November, 1997 - Vol. 2, No. 2

Leadership and Change

A group of managers met at the end of October to identify key research priorities for leadership and change. These priorities emerged from the discussion:

• Lateral leadership: What are the qualities that managers need to manage across boundaries, outsourcing contracts, and joint ventures?
• Ambiguous authority: How can managers best lead when they report through several bosses or their authority is uncertain?
• Building resiliency: How can organizations recruit and develop the right people and build the right kind of organization to display the stamina required for intense restructuring and change?
• Assimilating newcomers: Given that many firms experience frequent turnover in key positions, what steps should they take to ensure that new managers rapidly master their new responsibilities?
• Retaining people: Are there steps that organizations can take to retain key people during a period of change?
• Enduring values: To what extent is it critical for an organization to develop a set of shared values, and which are the most critical during a period of change?
• Diagnosing readiness: Is it possible to develop a method for diagnosing when an organization should not change and when it should?
• Measuring leadership: Can we also develop a way of measuring a firmâs leadership potential and its capacity for change?
• Overcoming resistance: How should managers initiate change when they are faced with entrenched groups or defiant cultures?
• Surmounting fragmentation: What steps should senior managers take to create consensus and a common vision at the top?
• Everybody is a leader: How can we best build leadership throughout the ranks so that everybody takes ownership of the challenges and results?
• Best practices: What are the leadership styles that have worked among companies that have successfully changed and prospered?

The discussion was led by Lance Berger and Michael Useem, and the participants were: Marj Adler, Philadelphia School District; Andrew Bergin, Lehman Brothers; Kathleen Cook, Vanguard Group; Elizabeth A. Dow, Leadership, Inc.; Charlene Parsons, Unisys Corporation; Robert F. Pelliciari, Elf Atochem North America, Inc.; Richard Sedory, PNC Bank; Arnold A. Trillet, Johnson & Johnson; Cathy Walt, Andersen Consulting.

Top Executives, Top Teams, and Top Results

Sydney Finkelstein and Donald C. Hambrick have assembled a wide array of scholarship and experience to offer an integrated appraisal of what is known about the impact of senior management and their teams on company performance. They illustrate their conclusions with a detailed case study of chief executive William Agee at Morrison Knudsen.

Among their key findings:

• Top management teams: Larger and more diverse teams generate more alternatives, evaluate the alternative in more ways, and, consequently, reach better strategic decisions -- but are also less effective in implementing the decisions.
• Top managers: Executives have greater impact on a company's performance when they enjoy greater discretion, and they face greater discretion when it is less clear what will produce shareholder value and when their ownership is widely dispersed.

Source:Sydney Finkelstein and Donald C. Hambrick, Strategic Leadership: Top Executives and Their Effects on Organizations (Minneapolis-St. Paul: West Publishing Company, 1996).

Companies and Globalization

Wharton Executive Education is offering a one-week program on organizing, negotiating, managing, and governing joint ventures, including both domestic and cross-national alliances. Entitled "Strategic Alliances," the program is presented on November 30-December 5, 1997, and May 17-22, 1998. Information: execed@wharton.upenn.edu and http://www.wharton.upenn.edu/execed

Leadership Development Program: World Economic Forum

Based in Geneva, the World Economic Forum is an international membership organization drawing leaders together from business, government and academia. In 1992, the World Economic Forum launched the Global Leaders for Tomorrow (GLT) initiative to assist the building of global leadership in the post-Cold War era. The mission of GLT is to create a worldwide network of young leaders for addressing contemporary economic and social problems.

Global Leaders for Tomorrow are individuals younger than 43 who hold positions of considerable influence and responsibility. They are based in business, politics, public interest groups, the media, and the arts and sciences. Each year the Forum selects 100 new participants worldwide. New GLTs in 1997 have included young leaders based in Bulgaria, Canada, China, the Czech Republic, Germany, Hong Kong, Hungary, Italy, Korea, Mexico, Russia, South Africa, Taiwan, the UK, and the USA. Among the GLT ranks can be found Lawrence Summers, Anatoly Chubais and Bill Gates.

The Forum invites GLTs to a special program on the occasion of its well-known Annual Meeting in Davos, Switzerland, and to its Regional Economic Summits in locations ranging this year from Harare and Hong Kong to Salzburg and Sao Paulo. There GLTs participate both in private meetings and in the public program to build their personal contacts and to meet with world leaders such as, in Davos this year, former US Senator Bill Bradley and Lord Yehudi Menuhin.

The Forum's GLT coordinator, Thomas Scherer, can be reached at tscherer@weforum.org. Information on GLTs can be found on the World Economic Forum's web site at http://www.weforum.org

"I remember a meeting of our executive staff in which we were discussing Intel's new direction as a 'microcomputer company.' Our chairman, Gordon Moore, said, 'You know, if we're really serious about this, half of our executive staff had better become software types in five years' time.' The implication was that either the people in the room needed to change their areas of knowledge and expertise or the people themselves needed to be changed.... As it turned out, Gordon Moore was right. In our case, about half the management transformed themselves and were able to move in the new direction."

Source: Andrew S. Grove, Only the Paranoid Survive (New York: Doubleday, 1996).