Globalization is a part of our growing business world. Especially, the importance of having strong leadership to drive business results for customers and shareholders.

Leadership on a global scale can be a daunting task, full of unknowns, uncertainty, and the fear of failure. So, the question to ask is; are we developing our future leaders with the right leadership competencies to lead our future business interest?

Understanding the financial impact of this sizeable investment in leadership development is the first step in building global leadership competencies. Purely stated, effective global leadership competencies are those that drive organizational performance, revenue growth, profitability, and shareholder value.

For example, current research (Knowledge Advisors, 2005) according to IDC shows that 50% of training expenses invested in people is wasted, because organizations don't fully leverage the investment to their competitive advantage. Furthermore, Fortune 500 organizations who invest 2% of their total revenues into Learning & Development and when organizations don't leverage the investment fully, only 1% of the revenue investment are utilized.

Thus a company with annual revenues of $10bn dollars, making a 2% learning and development investment of that revenue, has squandered $100MM dollars which can never be recovered. Therefore, the business case to leverage this investment is critical to the profitability of any organization.


What is the business case for building global leadership competencies?

The answer is quite simple. Constant internal and external pressures to reduce price, deliver specialized products, reduce labor costs, produce high quality products at low cost, etc. requires different leadership competencies to drive business results.

Leadership is often measured by the return on the investment or reduced turnover or improved profitability, etc. Therefore human resources or training professionals need to ensure there is a clear linkage between leadership competencies and business objectives.

The Human Capital Contribution Model as used by Knowledge Advisors" (2005) is a good model to help an organization understand the various aspects of how the development of global leadership competencies will effectively help drive business results. The model focuses on these dimensions:

- Business Needs Analysis
- Performance Analysis
- Business Results Analysis
- ROI Analysis
- Profit Impact Analysis

To review the model as described in this article, go to Knowledgeadvisors.com.

Using the Human Capital Contribution model provides a solid starting point to direct your efforts and understand the impact of measuring integrated global leadership competencies can have on your business. Aligning your global leadership competencies around the five dimensions of this model can provide you with a good analysis of how the competencies link to your business objectives:

Good, pragmatic global leadership competencies separate those who are global and those who are pretending to be global organizations. Therefore, the need to establish global leadership competencies and link them to business objectives is not only a prudent thing to do, but a business imperative to operate in a global environment.


Five Key Global Competencies for Tomorrow's Business Leaders

As globalization cements itself and becomes part of an organizations DNA, literature is still emerging as to what global leadership competencies are needed for tomorrow's leaders to gain a competitive advantage. In the book by Goldsmith, Marshall et al, "Global Leadership. The Next Generation there are 15 global leadership dimensions; with 5 factors (competencies) that tomorrow's global leaders need to understand to gain a competitive advantage for their organizations.

- Thinking Globally-Leaders need to understand world economies, the impact of political systems on business, and the legal impact of business ventures. Understanding globalization and the impact it carries, could provide organizations with a competitive business advantage.

- Appreciating the Cultural Diversity-Leaders need to understand and appreciate the differences of each culture. Respecting others culture and ethnicity is the hallmark of good leadership.

- Developing Technological Savvy-Understanding the impact of technology on business interactions. Organizations use technology in every aspect of their business operations and understanding how to leverage technology through people to recruit and retain talent.

- Building Partnerships and Alliances-Being able to navigate complex relationship as you build alliances is key to global business success. Having an integrated approach that is win-win is the best possible approach to relationship building.

- Sharing Leadership-Sharing leadership is no longer negotiable or an option, but must be a part of global leadership. Sharing is important to lead future employees, because the sense of organizational loyalty will become a thing of the past. No longer can you direct employees' with no input, they want to be involved, which is critical to your success as a leader. Employees are looking for leaders who provide challenges and opportunities, because as free agents employees have no problem in moving to another organization that will provide those challenges and opportunities.


Final Thoughts

Globalization is growing in an exponential manner through the emergence of new markets, opportunities, and technologies. For organizations to be prepared for the challenges of globalization, they should take an introspective look and assess their leadership development to ensure the appropriate global competencies are developed, measured and aligned to business objectives.

Using established talent management and succession planning actives in your organization will help drive the development and acceptance of global leadership competencies. Differentiation created through your global leadership competencies is what separates great companies from good companies.

Global leadership will continue to challenge organizational learning and thinking as organizations seek ways to gain a competitive advantage through good people practices. Understanding the complexity and sense of urgency surrounding this topic, human resources professionals and business leaders need to engage in conversations about building global leadership competencies with questions such as:

- Do we have defined global leadership practices and if so, should we revise them?
- Does it really make a difference if we don't' have global leadership practices to be successful in a global business environment?
- Will we see a return on these investments of leadership development if we make a substantial capital investment?
- How can we use our global leadership practices to really create a competitive advantage through people in global markets?

As you can see, these questions are just the tip of the iceberg; however they should stimulate a review your global leadership competencies to ensure they are linked to your strategic and tactical business objectives. Key take away, no leadership investment today---leaves nothing to lead tomorrow.