In writing about business strategy, a good place to start is leadership. But before considering leadership and why it’s important, let’s start at the other end of the business planning process and work our way back.
To be successful a business needs a clear action plan, a road map that drills all the way down to an activity plan by function. Everyone must be clear on what they need to do, when and how, to ensure they hit their targets and the business achieves its goals.
Plan first, then act
A clear action plan is derived from an articulated business strategy, so before you can implement the action plan you have to know the broader strategic objectives. This is the headline objective of the business, its purpose. It should be captured in the company’s vision and mission statements and be able to be articulated as the strategic intent by everyone in the business.
Many people deride vision and mission statements as exercises in theory, but when employed appropriately and consistently they are a vital step in the business planning process, shaping and directing the business. They are not static statements, emblems of a good idea at a point in time to be framed and mounted on a wall, to gather dust and fade to irrelevance; they should be living, dynamic documents that adapt to changes in strategy and the environment.
The articulated vision and mission which direct the business activity plan originate in leadership. Leadership therefore must set the broad direction before the detailed objectives. But what is leadership? It is often described as a social influence process.
Globalisation has been touted as the great issue and opportunity of the past 20 years, and potentially the next 20. In line with this, the mantra of many contemporary business writers and researchers is that to operate in several markets requires a universal approach to leadership and management. Their rationale is that consistency drives efficiencies and scale benefits. To ensure this, a consistent global organisational culture is required.
But the extension of leadership in a globalisation context can make its application simplistic and formulaic. It implies a universalism of approach to which I do not subscribe in my own research (for a PhD in international management) nor in practice.
Adapt to survive
Anyone running a business in multiple markets will be aware of profound differences across those markets. Businesses targeting the same demographic in different geographies, such as British expatriates, may experience greater consistency across markets but the unique characteristics of markets, not least regulatory frameworks, dictate market adaptation to a degree.
Leadership is culturally contingent. If leadership begets strategy begets business action plan begets business success in a market, as stated above, then a business needs to adapt to the market in which it is operating. My approach to leadership is to adapt to the specific market and resist the automatic adoption of cultural norms from the head office home country.
As different countries exhibit different value systems, business practices considered de rigueur in one country may be seen as unethical in another. A particular approach may be illegal in a local market or simply irrelevant.
Universally undermined
I acknowledge it is inevitable that the national culture of the home country will permeate the corporate culture of multinational financial services organisations and impact businesses across all markets they operate in. This may sound like homogenous globalisation and the universal leadership approach, but my position is that universal leadership potentially impacts performance negatively.
To be successful, organisations must adapt to the national and societal cultures in which they operate. To adapt to a culture, an organisation must possess a cultural awareness and understanding, which in my experience is often lacking.
So back to the question of what leadership is. If leadership is a process of social influence, it has to be relevant to the society in which it is being applied. It is the ability to challenge global corporate and market conventions, to apply the relevant components of a corporation’s strengths and ignore others, specific to the market the business is operating in. Leadership is the ability to apply these components, adapt to the local market, design and articulate strategy and use that as the compass for directing the operational business plan.
Leadership, then, is influencing, designing, communicating, selling, assessing and doing. Leadership is situational and is culturally contingent
