These times demand Cross-Enterprise Leadership

Business leaders are worried about numerous issues including the possibility of recession, high oil prices, the growing war for talent, the increasing speed of change and the complexity of managing in countries that each have their own political, cultural and regulatory restrictions.

But an overarching concern is the ability to manage across the enterprise – to keep everyone mindful of how their actions affect the entire organization and how they reach outside to affect what happens externally to their organization.

In a Question and Answer with IBJ, Ivey Dean Carol Stephenson discusses the importance of this cross-enterprise leadership approach.

Why is cross-enterprise leadership more important and necessary now than it has been in the past?

The role of the organization is changing. No longer are companies the top-down, hierarchical and stable organizations of the past, business now needs to be more nimble to compete in this more connected and flatter economy.

To survive in today’s business world, companies need to embrace leadership that unites the narrow expertise of each individual department; leadership that is based on a broad, issue-based platform.

Companies are increasingly enterprises where leaders need to manager and influence others – both inside their organization and outside. Leaders at all levels in an organization need to lead by persuasion and influence. Flatter organizational structures mean people often need to work with colleagues over whom they have no or little authority. This is true for projects that engage people both within the organization and outside. For example, bringing together various companies to create an informal alliance to collaborate on a special project – or getting a new technology to market.

You refer to companies as “enterprises” – is that an evolution of the company?

The term “enterprise” encompasses more than just the company. It consists of a complexity of interdependencies both within the organization and between the organization and the environments – both public and private – in which the organization operates. As companies interact with other firms in our increasingly global environment; and as they interact with governments and non-governmental bodies, the term enterprise incorporates these interdependencies. Companies such Research In Motion with smart phones and devices available in 110 countries need to not only think of their customers and employees, but also varying government regulations, different technological platforms and diverse cultural attitudes in all of the countries where they’re active.

Are companies too often divided into silos?

Managers can no longer view the business landscape through their own narrow functional lens. Instead of a sales manager focused on moving more product out the door, he/she needs to engage the designers of the products; to interact with customers to find out what they’re looking for; and to serve as a liaison between customers, production and distribution.

As one CEO I recently spoke with said – it’s not enough to come up with an excellent product that you like, the product has to be something the customer really wants. It can have all the great qualities in the world, but it won’t sell unless customers want to buy it. And not just the sales manager needs to be tapped into that, but every individual in the company, at all levels of the organization.

Speaking of surmounting silos within organizations, Sony Corp. Chairman and CEO Howard Stringer is working on an ambitious turnaround of the international technology and entertainment company and as quoted in the Globe and Mail, one of his first steps was to work improve the company’s ability to compete by “breaking down the existing silo walls and eliminating the highly decentralized structure we’ve maintained in the past.”

Sony has recently taken some steps towards turning around. It was successful in making its Blu-ray technology the standard for DVDs, beating out rival Toshiba’s HD-DVD format. That success was hard won with Mr. Stringer’s Hollywood contacts providing strong support. That’s a clear example of leading across the enterprise – reaching outside the organization and tapping into external networks to pull together a successful collaboration.

Although initially pummeled by Nintendo’s Wii, adoption of Sony’s Playstation game console was more recently bolstered due to the addition of the Blu-ray technology as Sony gave away free movies with the purchase of the PS3 – encouraging the use of the game console as a video player.

Apple Inc. is a prime example of a successful cross-enterprise company, bringing together outside content (music) and coupling it with their easy-to-use platforms. Content from the company’s partner providers is integrated seamlessly with Apple’s technology.

What are your ideal qualities of a CEO?

CEOs need to be able to work in a rapidly changing environment. Effective leaders must continually strive to gain greater knowledge and understanding and they need sound judgment to employ it properly. They must think on their feet and be comfortable making decisions, often when there’s not enough information.

Effective leaders need the ability to anticipate and adapt to change. With globalization, a growing integration of markets, and the rapid advance of technology and information systems, business is brimming with opportunities and endless possibilities, but also complex challenges. Leaders with a solid understanding of business units across the enterprise will be in a better position to manage and lead change when it occurs.

Perhaps most importantly, standout leaders need to be able to influence and persuade those over whom they have no power. They need to build, foster and influence a complex web of relationships across all levels – from employees, partners and suppliers to customers, citizens and even competitors. Great leaders never command people to follow their lead. Instead they engender trust, encourage initiative, and secure loyalty.