This is the third in a series of articles following an international panel discussions with TPCL Managing Partners Ulrich Schlattmann, Thomas-Navin Lal, and Reinier Labadie, along with TPCL Partner Marcus de Vasconcelos.
We’ve seen how culture and relationships beat at the heart of TPCL Germany. And we’ve examined how the toughest challenge facing Swiss multinationals is looking after their people. Now we turn our attention to the wider landscape of leadership in Europe – and what the future holds.
Corporates are leaving command-and-control leadership behind
Driven by changing demographics and an emerging discontent, businesses are waking up to the need to change. A growing proportion of the workforce in Europe is looking to be able to identify with what a company does. But it is still a challenge for many businesses to give their people that sense of belonging and purpose.
“I had a discussion recently with a senior leader of a multinational company,” says Reinier. “They were asking, ‘Where do I get my people from? Everyone wants to go to Google, to Apple, so how do I keep them here?’ Is money the answer? No. Is it the content of the job? No. Businesses need to offer much more if they want to attract people.”
Marcus notes that part of the issue is the gap between generations. There’s pressure from society and younger people to create a different work culture and ethic. But the leaders of many large corporations grew up in a different era and still retain their old means and methods.
“The vast percentage of senior leaders still believe that command-and-control is the way to go,” says Marcus. “But they are also smart enough to realise that when they have enough people who want a different approach, they need to change. At the moment this is a rational choice rather than, perhaps, an emotional choice.
“But the war for talent, I think, is going to force companies to change,” he adds. “And those that won’t change won’t survive; it’s as simple as that.”
Awareness among leaders is rising
Ulrich reflects that the command and control mindset is not easily avoided. He’s been a leadership consultant for many years but now, as a father of three children, he’s realising that he has some command-and-control tendencies in his parenting.
“It’s very difficult to not just raise your kids like you were raised,” says Ulrich. “And I think the same is true for managers. How do you unlearn the way you were trained? I think first of all, it’s very important to understand the way you think. Then second, you need to have the strong will to change it. Without this strong will, change won’t happen.”
Marcus adds that leaders are beginning to realise coaching has the power to help develop this self-awareness. In particular, they are discovering that gaining an awareness of how you impact others can make a huge difference.
“I think it’s a message of hope,” he says. “People are realising that through coaching they can develop themselves and help develop others. And this, to me at least, is a huge change from the corporate world I was part of for 20 years.“
Ulrich, too, thinks there is good reason to be optimistic about where leadership is heading in Europe. He remarks on the trend to rename Human Resources as the People Department. On the surface it’s only a name change but it also signifies a change in the way people lead and are led.
How to create the culture shift
So businesses are on the move in Europe. But part of the reason some organisations are not achieving greater change, Navin says, is due to what they measure and how they measure it.
Reinier agrees, saying that trouble arises when companies create KPIs that are not linked to the purpose of a company. The numbers such organisations measure may reassure senior leaders but they don’t align directly with the results the company actually needs from a strategic perspective.
“There is a mismatch between what the company does and where they really want to go,” says Reinier. “And this creates dissatisfaction in the business. To move forward, companies need to get a holistic view of what they are here for, what they want to reach, how they reach it – and then cascade it down consistently through the company, including the culture.”
Navin notes that a desire to see a return on investment in terms of euros measured is understandable. But the complexities involved in culture change and in coaching mean that it’s very difficult to extrapolate numbers from the equation. At least not directly.
“However, from a qualitative point of view, we have a lot of information,” says Navin. “We can see how people use their coaching sessions, how happy they are, and if behaviors change or not. The results in these terms are very promising and are really supporting the work that we do.”
Leaders need to pay attention to such data – and create new KPIs from it, which are linked to specific, tangible objectives. Otherwise, Marcus adds, change simply doesn’t happen. Not because people are opposed to the shift but because their time is already consumed by trying to meet their other, often more pressured, targets.
“I think we do need to see this in a bigger picture of ‘what does an organisation want?’” Marcus says. “Unless there’s a clear definition at the top of what an organisation wants to be and how they’re going to achieve it, it’s always going to be difficult to change things further down. Because you’ll always have a bigger picture that doesn’t support it.”
It’s about evolution not revolution
All of this talk of change doesn’t mean we need to begin from scratch, that corporations should seek to imitate start-ups or that businesses should abandon everything they know. Instead, for companies in Europe, it’s about integrating what we’ve learned from our previous stage of growth, then transcending it.
“I’ve seen a lot of people in their mid-20s come in full of great ideas,” says Marcus. “But too often they ignore everything that already exists. For startups, of course, this approach is fantastic. But if you’re coming into an environment where you need to build on pre-existing foundations, it’s about evolution, not revolution.”
The battle over an increasingly competitive talent market is building pressure in Europe. But the decisions senior leaders make today can position them to thrive in the coming years. Get in touch to learn more about how we can help.