Corporations live in a state of dynamic complexity.1 They are by their nature complex mechanisms, composed of many moving parts: divisions, subsidiaries, functional units, and employees at all levels, not to mention multiple stakeholders: government regulators, labor unions, public interest groups, and so on. These components all interact with each other, sometimes in predictable but more often in unexpected, even surprising ways.
As organizations expand into new product and service lines, new markets, and new geographies; and as they adopt new processes, reconfigure supply chains, create new partnerships, and embrace new business models, complexity increases exponentially. Simultaneously, the environment in which these multiple components operate and interact – technology, competition, labor markets, laws and regulations, cultures, currencies, national and regional political and economic forces, not to mention natural emergencies – is in constant flux.
Given the understanding that all organizations exist in a state of constant tension between unity of direction and responsiveness to external dynamism and the belief that leaders need to navigate businesses through that tension, it seems apparent that the leadership challenge has never been as salient as it is today. Now, more than ever, we need not just leaders but global leaders capable of meeting the unique challenges of extreme volatility, uncertainty, complexity, and ambiguity.
Right?
Well, not so fast.
Take the unfathomably popular acronym VUCA: volatility, uncertainty, complexity, and ambiguity. It is used to express the supposedly unique environment facing leaders. The VUCA world has rendered leadership “more difficult than ever.”2
Military leaders coined the term in the early 1990s to describe the destabilized world conditions precipitated by the fall of Communism and the end of the Cold War.3 The US-USSR confrontation had provided at least the clarity of a single enemy. Now, without that focus, the world of military leadership had become far more…well, VUCA.
But are we to believe that military commanders in Normandy in 1945, in Korea in 1950, in Berlin in 1961, or, for that matter, in the Vietnam “fog of war” ever experienced their conditions as stable, certain, simple, and clear? Of course not. This is simply a spurious attribution imposed on the past by presentists. Nonetheless, those who favored the formulation were convinced that they now lived in a uniquely VUCA world.
Organizational life has always been and will continue to be complex. Management theorists, it turns out, have long recognized a tension inherent in the management of organizations between the ever-present need to maintain some degree of control and stability while at the same time creating a capacity to respond to complexity and dynamism. As far back as the early 20th century, Henri Fayol pointed to the need to both administer a stable organization and to anticipate (prévoyance) the future.4 Chester Barnard articulated the requirement for executives to respond to a “fluctuating environment of physical, biological, and social materials, elements, and forces.” It was the task of the executive to engage in the complex process of readjustment of the internal dynamics of the business to the constantly changing external environment.5
It is easy to conclude from reading contemporary literature that, starting in the 1990s, globalization provided a new source of ever-escalating complexity. Global leaders – just the latest in a long line of ideal types – faced challenges unknown to their predecessors. “Globalization,” wrote Rosabeth Moss Kanter in 1995, “is surely one of the most powerful and pervasive influences on nations, businesses, workplaces, communities, and lives at the end of the twentieth century.”6 The world had become “flat.” Competitors everywhere were capable of competing anywhere.7 And then there was the unique technology of the Internet with its apparently boundless capacity to forge globally connected webs. Even “local” businesses found themselves at the end of complex, globally dispersed supply chains, often in direct competition with foreign-based companies.
Surely, globalization can be traced back further than that, for example to the 1960s when the United Nations began calling attention to and advocating for a “new international order.” By enhancing the movement of goods, knowledge, capital, and people across national borders, international trade could help promote “prosperity for all.”8 That was the mission of the United Nations Conference on Trade and Development (UNCTAD).
Starting in 1995, UNCTAD published an annual index of transnationality, defined as “the extent to which a firm's activities were located abroad.”9 The World Trade Organization (WTO), an outgrowth of the 1947 General Agreement on Tariffs and Trade, set out to promote international trade through the reduction of government-constructed barriers, placing particular pressure on tariffs that had been put into place originally as a protection for both new and threatened domestic industries.
There were critics who argued that the foreign direct investments that UNCTAD promoted and the tariff reductions called for by WTO bolstered the position of wealthy nations vis-à-vis poorer ones. Free trade, in this view, was seen as a detriment to the evolution of new business in emerging economies that needed protection in order to take root. Rather than promoting “prosperity for all,” the reality of globalization was a widening gap between wealthy nations and poor, and a growing chasm between socioeconomic groups within individual countries.10 That critique, however, did nothing to detract from the sense that globalization was a relatively new phenomenon with a unique set of challenges.11
We can accept globalization as a source of complexity and a challenge to leaders without buying into the suggestion that this is a new phenomenon or that global leaders are a distinct empirical reality. The scope of the term “global” has certainly expanded. Still, global trade has been a regular feature of economic activity starting in the premodern world.
The Internet is hardly the first technology to expand and connect the world simultaneously. Historians avoid the tranquility fallacy by analyzing the 15th century when advances in shipbuilding and navigation provided a prominent boost to global trade. Brazilian sugar, English wool, and – horribly – African people became part of an expanding commercial network. Trading companies created novel organizing techniques to deal with the complexities and ambiguities of their own global environment. Shipbuilding operations, centered in Amsterdam and Antwerp, served an emerging multinational market. An ongoing stream of technological innovation – the Guttenberg printing press, steam engines, transcontinental cables, telegraph/telephone/television, and air flight – added to the volatility and complexity of the world.12 From this perspective, the Internet can be seen as a continuous evolution of rather than a discontinuous break in the march toward global interconnectedness.
There is evidence that the pace of internationalization steadily increased, at least for a time. An index of global connectedness compiled annually by Pankaj Ghemawat and Steven Altman found steady growth in both foreign trade and foreign direct investment from the 1980s through the onset of the Great Recession.13 Nonetheless, Ghemawat argued, the world is not nearly so “flat” as advocates of the concept suggest: “The levels of internationalization associated with cross-border migration, telephone calls, management research and education, private charitable giving, patenting, stock investment, and trade, as a fraction of gross domestic product (GDP), all stand much closer to 10 percent than 100 percent.”14
Globalization is real. It is just not the uniquely singular defining characteristic of our times in contrast to earlier times. Merchants in any decade could say, justifiably, that they lived in an era of unprecedented globalization. What is relatively recent is the proposal of the global leader as an ideal type, something distinct in the world of leadership. The sectioning off of “global” from other types of leadership focused attention on what was believed to be the special, unique circumstances facing global corporations.
Locating the Global in Leadership
Marketing professor Theodore Levitt is credited with introducing the expression globalization to business. “The globalization of markets is at hand,” he proclaimed in 1983.15 Based on new technologies, particularly television, Levitt predicted a homogenization of global markets. We were living in “the republic of technology,” he noted (remember, this was 1983). And, he insisted, “the earth is flat.”16 Given the commercial purpose inherent in the conduct of business, “the global company will shape the vectors of technology and globalization” by pushing those vectors “toward their own convergence,” a convergence that would create a unified global market.17
The term global leadership began showing up in management literature in the 1990s.18 Christopher Bartlett and Sumantra Ghoshal addressed the challenge of managing in a global organization in their 1989 book on “transnationals,” and elaborated further three years later with an article asking, “What is a global manager?”19
Nancy Adler made a claim for global leadership as a unique construct. Unlike “its domestic counterpart,” she maintained, global leadership theory “is concerned with the interaction of people and ideas among cultures, rather than either with the efficacy of particular leadership styles within the leader's home country or with the comparison of leadership approaches among leaders from various countries – each of whose domain is limited to issues and people within their own cultural environment.”20 This is an important and valuable insight. It is not, however, a new theory of leadership. Rather, it suggests a contingency approach in which leadership style needs to be responsive to organizational context.
One of the defining features of that global context is the fact that global companies operate across multiple national borders. Complexity is an outcome of that reality. In his critique of traditional contingency theory, Keith Grint noted the fallacy of maintaining that leaders reacted to a scientifically objective, verifiable, and uncontested understanding of their environment.21 In fact, interpreting the environment and communicating that interpretation is a fundamental leadership task.
For organizations moving across country borders, the newly expanding environment is best understood not as an independent variable determining leadership behavior, but as an outcome of how leaders see that environment. Starting in 1980, especially with the work of Dutch social psychologist Geert Hofstede, an understanding of that global environment began to focus on the diversity represented by separate “national cultures.”
Leadership and National Culture
National culture was a formulation intended to capture a collective set of values. In this view, it stood as a kind of shared character that shaped the thought processes and behaviors of individual members. National culture was an important, certainly influential construct. Corporate leaders have relied on Hofstede's findings of national culture diversity to design systems and adopt styles. Academics were attracted to the quantifiable nature of the categorization.22 Despite the many questions that have been raised over time concerning the validity of his methodology, the appropriateness of his categories, and the rigor of his conclusions, Hofstede's work added useful complexity to how executives viewed the world.23
It is possible to recall a time in the not-so-distant past when executives scanned their global environment – looking at the nations in which the activities in their business models were undertaken – and saw a largely homogeneous world. Consider a 1971 article entitled “Understand Your Overseas Work Force.” The authors concluded that, despite “stereotyped assumptions,” there existed “considerable similarity in the work goals of employees around the world.” National cultural differences “are not nearly so great as some might think.”24 In devising strategies and policies, corporate leaders needed to recognize those similarities. And remember, Theodore Levitt's important 1983 “earth is flat” article envisioned globalization as an increasingly homogeneous world. Hofstede offered a useful anecdote to such Anglo-centric thinking.
Differences across Cultures
Hofstede had been wrestling for years with notions of motivation and how to help managers “predict” – that was his word – employee behaviors. As head of IBM's personnel research department, he initiated a massive employee attitude study. The IBM survey asked employees at all levels and countries to rank-order the importance of various work goals, from a sense of personal accomplishment and growth, to an opportunity for autonomy, a sense of job security, good pay and benefits, and a successful company. What Hofstede concluded in his early analysis was that different groups of employees – clerical workers, unskilled laborers, and managers – tended to cluster together in their self-described work motivations. National culture was acknowledged as another factor that could influence answers, but it was seen as “relatively minor”; certainly “smaller than the occupational differences described here.”25 To bolster his argument, Hofstede cited the above-mentioned 1971 “Overseas Work Force” article.
Very quickly, however, Hofstede's analysis bent toward national culture as the factor with the greatest explanatory power over employee attitudes. In a 1975 piece, for instance, he focused on employees in his native Netherlands, noting a “significant difference between the work-goal importance scores of Dutchmen and other Europeans.” Here was evidence, he insisted, “of the Dutch national character.”26 When the full results came out in 1980, in an Organizational Dynamics article and the influential Culture's Consequences, the notion of national cultural differences and their impact on employee behavior became firmly embedded in the discourse.27
The specific dimensions by which Hofstede distinguished national cultures – power distance, uncertainty avoidance, individualism-collectivism, masculinity-femininity, and, in later iterations, time orientation – are well known.28 Of particular interest here is the connection he drew between national cultural differences and leadership. Leadership needed to be culturally sensitive, he insisted. After all, “subordinateship” (his term for followership) differed across cultures. “Leaders cannot choose their styles at will,” he reasoned, because “what is feasible depends to a large extent on the cultural conditioning of a leader's subordinates.”29
Hofstede's study was not specifically focused on leadership theories. The implication of Hofstede's work was to beware of assuming that any theory of leadership could be applied universally. That warning – that there was no such thing as a globally applicable leadership theory – was countered in a study conducted by Robert House and his colleagues at the Global Leadership and Organizational Behavior Effectiveness (GLOBE) project.
The GLOBE study explicitly delved into the relationship between national culture and leadership.30 The goal was to determine how leadership effectiveness was viewed in various cultures. They did not study leadership practice, leadership effectiveness, or even organizational effectiveness. They focused instead on views of leadership effectiveness. The theoretical grounding for their inquiry was implicit leadership theory, which extrapolated prototypes from the “preferred leader attributes or behaviors” of followers.31
Rather than looking at individual nations as Hofstede did, the GLOBE researchers created what they called cultural clusters (“Nordic Europe,” for instance, which included Denmark, Sweden, and Finland, and “Confucian Asia,” which included China, Singapore, and Japan) to inform their analysis. There were, not surprisingly, significant differences in how leadership was viewed across clusters. Nordic Europeans expected their leaders to be long-term oriented, with an emphasis on orderliness, modesty, cooperation, and power sharing. Confucian Asian cultures, on the other hand, expected their leaders to make independent decisions. The GLOBE prototypes consisted of an undifferentiated stew of traits (orderly and modest, for example), cognitive styles (long-term oriented), and, perhaps, behaviors (independent decision making).
The finding of cultural differences in leadership style was to be expected. It conformed, after all, to Hofstede's earlier argument. What surprised many observers, although apparently not the researchers themselves (they admittedly “expected” it from the outset), was that there seemed to be some universals as well.32
Across all clusters, some leadership attributes were found to be desirable: trustworthy, dynamic, motivator, were among the vague and subjective attributes. Likewise, there were attributes found to be universally negative: dictatorial, ruthless, and egocentric, among them. Now, the GLOBE researchers made a major conceptual leap by converting these desirable (and undesirable) characteristics into a particular theory of leadership – a decidedly western, even U.S.-based, one at that – as the globally applicable theory of leadership.
Building on their finding of universally desirable and undesirable attributes, the researchers went to “charismatic / value-based leaders” as the universally applicable model. Why? Because they associated that style with a set of rosy end values “such as dignity, peace, order, beauty, and freedom,” and not necessarily “linked to other values.” By adopting some of the excess of the transformational leadership literature – transformational leaders seek “beauty and freedom” – and then imposing a single construct on a cluster of attributes, values, and behaviors the researchers reflected their own assumptions.
If we focus on the specifics of the GLOBE findings and avoid their sweeping theoretical conclusion, we can see evidence that how leaders think is vital; a key element of their capacity to be effective. That approach gained considerable traction in the body of discourse that argued for something called a global mindset. To understand the notion of a global mindset, we have to first unpack the concept and look at a mindset absent the global modifier.
A Global Mindset
Mindset is typically conceptualized as a cognitive orientation, one that shapes how an individual selects, processes, and formulates responses to stimuli from the external environment.33 Ryan Hamilton and colleagues added that mindsets are more than specific responses to particular situations. Rather, they are “sticky.” Once formulated, they create a readiness “to respond in a particular way” to a wide variety of situations.34
Nobody can process the impossible breadth and depth of information available in the world, Hamilton and colleagues reasoned, so people turn to cognitive filters. To help guide that process, people develop assumptions and rule-of-thumb heuristics to help guide them. The variety and complexity of the data they allow in for consideration varies widely. A mindset is a cognitive orientation, a set of heuristics constructed by individuals to help navigate a complex environment. So, what happens when we add the adjective “global”?
Consideration of global mindsets started with Howard Perlmutter's classic 1969 article in the Columbia Journal of World Business. His concern was with “primary attitudes” – he did not use the term mind-set – among “international executives.”35 There was nothing especially complex in Perlmutter's findings. He identified three clusters of such primary attitudes: ethnocentric, polycentric, and geocentric. But his was far from a simplistic argument. Perlmutter's point was that dominant executive attitudes (he admitted there was “some degree” of each attitude in every organization) shaped the nature of the interaction between corporate headquarters and international subsidiary units, impacting many elements of organizational design.
Take authority and decision making. Ethnocentrism, which was home-country oriented, led to high decision-making authority placed in the hands of corporate headquarters relative to subsidiaries. Polycentrism, which was host-country oriented, led to decentralization of decision making by placing authority in the hands of subsidiaries relative to corporate headquarters. Finally, geocentricity, which was world-oriented, led to collaborative headquarters-subsidiary decision making.
Note that Perlmutter treats the multinational corporation not as a single type but as one of three prototypes. It is the prevailing primary attitudes of executives that help shape the strategy and structure called upon by these organizations as they evolve toward multinational operations.
As the evolution toward multinational operations proceeded over the next several decades that followed Perlmutter's article, a thesis emerged from a number of writers that geocentrism would provide superior results. For Christopher Bartlett and Sumantra Ghoshal, geocentrism could best be produced through organizational design, specifically a matrix structure in which responsibilities and relationships around product, market, and functional operations intersected.
The requirement for “transnational” leaders – that was their term – was to recognize that “assets and resources are widely dispersed but mutually supportive” across the global organization; “the roles and responsibilities of organizational units are differentiated but interdependent,” and “knowledge and initiatives are linked through a worldwide learning capability that assures the efficient development and diffusion of innovations.”36
Matrixed leadership was neither especially new nor uniquely global. In the previous decade, books by Jay Galbraith and Stanley Davis and Paul Lawrence had heralded the usefulness of matrix structures for complex domestic organizations operating in complex environments. Bartlett and Ghoshal applied the term “transnational” to their matrixed “solution.”37
Placing emphasis on strategic capabilities rather than structure, Yves Doz, José Santos, and Peter Williamson introduced their own term: metanational. Some global businesses, even those that Bartlett and Ghoshal classified as transnational, owed their global competitiveness to advantages built up within their home country. Metanationals represented a different set, companies that learned from the world. They lacked a full complement of domestically grown advantages. From their earliest days, these companies were forced to look beyond their home base for innovation and integration capacities. For companies such as Finland's Nokia and Switzerland's ABB, leaders needed to recognize and develop “a global canvas dotted with pockets of technology, market intelligence, and capabilities.” It is in the ability to first sense and then mobilize this knowledge that creates the capacity “to innovate more effectively than their rivals.”38
Both sets of authors realized the degree to which the implementation of an effective approach would challenge the thinking of executives. Corporate leaders, said Doz and colleagues, were typically more comfortable developing products in the home country and then exporting them to new markets, a clear example of the ethnocentric mindset prevailing. For Bartlett and Ghoshal, the requirement was to create a “matrix in the minds” of executives.39
Matrix structures represented complex interactions while introducing ambiguity and uncertainty. A matrix of the mind suggested that willingness to live and ability to thrive within that type of environment would be a prerequisite for global leaders. The Bartlett and Ghoshal response tightly coupled a mindset with a structure. For Doz, Santos, and Williamson, the required mindset grew out of a particular set of circumstances: companies that were “born in the wrong place” and had to look at the world in toto for competitive advantage.40
When training consultant Stephen Rhinesmith introduced the term global mindset to the discourse in a 1992 article, he set off the word global in quotation marks, indicating some uncertainty about just what that modifier meant.41 He proposed that a global mindset allowed the individual to “scan the world from a broad perspective, always looking for unexpected trends and opportunities to achieve our personal, professional, or organizational objectives.”42
Rhinesmith emphasized characteristics including openness, a willingness to balance contradictory forces, a belief in processes rather than structure, and a willingness to “flow with change.”43 When these characteristics, the “being” side of management, were matched by key competencies, the “doing” side, the global mindset would help organizations “take a major step” toward “becoming more globally competitive – and toward enabling our global managers to be more fulfilled and effective.”44 In truth, there was little in Rhinesmith's formulation that was specifically global. One could easily drop the global adjective altogether and make an argument that openness, a willingness to balance contradictory forces, and so on could be seen as useful characteristics for any and all leaders.
Unquestionably, the pairing of the global mindset concept with increasing internationalization in the business world struck a responsive chord. “Strategic leaders must have a global mindset,” Michael Hitt and colleagues insisted.45 Must have. Corporate trainer Stephen Cohen agreed: “Effective global leadership requires a global mindset.”46 But Rhinesmith's description offered little specificity on which to build.
Paula Caligiuri's stream of work attempted to add detail to the definition of what she termed “cultural agility.” She focused on the capacity of expatriates – not specifically leaders but managers generally – to work successfully in nonnative cultures.47 Cultural agility demanded that individuals “read” – that is, sense, interpret, and formulate actions – their cultural milieu. Culturally agile managers demonstrate openness, flexibility, and low ethnocentrism.48 Caligiuri intended the concept as an examination of an individual's capacity to cope with environmental changes due to entry into new (i.e., unfamiliar) cultural situations. Coping allowed individuals to experience unfamiliarity with lower levels of depression, stress, worry, and exhaustion than people with less cultural flexibility.49
What all of these writers agreed upon was the notion that globalization implied complexity. Levy and colleagues, for instance, defined a global mindset as “a highly complex cognitive structure characterized by an openness to and articulation of multiple cultural and strategic realities on both global and local levels, and the cognitive ability to mediate and integrate across the multiplicity.”50 The particular challenge of leading in a complex environment may be the defining element in the rather vague notion of global leadership. In fact, rather than discussing global leadership, why not focus on complexity leadership?51
The Cognitive Challenge for Leaders
“Globalization,” Henry Lane and colleagues suggested, “is a manifestation of complexity.” That complexity arises from “conditions of multiplicity, interdependence, and ambiguity, all of which are related.” In addition, those conditions are in a state of constant flux. For global leaders, then, “predicting the future is impossible, and trying to control global organizational outcomes may be dysfunctional.”52
Multiplicity – of competitors, customers, value chains, governments, and stakeholders – is one, but only one of the conditions of complexity. Each of those elements is interconnected to each other. All of this is characterized by ambiguity, by confusion around cause-and-effect relationships, and by the likelihood of multiple interpretations of the continually changing state of the global environment.
Are executives up to the cognitive challenge posed by complexity? When faced with a situation of complexity – complex organizations in complex environments – leaders deal with problems for which there were no definitive, objective solutions, what Horst Rittel and Melvin Webber called “wicked problems.”53 Imagine railroad executives in the mid-19th century and corporate executives overseeing newly emergent multidivisional structures a hundred years later. All faced wicked problems. Globalization did not create complexity; it added an additional element.
When Levy and colleagues defined global mindset, they recognized its foundation in the mental processes of individuals who possessed “a highly complex cognitive structure.”54 They were not alone in exploring the benefits of cognitive complexity as an aspect of global leadership.55 But a matter often left underexplored by management writers was what, precisely, is cognitive complexity? For that, we need to turn to cognitive and brain scientists.
Cognitive scientist Stellan Ohlsson offered the idea of “deep learning.”56 The difficulty of mental navigation in a complex environment is that past experience is an inadequate, misleading, and perhaps even foolhardy clue to the future. The future is not a mirror image of the past. It is something that is different; not only that, but different in a fundamentally unpredictable way. For that reason, extrapolating from the past is an ill-suited methodology for navigating from the present into the future. If the future cannot be predicted, leaders must nonetheless chart a course that expands the possibility of effective action.
This is a tense, even paradoxical requirement. Cognitively complex individuals embrace conflict, encourage open discourse, expect diversity of cognition, reject either/or choices, welcome paradoxes, tolerate failures, and plan for contingencies.57 The question is: will leaders see these tensions as opportunities to exploit or problems to ameliorate, as positives or negatives.
Cognitive complexity is an individual trait. An individual with cognitive complexity has the ability to both differentiate – to perceive multiple dimensions in an array of external stimuli – and to integrate those multiple dimensions.58 This is not the same, and in fact, has no apparent relationship to, what we think of as traditional measures of intelligence.59 High intelligence (at least as measured by our most popular intelligence tests) and high cognitive complexity are simply not the same.
Individuals with low cognitive complexity, wrote Lars Larson and Kendrith Rowland, “are characterized as having categorical black-white perceptions as well as relatively few but rigid rules of integration.” High cognitive complexity individuals, on the other hand, “are characterized as perceiving more differences in their environment and [are] better able to assimilate contradictory cues.”60
How and why individuals acquire this trait is a matter that continues to generate debate.61 There is some recent research to suggest the existence of a biologically based capacity for cognitive complexity.62 Paula Caligiuri and colleagues discussed the usefulness of global assignments in impacting openness and flexibility.63 The two streams together suggest that both selection and development – selecting leaders who have already demonstrated cognitive complexity and providing them with global assignments to develop that capacity further – offer the most promising route to evolving global leadership.
As vital as cognitive complexity is, however, it is not the whole story. In his 1936 Esquire article titled “The Crack-up,” F. Scott Fitzgerald famously observed that “the test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function.”64 A “first-rate intelligence” implies a capacity to integrate thinking and doing.
Individuals with behavioral complexity have access to a range of roles that they are able to play.65 Let's put behavioral complexity into a specifically leadership context. Robert Quinn articulated a wide variety of roles that a leader can play, including a politically astute broker, a task-oriented director, a performance monitor, as well as a facilitator of opinions and consensus.66 Those roles may, at times, suggest contradictory pressures: the desire to reach consensus and the need to achieve performance objectives, for instance. A leader with behavioral complexity will be able to assume multiple roles effectively and to understand and interpret the environment in a way that guides that selection process.67
It is possible, perhaps even likely, that as both the internal and external environments become increasingly complex, no individual will be able to match that complexity with his or her cognitive abilities. That challenge may well require a leadership team.
From Individual to Team Complexity
In their 1992 “What Is a Global Manager?” article, Bartlett and Ghoshal asserted that the skills needed to be an effective global leader did not reside in an individual but rather in a combination of perspectives and competencies from business managers, country managers, and functional managers.68 The hope that a “first-rate intelligence” can emerge from a team presumed that teams can develop a level of cognitive complexity that surpasses the collective capacities of its individual members.
Top management teams, wrote Amy Edmundson and colleagues, are meant to provide a mechanism “to cope with the turbulence and complexity in the external environment that has complicated the task of executive leadership.” Teamwork among CEOs and their direct reports potentially allows corporate leaders “to engage in an inclusive, participative process through which diverse members grapple with difficult issues to make decisions and build commitment to implementing them.”69 Donald Hambrick, with his attention to upper echelon theory, emphasized that “leadership of a complex organization is a shared activity, and the collective cognitions, capabilities, and interactions of the entire [top management team] enter into strategic behaviors.”70
Teams are differentiated from collections of individuals in that team members share both purpose and responsibility for achieving an outcome.71 Types of teams differ considerably based on the interdependence of their task. One typology, offered by Scott Page, distinguished between disjunctive and conjunctive tasks.72 Disjunctive tasks require only one person to be effective for the team to succeed. These are not really teams at all but rather collections of specialists and advisors with a common goal: help the top person succeed. They are not designed nor particularly intended to engage in the kind of dialectical thinking that will view issues from multiple perspectives and arrive at the most economical and reasonable reconciliation of required collective action for outcomes.
In contrast, teams created to address conjunctive tasks require rich, reciprocal interdependence in which the inputs and outputs of each member occur in a dynamic, consequential manner.73 For such teams, group processes are intended to facilitate the full engagement of members in wrestling with difficult issues, making decisions, and engaging in actions necessary to implement those decisions.74
The actual nature of a task, however, is less significant than the interpretation and understanding of the nature of that task held by team members. Is a top executive team focused on assuring that the CEO succeeds, on the assumption that a clear, single leadership voice will optimize effective decision making? Or do top executives view their task as addressing complexity in which only interdependent action will lead to effectiveness? If the belief of top team members, including and especially the hierarchically powerful CEO, is that the task is disjunctive, then the top team is not likely to seek collective cognition.75
The potential for teams to address conjunctive tasks is based on some notion of collective cognition. However, the leap from individual to collective cognition is not an obvious one. Cognitive complexity is, after all, an individual attribute. Can a leadership team develop a collective, group-level cognitive process? And if so, under what conditions? Do teams cognate at all, or do they simply accumulate the outputs of separate individual cognitions?
There is considerable debate on that point within the behavioral and brain sciences. In his faddishly titled but rigorously argued Supersizing the Mind, Andy Clark insisted on the possibility of a synergistic effect that is larger than the individuals who make up that system.76 Teams of individuals can develop a shared cognition, one capable of complexity beyond any and all team members. That shared cognition, then, is different from the accumulated knowledge that a team can also arrive at. What makes his position so compelling, and so controversial, is that he goes far beyond the notion of collective knowledge.
Pooling individual knowledge can lead to positive team outcomes. Teams often benefit from the fact that members collectively know more than any individual team members. They do so by amassing their knowledge base. Anyone who has conducted a team problem-solving exercise has seen this phenomenon in action. Teams can accumulate knowledge when individual members first share their own knowledge and then acknowledge the contribution of other members.
Not all teams, however, are willing and able to develop and exploit accumulated knowledge. Members of poorly performing teams may fail to share what they know with each other. The contribution of individual members may be dismissed as untrustworthy. Team members may be inhibited by any number of external and internal factors (gender, age, race, hierarchy, expertise, and personality among them) from contributing their own knowledge to the pool. Under optimum conditions, however, the collective whole knows more than any one individual due to the distribution and sharing of each one's knowledge.77
Accumulated knowledge can be helpful to a leadership team. It was not, however, what Andy Clark had in mind when he addressed collective cognitive capacity. For Clark (and he is certainly not alone in his contention), individual team members can go further. They can actually incorporate each other's cognitive capacity into their own internal processes resulting in higher-order cognition for both the individual members and for the collective.
This is a compelling and appealing thesis. Top leadership teams can, in theory, engage collectively in the kind of complex thinking required of a complex organization operating in a complex environment.78 We are still left to wonder, is collective cognition a likely outcome of a top leadership team deliberating strategy and tactics within a dynamically complex context? In order to consider that question, we need to appreciate the special characteristics and dynamics of a top team as compared to other teams in an organization.79
The top leadership team is composed of CEOs and their direct reports. These will most likely be divisional profit-center heads (either product or market-based divisions or some combination) and functional cost-center heads (say, the chief financial, legal, marketing, and information technology officers). A number of writers have implicitly accepted Andy Clark's hypothesis that a top leadership team is, in theory, capable of operating in a way in which individual members combine their personal cognition to achieve the goal of shared cognitive complexity.80
However, Yves Doz and Mikko Kosonen recognized the extreme difficulty, even unlikelihood, that cognitive complexity would emerge from a top team.81 Top leadership teams aren't really teams at all. Don't count on them exerting truly shared leadership.
For most companies, Doz and Kossemen insisted, the “CEO continues to set strategic targets and holds the heads of the main business units or functions accountable for achieving them.” Department heads operate like “semi-autonomous feudal barons, using considerable discretion to achieve their goals.” This is true even when executives are given a stake in total company performance through stock options. Top team meetings “become highly ritualized, and little time is allotted for free-flowing exchange”82 This is not teamwork in any real sense and not likely to produce team leadership. At best, these teams may provide valuable and diverse advice to the CEO who will then make key decisions.83
The CEO is an institutional feature of all top leadership teams. Powerful CEOs can centralize decision making, constraining open discussion. And the chances are good that one or more of the team members has designs on that top position, setting up a win/lose career competition that mitigates collective processes.84 And then there is the question of diversity. Unless these teams are diverse, there is little likelihood of expanded cognitive complexity by virtue of team interaction.
It is the element of diversity among members that allows teams the opportunity to match external environmental complexity with internal cognitive complexity. Top leadership teams that enhance membership diversity and encourage members to challenge one another's thinking have the opportunity to develop a more complete understanding of their choices, create a richer range of options, and arrive at higher-quality decisions.85 Challenges arise from different approaches to seeing a problem, to understanding the environment, and to envisioning a response.
As the organization expands beyond national borders, leadership may flow from the diversity of the countries of origin for top team (and board) members. Often, differences in the country-of-origin of members are taken as a useful proxy for cultural diversity. The assumption that passport diversity equates with cognitive diversity, however, is dubious.
Particularly when the experiences, values, motivations, and biases of team members overlap, they are more likely to find consensus but far less likely to engage in the open debate, advocacy and inquiry, and problem-solving process that are required of complexity. If team members, regardless of their passport homes, share a way of thinking, a common approach to problems, a single paradigm for addressing the organization and its environment, then collective cognitive capacity is unlikely to be enhanced.
To acknowledge the obvious, executives do not find themselves on top teams randomly. They have all arrived through the same chute, traveling a path through the corporation (or hired from the outside by the corporation). Constructing a leadership pipeline typically involves not a search for diversity of thinking, but rather a desire for commonality.
The notion of “fit” works toward homogeneity rather than heterogeneity. The emphasis on corporation culture has the impact of favoring some ways of thinking over others. A common corporate culture may have a positive impact on corporate performance. Leaders at companies including General Electric, Southwest Air, Nordstrom's, and In-N-Out Burgers certainty believe that to be the case. Still, human resource policies relating to selection, promotion, and development intended to reinforce individual “fit” and cultural homogeneity do little to promote cognitive diversity.
And then there is the construction of the top leadership team that needs to be considered. This is not just any cross-functional team, not any passport-diverse team. This is a tightly structured, profoundly hierarchical team. There is, for the most part, one CEO. That individual may have a highly commanding style, demanding tight control over the team.86 Membership on the team is the result of promotion up the ranks, or of an acquisition that landed the CEO of the target company in the acquiring corporation's C-suite. Removing an individual from the team because of a failure to contribute cognitive diversity is no simple matter, even assuming such diversity was both desired and identifiable. “Finally,” noted Kathleen Eisenhardt and colleagues, some top leadership teams “may avoid conflict simply because of fear that endless debate will lead to slow decision making and divert attention from critical issues.”87
Collective cognitive complexity is an ideal, a theoretical possibility suggested by cognitive science. It is difficult to escape the conclusion, however, that top teams really function as advisory groups to a powerful individual. It can be a team capable of generating collective cognitive complexity, but the institutional conditions make that unlikely. That is not to say that a top leadership team cannot contribute. Certainly, it could be better able to process input than any individual, undoubtedly an asset in the huge complicated world of multinational companies.
Looking Backward/Looking Forward
Leadership theorists have long understood the complex nature of organizations. That complexity, both internal and external, has steadily increased throughout the 19th and 20th centuries, and continues to do so. To the degree that we understand complexity as a core component of leadership, we can look at the capacity of leaders, both as individuals and as members of teams, to manage complexity. For that reason, cognitive complexity has become a key focal point of the discourse.
The complexity of mindset and behavior that resides within an organization's leadership is intended to match the complexity of the environment in which those leaders seek to be effective. That's the reason many organizations look to leadership teams as a mechanism for enhancing cognitive capacity. The way leadership teams are constructed, however, often undermines the capacity that organizations seek to create by echoing hierarchy and reinforcing compliance rather than allowing for messy, inventive thinking. That limitation will be problematic particularly as complexity continues to grow.
In her review of the global leadership literature, Joyce Osland noted a tendency to create a definition of global leadership simply by extrapolating from “traditional domestic leadership definitions.”88 It's hard to conclude that scholars have moved beyond the assertion that global leadership is different from domestic leadership because global organizations and their contexts are more complex. Managing complex organizations in complex environments is a challenge for all leaders. Some purely domestic organizations may be highly complex, while some global organizations might be relatively less so. Rather than considering global leaders as an ideal type, we can think of leadership generally as residing in the challenge to navigate a course for complex organizations through complex environments.
