Welcome to the
Flight Deck
A Global C-Suite Study The Human Dimension of
Globalizing Mid-Caps - as Seen by their Leaders
Full Report
Welcome to the Flight Deck »
Introduction
This study is a deep exploration of the world of
globalizing mid-caps. It draws upon 83 interviews
conducted exclusively face-to-face with C-suite
leaders from every continent. Lasting up to two
hours, the interviews were conducted by Amrop
Partners over the Summer and Fall of 2013, using
a structured framework designed by researchers
at IMD, the top-ranked global business school
based in Lausanne, Switzerland.
Our focus: the human element:
− Talent Management at Top Levels
− Culture and its Implications for Performance
− Board Governance
This is your personal invitation to enter the Flight
Deck of today’s globalizing mid-caps - a place
beyond public declarations or annual reports - to
hear what C-suite leaders are confidentially, and
often spontaneously, revealing - in their own
words.
Welcome On Board.
Welcome to the Flight Deck »
On behalf of IMD
Foreword Maury Peiperl
Professor of Leadership and
Strategic Change,
IMD
@MauryPeiperl
Welcome to the Flight Deck »
On behalf of the Amrop Partnership
Foreword Ulrich Dade
Chairman of the
Executive Board,
The Amrop Partnership
Welcome to the Flight Deck »
Welcome to the Flight Deck: Headlines
1 Successful mid-caps take an ambitious, long-term view.
2 79% were studying the successes (and failures) of other companies:
3 If many mid-caps already have a successful international business, only 9% felt truly ready
for globalization.
4 Managerial and cultural capacity for globalization are top-ranking, critical issues.
5 Three main factors are positioning successful mid-caps to win the war for customers and
talent.
6 Successful mid-caps strike a compelling balance between local autonomy and corporate
influence.
7 Globalizing mid-caps have powerful employer branding to attract leadership talent:
8 Many mid-caps are ideally positioned to be innovation and entrepreneurship champions.
9 Mid-cap Boards are tailoring themselves for globalization.
Welcome to the Flight Deck »
Contents
View From 30.000 Feet
1 Introducing the High-flying Mid-Caps 9
2 Global Trade Winds
18
3 Key On-Board Conditions for a Successful Flight
27
4 Piloting Skills: Agility and Consistency
57
Closer to the Terrain
5 The Flight to Leadership
63
6 Becoming the Carrier of the Future: A Culture of Innovation
69
7 The Flight Controllers: Board Governance
88
8 What’s Next? 115
9 Appendix
126
Welcome to the Flight Deck »
Introducing the High-Flying Mid-Caps
Capturing the notion of a ‘globalizing mid-cap’ 1
Welcome to the Flight Deck »
Part One
View From 30,000 Feet
“From the very beginning we were
open to listening. We started this
company ‘from scratch’ with no
know-how, with only financial
shareholders. Our big competitors
ignored us then – for which we can
only be grateful now.” - CEO, Central Europe
Welcome to the Flight Deck »
1
Introducing the High-Flying
Mid-Caps
We find out the personal reflections behind
carefully crafted (and often undistinctive) press
interviews, annual reports, online declarations
of mission or vision.
We discover a winner mentality, with stretch
targets, globalization high on the agenda,
determination and a sense of no limits.
We found that 79% were studying the
successes of other companies. 21% had no role
model, some because they felt unique.
Welcome to the Flight Deck »
Introducing the High-
Flying Mid-Caps
As an introduction to our discussion, we
wanted to understand the personal
perspectives of our C-suite participants
regarding their organizational purpose. What
lies behind carefully crafted press interviews,
annual reports, or online declarations of
mission or vision?
Real Ambitions
“We are striving to
change the rules of the
game in our sector,
doing new things, in a
different way,
innovating, being
ground-breakers. We
have to do things that
have never been done
before.” - CEO, NSW Europe
1
Welcome to the Flight Deck »
“Our 2020 vision is
ambitious and we are
convinced that we can
achieve it. There are two
huge players but we do
not feel small, we are
winning step by step and
will continue to do so.” - Director, South America
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Admired Organizations
79% were studying the success (or failures) of one or
more companies
Mid-caps were primarily seeking lessons related to
growth and globalization
“Schlumberger switched
from a centrally-led to a
regionally-led
organization. With this
approach they have
been able to enter into
local oil companies (e.g.
Saudi Arabia is not run
out of the New York
office). Finally
[Schlumberger] have the
guts to experiment with
new business models.” - CEO, Northern Europe
Welcome to the Flight Deck »
“In former times, GEA
was a role model, and is
still in some areas,
especially concerning the
integration of acquired
companies.” - Board Member, Northern Europe
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55% were examining global market leaders
further along the globalization journey
16% are examining regional champions or peers for lessons closer to home
“Over the last 9 months
we have been increasingly
spending time in Silicon
Valley and other hotspots.
We are trying to bridge the
gap between a large
company and the desire to
function like a start up.” - CEO, Asia
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21% did not name a role model
“We’re unique in that
we grew out of a utility
mindset where the
culture is home-grown,
hard working, straight up
and honest, trying to
figure it out.” - Global Head of HR, North America
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1
Introducing the
high-flying
mid-caps
Summary
Welcome to the Flight Deck »
1
Introducing the
high-flying
mid-caps
Leading
Questions
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4
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2
Global Trade Winds
We discovered that only 9% of globalizing mid-
caps felt ready for globalization and that some
had fears of exposure in moving beyond
regional leadership to global competitiveness.
We learned about concerns regarding
managerial capacity, and cultural readiness for
globalization.
Welcome to the Flight Deck »
Global Trade Winds We asked our participants to what
extent they felt ready for
globalization. If many already had a
successful international business, only
9% considered themselves truly
ready. What were their hopes and
fears?
Some Mid-Caps Have
Fears of Exposure
2 “The biggest hope is that
globalization will give
you an opportunity to
grow much faster and
bigger. The biggest
worry - we were
shielded without
globalization. With this
you are exposed to a
much bigger canvas.”
- Vice Chairman, Asia
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Blips on the Radar – Critical Issues
1 – Managerial Capacity for Globalization is Insufficient
“Another fear is a
human resources risk. In
the context of rapid
growth we need to not
only retain but attract
new specialists and we
are the hunting ground.” - CEO, Central Europe
Welcome to the Flight Deck »
“The negative part is
that, if we lose our
strong position in our
home region, then we
will also lose the war of
attracting top talent and
be on a downward
slope. We need to keep
and expand these
positions.” - CEO, Nordics
Welcome to the Flight Deck »
2 - Anxieties Surround Change Readiness
“The biggest fear is that
you might not be able to
do it and achieve it in
the given timeframe. The
other is always of the
unknown something that
is lurking round the
corner, and there are a
lot of inherent risks in
the global business
where it grows rapidly,
uncontrollably.” - CEO, Asia
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“If you are constantly
thinking of
crashing, you will.” - CEO, Asia
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2
Global Trade Winds
Summary
Welcome to the Flight Deck »
2
Global Trade Winds
Leading
Questions
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3
Key On-Board Conditions for a
Successful Flight
Across the dimensions explored by our study,
three key characteristics emerge – freedom,
connectivity and C-suite Stewardship. Moreover,
these factors are by no means limited to the
smaller-sized companies.
Welcome to the Flight Deck »
Key On-Board Conditions for a Successful FlightThree main factors appear to be positioning successful mid-caps to win the war for
customers and talent: freedom, connectivity and C-suite stewardship.
1
3
Welcome to the Flight Deck »
Freedom
Boards are Free – and Give (or Reconfirm) Freedom to
Managers and their Operating Teams
“The supervision by
Supervisory Board
Members should stay
that way, because the
heart and the passion
needs to be within the
company. If the passion
is with the President of
the Supervisory Board
then he should run the
company.” - CEO, Northern Europe
3.1
Welcome to the Flight Deck »
“There is a Board
Chairman who believes
in me and my decisions.
He has earned my
appreciation and I have
earned his trust, where
at the end we both have
the company’s wellbeing
as a priority.” - CEO, Central America
Welcome to the Flight Deck »
“The owners have made
a conscious and unforced
decision to step back
from the operative daily
business and have given
room and power to the
Managing Director level.” - Chairman, Northern Europe
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Talent is Free, to Act, Fail and Evolve
“We cascade
responsibility down into
the organization - we
can act and react fast. It
also means we can get
80% of the work done
without having to go
through endless decision
trees. We prefer to make
a mistake every now
and then rather than
nothing happening. - CEO, Northern Europe
Welcome to the Flight Deck »
“We say YOU are the
manager and you have
to take over innovative
systems. I am ready not
to penalize the ones
who try, and to
encourage the ones who
test new models.” - CEO, Central Europe
Welcome to the Flight Deck »
“This sense of
empowerment, space,
freedom, achieving
something inspires
people to think
innovatively at their own
workplace. We make
people think as if they
are entrepreneurs.” - CEO, Asia
Welcome to the Flight Deck »
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3.1
Freedom
Summary
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3.1
Freedom
Leading
Questions
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Connectivity
Boards are Connected to Internal Information,
External Views and Growth
“Board Meetings are
open to all executives
of the company, who
participate in
discussions related to
their area of
responsibility.” - CEO, Southern Europe
3.2
Welcome to the Flight Deck »
“We moved from a strategy
of survival, to execution, to
growth, and then strategic
growth. I have personally
seen all four transitions.” - Managing Director, Asia
Welcome to the Flight Deck »
“Being private equity
owned does not help all
the time, but they
brought great Board
Members. They guided
the development of
the Board.” - President, Asia
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Talent is connected to new ideas and perspectives
“In the last three to five
years, we have pursued
our global aspirations.
The ability to assimilate
world-class learning was
key, from consultants,
from people who have
built other good
international airports,
who have forayed into
power generation
internationally, or coal
mines. It’s a whole
process of learning and
[we need to] be humble
about it - and enact.” - Chairman, Asia
Welcome to the Flight Deck »
“We do not look at
running our company
with best practices. Best
practices are common
practices and that may
not be what we need.” - HR Vice President, North America
Welcome to the Flight Deck »
“The management team
sits together every day.
This is been the system
for last 12 years since I
came in. There we
discuss all issues across
the table” - Managing Director, Asia
Welcome to the Flight Deck »
“There is less growth [in
Europe] but for us it is a
school, this is where we
send people to learn the
most mature market
business techniques.” - General Manager, Northern Europe
Welcome to the Flight Deck »
“We moved the best
cross-functional talent
and put them in different
locations. Within nine
months they came up
with an ERP package,
implemented with a big
bang approach and it
went so smoothly that
we got awards
from SAP.” - Chairman, Asia
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“It’s not about creating
think tanks and bringing
people together and
saying: ‘Oh, I need
something from you.’
That’s I think the wrong
word. You must go down
to the shop floor and be
as open as possible and
tell people: ‘Listen, if you
have a new idea we can
discuss it.’” - CEO, Northern Europe
Welcome to the Flight Deck »
“Our engineers have to
be close with major
customers and have to
develop a sense of what
customers really
appreciate. Our
customers drive our
innovations.” - Chairman, Northern Europe
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3.2
Connectivity
Summary
Welcome to the Flight Deck »
3.2
Connectivity
Leading
Questions
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C-Suite Stewardship
Many Mid-cap CEOs and Chairs Have a Distinctly
‘Hands-on’ Style
“One of my main
activities is meeting
customers, because the
customers grow the
business. I need to
know the pulse of the
market. I need to know
what’s going on.” - CEO, Asia Pacific
3.3
Welcome to the Flight Deck »
“When I visit factories, I
ask them: ”what
innovation have you
done that makes you
proud?” When you ask a
question like that, I think
people understand the
importance of innovation
and many times they
have presentations on
the shop floors to show
me what they have
done. I ask supply chain
people, I ask everybody:
“What innovation have
you done? What have
you done differently?”” - CEO, Asia
Welcome to the Flight Deck »
“I look to sell ideas and
create passion through
direct communication,
always face to face. This
is what I learned in the
process from the
beginning, working with
my father.” - Vice President, South America
Welcome to the Flight Deck »
“As our Chairman is known
to take so much interest in
HR, he personally
supervises all these
processes.” - Managing Director, Northern Europe
Welcome to the Flight Deck »
“We could define it as
paternalism: a long-term
relationship, looking after
our people. In addition,
the long delegation and
empowerment, this
together creates
maximal loyalty. We
never fire anybody.” - Chairman, Southern Europe
Welcome to the Flight Deck »
3.3
C-suite
Stewardship
Summary
Welcome to the Flight Deck »
3.3
C-suite
Stewardship
Leading
Questions
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Welcome to the Flight Deck »
4
Piloting Skills –
Agility and Consistency
Of all the tensions facing mid-cap leaders, the
tension between agility and consistency is the
most frequently encountered. In this chapter we
discover how mid-caps are finding a compelling
balance between local autonomy and corporate
influence. To reconcile agility and consistency,
many are centralizing processes (e.g. HR, ICT)
and decentralizing decisions – particularly in
market-facing areas.
Welcome to the Flight Deck »
Piloting Skills –
Agility and Consistency Global operations and production are a prime concern for mid-cap
leaders. We will now examine the meeting point between culture
and operations – the tension between agility and consistency. How
are mid-caps organizing themselves to be coherent and predictable,
without compromising responsiveness on the ground?
4
Welcome to the Flight Deck »
“We have centralized
policy making, CSR, HSE,
and we have built
resources to have the
same standards all
around the world…We
encourage local
empowerment and give
decisionmaking power to
each subsidiary.” - CEO, Nordics
Welcome to the Flight Deck »
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4
Piloting Skills:
Agility and
Consistency
Leading
Questions
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4
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Welcome to the Flight Deck »
Part Two A closer look at the terrain
5
The Flight to
Leadership
6
Becoming the
Carrier of the
Future: a Culture
of Innovation
7
The Flight
Controllers:
Board Governance
Welcome to the Flight Deck »
We discover that the tension between agility and consistency is the
5
The Flight to Leadership
Bright talent would be well advised to make
globalizing mid-caps a primary career choice.
We have seen that they can expect
opportunities that take them out of their
comfort zone, give them the freedom to swim,
and catch the keen eye of top management.
In this chapter, we will discover that they are
likely to be the primary talent pool for
leadership succession. As they rise in technical
or managerial excellence, they may face strong
external challengers.
Until then, top talent can enjoy a
diverse environment, enriched by
probable transfer, as we have
seen, between functions,
divisions and geographies.
Financial incentives will be
competitive, but culture will be
an equally strong motivator, as
will top-class formal learning
programs.
Welcome to the Flight Deck »
The Flight to Leadership In Part One we saw ways in which current mid-cap
leaders are assuring close stewardship of customers
and innovation and engaging in the live and interactive
communication of mission. We witnessed their keen interest in
talent. We experienced, too, ways of talent surfacing and
development through cultural features - freedom and connectivity.
Beyond standard HR strategy and practice, how are globalizing mid-caps
assuring the next generation of leaders?
Go Inside. Internal Talent Knows the Company and
Wants to Get Ahead
5
Welcome to the Flight Deck »
“Growth and
globalization provide
opportunities to surface
talent automatically.
There are fair methods to
reconfirm that this
person is a talent. High
potentials easily surface.
There are some just
below them who need
to be egged on. Get
them out of the shadow.
But the ones in deep
shadow? No no.” - CEO, Asia
Welcome to the Flight Deck »
Go Outside for Technical or Sector-
specific Know-how, and, Where
Necessary, Senior Positions
“It’s quite rare but in the
technical functions of the
research centres, for
project management, we
look for experienced
people, who have
worked for Vinci, Véolia,
or in very technical
professions. The Tax
Director had been a Tax
Director elsewhere but
otherwise we keep a lot
of our young and bright
recruits.” - General Manager,
Northern Europe
Welcome to the Flight Deck »
Attractive Options, a Distinctive
Employer Brand
“We have attractive
brands, a good
reputation and we give
people responsibilities
quite early in their
careers. We try to give
young and talented
people the chance and
give them
opportunities.” - CEO, Nordics
Welcome to the Flight Deck »
Diversity Blends Skills and Culture,
and is Evolving
“Fortunately more and
more women are going
for technical studies,
although our country is
still lagging behind
Southern countries, such
as Brazil.” - CEO, Northern Europe
Welcome to the Flight Deck »
“At the end of 2012,
approximately 30% of
the Directors reporting to
the Board were females,
while the percentage of
women in a middle
management position
was 35%.” - CEO, Central Europe
Welcome to the Flight Deck »
“This thing about
leadership to be unified,
to do the same things,
frightens me a little bit.” - CEO, Northern Europe
Welcome to the Flight Deck »
“We would not like to
keep a 90%-capability
person just because of
gender diversity. We
have close to 15-20%
female employees, but
that is also not because
an employee is a
woman, it is just that she
was the most suitable
for that role. We have
now started to think
about affirmative actions,
but until now it was
mainly capability-driven.” - Managing Director, Asia
Welcome to the Flight Deck »
Growth and Globalization – and
Internal Talent Sourcing – are Raising
the Bar on Formal Education and
Training
“For executive
development we have a
number of programs,
including collaboration
with [__] University. We
offer courses four to six
times per year and this is
the highest education
we deliver. “ - CEO, Nordics
Welcome to the Flight Deck »
Money and Growth Carry Motivational Weight
Welcome to the Flight Deck »
“The combination of
motivation system and
corporate culture, ‘being
a member of the
winning team’ leads to a
high retention rate – we
are not losing our
key people.” - CEO, Nordics
Welcome to the Flight Deck »
What Mid-Caps Still Have to Learn About
Leadership Talent Management
“If you tell somebody
within the 28-35 age
range “you are a top
talent,” some of them
can’t deal with it,
because they think they
are so important. They
then suffer from burnout
syndrome because they
get too excited and think
they must immediately
be the CEO.” - CEO, Nordics
Welcome to the Flight Deck »
“In the beginning there
was resistance from the
marketing guys so we
had better make sure we
put the top notch people
in there and prove it, so
that we could say that
you don’t need to be a
marketing guy to be a
front liner, a finance guy
can do that.” - Chairman, Asia Pacific
Welcome to the Flight Deck »
5
The Flight to
Leadership
Summary
Welcome to the Flight Deck »
5
The Flight to
Leadership
Leading
Questions
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6
Becoming the Carrier of
Choice: a Culture of
Innovation
Mid-caps are ideally positioned to be innovation
and entrepreneurship champions.
In this chapter, we discover that the innovation
spectrum is wide, moving from product, to
process, involving employees beyond the ‘usual
suspects’ or dedicated divisions, to the most
operational levels
The freedom to experiment and
fail as we have seen is a cultural
feature, with top managers
taking a personal interest in
employee initiatives. In this
chapter we examine underlying
systems and motivational
mechanisms.
While creativity is flourishing,
resources may be lower than
those of larger rivals. We will see
how mid-caps prioritize new
ideas.
We also ask, could mid-caps risk
losing innovative vitality with
growth and globalization?
Welcome to the Flight Deck »
Culture - the Story So Far
Connectivity
Freedom
C-suite stewardship
6
Welcome to the Flight Deck »
Innovation and Entrepreneurship Are
Closely Associated Concepts for Several
Mid-Cap Leaders
Innovation is More Than an Attitude –
it is an Imperative
“The resources obtained
by going public allowed
us to invest in
innovation and to
strategically develop
from a manufacturer into
a retail chain.” - CEO, South America
Welcome to the Flight Deck »
“Every year we target
around three hundred
new SMEs - new
entrepreneurs or new
members that need help
to grow… We help them
to do micro-financing to
support themselves. The
impact is not only
improvement on the
wealth of the people but
also, surprisingly, we
could unite the migrants
from Java with the local
people.” - President, Asia Pacific
Welcome to the Flight Deck »
“We have installed a
yearly engineering
meeting where our top
300 managers are
invited to listen to our
top engineers and get
educated on the best
innovations. The best
will be awarded with an
extra R&D budget of
€700,000, the second
with €500,000 and the
third with €300,000.” - CEO, Northern Europe
Extrinsic Motivation backs
Intrinsic Motivation
3
Welcome to the Flight Deck »
Focus is Essential in Challenging
Environments – and Mid-Caps are
Finding Ways
“It has been working the
pool of talent with a mix
of madness, conviction,
survival instinct, and
commitment to the
project.” - CEO, Asia
Welcome to the Flight Deck »
Some Mid-Caps Are Experiencing
‘Growing Pains’ “The promoter and
children are very
entrepreneurial. Below
that at operating level
CEO's [and] business
leaders, we fall short.” - CEO, Asia
Welcome to the Flight Deck »
“It is more and more
difficult to be an
entrepreneur. Of course
we can use the word
‘entrepreneur’ but with
two controls a day, it is
impossible. It becomes a
fight when you are
bigger. We are listed, we
have a lot of internal
control. Entrepreneurship
is not so natural any
more.” - CEO, Northern Europe
Mid-caps Risk Losing Innovative Vitality
as they Grow and Globalize
Welcome to the Flight Deck »
“We created an
innovation committee,
chaired by a specialist
brought in from the USA,
whose job was to
broaden our view on
innovation. An example
of this is the creation of
a Strategic Planning and
New Businesses area,
with its own Director. - CEO, South America
Welcome to the Flight Deck »
Finally, Innovation is Not a
Universal Imperative
“In this industry it’s a bit
difficult to be classical
entrepreneur in really
making revolutions. I
would more call it
innovation driven. So it is
in our DNA to be
innovation driven.” - CEO, Northern Europe
Welcome to the Flight Deck »
6
Becoming the
Carrier of the
Future:
a Culture of
Innovation
Summary
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Welcome to the Flight Deck »
6
Becoming the
Carrier of the
Future: a Culture of
Innovation
Leading
Questions
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Welcome to the Flight Deck »
7
The Flight Controllers:
Board Governance
So far we have seen that share- and
stakeholders are giving freedom to mid-cap
Boards to function independently. CEO’s are
trusted by Boards to perform. Operations in turn
are given room for maneuver. Boards are
structurally connected to internal information, to
external views and to growth and globalization.
In this chapter, we see how the Board agenda is
topped by an interplay between performance
and finance, investments and talent.
We will learn the value placed
upon the constructive
confrontation of independent
Board Members, how Boards are
seeking greater diversity to
reflect globalization, and the
challenge for Boards to be
representative, yet lean.
Welcome to the Flight Deck »
Board Governance – the Story So Far
Freedom
−
−
−
Connectivity
7
Welcome to the Flight Deck »
Boards are Performing a Balancing Act
CEO’s and senior managers may be free, but they are
Still Supported by Boards
“It is related to your
personal development.
In the first year you are
still pretty innocent and
open about everything
that needs to happen,
but once you have had a
number of meetings
with the Supervisory
Board, the Shareholders,
Founders, and so on, you
get ‘shaped’. And
secondly I am aware of
my impact on the
organization and more at
ease with that.” - CEO, Northern Europe
Welcome to the Flight Deck »
Trust in Senior Executives is Balanced With Risk
Management. The CFO is Crucial.
“Our Executive Board and
especially the CFO over
the last ten years have
built a robust
governance/control
structure. We are praised
for our risk register, how
we separate
authorization and the
underlying systems. With
regard to global and local
we believe strongly in a
culture of autonomous
local/business decision-
making balanced with
solid risk management
from a governance
perspective.”
- CEO, Northern Europe
Welcome to the Flight Deck »
Strategizing and Management are Distinct,
Yet Connected
“The Board has moved to
a more strategic role and
is no longer so close to
operations and
operational reviews,
which I think is good. My
role is then more to
facilitate the strategic
discussion with
the Board.”
- CEO, Nordics
Welcome to the Flight Deck »
Strategic Bifocals
“The CEO's role is to
monitor quarter-on-
quarter performance. The
Board’s is more long
term. It's the strategic
direction, a decade down
the line, rather than
short term goals.”
- Vice Chairman, Asia
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Agenda Items – 4 Clear Priorities Emerge
Composition is Shifting in Line
With the Organization Diversity – Prioritizing Specialisms, Industries and Nationalities
“Over the last three
years the Board has
become more diverse in
terms of background and
agenda.”
- Board Member, Northern Europe
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Globalization is Creating Shifts In Composition.
“Each one of them had
to bring a competence at
the Board level which
would be suitable and
relevant for the Board
management, not only
the SMEs. Because five
of those will not add any
value compared what
one would have added -
if it was the right guy.”
- HR President, Asia
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Growth - and More Complex Processes –
Are Forcing Change
Board Composition Must Reflect Organizational
Composition – yet Remain Lean and Athletic.
“My successor had to
change the Board.
Because of the diversity
of strategies and the
split of central functions,
we did not have the
people to manage this.
And now it works.”
- CEO, Northern Europe
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“I did a lot in engaging
and leveraging the
Board. Board meetings
lasted a day and half –
six to eight meetings -
and a lot of additional
calls.”
- President, Asia
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Independent Members – More Than Box-Ticking
“The current composition
with a small EC is indeed
more effective. I always
use the rule of thumb of
eight direct reports as
the limit for having
constructive thought
exchange, interaction
and commitment,”
- CEO, Northern Europe
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Composition is Only the Start -
Consensus, Synergies and Alignment
Must Follow
Achieving Unity and Collaboration
“Sometimes people who
are inside might have
reasons for not
confronting issues head-
on, but I have also seen
Independent Directors
not taking sufficient
interest. That way you
will let things go the
way they are presented -
and it just becomes a
ritual you are going
through.”
- Managing Director, Asia
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From Diversity, to Complementarity
“[The Board has] the
right mix of the
organization’s gene -
one optimist, one
pessimist, one to be
cautious and one who
controls the numbers.”
- CEO, Northern Europe
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“The Board takes it very
seriously that their toes
are equally held to the
fire as Management’s,
which is why we’re
getting more questions
about process, risk,
governance etc.; they
have to demonstrate
that they are
independent from
management.”
- HR, North America
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“These independent
members guided the
development of the
Board; setting up a
compensation
committee and how to
run it. How to build
compensation reviews,
model compensation for
leaders. Governance
[also]- setting up audit
committee, risk
evaluation…”
- President, Asia
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Some Mid-Cap Boards Must Resolve
Lingering Problems
“According to the way
the Board has been
growing, there are Board
Members that are more
patrimonial.”
- CEO, South America
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Board Succession –
Many Routes to Everest
Board Succession is Rising as a Board Agenda Item
Some Boards Seek a Younger Demographic
We generally say that
each successful manager
should have at least two
to three nominated
successors. Maybe it’s
not there as of now but
the spirit is to have that.
- CEO, Asia
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Mid-caps May Well Go Inside First For Board
Succession – (But Not Exclusively)
Several Internal Board Successors are Already Orbiting the CEO or Chairman
“It is not unusual to
promote and observe
potential candidates for
the Board over a period
of ten years.”
- Board Member, Northern Europe
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“Since I couldn’t
overstaff, I employed
extremely agile and
relatively young people, I
call them my Swiss
Knives. They’re people
that I can assign to
anything. The more
complicated the
problem, the more they
enjoy themselves. I give
them a web and they
untangle themselves”
- General Manager, Northern Europe
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When an Internal Focus is Not Enough
A Few Mid-Caps Are Facing Challenges in Board Succession
“We’ve been able to
bring in leaders who are
entrepreneurial risk
takers – 25 of our 150
top managers are new.”
- Global HR Head, North America
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“Our presence in the
international market is
helping us in training
individuals for profit centre
roles now. We have
Bangladesh, South Africa,
Dubai with P&L roles. Our
structure allows many P&L
roles. It helps train CEOs.”
- Chairman, Asia
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7
The Flight Controllers –
Board Governance
Summary
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7
The Flight
Controllers:
Board
Governance
Leading
Questions
?
4
4
?
4
4
?
4
4
?
4
4
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What’s Next? Towards a Leadership profile and strategies for globalizing
mid-caps: the Amrop view.
Who are the mid-caps? 4 distinctive features emerge as key traits.
Interestingly, these are ‘geographically agnostic.’
Could globalizing mid-caps inhabit a ‘vitality zone’?
Preety Kumar Member of the
Executive Board,
The Amrop Partnership
8
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Implications and recommendations
What pitfalls could these positive mid-cap characteristics contain? What counter-strategies
are successful mid-caps finding? What leadership profiling and related initiatives do we
recommend?
1 - Successful mid-caps take an ambitious, long-term view.
An ambitious, long-term view
Strength Pitfall
Risk
What’s Next: Inspiring and visionary ambitions matched by managerial and cultural capacity.
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Organization design
must allow for
upscaling whilst
preserving the vital
DNA of
entrepreneurship
and connectivity.
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Preparing Boards for
globalization must
embrace not only
current realities and
resources, but
ambitions. A context
driven evaluation is
an essential first
step. Yet the results
may confront
embedded
perceptions, lead to
tough decisions
regarding existing
members and a
need to build
consensus.
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2 - Freedom is a further feature of successful mid-caps.
Freedom
Strength Pitfall
Risk
What’s Next: it’s all about balance. Freedom balanced by self-governance, management
infrastructure, clarity and connectivity.
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Connectivity – a distinctive feature of mid-caps – balances
freedom
Leveraging the value
of independent
Directors must
transcend ‘box
ticking’ and
regulatory
compliance.
Furthermore, should
your independent
Directors have a seat
on the Boards of
other organizations,
do check their
commitment to
yours.
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More than
competent
practitioners in their
domain, talent in
globalizing mid-caps
must be skilled and
‘ego-free’ teachers
and coaches.
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3 - C-Suite Stewardship is a feature of successful mid-caps.
C-Suite Stewardship
Strength Pitfall
Risk
What’s Next: Preserving the ‘owner attitude’ in an expanding and virtualizing world.
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4 - Many mid-caps are positioned to be innovation and entrepreneurship champions.
Innovation and Entrepreneurship
Strength Pitfall
Risk
What’s Next: Preserving the innovative spirit whilst engineering focus and relevance.
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5 In summary
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Appendix
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Methodology
Sampling
Interviewing process
Analysis
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Demographics
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Acknowledgements Interviewees from the following organizations have given formal permission for their organizations’
names to be published in the report. We sincerely thank them, and all interviewees whose
organization names have been withheld to respect confidentiality, for their invaluable contribution to
our study.
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About the Authors
About IMD
About Amrop
Contact IMD Contact Amrop Secretariat
We thank Panteia B.V.
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Amrop Offices
ARGENTINA
GERMANY
AUSTRIA
BELGIUM
BRAZIL
GREECE
CANADA
HUNGARY
INDIA
CHILE
INDONESIA
CHINA
IRELAND
COLOMBIA
ITALY
JAPAN
COSTA RICA
KOREA SOUTH
CZECH REPUBLIC
LATVIA
DENMARK
LITHUANIA
ECUADOR
MEXICO
ESTONIA
MOROCCO
FINLAND
NETHERLANDS
FRANCE
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NORWAY
UKRAINE
PANAMA
UNITED STATES
PERU
PHILIPPINES
POLAND
VENEZUELA
PORTUGAL
ROMANIA
RUSSIAN FEDERATION
SAUDI ARABIA
SERBIA
SINGAPORE
SLOVAKIA
SLOVENIA
SOUTH AFRICA
SPAIN
SWEDEN
SWITZERLAND
THAILAND
TURKEY
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