WHARTON
LEADERSHIP DIGEST
July,
2002, Volume 6, Number 10
CONTENTS
Leading
at the Crossroads:
High-Achieving Women
By
Kate Faber, Coordinator, Wharton
Leadership Program
 The
Center for Creative Leadership offers programs and resources for
individual and group development, and its new book, Standing
at the Crossroads: Next Steps for High-Achieving Women, focuses on
distinctive steps for leadership development among women.
Authors Marian N. Ruderman and Patricia J. Ohlott
first studied the experiences of 61 women who attended the Women’s
Leadership Program at the Center for Creative Leadership.
They then expanded their investigation to 267 additional women,
quizzing them on past experience and future plans, and focusing on their
personal conflicts with the business world.
Historically, the authors argue, women in business
have been required to adapt to a well established hierarchal system built
around the strengths of its mainly male players.
As women entered the workplace, they initially tried to create only
a modest variant in the male-dominated workplace. But instead of replicating the same traditional model, say
the authors, women should have introduced their own developmental
approaches and needs in five key areas: agency, wholeness, connection,
authenticity, and self-clarity.
Ruderman and Ohlott argue that rather than pressing
women to give up their distinctive qualities up when they come to work,
companies should capitalize on them.
The result will a greater sense of self-actualization for women in
business, and this in turn will make for more dynamic managers, more
self-assured decision makers, and ultimately more effective leaders.
From their interviews, discussions, and surveys, the
researchers find that business women tend to focus on the five main
developmental areas at distinctive life stages during their careers.
Life Stage
Dominant Developmental Themes
29 – 33
Agency: How do
I get ahead in my career?
34 – 40
Wholeness: How
do I keep my career from pushing out the rest of my life?
Connection: How
do I develop and maintain important relationships?
41 – 45
Authenticity: How
do I redefine my work so it is more fulfilling?
46 –
50
Agency and authenticity:
How do I realign my life so it is fulfilling both personally and
occupationally?
51 – 55
Self-clarity: How
do I continue to learn and grow?
For highest achievement, the authors argue that
high-achieving women should take the risk of pursing their own approaches
during these several stages rather than just adapting the traditional
male-dominated methods. With
time to reflect upon and learn from their experience, women ought to be
able to evolve a place in business that draws upon rather than conflicting
with their own approaches. The
result should be not only a more authentic work experience for them but
also a more diverse and innovative workplace because of them.
Ruderman and Ohlott argue for an integrated “role
accumulation” rather a single, limited definition of one’s self.
“Individuals engaged in multiple roles,” their research
suggests, “have higher levels of well-being than people who engage
exclusively in one role in life.” They
contend that women and men are now both looking to integrate the roles
they play as parent, adult child, and employee to create a more whole and
authentic life experience. Standing
at the Crossroads suggests the next steps for business women – and
men – to create such an experience.
Source: Marian
N. Ruderman and Patricia J. Ohlott, Standing at the Crossroads: Next Steps for High-Achieving Women (Josey
Bass: San Francisco, 2002). Kate
Faber can be contacted at kfaber@wharton.upenn.edu.
Information on the Center for Creative Leadership is available at http://www.ccl.org/index.shtml.
Good Governance:
Sturdier Company
On July 2, 1997, the Thai currency began a
precipitous decline in value, triggering financial crises in Indonesia,
Korea, Malaysia, the Philippines, and Thailand.
Many companies experienced sharp drops in their stock prices as
investors fled the East Asian equity markets.
Researcher Todd Mitton hypothesized that better
governed companies in the region were likely to have better weathered the
crisis. If good governance
achieves what it presumed to provide, companies with it should presumably
display greater resilience during a period of enormous stress.
Focusing the stock performance of 398 companies based
in the five East Asian countries most affected by the crisis, Mitton
examined the impact of three characteristics of the firms: (1) the quality
of their financial disclosure, (2) whether a large fraction of their stock
was held by an outside owner, and (3) the extent to which the companies
were focused on single markets rather than diversified in portfolio,
making for greater transparency.
The researcher defined disclosure quality in two
ways: The company had a
listed American depository receipt (ADR), requiring it to meet heightened
reporting standards demanded by the exchanges upon which they were traded,
and company retained one of the six major international accounting firms. After taking into account the firms’ size, industry, and
other factors, Mitton found that companies with ADRs out-performed others
by 10.8% during the twelve months following the crisis.
Companies that had retained one of the international auditing firm
displayed a higher return of 8.1%.
Regarding stock ownership, the researcher found that
the firms’ stock displayed a greater return of 2.6% for every 10%
increase in the holdings of the companies’ largest shareholder, and this
was most evident when the largest shareholder was not involved in managing
the company.
Company diversification also had its predicted
impact. During the crisis
period, the stock of focused enterprises out-performed the shares of
diversified firms by 7.6%.
Better disclosure and transparency, more vigilant
outside stockholders, and greater market focus thus equipped companies in
the East Asian markets to better ride out the 1997-98 crisis in financial
confidence.
By implication, good governance and more
single-minded market focus should help publicly-traded companies in any
national market to cope with any market crisis.
Source: Todd
Mitton, “A Cross-Firm Analysis of the Impact of Corporate Governance on
the East Asian Financial Crisis,” Journal of Financial Economics,
Vol. 64, 2002, pp. 215-241.
Good Governance:
Better Environment
Does better governance lead to more law abidance?
George Kassinis and Nikos Vafeas compared 209 U.S.
companies prosecuted for violation of environmental statutes in 1994-98
with a set of matched that were not prosecuted.
They theorized that well governed companies would less often
violate the nation’s legal standards.
The researchers defined better governance in four
ways: compared to industry averages, (1) the company’s board had fewer
directors, (2) fewer of its outside directors were executives of other
industrial firms, (3) its directors held more directorship with other
firms (broadening the directors’ understanding of governance), (4) and
its stock was more concentrated in top management’s hands.
The investigators identified 209 companies that had
been convicted and penalized for breaking a U.S. environmental law during
the five-year period. An auto
maker, for instance, was fined $45 million for installing an illegal
device to circumvent pollution controls; a chemical company was fined $2
million for mislabeling its pesticides, a mining firm was forced to invest
$50 million to correct its handling of hazardous waste and polluted water. Kassinis and Vafeas then matched these violators with 209
other firms without violations in the same industry and of similar size.
Net of other factors such as the firm’s past
financial performance, the researchers found more environmental violations
among companies whose boards were larger and whose outside directors were
executives of other industrial firms.
Fewer violations occurred among companies whose directors held many
additional directorships. Contrary
to the investigators’ anticipation, however, when management owned more
stock, the likelihood of violation was higher, not lower.
By implication, good governance should help companies
avoid violation of government regulations, not only for environmental
protection but potentially all areas of public policy, including
securities and accounting provisions.
Source: George
Kassinis and Nikos Vafeas, “Corporate Boards and Outside Stakeholders as
Determinants of Environmental Litigation,” Strategic Management
Journal, Vol. 23, 2002, pp. 399-415.
Leadership
Teaching and Research:
The Baltic Republics
 By
Larry W. Stout, Stockholm School of Economics in Riga
When the three Baltic republics of Estonia, Lativia,
and Lithuania became independent in 1991, I joined with a small group of
Americans to assist these emerging nations in the transition from a
planned and very stagnant economy to one that embraced a free-market
model, governed by democratic principles and rule of law.
A key element for the transition, we believed, was a reshaping of
the socialist-oriented Weltanschauung into one that valued personal
creativity, visionary ideas, and independent thinking.
In short, new leadership was needed, and it was
needed in every field: the
arts, sciences, technology, commerce, education, government, medicine,
even religion. Leaders of
these institutions required learning opportunities, we concluded, if they
were to move beyond an archaic ideology and embrace a mindset that would
foster rather than retard their nation’s economic and social progress.
To that specific end, the Stockholm School of
Economics established a campus in Riga, Latvia, in 1994.
It now annually recruits 100 to 115 undergraduate students from
among nearly 2000 applicants, and it stresses Western economic principles
and, possibly more importantly, Western cultural values. The university now also extends its classroom opportunities
to those already in the work force through a thriving executive education
program and a soon to be started executive MBA program.
The curriculum in all of our programs is intended to
radically transform the students’ and participants’ thinking.
To appreciate precisely what this would require, for the past five
years we have conducted research on the Baltics’ most successful
emerging leaders, and our investigations have led us to formulate a
developmental approach that we term the Inter-Disciplinary Leadership
-- or IDEAL Leadership -- Model.
Our model identifies six critical capabilities that we group under
“Leadership Capital” and four capacities we term “Leadership
Conditions.”
The six critical leadership capital capacities are
the 1) vision and 2) values that
constitute the leader’s philosophy; the 3) wisdom and 4) determination
that compose the leader’s personal integrity; and the 5) courage and 6)
voice that enables them to influence others.
The four
vital leadership conditions for these capacities to make a difference are
1) a place where the leader can hold sway, 2) a period that calls for his
or her leadership, 3) a position that conveys leadership authority, and 4)
people who are ready for leadership.
Students of
the Stockholm School of Economics at Riga are using this model to study
leaders in various institutions throughout the Baltics, and our faculty
are drawing on it to design both their undergraduate courses and executive
programs.
We in the
Baltics have been endeavoring now for a decade to chart a course of
leadership development that will be comprehensive, simple without being
simplistic, and most importantly, practically as well as theoretically
sound within our national experiences.
We hope it works.
Note: Larry
Stout can be reached at larry@idealleadership.com,
and a website for the Stockholm School of Economics at Riga can be found
at http://www2.sseriga.edu.lv.
Leadership
Quote: Chairman and CEO John J.
Brennan of Vanguard
“I believe
leadership is more important in a business such as ours where the product
is intangible than in a business with conventional products.
Put bluntly, we have no patents or proprietary processes that
protect us for competition. Our
image, our reputation, and the trust that clients have in us and our daily
work represent Vanguard’s true net worth.
And this net worth is created – or could be destroyed – by our
people here each and every day.”
“A great
leader accepts all the blame and distributes all the credit.”
“To
succeed here, a leader must be willing to cede glamour to others. To cede the perks and symbols of status.
To cede the glamorous lifestyle and the glamour mind-set to our
competitors. We must be
comfortable being – no, we must relish the opportunity to be –
the lowest-cost, highest-value provider of investment services in the
world.”
Source:
John J. Brennan, The Vanguard Leader (1998).
The Vanguard Group is one of the world’s largest investment
management companies.
Copyright
© 1996-2002, Wharton Center for Leadership and Change Management
University of Pennsylvania
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