether the find-ings involving absorption are real or astatistical artifact.

Predictors of PsychologicalWell-BeingExhibit V shows the results of hierar-chical regression analyses in whichfour measures of psychological well-being were regressed on the samethree blocks of predictors. The mea-sures of work engagement accountedfor a significant increment in ex-plained variance on all four indicatorsof well-being.

Let us first consider exhaustion.All three blocks of predictors ac-counted for a significant amount or in-crement in explained variance on ex-



Int_AD-3


Exhibit VWork Engagement and Psychological Well-Being

Psychological Well-Being R R2 ΔΔΔΔΔR2 P

Exhaustion (N=659) Personal Demographics 0.16 0.02 0.02 0.01 Education (0.11) Age (-0.12) Work Situation 0.22 0.05 0.03 0.01 Organizational Level (-0.10) Engagement 0.29 0.09 0.04 0.001 Dedication (-0.22)

Work-Family Conflict (N=649) Personal Demographics 0.11 0.01 0.01 NS Work Situation 0.16 0.02 0.01 NS Engagement 0.25 0.06 0.04 0.001 Absorption (0.23) Dedication (-0.21)

Psychosomatic Symptoms (N=640) Personal Demographics 0.14 0.02 0.02 0.05 Work Situation 0.19 0.04 0.02 0.05 Organizational Level (-0.11) Engagement 0.3 0.09 0.05 0.001 Vigor (-0.28) Absorption (0.23) Dedication (-0.22)

Life Satisfaction (N=650) Personal Demographics 0.22 0.05 0.05 0.001 Gender (0.10) Work Situation 0.36 0.13 0.08 0.001 Organizational Level (0.19) Organizational tenure (0.17) Engagement 0.4 0.21 0.08 0.001 Dedication (0.28)

haustion. More educated managers,younger managers, managers atlower organizational levels, and man-agers scoring lower on dedication re-ported higher levels of exhaustion(Bs=0.11, -0.12, -0.10 and -0.22, re-spectively).

Only one block of predictors ac-counted for a significant amount or in-crement in explained variance onwork-family conflict (work engage-ment). Managers scoring higher onabsorption, and those scoring loweron dedication, indicated higher levelsof work-family conflict (Bs=0.23, and-0.21, respectively).

All three blocks of predictors ac-counted for a significant amount or in-crement in explained variance on psy-chosomatic symptoms. Managers at

lower organizational levels, managersscoring lower on vigor, managers scor-ing higher on absorption and manag-ers scoring lower on dedication indi-cated more psychosomatic symptoms(Bs=-0.11, -0.28, 0.23, and -0.21, re-spectively).

Finally, all three blocks of predic-tors accounted for a significantamount or increment in explainedvariance on the measure or life satis-faction. Women, managers at higherorganization levels, managers withlonger organizational tenure, andmanagers scoring higher on dedica-tion also reported higher levels of lifesatisfaction (Bs=-0.10, 0.19, 117 and0.28, respectively).

In all four analyses (exhaustion,work-family conflict, psychosomatic

symptoms, and life satisfaction) man-agers indicating higher levels of dedi-cation also reported more positivepsychological well-being. Managersindicating higher levels of vigor alsoreported fewer psychosomatic symp-toms. However, respondents indicat-ing higher levels of absorption re-ported more psychosomatic symp-toms and work-family conflict. How-ever, these latter findings may be astatistical artifact rather than a validresult.

Again, two more general observa-tions are worth noting. First, dedica-tion was more strongly and consis-tently related to both work and well-being outcomes than were thetwo other engagements measure. Sec-ond, work engagement accounted forgreater increments in explained vari-ance on the work outcomes than onthe indicators psychological well-be-ing.

DiscussionThis research examined potential an-tecedents and consequences of workengagement in a large sample of man-agers and professionals working in themanufacturing sector in Turkey. Anincreasing number of organizationsare concluding that they need to un-leash the untapped potential of alltheir employees if they are to competesuccessfully in an increasingly de-manding global market place (Burke &Cooper, 2008a, Lawler, 2008).

The results indicated that whilepersonal demographic and work situ-ation characteristics were generallyunrelated to levels of work engage-ment, stable individual difference mo-tivations represented by need forachievement (McClelland 1985) andworkaholic job behaviors (Mudrack,2007) were found to be strong predic-tors of all three engagement factors,vigor, dedication and absorption (seeExhibits II and III).

Work engagement, in turn, wasfound to have fairly consistent, butmoderate, relationships with severalwork outcomes and indicators of psy-chological well-being (see Exhibits IVand V). Engagement, it seems, has po-tentially positive consequences for



Note: Preparation of this manuscript was supportedin part by the Schulich School of Business, York Uni-versity and Nevsehir University. Mehmet Tekinkus,Cetin Bektas, Halil Demirer and Fusun Tekin Acarassisted with data collection. We acknowledge thecooperation of the organizations and our respon-dents.

Reference # 03M-2008-10-06-01

The accumulating research findings on work engagement have

added considerably to our understanding of implications for build-

ing more effective organizations

both employees and their employingorganizations.

Practical ImplicationsThe accumulating research findingson work engagement have addedconsiderably to our understandingof implications for building more ef-fective organizations. The researchthat has considered the organiza-tional environment associated withhigh levels of work engagement hasreported that organizational supportplays a central role (Demerouti,Bakker, deJonge, Janssen &

Schaufeli, 2001). Fortunately thereis some understanding of the pro-cesses on mechanisms that underlaythe levels of support.

Leiter (2005) offers a comprehen-sive look at interventions in the work-place designed to enhance engage-ment with work. Increasing engage-ment with work is a challenging andcomplex undertaking. As the re-search findings show, engagementstems from the employeeís contactwith a work environment.

Leiter offers a conceptual frame-work to build engagement with workthat considers the targets of interven-tion, strategies for intervention andpotential consequences. Interventiontargets include energy at work, in-volvement with oneís work, and effi-cacy at work. Intervention strategiesinvolve both individuals and organi-zational or workplace levels. It iscritical to remember that individualshave different views and valuesabout workówhich can change overtimeóand that employees must par-ticipate in building engagement atwork. Finally, the six areas of worklife considered in the present studycan serve as targets for change (e.g.,workload, control, rewards and rec-ognition).

Schaufeli and Salanova (2007,2008) suggest a number of ways tobuild work engagement. These in-clude:� Enhancing the person-job� Matching individual and organi-

zational needs� Developing a meaningful psycho-

logical contract that links per-sonal goals of individual employ-ees with organizational resources.

� Surveys of employee demandsand resources and their associa-tion with positive and negativeoutcomes

� Redesigning job to reduce stres-sors and increase resources

� Leadership development thatbuild a positive emotional climatein the workplace, and

� Developing training programsthat are targeted at both organiza-tional health and individual well-being.Our findings suggest that engage-

ment at work is associated with posi-tive work and individual well-beingoutcomes and that stable individualdifference factors are a major con-tributor to levels of employee engage-ment. They are consistent with theresults of an increasing number of re-cent studies (Gonzalez-Roma,Schaufeli, Bakker & Lloret, 2006;Hakanen, Bakker & Demerouti, 2005;Langelaan, Bakker, von Doornen &Schaufeli, 2006; Montgomery,Peeters, Schaufeli & Den Ouden,2003; Sonnentag, 2003) reflecting theimportance of understanding and in-creasing employee engagement. Ourfindings extend our understanding ofengagement in ways that have practi-cal implications such as those sug-gested by Schaufeli and Salanova(2007) who propose that selection,goal setting and the articulation of achallenging ëcontractí between the in-

dividual and the organization are theways to heighten engagement.

A Word of CautionThe individual and organizationalbenefits of work engagement found inthis sample of Turkish managers repli-cate the results obtained in severalother countries (See Schaufeli &Salanova, 2007, for a review). HumanResource Management (HRM) initia-tives designed to increase work en-gagement have typically been pro-posed for the highly developed coun-tries in the world (US, Canada, theNetherlands). There is evidence(Hofstede, 1980) that the societal andcultural values of Turkey, thoughchanging and moving slowly towardsthose in the West, are different fromthose in Western developed countries.Some Turkish writers (Aycan, 2001,Wasti, 1999) have cautioned againstthe direct application of Western ap-proaches to Turkey. We believe thesecautions should be heeded. Aycan(2001) suggests that greater attentionbe paid to adapting Western-basedHRM practices to the Turkish cultureand values and/or preparing Turkishemployees for the introduction ofWestern HRM practices.

LimitationsThis research has some limitations.First, all data were collected usingself-report questionnaires raising thepossibility of responses being af-fected by a common method. Sec-ond, the data were collected at onepoint in time making it difficult toestablish causal relationships.Third, a few of the measures had lev-els of internal consistency reliabilitybelow the generally accepted level of0.70. Fourth, the extent to whichthese findings can generalize re-spondents working in other indus-trial sectors or respondents in othercountries is not clear.



Ext_AD-12


Governmentcan play a

positive role increating cutting

edge regulations, or

establishing standardsfor safety, or new

process technologies

that benefit a wholeindustry. But governmentcannot forecast major

technological change.

– Prof. David Ahlstrom


I N E R E WIVT


and televisions, but automobiles andair travel.

The start of the second period ofglobalization can be traced to 1971.In that year President Richard Nixonannounced that the US would nolonger redeem international dollarholdings at the rate of $35 per ounceof gold. This commitment hadformed a central foundation of the in-ternational financial system set inplace around the end of World War II.This financial system was referred toas Bretton Woods System. The resultwas a more flexible economic envi-

ronment which further aided interna-tional trade. In this new environ-ment the US rapidly expanded ex-ports and imports by over 800% be-tween 1973 and 2002, while Japansaw a 900% jump in both items. Thisincrease in free trade, the movementof capital, and the spread of informa-tion about lifestyles and middle andupper class living have led to the de-crease in the emphasis on the BigUnit Capitalism of large firms andgovernment planning, and an in-crease in the emphasis on entrepre-neurship and freer markets with theirproven track record in increasing thewealth of societies. I do not agreewith the term corporate imperialism.I do not think free trade should be la-beled with the term ëimperialism.íNor do I accept the term ëcorporatewar.í Business is not war, but should

be characterized by win-win sce-narios, not ëfixed pieí mentalities. Thefixed pie mentality is one of the fun-damental fallacies of socialism.� A lot has changed in the last hun-

dred years of corporate history.What according, to you, were thedefining moments of that history?In other words, what were thestrategic inflection points/touchpoints during the last hundredyears of corporate history?

There are many. But I would selecttwo categories of revolutionarychange to answer that questionó

technological and political. For tech-nological change, the informationtechnology revolution that got radio,then the movies and television, andfinally computing and the Internetinto the hands of people worldwidehas changed the world significantly.It is much more difficult today fordictators and autocrats to incessantlylie to their populations about what isgoing on in the world. People cannow see with their eyes what is hap-pening around the world, and theycan start demanding better lives fromtheir leaders and the organizationsand institutions of their societies.This is a key point of ThomasFriedmanís fine work (Lexus and theOlive Tree, and The World is Flat). Re-lated to the improvements in commu-nications and computing is the finan-cial revolution which allows people,

� How do you characterize the lastcentury from the point of view ofbusiness and how do you foreseethe coming century? Can the pastcentury largely be interpreted asa Century of Conglomerates anda Century of Corporate Imperial-ism and the next century as aCentury of Emerging Markets?Did the end of Cold War mean thearrival of Corporate War?

I would argue that the 20th centurycan be divided up into two eras. Theperiod after World War I and increas-ingly after World War II has oftenbeen referred to as the period of ëBigUnit Capitalism.í Big Unit Capitalismis characterized by stable economicswith large domestic firms, a high de-gree of central planningóeven inmany free market economies such asthe US, the UK and India. Big UnitCapitalism is characterized by an em-phasis on large firms, often conglom-erates, government ownership andincentives and powerful tradeunions. Taxes were very high innearly all countries ñ for example, inthe US marginal tax rates for the up-per income earners were as high as94% during this period.

Big Unit Capitalism from the endof World War II until 1971 produced aperiod of unmatched economicgrowth. During this time the realwages of production workers in theUS grew at a steady 2 Ω - 3% annu-ally and boom and bust cycles be-came much less severe than in prioreconomic periods. During this timeconveniences once available only tothe rich became accessible to themiddle class and even the poor, suchas quality clothes, food and housing.In the more developed countries, thisincluded not only washing machines

It is much more difficult today for dictators and autocrats to

incessantly lie to their populations about what is going

on in the world

David Ahlstrom is a professor in the Department of Management at The Chinese University of Hong Kong. He has a PhD in management from New York

University and an MBA from the University of Hawaii.

Ahlstrom taught for several years in the US before coming to Hong Kong. He has taught in Hong Kong for 12-years in the areas of organizational behavior,

international management, and the management of technology and innovation.

He has published articles in over 50 refereed journals and books such as Academy of Management Review, Strategic Management Journal, Entrepreneurship

Theory & Practice, SAM Advanced Management Journal, and Asia Pacific Journal of Management. His research interests include management in Greater

China; venture capital and entrepreneurship; and management and organizational history. Ahlstrom consults and trains in the areas of management of

innovation and the science and practice of influence.

INTERVIEW



As far as political innovation, clearly the system of free trade

that has been spreading in fits and starts since the end of

World War II is a significant inflexion point. But this was not

energized until the end of the Bretton Woods System

even small investors with only $1000to make investments outside of theirhome country. This obviously hasmajor implications for economic sys-tems, capital markets, and coroporategovernance. Firms can no longer ap-propriate as easily, the money ofsmall investors as they did in thepast. Crony capitalism is gettingtougher to get away with as govern-ments realize it is potentially quiteharmful to an economy. Thus I can-not fix a particular year for these tech-nology inflexions, though loosely Iwould say that the World War II pe-

riod started the communicationsrevolution, and subsequent changehas happened with the rise of televi-sion in the following decades, andthe Internet in the 1990s.

As to political innovation, clearlythe system of free trade that has beenspreading in fits and starts since theend of World War II is a significantinflexion point. But this was not ener-gized until the end of the BrettonWoods System as noted above. Moreand more countries have chosen toparticipate (and have allowed theircitizens to participate) in global mar-kets, and the world is much better offas a result.� What lessons do the last hundred

years of business offer to the newbusinesses?

Industry leadership cannot be takenfor granted. Leadership will alwaysbe challenged in an industry. Upstartnewcomers are always on the hori-zon, even in heavily regulated com-munications and postal delivery net-works; disruptive innovation is here,and it affects business and industry.Disruptive innovation and the com-petition it brings leads to JosephSchumpeterís creative destructionand the renewal and growth in aneconomy. Big Unit Capitalism resists

this. Power labor unions resistchange. Government officials resistchangeóthey fear what will happento the cozy relation they have withthe big industries in their country ifthe upstarts begin to move in. But dis-ruptive innovation and creative de-struction must be allowed to con-tinue ñ the major innovations, both interms of technology and managementprocesses have been disruptive, andhave upset industrial (and sometimessocial orders). But they have beenbeneficial in the long-term. The per-sonal computer revolution has en-

abled thousands of new firms andnew services. Fortunately, the disrup-tion that the PC industry created wasnot stopped by some government bu-reaucrat and industry union coalitionthat wanted to ëavoid confusioní inthe marketplace (the usual stock ex-cuse given to stop competition andinnovation).� Globalization champions advo-

cated borderless trade and thathas led in some way to globaleconomic imbalances. The firsteight years of this century (2001-2008) would definitely go downthe history as watershed yearsfor global economy and globalbusinesses. First it was colossalfall of Enron, Arthur Anderson,Tyco, WorldCom, etc. September11 attacks put countries on highalert. 2007 saw the world gettingengulfed in sub-prime mortgagecrisis and with that a completewashout of trillions of dollars ofshareholder wealth and 2008 hasseen the global banking crisis, oilprice shocks and food price rises.Amidst all these, the centralbanks have been put in a quan-dary which has compounded theexchange rate risks and compa-nies across the globe seem out of

place and clueless. What do allthese events signify? Should theybe looked at in isolation or arethere any powerful lessons for fu-ture managers and CEOs whenthey connect the dots? Do youthink the world was integratedfor an inimitable disintegration?

The financial shocks have been rela-tively minor compared with the pan-ics of the past. The current system isbetter set up to manage these shocks.I agree that the banking industryneeds a lot of reform, and I hope thiswill happen. Enron and Tyco are non-issues. They were just examples ofpoor corporate governance in the cor-ner of North American industry.Crooks and thieves have always beenwith us in this world, and they al-ways will be. The challenge is to con-trol them properly and punish thempublically so the good majority doesnot start to get ideas to imitate them,as the ultimate game in economictheory has shown they might.� As you compare the Fortune 500

companies list, letís say in 1958and 2008, what distinguishesthese two lists? What can be sur-mised and learnt from those twolists? As you look at companies inUSA, Europe and Asia, whatstands out? Is there any particu-lar development that seems tosum up the impact of global com-petition?

I believe that there is more upheavaltoday. In addition, there are manynew firms that are in businesses thatcould barely be conceived of in the1950s. One social science researcherhas forecast that many future univer-sity graduates in the coming decadeswill work in an industry that does noteven exist. Expect, as CK Prahaladhas said, leadership has to be chal-lenged. That is happening more andmore today.� According a recent McKinsey

Global Survey, almost 70% of ex-ecutives around the world saythat global social, environmentaland business trends are increas-ingly important to corporatestrategy. Yet relatively few com-panies act on the global trends


INTERVIEW


Ext_AD-13


they think will affect them most;among those that do act, only17% report significant benefits.Why is there such a disparity be-tween need and action?

I can only speculate that firms scanprimarily in the area of direct compe-tition and other threats. They tend tomiss out on opportunities that do notextend the (recent) past for them.That is, they are very good at incre-mental, sustaining innovation, butnot good at disruptive innovation.Why? This could relate to cognitiveproblems that all people have, fromtop managers to down. But I wouldagree, many opportunities are beingmissed by firms that have the re-sources to take advantage of them.� Competition existed long before

modern economies and busi-nesses were born. It began withlife itself. Gauseís Principle ofCompetitive Exclusion illus-trated that no two species can co-exist that make their living in theidentical way. What would be thenew frontiers of competition?Who are likely to be the majorwinners in these frontiers? Whatwould be the new differentiating(when the competitors are clos-ing in on the gaps) factors forcompanies?

I was asked a similar question in themid1990s. At that time, very fewpeople could forecast the effect, theInternet would have on business,from supply chain management, tothe new finance, to media to eveneducation and medicine. The pointis, it is very difficult to forecast. Iwould rather talk about the new op-portunities that seem to be emerging:opportunities in major established in-dustries for example, such ashealthcare and education. These aretwo of the biggest industries (in termsof aggregate spending) worldwide.Yet they are dominated by govern-ment ownership and regulation.These industries are ripe for innova-tion, particularly disruptive innova-tion. For example, in higher educa-tion, only a very small percentage ofan age cohort worldwide can go touniversity or attend postgraduate

education, though many more wouldlike to do so. For instance, only a fewthousands per year can get an MBAor other postgraduate business de-gree. This is a very small percentageof those that might want to study anMBA, MSc, MPhil or DBA. There isgreat opportunity for entrepreneursin these two industries (and not justthese two) to change and grow them.And these are just the industries thatwe know about today, imagine whatelse that cannot even be conceived ofthat is coming in the next 10-15 years!� Do you foresee an increasingly

decreasing role of multilateral in-ternational bodies like, WTO(with the rise of regional and bi-lateral trade agreements and pe-rennial showdown at recentmeetings, including impasse atDoha round of talks), UNO (withprivate sector assuming a greatrole at humanitarian activitiesófor instance, Bill and MelindaGates Foundation, Clinton Glo-bal Initiative, and increasing roleof Social Entrepreneurship Ini-tiatives and Microfinance Initia-tives), the IMF and the WorldBank?

Yes, there is so much more money insociety today. Over the next 100years, with just modest growth, theaverage income in society will growby about 15 times in real terms, morein the emerging economies. This willgenerate a great deal of wealth andwith necessities well taken care of, Iexpect more philanthropy in the de-cades to come.� What according to you is the new

economic consensus and the newbusiness order? Do you see therise of business diplomacy? Doyou see a greater role for govern-ment in business, positively ofcourse?

I hope we will not see a greater rolefor government in business. Govern-ment can play a positive role in creat-ing cutting edge regulations, or estab-lishing standards for safety, or newprocess technologies that benefit awhole industry. But government can-not forecast major technologicalchange. I am hopeful that govern-

ments recognize this, and stop tryingto prop up old industries that are be-ing disrupted, such as the integratedsteel mill industry.� What according to you are the

five most important trends thatare going to shape the way globalbusiness will be carried out andwhat advice would you offer tothe top managers operating thosebusinesses?

1. The pace of technological changewill increase as more countriesëget in the gameí of science andtechnology.

2. Increased communication will fa-cilitate global business.

3. Trade barriers will continue tobreak down as regulations changeand technology facilitates trade.

4. Global business will become moreimportant and managers will haveto pay attention to becoming inter-nationally competent.

5. More attention will be paid tonew forms of energy and othersustainability factors.

� What do these trends mean forthe organizational preparedness?Do you advocate that companiesshould invest heavily in 4Ps ópeople, processes, platforms andprogramsóto be at the forefrontof innovation in the new businessorder?

Companies should not neglect invest-ments in human resources, at mul-tiple levels.� What should be a CEOís agenda

in the new economic and busi-ness order? What factors do youthink are going influence a CEOísagenda?

CEOs have to wear many hats in thefuture. They have to be leaders,influencers, and diplomats.� What do you think would be the

critical success factors for globalfirms in the new business orderand what should be key result ar-eas for the executives in the neweconomic and business order?

Innovation is central to firm success.It is difficult for a firm to disrupt itsown main products and introducenew ones, but the ability to do thiswill be even more important than go-


INTERVIEW


Reference # 03M-2008-10-07-06




Business schools should be educating future managers for sure,

but they should also be educating the public about the role of

business, management, and commerce in the economy

ing forward. Intel is an example of afirm that was able to disrupt its ownmain product line when it introducedthe Centrino line and other chips andchipsets that facilitated mobile com-puting. This was against the advice ofsome of Intelís top engineers, but theydid it, and the new lines are now avery important part of Intel business.� One of the often cited capabilities

that companies should develop ismanaging multicultural teams.How do individuals develop theircapability to adapt effectivelyacross different cultures? Why do

some individuals possess supe-rior capacity to deal with thechallenges of working in differ-ent cultures? How do individualsreach full productive potentialworking in culturally diversework environments in theirhome countries and overseas?How do organizations build ca-pability for effective work assign-ments in locations around theworld? How do organizations op-timize individual and collectiveperformance when they harnessthe cultural diversity of theirpeople across the world?

Firms should try to give cross-cul-tural training. Some people may bemore naturally adept in cross-cul-tural situations, but anyone can betrained so as to improve at this.� The current business lexicon

consists of competitive advan-tage/edge, strategic positioning,core competencies, value chain,value nets, value creation andvalue migration, shareholder ac-tivism, corporate governance,corporate social responsibility,blue ocean strategy, etc. Whatdo you think would be,rather should be, the newbusiness lexicon?

I do not argue for a new lexicon. Iwould like to see these concepts un-derstood first, and applied properly.They are powerful if used properly.Just think of the number of firms thatpractice ëme tooí strategies. They areviolating basic principles of differen-tiation and value-add. But they do itall the time, and we all suffer becauseof it. In Hong Kong for example, everyshopping mall looks just like everyother one. Why must they imitateeach other exactly? It has to do withthe staid retail environment here, andthe lack of risk-taking in this industry

here. Just trying to get students andbusiness people to understand andproperly apply these terms takes upmost of my teaching time and energy.� Corporate R&D labs used to be

the key for companies to createcompetitive advantage. But in the21st century, innovation is mov-ing out of the lab and across theglobe. The research indicatesthat a real source of competitiveadvantage is skill in managinginnovation partnerships. For in-stance, Boeingís unique assetsand skills are increasingly tied tothe way the firm orchestrates,manages, and coordinates its net-work of hundreds of global part-ners. Innovation is increasinglydriven through collaborativeteams due to product complexity,availability of low-cost buthighly skilled labor pool and ad-vances in development tools. At amacro level, whatís driving thistrend? Is this going to be a com-petitive necessity or a competi-tive choice? What are the advan-tages to companies that do itwell?

Innovation has always been in the laband out on the shop floor (or at thehospital bedside). Management inno-

vation (or process/treatment innova-tion) is a very important part of tech-nological change. For example, in thelate 1960s, what took about 100 man-hours to unload a ship now takesabout 4 man-hours. This is because ofnew process technologies and con-tainerization. This represent a verysignificant productivity improve-ment and one of many supply chaininnovations that firms (and consum-ers) have benefited from.� What do you think are the criti-

cal principles that the companiesshould follow to form and man-age successful collaboration pro-grams? Are there any best prac-tices from any company?

As I have found in my research, itis important to understand whatcriteria managers in other firms andin other countries and cultures seekout in their strategic alliance part-ners. Just like any relationship, it isimportant to find out what the otherside needs and what problems theyhave.� What is the role of business

schools in preparing the futuremanagers capable of handling in-creased business complexitiesand working with diverse workgroups?

I think business schools have a majorrole to play. They should be educat-ing future managers for sure, but theyshould also be educating the publicabout the role of business, manage-ment, and commerce in the economy.A business education is not for man-agers alone, and this is somethingthat the critics of business schools aremissing. It is very important to edu-cate the general population aboutwhat business really does, and how ithelps the economy and society. Busi-ness schools have a very importanttask to play in helping people under-stand the vital role business has inour society today.


INTERVIEW


Int_AD-4


If the growth of the Interaction sector in business is (as it islikely to be) a reflection of the increasing prevalence ofambiguous, nonformulaic situations today, then it should benoted that the choice facing today’s business organizations isnot ‘interaction or knowledge’ but rather ‘valuable interactionor wasteful interaction’.

tion of steam power and poweredmachinery. The development of all-metal machine tools in the first twodecades of the 19th Century enabledthe manufacture of more productionmachines for manufacturing in otherindustries; and thus, the Manufac-turing Economy began.

In the Agrarian Economy, compe-tition was based on quality and ac-cessibilityófor the most part, goodswere bought locally, and the farmer,craftsperson, or shopkeeper whocould offer the best combination ofcost and quality had what we wouldcall today a competitive edge. Withthe advent of manufacturing, theground of competition shiftedóproducts were more standard andcommoditized and were no longermade by a single local craftsperson.Thus, those who manufactured andsold these products began to empha-size features and services to differen-tiate themselves competitively.

With standardization, manufac-turing organizations began to dealwith large-scale coordinated actionunprecedented in business history.To do so, companies turned to theone model that was proven effectivefor large-scale activityóthe military.Interactions in the ManufacturingEconomy featured formal hierarchy,rigid roles, and highly controlled in-formation. If you worked in manu-facturing, you knew what was neces-sary to do your job and nothingmore. You were expected to focus onyour job and not interfere with otherpeople. Horizontal interactionswere, by and large, discouraged.

The acceleration of scientificprogress in the 20th century and thepressure to bring scientific break-throughs to bear on military, civilianand business issues brought aboutthe development of the third great

Gaining Competitive Edge


Throughout history, successiveeconomic eras have evolved asnew social and scientific forces

stimulated new ways of doing busi-ness which, in turn, require newcompetencies. The era now rapidlyemerging and its new ways of doingbusiness, demand new kinds ofskills in an ancient arenaóhumaninteraction.

Generally, the history of humaneconomics is considered to havegone through several phases, eachone shorter than the one that pre-

ceded it. The Agrarian Economy be-gan with the dawn of civilizationand was characterized by the vastmajority of people working on theland for their own food and sellingor bartering the crops that exceededwhat they and their family needed tolive on. This phase prevailed untilthe Industrial Revolution in the late18th and early 19th Centuries. Theshift from an economy based onmanual labor to being dominated byindustry and machine manufacturebegan in Britain with the introduc-


economic revolutionóthe Informa-tion Economy. World War II was wonlargely due to the Alliesí ability togather the best minds in the worldand to mobilize their thinking in ser-vice of intangibles such as freedom,scientific progress and democracy.This burst of concentrated scientificthinking led to the realization thatpooling information resources led tooutcomes that came faster and wereof a higher quality than those thesame scientists working alone couldcreate.

As early as 1959, Peter Druckercoined the term ìknowledge workerîto describe someone who works pri-marily with information or who de-velops and uses knowledge in theworkplace. The work environmentDrucker was observing was beingseminally affected by the work of WEdwards Deming, Genichi Taguchi,and others who invented principlesand methods to support organiza-tional assessment, learning and im-provement. Those principles andmethods connected customers, em-ployees and management in newways to eliminate waste and addvalue via their shared knowledge.ëWasteí and ëvalueí became wordsfreighted with new meaning and allaspects of organization began to bescrutinized to see whether they re-ally added value in the eyes of thecustomer. Layers of supervisionwere removed to take wasteful costsout of the system. Capital costs werereduced by decreasing investment intraditional collocated office space. Atrend toward the ìvirtual workforceîbegan and many new experiments inorganizational development ensued.

The knowledge revolution wasgiven a catalyzing vocabulary in 1990with the publication and wide accep-tance of Peter Sengeís The Fifth Disci-pline. Senge declared that a decisivecompetitive edge for businesses ap-proaching the 21st Century lay in theirbecoming ìlearning organizations.îThis idea is now widely accepted andthe concept of interaction itself hasevolved as terms such as ëtranspar-encyí and ëboundary-lessí describe en-vironments based on sharing and de-

ploying knowledge in ways that re-duce waste and add value.

Along with these developmentsin organizational theory and practicewere parallel developments in tech-nology that would catalyze anothermajor shift in the basis of theeconomy long before anyone mighthave expected it. As the amount ofinformation available has grown ex-ponentially with the development ofthe Internet, highly effective andwidely used search tools have beendeveloped and all the informationon the World Wide Web has becomeusefully and instantly available inthe Information Economy.

In 1609, Francis Bacon saidìKnowledge is power; the more oneknows the more one can controlevents,î and this aphorism has beenaccepted wisdom for 400 years. Ba-con could not have anticipated a cor-ollary to his famous dictum, thatwhen there is free and easy access toknowledge, knowledge is no longerthe source of power.

Knowledge has become so avail-able that it constitutes a commod-

ityóavailable at little or no cost toeveryone with access to the Internet.Thus effective, rapid access to infor-mation is now the entry to competi-tion rather than the competitive edge.Easy access to information has in-creased physical separation and cre-ated networks of relationships thatexist with little in-person contact. Allthese Information Economy effectsgive rise to the fourth great economicshift, what we call the InteractionEconomy.

The Basis of TheInteraction EconomyIn the interaction economy, the differ-entiating factor is not knowledge, butrather the rate at which we do newand valuable things with that knowl-edge. The rate of adjustment is crucialand is driven by the interaction ofthree elementsóinitiators, partnersand information. Initiators start inter-actions; they are exploring or are al-ready committed to a strategy for pro-ducing value. Partners are those withwhom the initiators must interact tocreate economic value. Partners maytake the form of customers, associates,employees, superiors, suppliers, and/or allies, that is, anyone who must par-ticipate for value to occur. Informationis timely, relevant knowledge. Thequality of the interactions betweenthese elements is the competitive fron-tier in the interaction economy.

Interactions have been importantin every economic age, but were con-sidered a secondary element ratherthan a primary source of value cre-ation. Interactions in earlier eco-nomic eras were largely hierarchical,stable and predictable, and learningoneís role was more important thanlearning how to interact betweenroles. In general, the source of coordi-nation was compliance with the dic-tates of authority.

The vocabulary of the InteractionEconomy shows how much all thathas changed. Terms such as ëcross-boundary initiativesí, ëhorizontal pro-cessesí, ësupply chainsí, ëvalue net-worksí, ëcollaborationí, ëconnectivityí,ësilos versus systemsí, and the ëmatrixorganizationí, all denote the promi-

Mickey Connolly is the

CEO and founder of

Conversant, a

management and training

consultancy in Boulder,

Colorado and is the senior

designer of its programs. He has worked with

400 organizations in 30 countries on issues of

coordination and communication. Mickey has

trained consultants, educators, and negotiators

who have in turn trained another 200,000 people

around the world.

He also founded a hospitality industry

organization that owns and operates several

restaurants, and has been a principal in an

adver tising and marketing firm, a hospitality

industry consulting firm, and a specialty

construction company. Mickey has worked with

people from top organizations like Hewlett-

Packard, The Coca-Cola Company, Honeywell,

Apple, IBM, Motorola, the US Air Force, the

University of Alabama, University of Texas

School of Business, and many others. He is the

co-author of The Communication Catalyst with

Dr. Richard Rianoshek.



Exhibit IIntraction Economy: The Roots

The Interaction Economy was foreshadowed over 65 years ago. In the early 1940s, a group of brilliantphysicists and other scientists were brought together to form the Manhattan Project, the object ofwhich was to design a weapon that used nuclear fission to create a level of explosive power that wasunimaginable in World War I. Almost all of the scientists had already been working for several years onthe problem, with very little progress. In 1941, they were united under the codirection of General LeslieGroves and Dr. Robert Oppenheimer, and placed under extreme time pressure lest Germany developthe weapon first. These were, for the most part, senior scientists of considerable reputation and insome cases with egos to match. To further complicate matters they were not all in the same place;there were 14 project sites, of which Los Alamos, Berkeley, and Chicago were the main ones. Grovesand Oppenheimer had the task of coordinating this widespread and disparate group, and how they didthis remains a case study in interaction management.

A parallel project was underway at the Kaiser Wilhelm Institute in Germany under WernerHeisenberg. The German project had personnel who were arguably as brilliant as those in theManhattan Project, a leader in Heisenberg who was at least Oppenheimer’s equal, and the sametime pressure, and it took place largely under one roof, yet the Manhattan Project succeeded andthe German effort did not. Why? The answer lies in part in a fundamental difference in how theprojects were managed. The German project was run along classical scientific lines—scientistsworked alone or in small groups, shared their work in colloquia, and went back to work in theirseparate labs. In the American project free exchange of information, thinking, and speaking acrossdisciplinary boundaries, brainstorming, and creativity were encouraged, particularly byOppenheimer who, along with Hans Bethe and other senior members of the team, sponsored anenvironment where ideas could come together and interact. Failure was not only tolerated butencouraged as creative approaches were tried. Learning and rate of adjustment were key values asthose failures were turned into discoveries and accelerated execution.

As we all now know, the Manhattan Project won. Prior to the US entry into the war, German andAmerican scientists had access to the same information. The possibility of nuclear fission in ura-nium was discovered and published in late 1938 by a team of German scientists, and in 1939Albert Einstein warned President Roosevelt about the dangers of an atomic bomb. The Germansactually launched their nuclear project in September 1939, well before the US even considered thisresearch seriously. The difference in execution was the rate of discovery and problem solvingenabled by the ease and quality of the interactions. This kind of interaction environment wasspawned by emergency and the fortunate presence of unusual people. The winners in today’seconomy will not depend on emergency or unusual personnel; they will proactively master creatingand leading networks of interaction.

nence of interactions in developingand executing value creation strate-gies. The source of coordination nowis ëmutual interestí because we needfar more cooperation than we can gar-ner through compliance. InteractionEconomy leaders must learn toevoke, connect with, and orchestratecommitment rather than demandcompliance.

In a recent article, Peter Senge(2006) alluded to these issues:

All businesses sit within muchlarger commercial systems, and it isthese systems that must change, notjust individual company policies andpracticesÖ

For me the fundamentals startwith a set of deep capacities which

few in leadership positions todaycould claim to have developed: sys-tems intelligence, building partner-ship across boundaries, and open-ness of mind, heart, and will.

High-quality interactions do notmerely coordinate action, they stimu-late innovation. The maxim ìAll of usare smarter than any of usî has beenvariously attributed to Walt Disney,Ken Blanchard, Warren Bennis, andothers. Regardless of who said it first,there is little doubt of its truth. Thereal challenge is making the transi-tion from theory to practice: just howdo we tap into the commitment andintelligence of a business communityto improve development and execu-tion of strategy? In his 2004 book The

Wisdom of Crowds, James Surowieckiprovides extensive documentation toshow that, under the right conditions,groups of people will reliably producesmarter solutions to problems thanwould be expected from any indi-vidual in the group or even from ac-knowledged experts. In our work atConversant with organizations in over35 countries we have found the sameto be true: there is a reliable design tohigh-value interactions. It is this ìreli-able designî that forms the basis forthriving in the Interaction Economy.

Interactions: Transactional,Transformational and TacitTwo recent studies by the McKinseyOrganization asserted that as wemoved farther away from the Manu-facturing Economy and as informa-tion became more easily accessible toall, the source of competitive advan-tage has indeed shifted. In 1998, stud-ies showed 61% of American workerswere in jobs that the authors classi-fied as either ìtransactionalî (routineand repetitive) or ìtransformationalî(manufacturing). By 2004, this per-centage had dropped to 59% and con-tinues to trend downward. The re-maining jobs involve what theMcKinsey authors call ìtacitî work,that is, work involving complex inter-actions with others, often across bothinternal and external organizationalboundaries.

In 1993, Michael Hammer andJames Champy, in their bookReengineering the Corporation, couldcredibly promote process improve-ment as a source of competitive ad-vantage. Shortly after reengineeringbecame widely adopted, however, itbecame clear that any advantagegained by process improvement, bestpractices studies, automation,outsourcing, and so forth were short-lived as rival companies adopted simi-lar improvements and matched theircompetitors. The rate of informationflow turns nearly every improvementinto public knowledge and whoevermost rapidly turns the knowledge intonew value creation wins.

At the same time, it has becomeincreasingly apparent that a key



Int_AD-5


Dr. Edward M Gurowitz is

a Vice President of

Conversant, a

management and training

consultancy in Boulder,

Colorado. He has over 25

years of experience

working on the leading

edge of organizational transformation

specializing in mergers and acquisitions and

cross-boundary collaboration. He designed and

led the internationally respected Executive

Excellence Program and has worked with the

CEOs and executive leadership of Fortune 500

companies worldwide as well as with non-profit

organizations and government officials and

agencies. His clients include IBM, Oral-B

Products, Charles Schwab & Co., Engelhard

Corporation, Dale Carnegie & Associates, Eli

Lilly, and many others. He has his PhD in

psychology from the University of Rochester

source of value creation lies in busi-ness activities that have largely beenignored, particularly in the complexinteractions that key managers andexecutives have, on an ongoing basisthat are central to performing theirjobs. By ìcomplex interactionsî, wemean, first and foremost, conversa-tionsóconversations with peers, su-periors, subordinates, suppliers, con-tractors, and customers to name a fewof the key examples. These conversa-tions typically require that managersdeal with considerable ambiguity andexercise high levels of judgment,with only their knowledge and expe-rience to draw on. According toMcKinsey, during the past six years,the number of US jobs in which thiskind of interaction is a key factor hasbeen growing three times faster thanemployment in the entire nationaleconomy. As business becomes morecomplex and managers have more in-formation to deal with, this trend canbe expected to continue and increase.

As the demand for valuable inter-actions grows, the companies whoseemployees are most skilled at theseinteractions have a considerablecompetitive advantage. Put anotherway, unproductive interactions willput companies at an increasingly ex-pensive disadvantage.

The point isnít how many tacit in-teractions occur in a companyówhatís important is that they ought toadd value. This shift toward tacit in-teractions upends everything we knowabout organizations. Since the days ofAlfred Sloan, corporations have re-sembled pyramids, with a limitednumber of tacit employees (managers)on top coordinating a broad span ofworkers engaged in production andtransactional labor. Hierarchicalstructures and strict performancemetrics that tabulate inputs and out-puts therefore lie at the heart of mostorganizations today.

But the rise of the tacit workforceand the decline of the transforma-tional and transactional ones demandnew thinking about the organizationalstructures that could help companiesmake the best use of this shifting blend

of talent. There is no road map to showthem how to do so. Over time, innova-tions and experiments to raise the pro-ductivity of tacit employees (for in-stance, by helping them collaboratemore effectively inside and outsidetheir companies) and innovations in-volving loosely coupled teams willsuggest new organizational structures.

The Next Revolution in InteractionsBC Johnson, JM Manyika,

and LA YeeThe McKinsey Quarterly, 2005.

Systems theory holds that a sub-system that is in wide use and largelyunexamined is a strong candidate fora likely source of waste in a system.By this definition, interaction, orwhat is more commonly called ìcon-versation,î is very likely to be a wastesource in most organizations. If welook particularly at what the quoteabove refers to as ìtacit interactions,î(i.e., those complex, ambiguous,judgment-intensive conversationsdescribed above), we find them inever-widening use, increasing as amanagerís seniority or scope of au-thority increases, and yet for the mostpart, unexamined. In our experienceof working with Fortune 100 compa-nies worldwide, it is possible to bring

to these conversations a level ofanalysis and clarity that goes beyondthe call for ëinnovations and experi-mentsí, lending itself to training andpractices that make complex conver-sations a source of significant addedvalue.

Interactions That AddValue vs. Interactions ThatCreate WasteWe define value as anything that cus-tomers and shareholders would bewilling to pay for and that employeeswould be willing and able to pro-duce. Waste, then, is any activity thatdoes not meet this criterion, as it doesnot produce value.

Clearly, the kind of complex inter-actions that we are discussing hereare a key potential source of value. Inhis book Moments of Truth, formerSAS CEO Jan Carlzon describes it thisway:

Last year, each of our 10 millioncustomers came in contact with ap-proximately five SAS employees, andthis contact lasted an average of 15seconds each time. Thus SAS is ìcre-atedî 50 million times a year, 15 sec-onds at a time. These 50 million ìmo-ments of truthî are the moments thatultimately determine whether SASwill succeed or fail as a company.They are the moments when we mustprove to our customers that SAS istheir best alternative.

If we are truly dedicated to orient-ing our company toward eachcustomerís individual needs, then wecannot rely on rule books and instruc-tions from distant corporate offices.We have to place responsibility forideas, decisions, and actions with thepeople who are SAS during those 15seconds: ticket agents, flight atten-dants, baggage handlers, and all theother frontline employees. If they haveto go up the organizational chain ofcommand for a decisionÖ then those15 seconds will elapse without a re-sponse, and we will have lost an op-portunity to earn a loyal customer.

Carlzonís strategy clearly workedat SAS, yet he would be the first toadmit that it was rife with risks. Everyopportunity to create value is also a



1 Much of the material for this case study is based on Mickey Connolly and Susan Burnett (2003) Hewlett-Packard Takes the Waste Out of Leadership.

15-second opportunity to createwasteóto lose a customer forever.What will make the difference be-tween value and waste is the qualityof the interaction.

Interaction EconomyCompetencies at Work:A Case Study1

We have found that leading in the In-teraction Economy requires three ma-jor competencies:� Interactive Vision

Seeing execution as a network ofinteractions;

� Interactive TimingBeing able to diagnose and re-spond to interaction opportuni-ties and problems at the righttime; and

� Interactive SkillBeing able to lead the interactioneffectively once you know whichinteraction to highlight with agiven group at a given moment.Despite almost 60 years as a com-

pany that was widely admired for itsproducts, ethics, innovations, andcompetitive spirit, Hewlett-Packardíserratic performance during the 1990shad begun to erode the companyísreputation. HP executives believedthat many opportunities for customerand shareholder value had been lostbecause of poor coordination be-tween the companyís more than 60business units.

In 2001, HP reorganized into fourGlobal Business Units (GBUs) andthe companyís Board and ExecutiveCouncil recognized that even with thisconsolidation, collaboration across theGBUs was going to be critical. A surveyof employees at all levels of the com-pany confirmed both the need for andthe potential difficulty of whatamounted to a major cultural shift. Thefeedback from the survey spotlightedthe need for a different style of leader-ship, one better suited to driving cross-boundary innovation, efficiency, andrapid change.

One early discovery in the changeprocess was that managers who were

most effective in unscripted conversa-tions were also the most effectivechange leaders. Susan Burnett, HPísVice President of Workforce Develop-ment, became very interested in thenotion of conversations as a catalystfor change. Burnett was instrumentalin HP partnering with our companyConversant, a Boulder, Colorado, con-sulting practice focused on how con-versations affect the rate and quality oforganizational accomplishment. Con-versant had worked closely with theInk Jet Supplies business of HP forsome 10 years, gaining familiaritywith HP and demonstrating the effec-tiveness of their approach with HPmanagers and executives.

In an extensive report on the HP/Conversant project, Greg Merten,then Vice President and GeneralManager of Supplies Operations forthe Ink Jet Supplies business, said:

The way we used to solve problemstended to damage relationships. Turfprotection and blame would leave thepeople involved weakened as a teamand in worse shape to solve whateverproblem came next. Now, we solve big-ger problems faster, and relationshipsare in better shape after the problem-solving, not worse.

Mertenís endorsement andBurnettís investigation led to the co-development by Conversant and HPof a programóDynamic Leader-shipóthat would train HP managersin the three competencies of the In-teraction Economy.

Dynamic Leadership andInteractive VisionThe purpose of Dynamic Leadershipis to substantially improve the abilityof HP managers to accelerate ëtime-to-valueí for HP customers, sharehold-ers, and employees. The method ofacceleration is conversational leader-shipóseeing the quality of interac-tions as the key to value creation andthe creative resolution of differencesas critical to time-to-value.

Participants in Dynamic Leader-ship were brought together mostly as

intact work teams and trained in con-versational tools developed by Con-versant, including the ConversationMeterô, the Intersection Modelô,and a participative decision-makingprotocol. Teams were asked to bringto the program real work issues thatwere not proceeding smoothly tocompletion, required collaboration toaccomplish, and fit the agreed-upondefinition of value. By applying con-versational tools to these problemsand in exercises in the program, par-ticipants came to see execution andthe barriers to execution as issues ofinteractions.

Dynamic Leadership andInteractive TimingTiming is one of the most importantissues in complex interactions. Tim-ing estimates relationships as they re-late to action. (By way of analogy, theaction of jumping rope requires you toestimate the relationship among yourbody, the rope, and the ground.) Well-timed action is highly productive:benefit rises while effort falls. Whiletime may be a constraint in a project,timing is about maximizing opportu-nities for action.

Timely action is not common-place because people tend to perceivethe world in terms of objects ratherthan relationships. We focus on theindividual things in front of us, ratherthan on the relationship betweenthose things. When timing is good,the focus is not on oneself, others, orthe circumstances, but rather on therelationships and interactions be-tween theseóon how things fit to-gether, on the pathways they form.When the focus is on separate parts,insightful observations are rare,which leads to great effort being ex-pended for small results.

An integral part of the DynamicLeadership program at HP is an exer-cise called the ìEvening of Value.îLate in the afternoon of the first dayof the workshop, the participantsbreak into groups and plan a valuableevening together, using tools ac-quired during the day and guided bythe definition of value. The groupsthen present their plans to each other



Ext_AD-14


The Cycle of Value is composed of eight conversations which,when skillfully managed, provide what we believe is the shortest

and the most effective route to value creation

and align on what to do for theevening. Course leaders observe andtake notes about the quality of appli-cation of Day One concepts and tools.In the morning of the second day, theëEvening of Valueí exercise is thor-oughly debriefed and the course lead-ers provide coaching. Managers re-port a dramatic shift ëfrom just under-standing the concepts to really usingthem well.í

Two factors focus the Evening ofValue exercise on the issue of timing.First, the exercise happens in realtimeóthe small groups have about45 minutes to plan their proposal forthe evening, and then the group as awhole has about the same amount oftime to align on the final plan and itsexecution. Second, the groups usu-ally comprise a range of levels of au-thority, from independent contribu-tors to senior managers. The trainingof the day prior to the exercise createsa strong bias toward interaction andconversation rather than authorityand deference. This combined withthe time constraints of the exercisemakes timely interaction key to suc-cessfully completing the Evening ofValue, a point that is generally madevery strongly in the Day Two debrief.

Dynamic Leadership andInteractive SkillConversantís conversational method-ology is rooted in what is termed theCycle of Valueô. The Cycle of Valueis composed of eight conversationswhich, when skillfully managed, pro-vide what we believe is the shortestand the most effective route to valuecreation. These conversations, bro-ken down into three overall areas, areas follows:ALIGN� Intersect

Creating relationship based onmutual interest in a common fu-ture

� InvenCreating creative conversation,leading to a surplus of possibili-ties for how to fulfill the commonfuture

� InvestSelecting the possibilities with

the greatest potential for return oninvestment (ROI) and allocatingresources (time, money, and tal-ent).

ACT� Engage

Explaining the thinking behindthe plan to those who will executeit

� ClarifyClarifying necessary roles and re-sponsibilities

� CloseObtaining explicit commitmentsto achieve important goals

ADJUST� Review

Using frequent debriefs of perfor-mance to date and gleaning im-portant learnings

� RenewRefocusing and reallocating re-sources based on what has beenlearned so far.As the term ëcycleí indicates, the

eight conversations are held itera-

tively, maximizing learning and theapplication of learning to better fu-ture performance.

At HP, interactive skill was en-sured both by the training in the pro-gram itself and by an innovative post-program support system. In partner-ship with the Fort Hill Company, HPand Conversant implemented a rigor-ous post-course management systemusing Fort Hillís Friday 5sÆ manage-ment tool. This system required par-ticipants to set concrete goals to beaccomplished in the eight weeks fol-lowing the programóthese goals in-cluded both business results andgoals for changes in their interactionsat work to be achieved by applyingthe knowledge gained from the pro-gram. The post-course program wasimplemented through a combinationof online reporting and coaching and

was also used to assess the impact ofthe program within HP.

Results of DynamicLeadership

Measurement and ImprovementThree types of evaluation are used tocontinuously improve the program,measure its impact, and calculate thereturn on investment:� Immediate post-workshop evalu-

ations� Analysis of follow-through re-

ports� Three-month post-program finan-

cial impact analysis.

Immediate Post-Workshop EvaluationsAt the conclusion of the two-dayworkshop, participants complete a17-point evaluation of both the con-tent and workshop leaders. The mini-mum performance standard for lead-ers to continue leading workshops isan average score of 4.0 on a 5-point

scale. The Dynamic Leadership pro-gram staff reviews the evaluations;leaders with ratings less than 4.0 arecoached, while leaders with averageratings of 4.5 or above are inter-viewed for best practices, which areshared widely. Leader support pro-cesses and course materials are peri-odically revised based on theseevaluations. As a result of these con-tinuous improvement efforts, theworkshop evaluation scores havebeen strongly positive, with 91% ofover 8,000 participants worldwiderating the program as ìworth thetime away from the office,î 94% stat-ing ìit will increase my effectivenesson the job,î 89% agreeing theywould recommend the program totheir peers, and 89% saying it willhelp them produce rapid time-to-value.



Reference # 03M-2008-10-08-01

In the agrarian age, competitive advantage was gained by qualityof goods and by minimizing the distance to be traveled betweenproducer and consumer. In the manufacturing age competitiveadvantage was a function of commoditization, economies of

scale, and process efficiencies

©2008 Conversant Solutions, LLC. All Rights

Reserved.

Analysis of Fo l low-Through ReportsBecause all of the participantsí goalsare entered into a database, Fort Hillis able to evaluate the distribution ofplanned post-course objectives. Asintended, more than three-fourths ofall goals focus on improved align-ment, more effective conversation,and accelerated decision making, allof which are leadership objectiveskey to HPís intent for the program.Thirty-five percent of participants re-ported better alignment, 23% moreauthentic conversations, and 22%more rapid decision-making. Otherobjectives achieved included betterissue resolution (13%), and betterlearning and adjustment (5%). Post-program goals demonstrate that theparticipants plan to apply the in-

tended lessons in ways that will havepractical benefit for HP. More impor-tantly, participantsí biweeklyFriday5sÆ reports indicate that theytranslate their learning experienceinto actions that benefit their teamsand the company as a whole.

In week 9 following the work-shop, participants are asked whatthey found most useful from the pro-gram. More than half of all commentsmention the conversation tools andthe closely related concepts of sharedand intersecting purpose.

Three-Month Post-Program FinancialImpact AnalysisTo quantify the impact of the pro-gram, HP worked with Fort Hill to de-sign an analysis to occur after eachparticipant had sufficient on-the-jobexperience with Dynamic Leadershiptools. Three months after attendingthe workshop, participants are askedto indicate how frequently (if at all)they have used the Dynamic Leader-ship tools. They are also asked to de-

scribe, if possible, a single specificexample in which this created valuefor HP and to provide details of quan-tifiable benefits, such as hours saved,new revenue generated, or costsavoided. In evaluating the programísimpact, only specific examples forwhich there is good documentationare included.

The value generated by the Dy-namic Leadership program is calcu-lated by multiplying the medianvalue of reported events by the num-ber of reported uses of program mate-rial, then discounting (by 75%) forpositive reporting bias. The medianrather than the average reportedvalue is used to avoid undue influenceof a small number of very high-valueinstances. The ROI is calculated by

comparing the value generated to thefull cost of delivering the program,which includes the per-hour cost ofthe attendeesí time. The results haveoverwhelmingly supported the valueof HPís investment with an ROI calcu-lated at 15 to 1. Perhaps most remark-ably, these results were achieved inthe midst of one of the largest reorgani-zations in corporate history, the HP-Compaq merger.

ConclusionIn the agrarian age, competitive ad-vantage was gained by quality ofgoods and by minimizing the dis-tance to be traveled between pro-ducer and consumer. In the manufac-turing age competitive advantage wasa function of commoditization,economies of scale, and process effi-ciencies. In the information age thecompany with the best informationóleading-edge technologies, first-to-market advantage, and competitiveintelligenceówas likely to hold anadvantage. In the Interaction

Economy, according to the 2005McKinsey study:

Jobs requiring the most complextype of interactionsóthose requiringemployees to analyze information,grapple with ambiguity, and solveproblemsómake up the fastest grow-ing segment (of employment in theUS)Ö70% of all US jobs created since1998 require judgment and experi-enceÖ Advantages that companiesgain by raising the productivity of theirmost valuable workers may well bemore enduring (than technology orprocess improvement), for their rivalswill find these improvements muchharder to copy.

These ìcomplex type of interac-tionsî are usually required whensituations are both complex and rifewith ambiguity. By their nature theyare unlikely to be valuably resolvedby one person or, as Surowiecki hasshown, even by a group of experts.This type of situation is most valu-ably resolved when individuals areboth empowered to think and act inthe interest of the system as a whole(as in the SAS example) and arebrought together to mobilize a varietyof views of both the situation and thesystem to produce solutions that arenot likely to be produced from one ora few views.

If the growth of the Interaction sec-tor in business is (as it is likely to be) areflection of the increasing prevalenceof ambiguous, nonformulaic situa-tions today, then it should be notedthat the choice facing todayís businessorganizations is not ëinteraction orknowledgeí but rather ëvaluable inter-action or wasteful interactioní. Thetype of situation we are discussinghere is usually urgent and will nottolerate being left to resolve itself. Forthat reason, complex interactionswill have to happen and the compa-nies that build and sustain competi-tive advantage will be those whoseleaders can sponsor an environmentin which high-value interaction is thenorm.



A watershed moment can shape the course of history. In sucha situation, leaders of nations and organizations can capitalizeon great fluidity and shape their environments in accordancewith their ideals. To succeed, they must follow the threerecommendations outlined in a new framework of ‘flashpointleadership’, which is the art and science of inspiring people togreatness in the face of a cataclysmic event. The actions takenby Chinese leaders to cope with the mega-earthquake inSichuan province epitomize the best practice in soul-callingmoments. Contrary to conventional wisdom, the first stagestarts long before the crisis. A ruler needs to steel himself as ashadow crisis leader long before the calamity strikes.Secondly, when destiny calls him and his soul is laid bare, hehas to empathize with people on the ground. At this stage, theleader should spend most of his time interacting with thevictims and the rescue workers, imbuing them with anunshakeable belief in the final victory despite all odds. In thefinal step, he must mobilize all constituencies for an enduring‘total war’. Together with his team at the top and an army of‘crisis heroes’ at all organizational levels, he needs to eradicatethe root causes of the crisis and realize an enthralling visionthat will benefit all stakeholders tremendously.

The place where your treasure is, isthe place you will most want to be, andend up being.

Matthew 6:21

It has been said that people prefercertainty over knowledge. But vola-tility can be tremendously valuable

for movers and shakers. A crisis of epicproportions is a watershed moment inwhich even ossified structures becomefluid. It can shape the course of history.

Creating ‘Crisis Heroes’

How to Lead inSoul-Calling Moments

Such a defining moment is the litmustest for leaders of nations and organiza-tions alike, giving them the rare chanceto differentiate themselves immedi-ately in front of a world audience, ei-ther through mastery or incompetence.Literally in a blink, helmsmen at a criti-cal juncture have the latitude to createheaven or hell on earth, depending onwhich path they choose.

The 7.8 magnitude earthquake inWenchuan, which is located in

Sichuan province, was one of theworst natural disasters in the historyof modern China. How national politi-cians dealt with this catastrophe is abest practice case of what I callëflashpoint leadershipí, which I defineas the art and science of inspiringpeople to greatness in the face of acataclysmic event. Success in this en-terprise makes it possible to shape theenvironment in accordance with oneísideals.

In the aftermath of the terrificquake, Chinese leaders distinguishedthemselves as true masters of softpower. Even though the Wenchuan ex-ample is drawn from politics, leadersfrom all walks of life, including cap-tains of industry, can learn from it.

There are three interconnected keysuccess factors for handling extremechallenges (see Exhibit). The rulerísimpact increases at an exponentialrate as his intent and energy are cas-caded to the bottom of the organiza-tion. Contrary to conventional wis-dom, the first stage of flashpoint lead-ership in this new framework startslong before the crisis.

Steel Yourself asShadow Crisis Leader

Paradoxically, the unknown is not astate of affairs for which we can onlybe left unprepared. For sure, you can-not make targeted preparations for anuncertain event. By definition, it mayoccur in any place at random, whicheven makes it impossible to calculatesubjective probabilities.

But since the occurrence of the un-expected can be expected, you mustbuild the required leadershipstrength, ëruler knowledgeí, credibility


Ext_AD-15


and networks well in advance to beready when destiny calls you. Manypeople only see the heroic moment ofa leader and attribute everything to ge-nius and inspiration. They ignore thelong gestation period required to makeit possible to become a hero. Such ac-cumulated life capital, including val-ues, beliefs, attitudes, action scriptsand other intangibles, is the part of aniceberg that is under water.

Leadership is not like an im-promptu performance; you have toprepare. Like a good general, youmust get ready for war during timesof peace. You should spend years pre-paring for possibly only a few min-utes that will decide your life and thelives of your nation or organization. Ifyou had a week for reading the Bible,it would be wise to spend five dayson improving your speed readingskills first.

Once a crisis like the earthquakein Wenchuan happens, you will nothave much time to think about yourstrategic approach. You will be sur-rounded by a swarm of hysterical fol-lowers, the world media will pressyou constantly, and time will be ex-

tremely limited. The fog of war willcloud your vision. You will have toresort to the elements of action scriptsthat you have developed well in ad-vance, giving you a sense of directionthat reduces stress. Otherwise, yourun the danger of panicking. Youmight be impaired by a fight-or-flightresponse that can lead to tunnel visionand, at worst, paralyze your mind. It isa state of hyperarousal that can be use-ful for confronting immediate physi-cal threats. But it will make it impos-sible for you to calmly solve demand-ing intellectual problems.

Even when you are still a Mr. No-body or pass through the ëvalley ofdeathí after some initial public expo-sure, you should think, feel and be-have like a supreme ruler, accumulat-ing valuable intangible assets aheadof demand. In some countries, oppo-sition parties practice their skills andbuild their profile by runningshadow governments with all the vi-tal posts that they need to fill afterthey have ascended to power. It is agood idea to act like what I call aëshadow crisis leaderí before the mo-ment of truth. You can also be a real

or virtual exile leader in a safe haven.If you are in a risk-free environment,mistakes will not prove too costly.

The action needed to overcomethe future challenges occurs twice,once in your head and then again inreality. Take contemporary chal-lenges and think through how youwould handle them. Like a sports-man who visualizes an upcomingcompetition, you have to simulate inyour head the measures you will takeat a decisive point. Since your sub-consciousness cannot tell the differ-ence between the real and the simu-lated events, it will produce an adap-tive response to both real and imag-ined experience.

I could imagine the next genera-tion of Chinese leaders, who werestill kids, watching TV broadcastsand Internet videos covering theWenchuan quake with considerabletrepidation. Undoubtedly, these seek-ers of glory and honor closely ob-served the actions of their idols at thetop echelon of the Chinese govern-ment. Such political hopefuls grow instature by emulation, followed by un-learning, which enables them to sur-pass their role models and reach star-dom.

At first, most of them act like bud-ding sportsmen who carefully studythe performances of their favorite ath-letes and then copy some techniques.At the extreme end of the imitationspectrum, they behave like young ac-tors who devour the recordings of amaster. These aspirants dissect theirheroís performances to become hisclone, even mimicking his facial ex-pressions.

To ready themselves for dauntingchallenges, fledglings eager for highpolitical office should first becomeliving concordances of leadershipcases. More independent thinkerswho desire to become great helms-men will ponder how they woulddeal with a calamity such as theWenchuan quake should they make itto the top. After the ambitious young-sters have matured and arrived at thepinnacle of power, they are likely touse their own style, developed fromprevious observations and reflec-

How to Lead in Soul-calling Moments


Prof. Dr. Kai-Alexander Schlevogt (D.Phil. Oxford) serves as the first professor of management practice

at the National University of Singapore (NUS). At the NUS Business School, he specializes in global leadership

and growth strategies in emerging markets, especially Asia. He is a Program Director of the Nestlé Global

Leadership Program, delivered in association with the London Business School (LBS). He has also been

invited as columnist for the Jakarta Post, the leading English-language newspaper in Indonesia. His bi-

weekly column is entitled: “Prof. Kai on Strategic Leadership”. Kai-Alexander also serves as the Chief

Editor of the Global Leadership Review. He has also been invited to become a Member of Duke Corporate

Education (CE)’s Global Learning Resource Network, an elite circle of the world’s top executive educators.

Besides, he joined the renowned London Speaker Bureau.

Kai-Alexander was elected Fellow of the McKinsey & Co. Global Institute (MGI), San Francisco and

Shanghai. Before, he founded the Schlevogt Business School, the first school in Germany focusing on

European-Chinese economic relationships, and served as its President. He was also appointed as the first

regular foreign professor in the history of Peking University. Besides, he served as a senior faculty member

at the Australian Graduate School of Management (AGSM), a joint venture of the University of New South

Wales and the University of Sydney. Moreover, Kai-Alexander wrote

the Asia Column of Manager Magazin, a leading German business

publication.

He served as Visiting Full Professor at the Henley Management College (UK). Besides, he held two appointments at

Harvard University, one as Associate at the Harvard Fairbank Center for East Asian Research, Asia Center, another as

Visiting Scholar at the Harvard Business School (HBS). Before joining Harvard, he worked as a strategic management

consultant for McKinsey & Co. in Greater China, advising the Malaysian Prime Minister on how to develop a Multimedia

Supercorridor (MSC). In the former Soviet Union, he served as Country Manager for “Colonia-Victoire” (now: AXA Colonia),

a leading German-European financial services company, and as Representative of the Association of German Insurers,

advising the Russian government on insurance legislation.

Kai-Alexander has been listed in the “Who’s Who in the World” and the German “Who’s Who”. A globally recognized

expert of strategic leadership in emerging markets, he has written three books and over 200 articles. One of his books,

The Art of Chinese Management (Oxford University Press), has been hailed as the standard text on the subject. He is a

regular TV commentator for Channel NewsAsia and other broadcasting stations. He also gave exclusive radio interviews

to the BBC World Service and Deutsche Welle (German National Radio). He frequently runs degree courses and executive

education programs for global business leaders and government officials throughout the word, serving organizations such as Nestlé, Bosch, Panasonic,

Evonik-Degussa and the government of a major Chinese city.

Kai-Alexander pursued postdoctoral studies at Harvard University. He holds a Ph.D. in Management Studies from the University of Oxford, Saïd Business

School. He speaks fluent Chinese (teaching senior leaders in Mandarin) and seven other world languages. His website is: www.schlevogt.com.

tions, to prevail in a watershed mo-ment. During the formative years,you also have to build up physicalstrength, which matters to a consider-able extent if you want to hold out asa leader for a long time. Alas, this taskis often neglected by short-sightedyoungsters. They ruin their body,which is their most valuable ma-chine.

Besides, in this ëleadership incu-bationí stage, you have to incessantlydevelop your character and reputa-tion. In the extreme situation that youare likely to face, you will encounterwhat I call a ëmoment of unmaskingand soul-callingí, when your inner-most self is laid bareóostensibly

holding all levers of power in yourhand, you will be armed only withyour spirit. Surrounded by thousandmen, you will be the loneliest man onearth. In such a soul-calling moment,you can only resort to the inner reser-voir that you have filled during yourpreparatory years. Your detailed stud-ies of similar situations and relentlesspractice will help you produce theright reflexes when you have to makesplit-second decisions, like a goal-keeper awaiting a penalty. Your self-mastery will enable you to keep yourhead and spirits high. Your prestigecan serve as an invisible shield, butcan also be easily destroyed in exact-ing times.

To accumulate such innerstrength, experience and halo, youshould incessantly steel yourself forthe battle of your life, embracing theadage that what does not kill you,makes you stronger. You have to seekarduous leadership challenges every-where and greet the trying tasks withdelight. To get ready for the definingmoment, you must stretch yourselfconstantly and establish a trackrecord that impresses others. Duringyour ascent to high office and as anincumbent, you need to build up areservoir of goodwill, too.

The founder of the Soviet Union,Vladimir Ilyich Lenin, prepared him-self intellectually for his revolution-



ary mission, established his reputa-tion, and developed powerful net-works while in exile. Behaving like atop leader, he virtually breathed poli-ticsóhe devoured the entire librarycollections, eagerly analyzed theevents of the day, composed elaboratetreatises and engaged in public de-bate. Charles de Gaulle also polishedand loaded his intellectual gun wellahead of time. For example, he wrotean elaborate treatise on leadershiplong before he became French presi-dent. For the rest of his life, MaoTsedong profited from the prestige hegained by commanding the ëLongMarchí, which helped him escapefrom the claws of his Guomingdangenemies. He also capitalized on thegoodwill that he created among peas-ants who felt that he had liberatedthem from oppressing landlords.People also credited his goodwill ac-count for the role he played in rid-ding their country of the Japanese oc-cupying forces.

Before the Wenchuan crisis, WenJiabao, the Chinese Premier Ministerand one of the protagonists in theearthquake drama, accumulatedvaluable social capital in his coun-try, as evidenced by the popularityamong his people. He cultivated ahumble attitude, demonstrated com-passion, and showed himself alwayseager to learn. During the question-and-answer session following hisëEminent Persons Lectureí at the Na-tional University of Singapore(NUS) in November 2007, a studentasked him about his greatest mistakein government. He replied that hehad underestimated the magnitudeof the ëSevere Acute RespiratorySyndromeí (SARS) epidemic, whichhad cost the lives of many Chinesecitizens and other people around theworld. This realization apparentlytaught him to act swiftly in theWenchuan crisis, assuring greattransparency about its scale andlosses.

Before the emergency, you musthold creative scenario planning ses-sions to imagine the unthinkable.Then you need to complete the de-tailed preparations for the contingen-

cies that you have identified. This in-cludes actually rehearsing your re-sponse to the pandemonium. For ex-ample, the Singaporean governmentconducted large-scale simulation ex-ercises, involving the civilian popula-tion, to ready itself for a major terror-ist attack on the island state. In someconflicts, the image of strength, de-veloped through careful publicpreparation and resulting task readi-ness, may deter potential enemiesfrom picking up a fight.

Empathize with Peopleon the Ground

A crisis is not only a technical prob-lem, but above all a psychologicalchallenge. At the early stage offlashpoint leadership on the ground, aruler has to concern himself morewith people than tasks, focusing moreon micro-relations than grand solu-tions. Later on, the leader must be-come a national voice offering a com-pelling vision and delineating a clearstrategy to his followers for overcom-ing the crisis and becoming stronger asa result of it.

First impressions matter particu-larly at zero hour. Once you are per-ceived to be late, you will play acatch-up game that you are unlikelyto win. For example, many peoplethought that the famous Chinese bas-ketball player, Yao Ming, gave a dona-tion that was mean compared to hisfabulous wealth. When he subse-quently provided more funding, hewas slated for acting only after beingpressured. The implied criticism washe cared more about looking goodthan doing good.

The helmsman has to arrive atground zero as soon as possible to sig-nal to this country and the world theimportance of the crisis and his fullreadiness to help in any feasible way.At the scene of the disaster, he mustnot micromanage where he lackscompetence and bandwidth; the de-tailed work has to be done by his fol-lowers. In the early stage of a crisis,his most important task is to connectemotionally with people who sufferfrom extreme misfortune and inspirethose who are to help them. As what I

call an ëavuncular leaderí, he mustopen up, behave naturally, as well asdisplay humaneness and generosity.

Giving and receiving must con-stantly alternate; the leader has toswitch easily between showing, tell-ing and listening. He should arrive atground zero with a clear message,which he supports with symbolic ac-tion, including powerful body lan-guage that is congruent with what hesays. Especially in a crisis, people arethirsty for clear words of assurance,which are uttered with full confi-dence. They are quick to sense hesita-tion.

Even if the leader harbors doubtsin his heart, he must never blink. Heshould never reveal his insecurity toanybody, neither in words northrough body language. This canonly be done if he has built up astrong personality and filled his res-ervoir of energy and emotions aheadof the crisis. The mental self-controlthat he learnt in the past and has be-come a habit is the key to success; byguiding his thoughts, focusing themon the positive aspects of the crisis,negative reactions will not even arisein the first place. Such smart thoughtmanagement is preferable to merelytrying to suppress emerging stress,which can prove to be a futile at-tempt; at times, counterproductivebiological processes are continuouslyreinforced subconsciously; it is pos-sible that even a leader with iron will-power cannot halt this spiral.

Simply by radiating confidenceand energy amidst the surroundingchaos, imbuing the faint-hearted withan unshakeable belief in ultimate vic-tory against all odds, the leader willproduce spectacular results. He willkindle a light in the souls of his fol-lowers that will shine in the darknessand in turn inspire others in an end-less chain of human energy transmis-sion. Simple gestures can often proveextremely powerful. Many ordinarycitizens already consider it a greathonor if a top leader simply holdstheir hands.

The immediate aftermath of a di-saster emphatically is not the time fornuanced scholarly analyses. At this



point of time, the leader does notneed to have all the answers for thedetailed problems of all people. Buthe must be able to communicate in acredible way that he has the compe-tence to lead them out of the crisisand that people are strong enough tofollow his lead. With powerful pro-jection, he must bring across the mes-sage: ìWe will get through this andgrow as a resultî. He might say: ìGiveme six months and we will havepulled ourselves out of this disaster,gained tremendous strength from thishorrible experience, and will standtaller as a resultî. People must feelthat if everything else fails, they canhave recourse to the father of the na-tion who will work with them to getout of hell.

On the other hand, the ruler mustalso ask questions, exploring the hu-man side of the disaster in particular.He should soak up impressions like asponge and orderly shelve them inhis memory bank. This enables himto access them easily at the strategyformulation stage. In particular, theleader needs to listen for ideas andrecognize emerging patterns amongthem. He should develop and test ini-tial hypotheses as regards effectivepossible solutions, for example, byposing probing questions.

The top politicians of Chinascored well in the early stages of cri-sis leadership, reacting in a flash tothe emergency. Wen Jiabao flew to thedevastated area on the very day thequake struck. He thus stressed thesignificance of the event and the per-sonal commitment of the top leader-ship to overcome the crisis. The Pre-mier was widely admired for hiscourage to visit the worst-hit andmost dangerous spot, where after-shocks occurred in his presence. Thisreminded me of an episode when Na-poleon Bonaparte rode across abridge ahead of his scared army, eye-ing the enemy fire. With such a heroand powerful role model in charge,followers cannot do less; in fact, theywill usually try to outdo the leader ingallantry, as was seen in the enthusi-astic charge that followed Napoleon.In the earthquake case, such collec-

tive bravery was also necessary giventhat many devastated areas inSichuan could only be reached byfoot!

Wen Jiabao showed himself as fo-cused and energetic. With a mega-phone in his hand, he addressed overa hundred people trapped beneath acollapsed hospital in Dujiangyan,close to the epicenter in Wenchuan.He also visited the site of a middleschool where about 900 pupils wereburied. The father of the nation, whohas a strong pastoral quality, sat in acircle with survivors and inspiredrescue workers and hospital staff togive their best. These pictures pro-duced a goose skin feeling and mademany people cry.

The Premier stayed for an esti-mated 88 hours in the crisis zone, af-ter which he was immediately re-placed by President Hu Jintao. Likeparents taking turns in watching overa sick child, the smooth handoversent the following powerful signal tothe peopleóYou will never walkalone; we are in this together. Theleaders clearly made human livestheir top priority.

During these encounters and lateron, the Chinese politicians effectivelyconveyed a dual message, acknowl-edging the bitter reality and empa-thizing with the victims, but at thesame time calling for strength, hold-ing out the prospect for betterment.President Hu Jintao told the people:ìI know you lost family and property.I share the pain with you. We will tryevery effort to save your people oncethere is the slightest hope and possi-bility.î He asked even an 8-year oldboy to be brave in this calamity.

Top leaders have to ensure thatthey make minimum fuss aboutthemselves and their entourage.Their presence and accompanyingmedia circus empathetically are notto disrupt the rescue efforts. When-ever possible, they should try tobreak out of their security cocoon andcollect first-hand information. Whileit is important that the nation seestheir action in the rubble, they haveto walk a fine line. They must avoidthe exhibitionistís temptation to look

out for photo opportunities whileconsoling a sobbing girl and stayclear of voyeuristic disaster tourism.Of course, the public relations offic-ers will still select the photo of theleader padding the newborn, but thisdoes not matter if his intentions arepure.

The pictures of the Chinese Pre-mier crying gave expression to thefeelings of the entire nation, whichcreated strong resonance among thepeople. The footage traveled aroundthe world at the speed of light. Hegained much sympathy among for-eigners who appreciated the show ofemotion. The footage attenuated theprevious stereotype of the Chinesepeople working as industrial robots.

Such strong presence on theground, compassion and encourage-ment contrast sharply with the coolwithdrawal of US President GeorgeW Bush after the attacks on the WorldTrade Center in New York in 2001.While such isolation might have beenjustified in the first hours for reasonsof national security, he delayed histrip to New York for too long. TheNew York mayor, Rudy Giuliani,demonstrated better psychologicalinsight by going to Ground Zero veryearly and behaving like a successfulwartime president.

It is most difficult for a leader toshow up at the epicenter of a catastro-phe when he has presided over thegestation of the crisis. In this case, hemust balance in his head the benefitsfrom meeting with people on theground, such as their deposits to hisgoodwill account and his newlygained front-line knowledge, with thecost of being personally associatedwith the event, which might decreasehis prestige and popularity.

During the second World War, theGerman leader Adolf Hitler feared thecosts of negative anchoring thatcould undermine his aura of invinci-bility. As a consequence, he nevervisited bombed out cities and thusstayed away from the victims. He didnot heed the advice of his propa-ganda specialists. They stressed themileage he could gain from sympa-thizing with the myriad brutalized ci-



vilians on the ground, who had beenferociously attacked by their merci-less enemies.

Mobilize AllConstituencies forEnduring ëTotalWarí

After the very brief honeymoon pe-riod when the leader is allowed todedicate most of his efforts to empa-thizing with people, at the next stage,people expect initial answers to theirquestions, preferring simple certi-tudes over complex thoughts that arecast in doubt. After people have real-ized that they are lost in a dark forest,they will follow the person who says:ìI know the way into the lightî. Theultimate showstopper at this junctureof crisis leadership is a remark thatstarts with ìIt all dependsî.

Through the visit to the crisiszone and his observations, the ëideal-sponge-in-chiefí gains a first-handimpression of the catastrophe. Yet heshould not become overconfidentabout his factual knowledge, resistingthe temptation to make rash infer-ences and draw general conclusionsfrom his limited set of experiences.Unknown to himself, his perceptionmight be biasedóonly if the mentaleye is good, the body will be full oflight. The ruler may have formed awrong picture of the situation be-cause his underlings showed himPotemkin villages, or he saw outliers.According to an anecdote, the impe-rial field marshal GrigoryAleksandrovich Potemkin, keen tocover up shortcomings, had orderedthe building of mock houses to im-press his empress Catherine II duringher tour of the Russian South in 1787.

Still, the leader who has been tothe front will be in a better positionthan an armchair crisis administratorto exercise purposeful leadership andtake appropriate next steps. The chal-lenge for him is to be able to managedifferent modes, flexibly switchingfrom sensing and empathizing to in-tellectualizing.

First, the ruler has to mold a smallgroup of gifted individuals into aclose-knit elite team. The members,

who must be attracted by his compel-ling mission, enthralling vision andstrong values, may carry the designa-tion ëcrisis heroesí. The supreme or-chestrator should select those mem-bers who are best suited for dealingwith uncertainty and complexity.This means that the crisis heroes cho-sen may well differ from the bench atthe top of the organizational hierar-chy. It is possible that highly compe-tent and motivated young peoplewithout high-sounding titles and im-pressive CVs might well do a betterjob in combating the crisis than in-cumbent top administrators. Somejuniors might even come forward andvolunteer to serve the great causewithout the need for recognitionóanoffer that the leader must always takeseriously and carefully examine,since it signals valuable intrinsic mo-tivation. Together with his team, hemust build a phalanx, counting sev-eral hundred movers and shakers,who will spearhead the nationalemergency campaign.

Then, after mulling over ideasduring at least one nightís sleep, thesupremo needs to draft what I call aëback-on-the envelope strategyí with acouple of meaningful national priori-ties. It is literally scribbled on thescratchpad he had taken to groundzero, crystallizing the key ideas hedistilled from observations, conver-sations, and reflection. Even if thegestation process relied on highlycomplex thinking, the result on paperneeds to be a simple, easily under-stood statement of grand strategy.This improvised and parsimonioushigh-level blueprint should comple-ment the detailed systematic contin-gency plans that had been developedbefore the crisis.

Importantly, the chief has to adoptan integrated open system approach,which cuts through organizational si-los, and ensure high levels of trans-parency. This improves the flow ofinformation, people and material re-sources, as well as builds up publiccredibility. For example, instead ofoperating in a black box, the leadermust continuously cross-check hisstrategic thought with the collective

wisdom of the followers. This re-quires several iterations of the strat-egy design at all levels of the organi-zation. The leader must not hesitateto expose the severity of the disaster.It was one of the big mistakes of theprevious Chinese administration totry to hide the true scale of the 7.5Tangshan earthquake in 1976 fromthe population.

Once your improvised strategy isin place, you have to formulate a con-crete action plan with practical firststeps and make the required organi-zational arrangements. You must mo-bilize your followers, transformingyour country into a ënation in armsí,ready for an all-out fight with the ad-versity. You need to empower themby providing them with the necessaryresources and granting them flexibil-ity to adapt to the local circum-stances. Leaders must prompt themto delve into the specific problems atthe local level, devise specific solu-tions for the idiosyncratic situationand integrate them back into the mas-ter plan that aims at overcoming thecrisis at the national level. Later gen-erations might be fooled by historianswho unwittingly show off their hind-sight bias. Drawing on apocryphal ac-counts from presidential admirers,they will rationalize these im-promptu responses at the grassrootsas ëstrategiesí devised by the allegedlyomniscient and omnipotent ruler.

You should use all possible com-munication channels to transmit acompelling story, making the dramapalpable. While pathos is appropri-ate, kitsch must be avoided at allcost. In the aftermath of the quake,the Chinese media offered around-the-clock coverage of the event.They emphasized the early wins,such as miraculous rescues. Pictureswere accompanied by dramaticmovie-style sound effects and famil-iar revolutionary tunes. Official dig-nitaries and their consorts openedtheir purses. The wife of the lateparamount leader Deng Xiaoping,who had ushered China into the re-form and opening era after the disas-trous Great Proletarian CulturalRevolution, even gave away her life



The chief has to adopt an integrated open system approach,

which cuts through organizational silos, and ensure

high levels of transparency

savings for the rescue effort. A widenetwork of informal opinion leaders,such as movie stars, reinforced thegovernmental message.

Leaders should prove to thepeople that they are really in control,showing their nation the familiarand stable pillars that will supportthem. For example, the Chinese lead-ership highlighted the role of thePeopleís Liberation Army (PLA) asan anchor in the exigency, showcas-ing its advanced equipment and pro-fessionalism. The media stressed theearly wins, including miraculousrescues.

Leaders should exploit the ben-efits of the demonstration effect.

When people see what works else-where, they will rush to copy the ac-tion that led to the success. Theeagle on the summit will easilyspread his wings over the entire na-tion, since contagious best practicein crisis leadership will rapidly cas-cade to the smallest village. Theflipside is that undesirable behaviormay also spread like wildfire if it isleft unpunished. For example, in theWenchuan case, there were reportsof corrupt officials channeling dona-tions into their own pockets. The topleader must not hesitate to severelypunish the culprits irrespective oftheir positions. Such retributionsends out a stern warning to otherswho might be tempted to follow suit.Otherwise, the national story ofheroism and bravery in the face ofadversity will be tainted and the cri-sis will even become worse.

In a major emergency, you haveto resort to rituals, such as emotion-ally charged ceremonies, and inces-santly communicate a few powerfulëbumper sticker slogansí, which areshort memorable messages. Bypainting vivid mental images, lead-

ers can write their purport into whatI call the ëbook of remembranceí inpeopleís hearts.

Importantly, rulers must seizethe moment of crisis to promotepowerful ideals that are desirable asends or means in themselves. At thiscrossroads, they need to reinforcethe historical national mission, vi-sion and core national values withtheir mantras. Sometimes, aspira-tions and an ethos can even be cre-ated from scratch and be spreadacross the country in the moment ofcrisis.

The Chinese government sched-uled a three-minute solemn momentof silence exactly one week after the

quake and mandated a three-day pe-riod of mourning. It was the firsttime that such an event was held forordinary citizens in the Peopleís Re-public. The lowering of the Chineseflag, a powerful symbol, accompa-nied by the eerie sound of air-raid si-rens, evoked strong emotions. Youcould even see tears in the eyes ofthe usually restrained state televi-sion anchors, who all wore blackclothes. At the very least, theirbosses must have allowed them todisplay sorrow. During the mourn-ing period, the government shutdown entertainment, sacrificingconsiderable income, and sus-pended the Olympic torch relay.

As part of their communicationeffort, leaders should nurture ahealthy belief in heroes and bravery.Only he who trusts that there aregreat men, whose spirits are unitedacross time and space, can achievegreat things and become great him-self! By appealing to noble valuesthat are held in high affective regardand prophesying a bright future,leaders can make followers eager toreach the stretch target of overcom-

ing the crisis. In defining moments,expectations matter tremendously.The anticipated pride of meeting thetremendous challenge and foretasteof joy over this feat are among thestrongest incentives for action.Those affective states are highly in-fectious.

The Chinese leaders appealed tothe national patriotic psyche, articu-lating the pivotal role of nationalunity, compassion and courage.They called on each citizen not toyield to difficulty. It was emphasizedthat every single death is a tragic lossfor the entire Chinese nation, re-minding me of the biblical parable ofthe lost sheep. Leaders created thefeeling that all Chinese form part ofone big family, in which everybodymatters. As a result, citizens felt partof a special national team and ralliedaround the common cause in rap-ture.

In the process of cascading theemergency response plan to the low-est echelon in the hierarchy, leadersmust constantly ensure high levelsof collective organization and al-ways allow for effective localimprovization. The orderly Chineserescue effort and discipline of citi-zens at all levels contrast sharplywith the fiasco that ensued afterHurricane Katrina hit New Orleans.The legendary city was cut off fromrescue workers for days, and the USpresident received his informationthrough the media. Heavily armedgangsters looted the flood victimsíhouses and attacked innocentpeople. Tens of thousands evacueessuffered in the LouisianaSuperdome football stadium, sincethey lacked food, water and ad-equate sanitary conditions. Whenhelp arrived in New Orleans at last,mobs shot at rescue helicopters.

The open system approach en-tails spanning national boundaries,too. Mainland Chinese leaders wel-comed foreign aid, enlisting the sup-port of their overseas compatriots inparticular. Those were infected withthe national spirit of sacrifice andran donation drives for the mother-land.



Int_AD-6


Reference # 03M-2008-10-09-01

©2008 Prof. Dr. Kai-Alexander Schlevogt. All

Rights Reserved.

Such openness contrasts withthe behavior of the military junta inBurma, which initially refused for-eign aid in the aftermath of a devas-tating cyclone that occurred shortlybefore the Wenchuan disaster.

As part of the total war, the para-mount leader needs to capitalize onthe visibility of the crisis and con-comitant problem awareness to pushthrough deeper changes. Togetherwith his team at the top and an armyof crisis heroes at all organizationallevels, he has to eradicate the rootcauses of the crisis and realize an en-thralling vision that will benefit allstakeholders tremendously.

In an inverse funnel, leadershave to move backwards in thechain of causation, uncovering evenfactors at work that had only an indi-rect effect on the crisis gestation.Nobody should be allowed to blinkat inconvenient truths. No sacredcows should be spared in the deter-mined effort to sweep the houseclean; all that is wrong must be re-paired irrespective of ideology andother obstacles.

To start with, the Chinese gov-ernment has to cure man-made un-derlying factors that aggravated theoutbreak of the natural disaster. Forexample, due to poorly enforcedconstruction norms, especially atthe village level, the damage wasmultiplied. The risks associatedwith rapid industrialization and en-vironmental degradation can also behighlighted. In an even broader con-text, a leader can refer to the increas-ing disparity between the rich (whocan afford more secure housing) andthe poor, and hold out the prospectof building a cohesive society whereeverybody can prosper. Instead ofsimply blaming a few ëbad applesí,he has to address systemic deficien-cies. For example, the prevailingpower structures in China led towidespread corruption, which un-dermined law enforcement.

As time passes and the actioncascades to lower levels in the hier-archy, top leaders have to ensurethat the special ethos that emergedduring the crisis is kept alive. Under-

lings should neither act as mereclones of their superiors nor act self-ishly, for example, using visits to thequake zone merely to shore up theirpublic image.

Eventually, the changes need tobe institutionalized and perpetuatedin the form of well-resourced organi-zations with fitting leaders and com-petent staff at all levels, as well asmatching structures, processes, sys-tems and values. Those organiza-tions must be imbued with thestrong combat spirit that helpspeople cope with the crisis. Remem-brance ceremonies have to be regu-larly scheduled. Instead of degrad-ing into meaningless routine, theymust enthrall all people. Theyshould not only honor the victims,but also recall and reinforce theethos from the fighting time.

The Chinese government skill-fully used a surprise effect at theopening ceremony of the OlympicGames in Beijing to evoke memoriesfrom the Wenchuan crisis, whichhad knit the nation together. Tens ofthousands spectators in the NationalStadium and a TV audience count-ing over a billion people freneticallyapplauded an amazing sceneóLinHao, a boy attending a primaryschool in Wenchuan County, pa-raded into the ëBirdís Nestí arena to-gether with the Chinese basketballstar Yao Ming, who bore hiscountryís flag. They spearheaded the1,099-member strong Chinese Olym-pic delegation. The nine-year-oldsecond grader had rescued fellowpupils from a collapsed structure atthe risk of his life. The moving sceneof the mini-hero with his little Chi-nese flag walking hand in hand withthe giant NBA star moved millions ofpeople to tears.

As an attestation to the power ofpsychology, the soft mattered morethan the hard. The ëLin Haoí effectproved that money is not all thatcounts in leadership. If rulers arecreative, they can achieve huge im-pact with little input. The episodedemonstrated the value of usingwell-chosen images in the process ofcrisis leadership, since they can

have an amazing impact on manypeople. The human touch of bring-ing in Lin Hao, which cost little,proved far more memorable than thedazzling high-tech spectacle of theopening ceremony, which con-sumed millions of US dollars.

The measure of success in ëwater-shed leadershipí is not what you did,but what you achieved in the longrun. Your impact will be reflected bythe way your compatriots and dis-passionate historians judge you. Ittakes a long time, often a generationor more, to reach a verdict about thetotal impact of crisis leadership. Theresults of the early stages in the exer-cise of top leadership in theWenchuan mayhem were very posi-tive indeed. They contrast favorablywith the management of other recentmega-catastrophes around theworld.

It follows from the opening quo-tation that since the Chinese leaderssingle-mindedly treasured the rightthingóhumanityótheir hearts werein the right place and they ended upwhere they wanted to be. Above all,their compassionate response to thecalamity and their social sensitivityearned them the sympathy and re-spect not just of the people in thePeopleís Republic; their mojo alsomesmerized the overseas Chinesecommunity and millions of otherpeople around the world.

I have no doubts that what I callthe ëWenchuan spirití, epitomizingunity and humanity in the face of ad-versity, is going to occupy a keyplace in the national psyche ofChina. The flashpoint heroism willbe a valuable memory to be activatedin later national crises.

Like the liberation of China fromJapanese occupation forces, the ex-perience endows the Chinese leader-ship with fresh moral authority,which pulls people, and thus ismore effective than coercion, whichpushes them.



Unfortunately, much of business is

driven by the pressure to meetshort-term targets. An obsessionwith meeting them by any means

and at any cost has promptedmanagements to adopt very

questionable methods. While they

yield results that seem to satisfyimmediate goals, they compromise

long-term organizational health.

– Dr Jittu Singh

I N E R E WIVT



changing. There has been areassertion of political indepen-dence and sovereignty. As a result,even large multinational firms thatcommand resources exceeding thatof some underdeveloped nations,have to comply with both nationaland international laws. Brazen im-perialism began to yield in themiddle of the 20th century.

The end of the Cold War did cer-tainly help to open new markets be-hind the ëIron Curtainí. Globalizationalso got a new impetus from rapideconomic development in otherparts of the worldómost notably inAsia and the Middle East. In order tomake the most of these emerging op-portunities, international companiesare competing fiercely with one an-other. Therefore, I tend to agree thatwe are going to witness more intensecompetition in the years to come.� A lot has changed in the last

hundred years of corporate his-tory. What according to you,were the defining moments ofthat history? In other words,what were the strategic inflec-tion points / touch points duringthe last hundred years of corpo-rate history?

I can think of several ëinflectionpointsí: the separation of ownershipfrom professional management oflarge firms; bridging of the gap be-tween management and unionizedemployees; realization that the cus-tomer is really the king; recognitionthat firms are accountable to a net-work of stakeholdersórather thanmerely shareholders; and the emer-gence of global markets.� What lessons do the last hun-

dred years of business offer tothe new businesses?

Not many companies have surviveda century in good health. Most haveeither wound up or have lost theirmarket ranking. Therefore, businessleadership cannot be taken forgranted by anyone. To remain aleader, one must continuously ëreadíchanging trends and adapt oneself.Those who failed to change in timehave fallen by the wayside.� Globalization champions advo-

cated borderless trade and thathas led in some way to globaleconomic imbalances. The firsteight years of this century (2001-08) would definitely go down thehistory as watershed years forglobal economy and global busi-nesses. First it was colossal fallof Enron, Arthur Anderson,Tyco, WorldCom, etc. September11 attacks put countries on highalert. 2007 saw the world gettingengulfed in sub-prime mortgagecrisis and with that a completewashout of trillions of dollars ofshareholder wealth and 2008has seen the global banking cri-sis, oil price shocks and Foodprice rises. Amidst all these, theCentral Banks have been put ina quandary which has com-pounded the exchange rate risksand companies across the globeseem out of place and clueless.What do all these events signify?Should they be looked at an iso-lation or are there any powerfullessons for future managers andCEOs when they connect thedots? Do you think the worldwas integrated for an inimitabledisintegration?

Unfortunately, much of business isdriven by the pressure to meet short-term targets. An obsession with

� How do you characterize the lastcentury from the point of view ofbusiness and how do you foreseethe coming century? Can thepast century largely be inter-preted as a Century of Conglom-erates and a Century of Corpo-rate Imperialism and the nextcentury as a Century of Emerg-ing Markets? Did the end of ColdWar mean the arrival of Corpo-rate War?

Perhaps because I am not a historian,I find it difficult to attach any sweep-ing label to a century. Hence I am notsure that the 20th century can becharacterized as a Century of Con-glomerates or a Century of CorporateImperialism. Yes, for a brief periodduring that time conglomerates didseem to dominate the corporateworld. But it became clear fairlysoon that increasing size and diver-sity also came with some disadvan-tages. Therefore, conglomeratesabandoned the notion of being runas monolithic, centralized organiza-tions; instead, they reorganizedthemselves into several smaller,more autonomous units. Like ITTóthe archetypical conglomerate puttogether by Harold Geneenóotherstoo have split to become more man-ageable. Subsequent experience hasshown that they thereby gained infocus and efficiency.

Likewise, there certainly was anera of corporate imperialism. TheEast India Company colonized In-dia; several US food companiestreated many of the Caribbean andLatin American nations as captiveëbanana republicsí; and some min-eral companies even today treatlarge tracts of Africa as virtually pri-vate property. But times are surely

Dr Jittu Singh worked as an academician-cum-administrator at XLRI and subsequently as a senior executive at Tata Steel. His earlier stint at the institute,

spanning 10 years, culminated as Dean for a 4-year term. He taught a variety of courses in the Organizational Behavior, Economics and General Management

areas in the postgraduate and executive development programs. He also conducted a large number of in-company programs for leading companies. At

Tata Steel, he played a pivotal role in designing many of the HR systems and practices for which the company is renowned. He also spearheaded its

learning centers for 20 years. He has now returned to XLRI as the “Tata Steel Chair Professor of Organizational Development.

INTERVIEW



The need for continuous reinvention is heightened today because of

increasing competition from all directions. Each year, the Fortune list

has been featuring an increasing number of new entrants from the

emerging economies. The old giants beware!!

meeting them by any means and atany cost has prompted manage-ments to adopt very questionablemethods. While they yield resultsthat seem to satisfy immediate goals,they compromise long-term organi-zational health.

To compound problems, indi-viduals seem to be motivated by ex-cessive greed. In their attempt to getrich as quickly as possible, they puttheir personal aspirations and ambi-tions much higher than larger orga-nizational interests. Even board-

level executives have been foundguilty of gross misconduct. Therehas been a wholesale decline in rec-titude.� As you compare the Fortune 500

companies list, letís say in 1958and 2008, what distinguishesthese two lists? What can be sur-mised and learnt from those twolists? As you look at companiesin USA, Europe, and Asia, whatstands out? Is there any particu-lar development that seems tosum up the impact of globalcompetition?

The fact that many of the companieson the original list of 1958 have dis-appeared from its 2008 version sug-gests that giants are not invincible. Itis not the biggest who surviveóbutthe most alert and adaptive.

Unfortunately, this repeated les-son of history is often lost on thosewho are current leaders. They are sodrunk on their own success that theyrefuse to pay attention to emergingdanger signalsóand to chart a differ-ent course from the one that madethem the current leader.

The need for continuous rein-vention is heightened today becauseof increasing competition from all

directions. Each year, the Fortune listhas been featuring an increasingnumber of new entrants from theemerging economies. The old giantsbeware!!� According to a recent McKinsey

Global Survey, almost 70% of ex-ecutives around the world saythat global social, environmen-tal, and business trends are in-creasingly important to corpo-rate strategy. Yet relatively fewcompanies act on the globaltrends they think will affect

them most; among those thatdo act, only 17% report signifi-cant benefits. Why is there sucha disparity between need andaction?

Yes, as I have already indicated ear-lier, management cannot afford to beinsular any more. It must open itseyes to a wider environment sur-rounding it. It must detect shifts insocioeconomic, political, and com-petitive trendsóand change in ap-propriate ways as rapidly as pos-sible; otherwise, it runs the seriousrisk of managing in outdated and ob-solete ways. Furthermore, obtainingpublic support and goodwill forwhat it does is essential for the sur-vival.� Competition existed long before

modern economies and busi-nesses were born. It began withlife itself. Gauseís Principle ofCompetitive Exclusion illus-trated that no two species cancoexist that make their living inthe identical way. What wouldbe the new frontiers of competi-tion? Who are likely to be themajor winners in these fron-tiers? What would be the newdifferentiating (when the com-

petitors are closing in on thegaps) factors for companies?

Yes, there has been competitionthroughout human history. But whatdistinguishes our era is the intensityand pace of the competition. A firmdoes not compete against only a lim-ited number of local or domesticcompetitors; it is now required totake on the best from around theglobe. Therefore, the field has ex-panded. To compound difficulties,both the general business environ-ment and competitors seem to throwup new challenges suddenly and atshorter intervals. As Toffler said, ev-erybody is confronted with ëfutureshockí.� Do you foresee an increasingly

decreasing role of multilateralinternational bodies like, WTO(with the rise of regional and bi-lateral trade agreements and pe-rennial showdown at recentmeetings, including impasse atDoha round of talks), UNO (withprivate sector assuming a greatrole at humanitarian activi-tiesófor instance, Bill andMelinda Gates Foundation,Clinton Global Initiative, etcand increasing role of Social En-trepreneurship Initiatives andMicrofinance Initiatives), theIMF and the World Bank?

The existing international organiza-tions have played an important rolein the past. However, they seem to berunning out of steam. They havebeen criticized for not evolving withthe changing nature of internationaltrade and commerceóand of beingpartial towards the needs of the ma-jor economic powers.

If anything, globalization re-quires new life to be breathed intomultilateral bodies such as the UN,WTO, IMF, and the World Bank. Ifthey are not capable of transformingthemselves to meet todayís needs,maybe new organizations ought tobe established. But this role cannotbe played effectively by privatefoundations and initiatives.� One of the often-cited capabili-

ties that companies should de-velop is managing multicultural

INTERVIEW



The first and foremost purpose of a business school, as of any

educational institution, should be to develop a good, all-rounded

human being capable of acting as a model citizen—either in civil

society or in the corporate world

Reference # 03M-2008-10-10-06




teams. How do individuals de-velop their capability to adapteffectively across different cul-tures? Why do some individualspossess superior capacity to dealwith the challenges of workingin different cultures? How do in-dividuals reach full productivepotential working in culturallydiverse work environments intheir home countries and over-seas? How do organizationsbuild capability for effectivework assignments in locationsaround the world? How do orga-nizations optimize individualand collective performancewhen they harness the culturaldiversity of their people acrossthe world?

Globalization implies internationaloperationsówith employees, cus-tomers, and vendors of varied na-tionalities. To be successful in such acontext, executives in firms musthave an understanding of culturalnuances. Otherwise, even their well-intentioned actions may sometimesoffend people from other cultures.

An understanding of foreign cul-tures can be developed through or-ganized training, reading, and inter-national travel. Companies must in-vest in such cultural training.

The need for culturally well-rounded executives is going to in-crease as organizations spread theiroperations around the world. It willnot be possible to staff them exclu-sively with citizens of the ëhomeícountry.� The current business lexicon con-

sists of competitive advantage/edge, strategic positioning, corecompetencies, value chain, valuenets, value creation and value mi-gration, shareholder activism,

corporate governance, corporatesocial responsibility, blue oceanstrategy, etc. What do you thinkwould be, rather should be, thenew business lexicon?

The purpose of all communicationshould be to expressónot impress.Unfortunately, however, we seem tobe more interested in impressing.Therefore, we end up inventingfancy terms to disguise simple ideas.The sample terms you mentionedare of that genre. If ideas are ex-pressed in simpler terms, they willbe understood more readilyóandperhaps be acted upon.� Corporate R&D labs used to be

the key for companies to createcompetitive advantage. But inthe 21st century, innovation is

moving out of the lab and acrossthe globe. Research indicatesthat a real source of competitiveadvantage is skill in managinginnovation partnerships. For in-stance, Boeingís unique assetsand skills are increasingly tiedto the way the firm orchestratesmanages, and coordinates itsnetwork of hundreds of globalpartners. Innovation is increas-ingly driven through collabora-tive teams due to product com-plexity, availability of low-costbut highly skilled labor pool andadvances in development tools.At a macro level, whatís drivingthis trend? Is this going to be acompetitive necessity or a com-petitive choice? What are the ad-vantages to companies that do itwell?

R&D has become an extremely ex-pensive activity. To make thingsworse, the lab-to-market lead timealso seems to have increased. As aresult, companies are finding it very

risky to undertake ëbig bangí researchon their own.

I foresee more attempts to formconsortia of like-minded companieswho together will undertake re-search of mutual benefit. This willspread the cost, and risks, of R&Damong themóthereby lowering theburden on each of them.

Another option that companiesmay prefer is partial funding of re-search at premier academic or re-search institutions. This way, theywill not have to invest in the man-power and hardware necessary forresearch.� What do you think are the

critical principles that the com-panies should follow to formand manage successful collabo-ration programs? Are there anybest practices from anycompany?

I tend to agree with critics whomaintain that business schools havenot evolved to meet the needs of ourtimes. They seem to cling to an out-dated syllabus, teach esoteric mod-els that have little semblance to mar-ket realities, overemphasize analysisat the cost of initiative and leader-ship skills, glamorize short-term fi-nancial results ignoring larger soci-etal and ethical issues.

The first and foremost purpose ofa business school, as of any educa-tional institution, should be to de-velop a good, all-rounded human be-ing capable of acting as a model citi-zenóeither in civil society or in thecorporate world. It must also impartto them the knowledge and skillsnecessary to build and lead organi-zations that enrich all of societyónot just a small group of individuals.Their students should come outwith the versatility and leadershipskills to build the enduring and greatorganizations of the future.

INTERVIEW



Emotional IntelligenceMust Leaders Have It?

Shakespeare, making King Lear inflict capricious cruelty onhimself and his wards, conveys his credo that it is the actions ofthe mankind which are responsible for the fruits they reap.And, if the actions of leaders are to be functional, they shouldhave a critical mass of emotional intelligence, says DanielGoleman.

be too critical nor unrealisticallyhopeful; two, self-regulationótheability to control or redirect oneísimpulses and moods, have a ten-dency to think before acting whichmakes ambiguity acceptable, besidesbeing open to change; three, motiva-tionóa fashion to work for reasonsthat go beyond money or status, anatural inclination to pursue goalswith energy and persistence; four,empathyóability to understand theemotional makeup of other people,having the wherewithal to react topeople according to their emotionalplane; and five, social skillóprofi-ciency in managing relationshipsand building networks by identify-ing the common ground for buildingsuch rapport.

Among the five components ofemotional intelligence, it is, per-haps, self-awareness and self-regula-tion that appear to matter most forleaders in making them more effec-tive. Self-awarenessóthe firstamong the components of EmotionalIntelligence (EI) identified byGolemanóenables a leader to un-derstand how his feelings affect him,people around him, and his perfor-mance at the given job. It also helpsleaders in understanding their val-ues and goals clearly. Its awarenessreflects in oneís candor and the abil-ity to assess oneself realistically.While being highly confident ofthemselves, self-aware leaders areoften found narrating their failureswith a smile. A self-aware leader isquite in the know of his emotionaltendencies and proclivities. It is theleaders who are not well self-ac-quainted and do not know how theiremotional states impact the self andothers that are prone to create amore anxiety-provoking emotionalcontext for everyone involved.

In his groundbreaking article,ìWhat Makes a Leader?î DanielGoleman said that the most effec-

tive leaders are all alike in one crucialendowmentóthey all have a highdegree of emotional intelligence. Hedoesnít mean that leaders do not re-quire the usual IQ and technicalskills, but they, according to him,matter only as ìthreshold capabili-tiesî that enable one to attain an ex-ecutive position. Based on his re-search, Goleman says that ìemo-tional intelligence is the sine quanon of leadershipî. Even the earlierstudies carried out by DavidMcClelland in 1996 reveal that the

performance of divisions headed bymanagers with a critical mass ofemotional intelligence has sur-passed their goals by 20%. Emo-tional intelligence is thus consid-ered essential not only to get alongwith others, but also to think clearlyand take control of oneís life so as tolead businesses on success curve.

Emotional intelligence has fivecomponents: one, self-awarenessóhaving a deep understanding ofoneís own emotions, strengths,weaknesses, needs and drives thatenables them to be honest withthemselves and others as well be-cause of which they would neither

L E A D H ISRE P


The next component of emotionalintelligence is ëself-regulationí. We areall aware that it is the biological im-pulses that drive our emotions. Wecannot wish them away, but can cer-tainly, manage them to a great extentprovided we know what is driving ustowards what. It is the self-regulationcomponent of EI that enables leadersto act free of these forces. Of all thecomponents of EI, self-regulation isperhaps the most critical element for aleader, for it is only those who are incontrol of their feelings who can createan element of trust and fairnessówhere politics and infighting auto-matically become less and lessóinwhich the rest of the employees feelcomfortable to give their best to the or-ganization. Secondly, in a competitivebusiness environment, only the lead-ers who master their emotions canadapt to the changes imposed by thechanging consumer demands, changein technology, mergers, etc. It mini-mizes, if not eliminates impulsive be-havior in the organizations andthereby enhances the integrity of lead-ers and organizations as well, whichin turn eliminates the scope forfraudulent or unethical practices.Leaders who are capable of regulatingthemselves are found to be comfort-able with ambiguity and change, andalso exhibit high propensity to reflectwell before acting.

But one of the most disquietingtruths about leaders is that many ofthem are not at ease with themselvesóthey are often entirely out of touchwith ëwho they areí. And with noknowledge of the self, a leader is lesslikely to regulate himself. These twocomponents of emotional intelli-gence are so intertwined that unlessone is aware of what he is and whatinternal forces are driving his/herbehavior, one cannot visualize as towhich behavior is not in the interestof the organization and hence needsto be regulated and which to let go.But the inability of a leader to have asort of internal dialogue with him-self and thus regulate his/her ownemotions is more likely to face crisisin life or for that matter in any walkof life as it indeed happened with

Shakespeareís Lear, in the play KingLear. To better our understanding ofthe importance of EI for a leader tobe more effective in his/her role, it isin order here to dwell a little deeperinto the life of King Lear.

Lear is the King of Britain. He is avery old manóperhaps, ìa very fool-ish fond old man, / fourscore and up-ward, not an hour more nor less.î Atthe very beginning of the play wecome to know how predisposed he isto insanity. Like any other agingKing, he expresses his anxiousnessto relinquish his kingship to histhree daughtersóGoneril, Regan,and Cordeliaóthus: ìÖ Know thatwe have divided /In three our king-dom: and ítis our fast intent /Toshake all cares and business fromour age,/ Conferring them onyounger strengths, while we/Unburdeníd crawl toward deathî (I,i, 30-34). But heóperhaps, wishingto give away the most desirable partof his kingdom to his most favouritedaughter, Cordeliaósubjects hisdaughters to an absurd love-test, achildish game to reassure himself ofhis absolute power and the devotionof his daughters for him, saying:ìWhich of you shall we say doth loveus most; / That we our largest bountymay extend / Where nature dothwith merit challenge.î His two elderdaughters express their love for himin hyperbolic terms, that too, in avery flattering tone. Though he ispleased with the confessions of loveof his first two daughters, he awaitsCordeliaís declaration of love forhim with more interest. ButCordelia, repelled by the enormitiesheaped by her two elder sisters ontheir father, in her concern to staytruthful in her filial devotion and be-ing guided by her inner voiceóìWhat shall Cordelia do? Love, andbe silentîósays: ìNothing, my lordî.This astonishes Lear but declaring,ìNothing will come of nothingî, heasks her to ìspeak againî. She thenelaborates her love for him quitetruthfully: ìGood my lord, / Youhave begot me, bred me, loved me: I /Return those duties back as are rightfit, / Obey you, love you, and most

honour you /Ö Haply, when I shallwed, / That lord whose hand musttake my plight shall carry / Half ofmy love with himî.

This truthful, sincere and un-bending assertion of Cordelia abouther unfailing filial devotion, throwsLear, at once, out of gear. For, heloved Cordelia most and perhaps,wanted her to outdo her sisters inexpressing her love for him. But as itdidnít happen, feeling insulted, hebecomes furious. Driven by extremeanger and shame, and being not ableto put up with contradictions, heairs his imprecations: ìby the sacredradiance of the sun, / By all the op-eration of the orbs, / From whom wedo exist and cease to be, / Here I dis-claim all my paternal care.î Thissudden act of disowning his ìPro-pinquity and property of bloodîóCordeliaóthat too, ìfor everî,clearly shows how poorly he is en-dowed with the skill of empathyóthe other component of emotionalintelligence that enables one to un-derstand others emotions and theirperspectives. Here, Lear has simplyfailed in considering Cordeliaís feel-ings thoughtfully from her perspec-tiveóthat once married, she, likeany other lady, has to go along withthe husband; being a wife her firstresponsibility is towards her lordand obviously, she, unlike her sisterswho promised to treat him ìdearerthan eyesight, Öbeyond what can bevaluedî or professing ìan enemy toall other joysî serve him alone, can-not but be content with giving onlyhalf her love to him, and most im-portantly her concern to be as nearto truth in her sayingóbefore airinghis decision. It is the gross absenceof empathyóa trait of successfulleadership that is found helpingleaders retain talent in todayís com-petitive marketóin Lear that makeshim lose, as the later events of theplay prove, the love and care of hismost devoted daughter and ofcourse, suffer too.

It is indeed an impulsive deci-sion; and people with no self-regula-tion alone can succumb to such rash,intemperate behavior. Lear is so

LEADERSHIP: Emotional Intelligence



overtaken by his emotions that evenwhen the Earl of Kent intervenessaying ìGood my liegue,î he simplysnubs him saying: ìPeace, Kent!/Come not between the dragon andhis wrath. / I love her most, andthought to set my rest / On her kindnursery. Hence, and avoid my sight!/ So be my grave my peace, as here Igive / Her fatherís heart from her!îBut Kent, being a valuable allydriven by courage and candor, goodjudgment and commonsense, pro-fessional excellence, involvement inthe affairs of kingdom and most im-portantly, with no expectation of fa-vors from the leaderóthe qualitiesthat David A Nadler prescribed foran internal counselor for todayísCEOs, to be effectiveóurges Lear:be Kent unmannerly, / When Lear ismad. What wouldst thou do, oldman? / Thinkíst thou that duty shallhave dread to speak, / When powerto flattery bows? To plainnesshonourís bound, / When majestystoops to folly. Reverse thy doom; /And, in thy best consideration,check / This hideous rashness: an-swer my life my judgment, / Thyyoungest daughter does not lovethee least; / Nor are those empty-hearted whose low sound / Reverbsno hollowness ( I; i; 138-148)

At this, Lear warns him: ì Kent,on thy life, no moreî, but Kent reply-ing ìMy life I never held but aspawn. / To wage against thine en-emies; nor fear to lose it, / Thy safetybeing the motiveî insists that heìSee better, Öand let me still re-main.î This pleading of Kent bringsout Learís wrath in full: ìHear me,recreant! / ÖSince thou hast soughtto make us break our vow, / Whichwe durst never yet, and with strainídpride / To come between our sen-tence and our power, / Which norour nature nor our place can bear, /Our potency made good, take thy re-ward / ÖThy banishíd trunk befound in our dominions, / The mo-ment is thy death. Away! By Jupiter,/ This shall not be revokedî (I; i; 151-174). Kent, as a loyal ally of the Kingtrue to the honesty of purpose leavesthe court bidding well to the King,

and wishing Cordelia that gods willtake care of her just thinking andright saying while hoping that thedeeds of Goneril and Regan approvetheir large speeches. Having servedLear with a clear, unmingled fidelity,Kent finally walks out of the court toìshape his old course in a countrynew.î But it is a different matter thatsubsequently Kent rejoins Lear toserve him when his two daughters towhom he has divested his kingdom,leaves him alone to mend himself.

How lucky a leader is to have aKent-like counselor who in the wordsof Coleridge ìis the nearest to perfectgoodness in all Shakespeareís charac-ters, and yet the most individualized.There is an extraordinary charm in abluntness, which is that only of anobleman arising from a contempt ofover-trained courtesy, and combinedwith easy placability where goodnessof heart is apparent. His passionateaffection for and fidelity to Lear acton our feelings in Learís own favor:virtue itself, seems to be in companywith him.î It is of course a differentmatter that Lear could not take ad-vantage of his counseling. But theevent clearly teaches us that counse-lorsóas quoted by David A Nadler(2005)óshould ìnot fall in love withus [CEOs]. The minute you fall inlove with us [CEOs], you lose yourvalue.î

Having said that, what we need tounderstand importantly here is thepersonality and the behavior of Lear.His most distinguishing mark, ascould be deciphered from his utter-ances to Kent particularlyóìThe bowis bent and drawn; make from theshaftî, ìO, vassal! Miscreant!î, ìHereme, recreantî, ìTo come between oursentence and our powerî óis the vio-lent impatience of his temper (AaronHill). He is obstinate, rash and vin-dictive. He has the fancy for measur-ing the merit of all things by theirconfirmative to his will. He cannotjust put up with contradictions. Theirvery image is known to inflame himinto frenzy. Besides exhibiting ìvio-lent impatience of temperî, he is alsoknown to ìmeasure the merit of oth-ers by their confirmative to his will.î

All this cumulatively establishes thatLear has no regulation on himself,nor the patience and ability to under-stand othersí sayings in right perspec-tive. It doesnít matter to him how hisimpulsive behavior is going to affectothers and even himself. He has nosense of appreciation for others feel-ings. He thus fails to find a commonground with Kentís arguments. Hav-ing expected the best to come fromCordelia and being thwarted of hishope, his weakness flames out in hisaddress to France, the suitor in wait-ing for Cordeliaís hand: ìI would notfrom your love make such a stray, /To match you where I hate; thereforebeseech you / To avert your liking amore worthier way / Than on awretch whom nature is ashamed /Almost to acknowledge hers.î Thisobviously makes the King of Francewonder: ìThis is most strange, / Thatshe, that even but now was your bestobject, / The argument of yourpraise, balm of your age, / Most best,most dearest, should in this trice oftime / Commit a thing so monstrous,to dismantle / So many folds offavour.î No wonder, every other hu-man being of a rational mind wouldhave indeed been shocked listeningto a father talking so peevishly of hisdaughter. But it hardly appears tohave mattered to Lear, for no artseems capable of restoring respect tohis waywardness.

The greatest riddle here is: Whydoes Lear treat Cordelia, the way hedoes? Is it that peopleóbe they kingsor paupersótake a strange pleasurein acting without a reason, for in itthey perhaps feel that they have as-serted as also augmented theirpower? Or, is it the very shame of do-ing wrong that sometimes quickensmen from refusing to retreat and goon commit insane acts one after theother? Then again, it is not that every-thing with King Lear is bad. He haswisdom, courage, and ability. He is,in the modern day jargon, a socialistwhen he says: ìSo distributionshould undo excess / And each manhave enough.î He even championsjustice: ìplate sin with gold / And thestrong lance of justice hurtles


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breaks.î Indeed, later events in theplay reveal his cherished feelings andthe shrinking soreness of his mindparticularly, when the Foolís grief atthe loss of Cordelia is made known tohim. What does it mean?

In todayís management language,all this means lack of EI. Such freeflow of self-will ruling the roost un-mindful of the wreck it inflicts onthose involved, is more out of oneísinability to take a pause for a whileand have a silent internal dialoguethat facilitates rational analysis ofthe issue under consideration from

all dimensions, including the per-spective of others involved and rea-son out a balanced way to move for-ward. But here, it is the lack of self-regulation and empathy that makesLearís gusts of raze, that too, of hisown imagination, eclipse all hisgood traits. The net result of all thisintemperate behavior is: he casts outCordelia, gets himself thrown out ofthe royal comforts by his two ëpeli-can daughtersí to whom he has givenhis kingdom and finally stands ex-posed to winds and rains not know-ing who he is. This final fate of Learmakes another revelation: he notonly failed in managing himself byvirtue of lack of self-awareness, andself-regulation, but also failed inmanaging his relationship with histwo daughters due to lack of ësocialskillsí that enables one to maintainfriendliness with a purpose. Even af-ter becoming totally dependent onGoneril and Regan, and knowingtheir ill-disposition towards him, hecould not cultivate the much neededëself-regulationí of his behavior. Forinstance, the curses Lear heaps onGoneril when she suggests him to re-quire ìa little to disquantityî and re-form his train of knightsóa demandbacked by false accusations against

knights and made in a manner that ishateful, is sure to cause only indigna-tion, particularily from an old fatherof Learís statureóare frightful: ìHear,nature, hear; dear goddess, hear! /Suspend thy purpose, if thou didstintend / To make this creature fruitful!/ Into her womb convey sterility! / Dryup in her the organs of increase: / Andfrom her derogate body never spring /A babe to honour her! If she mustteem, / Create her child of spleen; thatit may live, / And be a thwartdisnatured torment to her!î Now, thequestion is what does it tell us about

Lear? It only shows that he still doesnot understand himself and his cur-rent plight, nor does make any attemptto better his relations with the onlydispensation that he has right now,that too, even after repenting the evilhe did for Cordelia: ìO, most smallfault, / How ugly didst thou inCordelia show! / Which, like an en-gine, wrenchíd my frame of nature /From the fixíd place, drew from myheart all love / And added to the gallî (I, iv, 261- 265).

Interestingly, Shakespeare makesEdmund mock at the weaknesses ofmankind thus: ìThis is the excellentfoppery of the world, that, when weare sick in fortune, often the surfeit ofour own behavior, we make guilty ofour disasters the sun, the moon, andthe stars: as if we were villains by ne-cessity; fools by heavenly compul-sion; knaves, thieves, and treachers,by spherical predominance; drunk-ards, liars, and adulterers, by an en-forced obedience of planetary influ-ence; and all that we are evil in, by adivine thrusting on: an admirable eva-sion of man, to lay his disposition tothe charge of a star!î One wonders ifShakespeare by his thus proclaimedcredo wants us, the audience, to knowthat our behaviors are primarily re-

sponsible for our good or badóìOurmeans secure us, and our mere defects/ Prove our commodities.î

Therefore, the takeaway from theplay is that mere presence of IQ andtechnical ability does not constitutethe full recipe of leadership. Therecipe becomes complete only whenit is seasoned with emotional intelli-gence, for it alone engenders good be-havior. That aside, what is importantto consider here is that in todayísknowledge economy, no CEO is untohimselfóhe has to necessarily relyon others for expanding the bound-aries of organizational knowledge.Sustainable leadership cannot bewrought in isolation by a singleleader, and it must hence be a collec-tive and collaborative effort of a lead-ership team. Indeed, it is not the re-sponsibility of a single leader to pro-vide answers to all the questions thatan organization faces, but a leader hasto make the followers own up theproblem and find solutions by them-selves (Heifetz). Thus the success oftodayís leaders is as much dependenton the actions of others as any per-sonal qualities that the leader canbring to the chair. The increased useof teams to execute company priori-ties, the heightened need to retain tal-ent, and the globalization of busi-nesses have cumulatively made so-cial skills highly relevant for leaders.It is a matter of common sense thathow challenging it is to lead a team,that too, of knowledge workers withìcauldrons of bubbling emotionsî.To keep the going of teams in goodstead, a leader has to constantly beable to sense and understand the per-spective of every member and gener-ate a consensus. And getting workdone from such teams becomes pos-sible only when one is deft in usinghis social skills. Thus, to perform wellin todayís competitive markets, busi-ness leaders need to have emotionalintelligence; else one cannot rule outthe kind of calamity that Lear inflictedon himself and his kingdom happen-ing even in todayís organizations.


Sustainable leadership cannot be wrought in isolation by a single

leader, and it must hence be a collective and collaborative effort of a

leadership team

global economy and global managers - philippe pierre · 2018-12-30 · david ogilvy checking the...

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