Leading in a global environment
2010 Best Companies for Leadership
June 21, 2011
Erin Lap and Rob Stolk
Agenda
1
2010 survey findings: facts/figures
2
The changing environment
3
Globalization and collaboration
© 2010 Hay Group. All rights reserved
2
01
2010 survey findings:
facts/figures
The study results apply to all organizations
Regional distribution
Region
Revenue distribution
Per cent
Annual revenue in US$
Per cent
Europe/Middle East/Africa
27.5
Under 500 million
32.0
North America
26.6
501 million to 1 billion
13.5
South America
23.7
1 billion to 5 billion
16.4
Asia
19.7
6 billion to 10 billion
6.6
Pacific
2.6
Total
100.0
Source: 2010 Best Companies for Leadership study
Over 10 billion
Total
31.5
100.0
Source: 2010 Best Companies for Leadership study
3,769 individuals participated in the study
© 2010 Hay Group. All rights reserved
4
2010 Top 20 Best Companies for
Leadership
World Wide
1
General Electric
11
ABB Ltd
2
Procter & Gamble
12
Microsoft
3
Intel Corporation
13
PepsiCo
4
Siemens
14
Goldman Sachs
5
Banco Santander
15
Hewlett-Packard
6
The Coca-Cola Company
16
Unilever
7
McDonald’s Corporation
17
Cisco Systems
8
Accenture
18
FedEx
9
Walmart
19
Pfizer Inc
Southwest Airlines
20
BASF
10
© 2010 Hay Group. All rights reserved
5
The best
companies
for leadership
outperform others
over the long run
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6
Top 20 produce better shareholder
returns than S&P 500
Top 20 vs S&P 500
20
15
14.42
13.84
Per cent
10
6.17
Top 20
5
S&P 500
1.27
0
(0.17)
(2.17)
(5.0)
(0.76)
(6.77)
(10.0)
1 year total return
3 year total return
5 year total return 10 year total return
Source: S&P Compustat data as of 7/30/2010
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7
Best Companies for Leadership
create better leaders
100
100
100
Per cent of respondents
100
90
80
73
69
70
60
50
42
Top 20
All others
40
30
20
10
0
Leadership development
All employees have the
There are a sufficient
programs enable employees opportunity to develop and
number of internal
to deliver on
practice the capabilities
candidates ready to assume
goals/strategies
needed to lead others
open leadership positions
Source: Hay Group 2010 Best Companies for Leadership study
© 2010 Hay Group. All rights reserved
8
Best companies for leaders focus

Collaboration
Diversity
Sustainability

Leadership
Practices – systems
Programs
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9
02
The changing environment
Innovation,
efficiency and
emerging markets
will pave the way
for future growth
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11
Increasing challenges and
opportunities for organizations
Globalization

Shift in the global economy

Need to operate in global markets with local anchoring

Leading virtual teams from different cultures
Operating in a flatter, more matrixed environment

Managing across functions and geographies without authority

Increased use of technology
Driving innovation while reducing costs

Collaborating/partnering with outside constituents

Focusing on initiatives that will provide the greatest value
© 2010 Hay Group. All rights reserved
12
Increasing challenges and
opportunities for organizations
New trends and demographic changes

China and India will contribute an increasingly significant proportion of global talent

Women make up over half of the global educated workforce

Key leadership skills will be lost from the workplace as boomers exit the workforce

There is a growing number of inexperienced young managers, who need to assume
senior leadership roles without the requisite leadership skills, particularly the case in
emerging economies

Employees expect more from organizations

Purpose driven leadership – more than just generating profits

Work/life balance while meeting the needs of the organization
© 2010 Hay Group. All rights reserved
13
Future leaders have to inspire, mobilize a diverse workforce
to innovate and grow
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14
What organizations value most in leaders
Global top 20 vs all others
Strategic thinking
52
Execution
60
35
Ethics
45
19
Inspiring leadership
40
28
Technical competence/expertise
26
30
Decision making
Teamwork
20
Capacity to learn
20
7
Social responsibility
3
0
60
Top 20
All others
35
35
32
10
10
20
30
40
50
60
70
80
90
100
Per cent of respondents
Source: Hay Group 2010 Best Companies for Leadership study
© 2010 Hay Group. All rights reserved
15
03
Globalization and collaboration
How BCL drive collaboration

Everyone, at all levels, has to lead and to bring value

Actively seek out and disseminate innovative ideas,
successful practices

Reward structures that encourage collaboration
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17
How the best companies prepare more
effective collaborative leaders
Best Companies for Leadership are more proactive and focused in
preparing employees to be effective in a global matrix
100
100
95
100
Per cent of respondents
90
90
80
80
66
70
60
50
43
48
40
Top 20
All others
30
20
10
0
Programs designed to
develop leaders who can
creatively bring together
resources across the
organization
Use collaborative
technologies to
encourage information
sharing across business
units
Expat program that deals Company recruits cultural
with blending expats with
minorities
the local culture
Source: Hay Group 2010 Best Companies for Leadership study
© 2010 Hay Group. All rights reserved
18
How to make
leaders more
effective in a
global
environment
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19
BCL: gain value from diversity

Global views and direction applied differently to meet local
needs

Hire and develop potentials from regions and
constituencies, that they see as future markets

Programs and practices to help employees manage
competing demands work-life
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20
Diversity
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21
BCL: sustainable work force
Changing values new generation

Contribute to society

Energy efficiency

Social responsibility
 Combine initiatives with development
 Flexible career paths
 Purpose driven leadership
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22
Responsible practices
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23
Focus in the attraction and
development of future leaders
Global top 20 vs all others
Targeted leadership
training and development
100
73
Stretch assignments
90
64
International opportunities
55
31
35
35
Mentoring programs
15
Fast track promotions
15
14
10
Early long-term incentive opportunities
Higher pay and bonus opportunities
0
10
20
Top 20
All others
27
29
30
40
50
60
70
80
90
100
Per cent of respondents
Source: Hay Group 2010 Best Companies for Leadership study
© 2010 Hay Group. All rights reserved
24
The future leaders
of organizations are
looking for a job that
allows one to live a
meaningful life and
have a life
© 2010 Hay Group. All rights reserved
25
Per cent of respondents
Best Companies for Leadership
continue to adapt to employees needs
80
70
60
100
95
100
90
92
84
61
50
40
30
20
60
Top 20
All others
43
32
10
0
Introduced an on It is easy for people to Leaders are change
boarding program to
work from home
agents towards
help new parents
higher enviromental
return to the
standards
workplace
Company pays male
and female
employees the same
rate
Source: Hay Group 2010 Best Companies for Leadership study
© 2010 Hay Group. All rights reserved
26
Leadership must keep pace with
organizational change

Competencies have been adapted to meet future
challenges

Focus on preparing leaders to manage a global, divers
workforce

Leadership development is a priority at the highest level in
the organisation

Leadership development co-creation between top leaders
and professionals
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27