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TheStreet Open House

Leading Without Coercion

NEW YORK ( TheStreet) -- Last month I asked, "Where are Asia's global companies?" Why is it that a region with such strong manufacturing capabilities is lagging in building global businesses?

There are myriad reasons, but two stand out. The first is English. Asian languages are very different. For most Asian companies, conducting operations in English is a monumental task.

But the biggest challenge to global success is moderating the coercive leadership style common across Asian cultures. Coercive leaders tell followers what to do. In emerging Asian countries where skills are low, coercion is often a successful style.

But when Asian managers tell developed-country employees what to do they inadvertently create conflict. Successful global managers must be able to adapt their leadership to match the situation. That means they need more than one management style in their tool belt.

Mary Fontaine, a management committee member for the Hay Group, describes the experience of an American general manager of a U.S. consumer products company in China. The general manager felt a new direction was needed and tried, unsuccessfully, to convince its Chinese franchisees to accept the new direction. He used the same influence approach that he had used successfully with U.S. franchisees.

But this time the result was confusion. In frustration, he gathered all franchisees to an offsite workshop and told them that every family has one father. As the company's representative in China, he serves as the father and the franchisees needed to follow him. Immediately, they fell into line. In this case, his switch to a coercive style met the franchisees' expectations.

Several years ago, I conducted a 360 feedback session with a Japanese manager of a Japanese workforce. His scores indicated that he created a highly motivating climate. But his dominant management style was coercive. I was dumbfounded.

"What is your role?" I asked. He told me that he takes new graduates and teaches them to be entry-level engineers. That made sense. It's kind of like a high school algebra teacher. No one wants a democratic algebra teacher, "Let's vote on how to do this problem." Coercive leadership is a better match to the needs of unskilled followers.

But use coercion to lead a group of Dutch engineers and you are in for a world of pain. I can attest to that from personal experience. Successful managers manage to the situation.

Below are two prescriptions for Asian companies to align their management styles to the needs of global followers.

Prescription #1: Localize international operations.

For Asian companies, the fastest way to improve global management capabilities is to place locals in key management positions. Asian companies are well-known for deploying large numbers of expatriate managers (Asians in non-Asian countries). Their rationale is that local managers are required to communicate with headquarters.

However, in many cases, that assumption has not been carefully considered. Here is a method for making more thoughtful resourcing decisions:

Standardize all country-level positions and clearly describe how each position operates. Create no more than five major activities -- what position holders must do when they come to work each week. If they do 100 tasks, then group the 100 into five categories. Five is typically the most activities that people can remember. And if you cannot remember all five, the definition will have no impact on behavior.

Decide, precisely, which positions require communication with headquarters. It will be far fewer than previously assumed.

Create a detailed plan to move expats back to Asia and rigorously enforce timelines.

Collect input from local unit employees to create a statement of "how things are done around here." Use corporate values as principles (e.g., teamwork) and create behavioral examples of how each principles is applied locally ("In our unit, team work means that ...").

Prescription #2: Moderate management styles.

The Hay Group bases many of its tools and practices on the work of the late David McClelland, a Harvard psychology professor and pioneer on human motivation.

McClelland described six primary management styles: Coercive (telling what to do), Authoritative (setting direction), Affiliative (creating good interpersonal relationship), Democratic (gaining broad input), Pace Setting (suggesting what to do), and Coaching (helping subordinates identify and solve their own problems).

Fontaine suggests that reversing the coercive management style of a 45-year-old Asian manager is impractical, if not impossible. But adding an additional style is very practical. Here's how:

Assess all expat managers. Look at every expat manager's climate scores and conduct 360s to identify prominent management styles. Separate those who can develop global management skills from those who cannot.

Add additional styles. Rather than focusing on reducing coercion, try adding one or two new styles. Consider adding the affilitative style first -- "I care for you and that is why I'm hard on you." Most coercive leaders focus on the task and ignore the impact on the person. Strengthening the affiliative style will help reduce the sting of coercive leadership.

Fontaine suggests that other Asian leaders have been successful gradually adding the democratic style. In this approach, the leader defines a few areas where he/she is willing to truly delegate work. If one delegated area goes well, then try one more and then another. Practice makes perfect.

Over the past few decades, Asian companies have built strong manufacturing/export capabilities. But extending that growth path will require building global companies and leveraging the world's best talent.

A primary challenge is leading developed country work forces differently -- leading without coercion. Global aspirations are great, but failing to plan is planning to fail.



This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Brad Hall is managing director of Human Capital Systems (www.humancapitalsystems.com), a firm that designs systems for improving workforce performance. He is also an instructor in Duke Corporate Education's teaching network and author of The New Human Capital Strategy. Hall was formerly a senior vice president at ABN AMRO Bank in Amsterdam and IBM Asia-Pacific's executive in charge of executive leadership and organization effectiveness. During his tenure, IBM was twice ranked No. 1 in the world in Hewitt/Chief Executive magazine's "Top Company for Leaders." Hall completed his Ph.D in industrial-organizational psychology at Tulane University, with a dissertation on people management practices of Japanese corporations.

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