Collaborative Leadership

In 2nd half of 20th C, influenced by 2 World Wars & Depression, organizations are often top-down and multi-layered, based on military model. Control is exerted through rules and processes. Big American corporations like General Electric, General Motors, AT&T and Sears are role models. They are followed by hundreds of others like Kodak, Motorola & Westinghouse.

As shareholders and the market are looking for quicker and short term results, leaders tend to focus their attention on short term profits. This led to Enron, Worldcom… and then, the Wall Street meltdown. Trust in business leaders plunged. Companies once seen as role models also became failures.

To lead in the new century, a military model no longer works. Authentic leaders have to align people around mission & values, and such would have to be bought in rather than enforced. Shared vision is key to peak performance and to truly inspire a shared vision is the mandate of an authentic leader.

Contemporary management suggests the following:

Aligning : align people around the organization’s mission & shared values, to be part of something greater than themselves. This is a particular challenge for global organizations where local operations typically command more loyalty than a far away corporate headquarters.

Empowering: empower leaders at all levels, especially in the front lines, where people must lead without direct reports. A sophisticated accountability system with closed-loop management is to be in place to ensure commitments are met.

Serving: serve customers rather than shareholders. Provide customers with superior value relative to competitors. Employees are motivated once this is obvious.

Collaborating: collaborate within the organization, with customers, suppliers … to solve business problems. Problems are often too complex to be solved by a single individual or department. Leaders must foster this collaborative spirit by eliminating internal politics & parochialism. Cooperate internally to be competitive externally.

Organizations with authentic leaders building collaborative organizations delivering superior results: IBM’s Sam Palmisano, Cisco’s John Chambers, PepsiCo’s Indra Nooyi, General Mills’ Ken Powell and Avon’s Andrea Jung. They are new role models to validate that capitalism is still the best economic system.

(Synopsis of an article by Bill George, Professor of Management Practice at Harvard Business School, and author of “7 Lessons for Leading in Crisis” and “Authentic Leadership”)

Conspicuous Consumption

From Wikipedia: Conspicuous consumption is a term used to describe the lavish spending on goods and services acquired mainly for the purpose of displaying income or wealth. In the mind of a conspicuous consumer, such display serves as a means of attaining or maintaining social status.
Bentley sold 404 cars in China vs 1,368 in Europe last year. Lamborghini sold 66 compared to 565 in Europe. Rolls Royce sold 106 cars in China in 2008, and Beijing is now the city with the 3rd highest sales of RR in the world.
Bain & Company estimates that China, now the world’s second largest market for luxury brands, could unseat Japan for the top spot within a few years. With over 120 cities with population exceeding 1 Mn, potential for growth of the luxury market further to the coastal and first-tier cities are tremendous. Second & third-tier cities such as Zhuhai, Shaoxing & Wuxi have contributed to 60% of the luxury market growth in 2008 & 2009. Comparatively, big spenders in first-tier cities tend to shop overseas where prices are cheaper and selections are more abundant. In 2008, mainland stores only accounts for 40% of all luxury sales made to Chinese consumers.

Nevertheless, a walk along Huai Hai Zhong Lu in Shanghai will witness a row of top luxury brands including Cartier, Tiffany, Louis Vuitton, Zegna …. & Hermes under renovation.