Need new leadership models to help us recover from current economic gloom - http://www.chaordicsolutions.co.uk/blog/from-our-strategy-implementation-consultants/need-new-leadership-models-to-help-us-recover-from-current-economic-gloom/

http://www.chaordicsolutions.co.uk/blog/from-our-strategy-implementation-consultants/need-new-leadership-models-to-help-us-recover-from-current-economic-gloom/

Need new leadership models to help recover from current economic gloom: must look beyond Fortune 100 for inspiration.

 

Extract from London Business School Business Strategy Review – Professor Julian Birkinshaw:

Rethinking the responsibility of business leaders

What is the primary responsibility of business leaders today? Is it to make a financial return for their shareholders? Or is it to contribute more broadly to the welfare of employees and society as a whole?

This question has always been important, but it takes on greater significance as we seek to recover from the worst contraction since the Great Depression.  How business leaders respond, and how they prioritise different stakeholders, will have a major impact on the speed of recovery.

A poll conducted by London Business School, in the lead up to the Global Leadership Summit on 20 May, showed that business leaders are being expected to take on a broader set of responsibilities than ever before. Across 3,800 respondents, maximising total financial return to shareholders was rated 3.7 out of 5 in terms of importance, while creating a responsible culture, demonstrating integrity and moral leadership, contributing to the long-term sustainability of the global economy, and creating an engaging place of work for employees all scored between 3.4 and 3.6. The message seems clear: we want our leaders to do everything!

What is the way forward?  There is an increasing recognition that we need new models of leadership, where business leaders can balance the needs of multiple different stakeholders and are visibly accountable to the organisations they work for rather than the other way round.  But it is not obvious what these alternative models might look like.

My view is that we need to look beyond the usual best-practice corporate case-studies, to see if there are leadership and management principles we learn from other settings.

- If we want our business leaders to be properly accountable, we can gain insight from the principles of joint responsibility exhibited by many professional partnerships.

- If we want our business leaders to take a long-term view, we should seek to understand how many family-owned firms have sustained themselves over hundreds of years.

- And if we want our business leaders to balance multiple competing objectives, we can learn from the checks-and-balances built into democratic governments.

This is just a starting point. There are also, of course, many different models of corporate governance that avoid the short-termism and financial focus of the Anglo-American model, and there are insights to be drawn from the renewal and adaptability of cities, faith systems, and even life itself.  The challenge is to raise our horizons, and to look beyond the Fortune 100 for a glimpse of what the future of leadership might look like.

Author: Julian Birkinshaw is Professor of Strategy and Entrepreneurship at London Business School

Copyright 2013 London Business School

More … http://bsr.london.edu/lbs-article/754/index.html

Evidence of severe financial contagion risk from weaker countries - http://www.chaordicsolutions.co.uk/blog/from-our-strategy-implementation-consultants/evidence-of-severe-financial-contagion-risk-from-weaker-countries/

http://www.chaordicsolutions.co.uk/blog/from-our-strategy-implementation-consultants/evidence-of-severe-financial-contagion-risk-from-weaker-countries/

New research shows unexpected evidence of severe financial contagion risk from weaker countries in European Union.

 

Extract from University of Portsmouth Press Release – 16 April 2013:

Financial shocks coming from weak Euro zone countries are three times more likely to destabilise the region’s economies than shocks from richer Euro zone countries, according to new research.

Research by Dr Nikolaos Antonakakis, an applied Economist at Portsmouth Business School, is among the first to find compelling – and unexpected – evidence of a severe financial contagion risk from weaker countries in the European Union.

The results challenge the arguments for a single European currency and suggest a need to re-examine the single currency in the new post-economic crisis era.

Dr Antonakakis said: “The findings highlight the increased vulnerability of the Euro zone from the destabilising shocks originating from beleaguered countries in the periphery.

“This is the first study to have found evidence of a financial contagion effect where what happens in weaker Euro zone countries spills over to the rest of the region. Most people assume the effect is the other way around. It is counter-intuitive and suggests there is probably a need to reassess the effectiveness of the EU directorate economic policies.”

Dr Antonakakis studied the difference between the 10-year government bond yields  of nine euro zone countries – Austria, Belgium, France, Netherlands, Greece, Ireland, Italy, Portugal and Spain – between March 2007 and June 2012; a turbulent period encompassing both the global financial crisis and the Euro zone debt crisis.

The data from the nine states was compared with German government bond yields of the same maturity over the same period and all data was collected from Bloomberg. The results provide information on whether each country is a receiver or a transmitter of economic shocks.

Dr Antonakakis said: “These results are of great importance because, for instance, changes in government bond yield spreads in other Euro zone countries can be a good indicator of future changes and their repercussions.

“Shocks coming from the periphery have, on average, three times the destabilising force on other countries than shocks coming from the core, richer nations. This indicates a decoupling effect of countries on the periphery and those at the core that may challenge the argument for a single currency in the countries examined.”

Until now, very little was known about the interdependencies and complex links between Euro zone economies during the debt crisis and global economic downturn.

He said: “The results have important policy implications and can be used to change for the better how governments and regions manage the balance of austerity measures and growth-promoting initiatives.

“The cost of severe austerity measures is not just economic, it has human lives at its heart. If we can produce models which can be used to predict the effect of different scenarios they could be used to help stave off some of the more barbaric measures used to contain economic problems.”

Dr Antonakakis, a senior lecturer in economics and finance, has been invited to present his research alongside world leaders in the field at the SIRE Econometrics Workshop in Glasgow in May. Fellow presenters include Cambridge Professor Hashem Pesaran, editor of Journal of Applied Econometrics, one of the top five econometric journals in the world; Professor Paolo Zaffaroni, Imperial College; Professor Valentina Corradi, Warwick; and Rod McCorie, St Andrews.

More … http://www.port.ac.uk/uopnews/2013/04/16/weak-european-neighbours-have-immense-power/

Only 44% leaders believe they are good at implementing strategy

http://www.chaordicsolutions.co.uk/blog/from-our-strategy-implementation-consultants/only-44-leaders-believe-they-are-good-at-implementing-strategy/ Only 44% leaders believe they are good at implementing strategy: and just 2% confident will achieve all objectives.   Extract from Bridges Consultancy Strategy Implementation Survey Findings 2012: In 2012 Bridges conducted its 12th year of research. It is now 10 years since we first...