ECONOMY

DEVELOPING LEADERS IN THE GLOBAL KNOWLEDGE ECONOMY

The globalization of markets, the increasing pace of change, and the expanding use of information and communication technologies are transforming the business environment drastically. In order to compete effectively in this environment, business leaders need to understand the nature of the challenges and opportunities that lie ahead, and respond to them in an intelligent manner. This means rethinking their strategy and processes, reconfiguring their organizational structure, redefining their personnel or employees’ roles and skills required, and reassessing their technology base. Developing a new leadership style that combines charisma with the ability for execution, emotional intelligence with the ability to cope with complexity, ethics and sense of purpose with flexibility and rapid action, integrity and rigor with entrepreneurial spirit and knowledge sharing, is critical for any organization that has the ambition to lead and not only follow change. The key leadership directives Research on what are the key leadership directives today is abundant. Here is a selection of the insights provided: Demonstrate Emotional Intelligence. According to Goleman, et.al. [2], emotional intelligence accounts for 85% of what distinguishes the stars in top leadership positions from low performers. It includes self-awareness, self-management, social awareness, and relationship management. «Resonant» leaders know their limitations and strengths, control their emotions, demonstrate empathy towards others, and have the ability to communicate clearly and convincingly, manage conflicts, build strong personal bonds, and motivate employees and customers. Handle Complexity. The business environment is continuously changing and becoming increasingly complex, hence decision-making requires the ability to handle complexity and change. It is important that the leader understands the issues, the risks and their implications «down the road», in order to evaluate alternatives and come up with a sound strategy that achieves the corporate objectives. Personalize and Instill Innovation, Flexibility, and Entrepreneurial Spirit. Innovation in both tangibles and intangibles has become a major task for every organizational member, and of course, for the leader. Strategy formulation should be considered as a continuous and dynamic process; giving the opportunity to reformulate business plans at appropriate and flexible intervals [1], adapt core businesses to changing markets, as well as building new businesses instead of focusing on non-sustainable core areas [3]. Promote Knowledge-Sharing. If knowledge is an asset, then how can it be turned into competitive advantage? The leader’s role is important in promoting the sharing of knowledge by cultivating an open culture, developing systems and putting in place appropriate HR systems and policies. Rely on mechanisms of connectivity and collaboration in order to remain in the frontline of innovation, flexibility and market penetration, as well as exerting influence without authority. In a competitive environment, and especially in periods of falling markets, the «lateral» leader [4] knows how to manage alliances and collaborations – both vertical and horizontal – and how to cultivate and leverage these connections, externally but also internally. Develop a Frontline Culture. With highly demanding customers and suppliers, there are no more closed and opaque hierarchies. What needs to be rooted out in organizations is irresponsibility, and laissez-faire attitudes. Employees «in the frontline» will not forget who make their living – the customers do. They will not misunderstand what the customers want – immediate correction will take place through the direct interaction with the customers [1]. Measure performance; constantly raise the bar for yourself. In today’s hyper-competitive environment, there is no room for mediocrity and market followers duplicating the pioneers. The leader should be the first to raise the expectations bar. Management education challenges These directives pose a great challenge in management education. Based on a European study [5] involving more than 300 managers in seven European countries (the UK, France, Spain, Italy, Germany, the Netherlands, Denmark and Greece), the cornerstones that should characterize management education in today’s economy are: Emphasis on Analytical skills and Decision-Making. Develop the ability to grasp context, analyze/structure complex problems, use data, evaluate alternatives and risks, handle complexity, and ground decisions in profound knowledge. Develop Human Skills. Through exercises, team assignments, leadership role-playing, and personal coaching develop self-awareness, self-management, negotiation and communication. Cultivate Entrepreneurial Culture and Skills. Through a combination of activities such as courses, case studies, mentoring, and a personal venture development exercise, build up the skills and cultivate the culture required in today’s entrepreneurial economy. Provide Technological Awareness. Especially in technologically driven areas, such as banking, telecoms or supply chain management, technological awareness is critical not only for productivity improvement, but also for strategy formulation and entrepreneurial development. Provide Action Training. No classroom education can be complete without practical training. In fact, it has been reported that up to an 80% of a leader’s development occurs on the job [6]. It is important, therefore, to develop activities that provide on-the-job training and skills development. Implementing a new program At AUEB, we implemented the above cornerstones in an innovative management program, the Decision Sciences International MBA program (www.i-mba.aueb.gr), which has been running successfully for the last six years. This English-speaking program, the largest graduate program of AUEB, is characterized by a rich curriculum of more than 60 courses, a personal development program for every participant, a field-consulting project at the end of the coursework, and extensive corporate and academic cooperation programs, while it offers the possibility of specialization in a number of key management areas. Most of all, it stresses the need for continuous self-development, as leading is a journey, and leadership skills can dynamically change. The program has managed to attract international attention, top students (GMAT ranking eighth in Europe), as well as leading companies and sponsors. References 1. Prastacos, G., Soderquist, E., Spanos Y. and Van Wassenhove, L. «Managing Change in the New Competitive Landscape», European Management Journal, January 2002. 2. Goleman, Boyatzis and McKee, «Primal Leadership: The Hidden Driver of Great Performance», Harvard Business Review, December 2001. 3. Dye, R., Hulme, R. and Roxburgh, C., «The Basics of Corporate Performance», The McKinsey Quarterly, no. 3, 2003. 4. Johnson, L., «Exerting Influence without Authority», Harvard Management Update (HMU), December 2003 5. Prastacos, G., MACIS – Final Report, AUEB, 1998. 6. Gary, L., «Pulling Yourself Up through the Ranks», Harvard Management Update, October 2003. (1) Athens University of Economics and Business