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Servant Leader Across Cultures

Fons Trompenaars on the organization as a cultural context for leaders



Wednesday 08 June 2011



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During the last twenty years, the fact that national and organization culture both need to be considered in modern business management has been increasingly recognized. Leaders, even in local companies, find they are leading and managing workforces that are multi-cultural. Frameworks describing culture are often based around how different cultures give different meanings to relationships with people, the environment, time and other dimensions. Similarly, much attention has been given to the recognition and respect for cultural differences. If we stop at only these first two stages we run the risk of supporting only stereotypical views on cultures. In our extensive cross-cultural database, we have found enough variation in any one country to know it is very risky to speak of a national, corporate or even functional culture in terms of simple stereotypes.

The starting point is to ask how leaders deal effectively with situations where there are competing demands from different stakeholders and with a multi-cultural workforce.

Take these alternate descriptions as examples. Which would you choose?

(a) Today’s effective leaders are like parents not teachers, telling their subordinates how to solve problems.

(b) Today’s effective leaders occupy a position between that of a private coach and a teacher. Their effectiveness depends on how they balance both roles.

(c) Today’s effective leaders get things done. They set goals, give information, measure results and let people do their own work in that context

(d) Today’s effective leaders give a lot of attention to work streams, so that goals, tasks and achievements are aimed at improving those processes.

(e) Today’s effective leaders get things done. They set goals; give information and measure results so that everyone is embedded in continuous work streams.

We posed these types of questions to many top leaders during our research into organization sustainability through innovation and leadership. Answers are consistent with our proposition that leaders such as Richard Branson, Michael Dell, Kees Storm of AEGON and Laurent Beaudoin of Bombardier made significantly different choices from people in our database of more “ordinary” managers.

The leaders described in answer “a” look like those of the beginning of the last century: Listen to ‘father’ or ‘mother’ and everything will be OK. This style is still very popular in Latin America and Asia, where we have also collected research data, compared to Europe and the US. There is nothing wrong with this approach, simply that it is limited in its applicability outside these regions.

Answer “b” is a typical compromise and will not work very well anywhere ~ it is certainly not the optimum approach.

Answer “c” is very popular amongst Anglo-Saxons and Northwest European managers. The ever-popular “Management by Objectives” is again applied recklessly. Add some vision and mission, and you’re the modern leader; but the French would quickly argue: “Whose vision and mission is it?”

Answers “d” and “e” are two alternative ways to integrate seemingly opposing values on a higher level and would therefore have our approval. Answer “d” suggests that good leaders guide people who make mistakes and learn from them, while “e” integrates the dichotomy of task orientation with work streams beginning from the opposite direction.

More successful leaders selected the last two choices much more frequently. They are the servant-leaders of today, always trying to have other’s perform better [1] by reconciling major dilemma’s they are facing. [2]

Redefining sustainability

The evidence from our research and consulting practice reveals that ‘organizational sustainability’ is not limited to the fashionable environmental factors such as emissions, green energy, savings of scarce resources, corporate social responsibility etc. The future strength of an organization depends on the way leadership and management deal with the tensions between the five major entities facing any organization: Efficiency of Business Processes, People, Clients, Shareholders and Society. The manner in which these tensions are addressed and resolved determine the future strength and opportunities of an organization. The task for today’s leader is to connect and integrate these drivers in ways that is more than just compromise.  

From what do these five components derive?

If we look at any classic book on the history of management and organization theory we see whole schools built around each of them.[3]  Much research by the likes of Taylor and Fayol was conducted into the area of employee efficiency at the end of the nineteenth and the beginning of the twentieth century. A new school of thought, the Human Relations School, developed under the influence of Elton Mayo and Fritz Roethlisberger.

Since then, much attention has been given to social aspects which play a role in the organization. The employee as socialactor was introduced but the organization remained a closed system. Simultaneously, a phenomenon developed which opened up the organization because extreme financing was needed. Management and property were divided; an organization was viewed as an open system. As the result of a study, better known as the “contingency theory,” the end of the “one best way of organizing” approach was in sight. The organization ‘opened up’ and three new schools representing new stakeholders came to the fore. The client and shareholder’s stakes were abundantly represented next to the efficiency of the system and the happiness of the employee. One fad replaced the other by exaggerating the workings of it. The latest monolithic approach, supported by the famous Anglo-Saxon MBA’s led to an obvious malfunctioning of the capitalistic system. And now we wait for the next exaggeration: serving society. The issue is not that all these components are of no value. The challenge of the modern leader is that you can’t just ‘bet on one’.  And replacing the next by the previous rejects any benefits of the earlier theoretical framework. The different demands from each component lead to a goal conflict matrix with the tensions manifesting as dilemmas that need to be reconciled by leadership. Only when all have been satisfied is there a basis for a sustainable future.

We have collected and analyzed some 8,000 of these tensions and have identified ten frequently recurring ‘Golden Dilemmas’, which exist between these five components.

We have created ten dimensions out of our five components because each one competes with the other four.

The value conflicts between these components, precipitated by scarcity and different sectional interests and the role of the leader is to reconcile these dilemmas over time.

Below are listed 10 such Golden Dilemmas in a generic format with a relatively high level of abstraction.  

Golden Dilemma

On the one hand

On the other hand

1

(B: Employees) We need to develop our people for their future roles

(A: Business Processes) We need to become more cost conscious and results oriented

2

(C: Shareholder) We need to cut costs wherever we can for the sake of our shareholder's return

(A: Business Processes) We need to invest for long-term sustainability

3

(A: Business Processes) We need to supply standard products/services as defined from HQ

(D: Clients) We need to supply products/services that respond to local tastes and needs

4

(A: Business Processes) We need to focus on Cash flow and Working Capital

(E: Society) We need to serve the wider community in a sustainable and responsible way

5

(B: Employees) We need to motivate and reward our people

(C: Shareholder) We need to satisfy our shareholder

6

(B: Employees) We need to educate clients/customers with new solutions we can offer

(D: Clients) We need to keep the customer in focus ahead of our own personal preference

7

(B: Employees) We need to retain equal opportunities for all existing staff

(E: Society) We need to apply some positive discrimination to increase diversity

8

(D: Clients) We need to satisfy our clients/customers needs

(C: Shareholder) We need to generate both revenue and capital growth for our shareholders

9

(C: Shareholder) We need to maximise shareholder return from our existing business

(E: Society) We need to adapt to the future as society evolves

10

(E: Society) We need to supply products and services that enhance our reputation in the wider community

(D: Clients) We need to supply products which our clients and customers are asking for

 

The challenges for the leader

Of course you have to inspire as a leader and you have also to listen. You need to follow the orders of HQ to fulfill the global strategy and you have to have local success by adapting to regional circumstances. You have to decide when to act yourself but also when and where to delegate. As a professional you need to input your own day-to-day contribution and at the same time to be passionate about the mission of the whole. And you need to simultaneously use your brilliant analytical power while enabling the contribution of others. You need to develop an excellent strategy while simultaneously having answers to why the strategy misses its goal.

Leaders find themselves between conflicting demands and are subject to an endless series of paradoxes and dilemmas. There are non-stop culture clashes and by culture we mean not simply the cultures of different nations, but those of different disciplines, functions, genders, classes, and so on.

Leading for sustainability

Let’s explore some of the Golden Dilemmas and how successful leaders might approach the tensions and resolve them.

1

(B: Employees) We need to develop our people for their future roles

(A: Business Processes) We need to become more cost conscious and results oriented

Is the leader of the 21st century a cool analytic brain, able to chop the larger whole in piecemeal chunks and strive monolithically for corporate efficiency?  Or a person that puts everything into a larger context and prioritizes the contribution of people?

At Shell, van Lennep’s concept of Helicopter Quality was introduced to focus on an important quality of the modern leader – the competence to transcend the problem by elevating to higher levels of abstraction but at the same time the ability and drive to zoom in to certain aspects of the system of problems. Jan Carlzon of SAS called this integration of more specific moments with the ability to go deeper when one approaches a client Moments of Truth. Here also we find an important new quality of the leader – the (competence) ability to select where to go deep. Pure analysis leads to paralysis and an overdone synthesis leads to aimless holism and protest against action.

It is obvious that this first dilemma is crucial and is effectively inherent  in the Balanced Scorecard introduced by Kaplan/Norton. Their scorecards consist of four entry points together making up two crucial dilemmas. The internal and external world of business processes versus the client on the one hand. On the other hand there is the dilemma of cost reduction/efficiency versus developing people. The latter dilemma has been the most quoted dilemma by our 8000 participants over the period 2002-2008.

During some consulting with AXA Insurance, coinciding with the first major recession in this century, the leadership of AXA was very worried by the extensive cost reduction programs they executed for many years. The cracks had begun to show as evidenced by a lot of talent leaving the company ‘because there was no seemingly investment in our top-people’. The balance was lop-sided. The effective leadership skills of Henri de Castries can be seen in the way he approached this dilemma. After we had presented a dilemma Reconciliation workshop that offers a methodology to elicit and deal with such dilemmas, he introduced an increase of 30% in all development programs, under one condition ~ all suppliers (including us!) had to demonstrate how their interventions would lead to cost efficiency.  

The reconciliation he created was as powerful as it was simple. By developing people in how to reduce costs you marry the best of both worlds.  The balanced score card became an integrated score card.

 

5

(B: Employees) We need to motivate and reward our people

(C: Shareholder) We need to satisfy our shareholders

 

This dilemma is very much shared around the globe. A specific version of it is referred to as work-life balance. In this case you need to reward yourself by having a decent private life. On the other hand, you need to work hard and possibly long hours to lead to more profits for the shareholders. As a leader you need also to be able to be yourself. However, from our research findings we conclude that our leaders are not different from what they do.. One of the most important sources of stress is when ‘being’ and ‘doing’ are not integrated. An overdeveloped achievement orientation that doesn’t harmonize with what the person suits in their lifestyle and themselves leads to ineffective behaviours.

Any brief look at the essential literature indicates just how complex this subject is. It can be summarized in five (overlapping) models. We should also note how much they are influenced and affected by cultural differences.

First is the segmentation model in which it is assumed that work and activities outside of work are completely separate and that they do not influence each other. In predominantly specific (=low context) cultures, one expects that private problems are not discussed at work and that at home the saying “No talking shop” dominates. Then there is the spillover model in which one assumes that both spheres of life can influence each other. A third model is the one of compensation that suggests that what one lacks at work is compensated in private life and vice versa. For example, if you do a lot of routine work without too many challenges, one is inclined to become an overactive director of a football or social club where one can derive higher levels of self-actualization. And then the instrumental model in which the success of one sphere of life helps achievements in the other. In diffuse (=high context) cultures such as Southern Europe, you can use the status you gained at work to get an extra discount in the purchase of a car. Finally is the conflict model. Here one assumes that the ever increasing demands in all spheres of life forces people to make choices. So you are allowed to work very hard and in a very responsible role, as long as you know that dinner starts at 6pm every evening. 

All these models are implicitly a consequence of the so-called border theory of Clark. This assumes that people cross borders every day but in different ways. On the basis of this construct we will never find a creative reconciliation for this dilemma between work and our non-working life. In particular, and on levels of senior leadership, we can only find long term solutions when we depart from the imaginary line connecting “Life” and “Work”.

We believe we need a new sixth model that we call the integration model. Dilemmas of this nature can only be resolved if the work helps you to raise the quality of other life spheres and when non-work related activities can help you enrich work. Here again the dynamics between the culture of the family and the culture of the organization determines the nature of the dilemma and the way it is approached. In this context the typical Anglo-Saxon notion of Quality Time is a good example of reconciliation. The reconciliation of a series of precious moments is used in a European context to apply essential lessons of life while at work. It achieves the same reconciliation in the end, but the starting points are reversed. In many Asian and Latin cultures in which the family is central, we see a natural reconciliation of work and private life in their numerous family businesses.  The most intimate private problems are collectively discussed at work, and home is an important haven where the most crucial strategic businesses are resolved.

Jewish culture knows its “Sabbatical” which was not intended to allow for a rest period (but as in the original meaning of Sabbath)  as a way to enhance future research by new information and a period of reflection. In this we accept the notion of a vacation in Europe, so much ignored by North Americans. In a healthy society, vacation is used to accumulate the energy in a peaceful and relaxed private setting in order to increase productivity at work on your return. But colleagues can be a very good (by being distant) as a source for solving private problems. At Google they have even institutionalized this idea by giving people the freedom to work one day a week on private matters whilst being paid for it. In the long run, the best ideas came from those days.

 

3

(A: Business Processes) We need to supply standard products/services as defined from HQ

(D: Clients) We need to supply products/services that respond to local tastes and needs

 

It is striking how frequently we found this dilemma. Should we globalize or rather localize our approach? Is it better for our organization to mass-produce or to focus on specialized products? Good leaders in their trans-national organization are effective in finding resolutions whereby locally learned best practices are globalized. Thus, activities might be decentralized but the information about the activities is centralized.

Universalism, as practiced by McDonalds and Coca-Cola, fuels the search for the one best way of doing things and releases the synergy of a global corporation. Without this synergy, it is easy to lose the benefits of operating globally, so this is an important attribute.

At the same time, taken to extremes and not balanced with a healthy dose of particularism, it can lead to the “one best way” being pursued at the cost of flexibility to the particular circumstances and needs of the local situation. This might explain McDonalds’s difficulties in the late 90’s and early this century   This interesting bi-cultural set-up has allowed McDonalds to create freedom in a framework of strong values. It enables McDonalds to reconcile the dilemma of how to exploit the common franchise frameworks of the brands (universalize) and how much to leave to local market adaptation (particularize). While in Indonesia, The Netherlands and South Korea, McDonalds offers Big Macs and Happy Meals, in Austria its franchises also contain “McCafes,” which offer coffee blends for local tastes. Next to French Fries, it also offers rice in Indonesia. In Amsterdam, McDonalds offers the McKroket, a local Dutch snack. And in Seoul, the burger chain sells roast pork on a bun with a garlicky soy sauce.

But McDonalds is going beyond the theme that “all business is local”. McDonalds executives say they are responding to concerns of too much localization. McDonalds is in tune with its decentralized foreign operations where it is actively experimenting. From there it takes the best local practices and tries to use them in other areas of the world. It globalizes best local practices. And now even the design of McDonalds restaurants were initiated and tested in France and have become the standard according to which new restaurants are built, even in the US.

The result is a trans-national organization in which exceptions and rules modify the existing principles.

 

7

(B: Employees) We need to retain equal opportunities for all existing staff

(E: Society) We need to apply some positive discrimination to increase diversity

 

The commonest approach to fairness in the workplace is the “equal opportunity model” (EOM).  It is also the backbone to the Compliance Paradigm.  If you can show the courts that minorities were evaluated fairly, then you cannot be blamed if the white European males keep showing up in the executive suite.  Perhaps they are simply better! Possibly, but we do not think so.  The problem with the EOM is that it assumes that the rules of the game are gender and culture neutral and they almost never are.  Business is a game invented by men, played by men and ruled by men for their own convenience.

What we have yet to discover is what happens to women contestants when we give them the power to qualify the rules by which they are judged.  Why should a woman who has taken time out to raise her children be ‘taken off’ the career track? 

The underlying principle is that women and other minorities should help write rules to make the best of their unique talents.  There is a fairly predictable sequence to the mess organisations keeps getting into.  The norms of some of the workplaces allow sexual “kidding” and the lives of some women become impossible.  This is solvable by a critical mass of women setting up norms for themselves and insisting on respect as they define it.  It would be interesting to see how the norms of a project team with over 50% female membership differ from male-dominated teams and consider their relative performances.

David A. Thomas and Robin J. Ely[4], suggest three stages to achieve reconciliation. We first need compliance to positively discriminate so we can increase the diversity of the total available pool. But don’t stop there because if females are hired for the fact that you need the numbers, it will not serve the purpose. The second stage consists of using minorities for minorities, such as Japanese salesmen working for the Japanese markets and females trying to sell Tupperware to other females. The problem here is that it segments the organization since people can’t be moved around. The final most effective stage is where the two are reconciled by making diversity a business issue, such as linking it to innovation or more complex and high quality decision-making processes.  .

6

(B: Employees) We need to educate clients/customers with new solutions we can offer

(D: Clients) We need to keep the customer in focus ahead of our own personal preference

 

Another core quality of today’s effective leaders is the competence to integrate the feedback from the market and the technology developed in the organization, and vice versa. Again, it is not a competition between technology push or market pull. The modern leader knows that a push of technology will eventually lead to the ultimate niche market, that part of the market without customers. Conversely, a monolithic focus on the market will leave the leader at the mercy of its clients.

Our proposition is that values are not “added” by leaders, since only simple values “add up”. Leaders combine values: a fast and a safe car, good food yet easy to prepare. Nobody claims that combining values is easy, but it is possible. A computer that is able to make complex calculations can also be customer friendly. It is the more extended systems of values that will be the context in which international leadership will prove its excellence. Laurent Beaudoin, president of Bombardier, skillfully reconciled his dilemma in this arena of inner- and outer-direction.

Evidence suggests that the reconciliation of this dilemma accounted for much of the success of Bombardier. An acquisition strategy is an advanced form of inner-direction with powerful motives, steered from within. Beaudoin has created a company that looked for the rare and valuable.  Bombardier was always looking to find this ability coupled with its opposite, the readiness to understand, acknowledge and respond to the value-creating capacity of another system outside yourself.

Laurent Beaudoin used humility, listening and patience to learn about the companies Bombardier acquired. He reconciled the inner-directed strategy of bold new acquisitions with the outer-directed policy of respecting the integrity of acquired companies. He had to let companies he acquired share their dreams, so he could understand what was possible and of how much they were capable.

The resolution of these contrasting abilities, hitting the acquisition trail and studying respectfully what you acquire, is the way of The Acquiring Scholar.

Summary

So our argument posits as follows: In order to become a sustainable success as an organisation, the dilemmas between the various stakeholders need to be reconciled. It is the Servant Leader that has the capability to do so. Since essentially innovation could be defined as combining values that are not easily joined essentially this process is created by and leads to innovation. It is the innovative capability of organizations, from process to product, from R&D to HR that will make an organization sustainable. And it is far more than just Corporate Social Responsibility.

 This article was first published in Developing Leaders, Issue 3.




 
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