Best Companies for Leadership | Europe
Inspiring leadership and the ability to recover quickly from setbacks distinguish Europe’s Best Companies for Leadership from the rest. Georg Vielmetter
Regional director, Europe, leadership and talent
Time to develop
Europe saw a significant increase in survey participation this year with over 7,500 respondents taking part. It has given us a detailed picture of what is currently driving European organizations and, what distinguishes the Best Companies for Leadership from their peers. Germany is particularly well represented this year with four companies in the European top 10: Siemens, Daimler, Volkswagen and SAP. We’ve also seen a growing recognition that leadership and leadership development will be critical for steering the region’s businesses out of the economic difficulties that have beset the region: our results show that senior leaders in 65 percent of Europe’s Best Companies personally spend time developing others – almost 20 percent more than the European peer group, and a 13 percent increase on last year.
Innovation: the European difference
In common with their global counterparts, Europe’s best-led companies are adept at balancing the ‘twin peaks’ of operational excellence and innovation. But there is something striking in the way European companies view innovation. For them, the focus is on continuous improvement of existing products and services: 57 percent of top 10 European companies say that this will be central to growth over the next five years, versus 43 percent of the global top 20.
This is in contrast to Europe’s global peers, which model a more disruptive approach to innovation, focusing on comprehensive breakthroughs. For 46 percent of the global top 20 Best Companies, ‘finding new, different ways to go to market’ will be a priority over the next five years, whereas only 22 percent of the European top 10 agree.
The innovation opportunity
The increasingly complex and volatile global business environment is such that European companies – as part of their planning – would do well to consider scenarios where a more disruptive approach might be more appropriate.
Overcoming the downturn
The most noticeable difference between Europe’s top 10 companies and their regional peers is the emphasis they place on inspiring leadership. While about 27 percent of respondents in companies outside both the European top 10 stated that inspiring leadership is most valued in their company, it is much more likely to apply in Europe’s best-led organizations (46 percent) – even higher than the proportion in global top 20 companies (36 percent).
Leaders in Europe’s best-led companies are also more resilient – the ability to bounce back from setbacks is valued more highly in the top 10 companies than in the peer group.
This is perhaps owing to the fact that setbacks themselves are viewed with a sense of proportion: 71 percent of the region’s best-led companies treat failure as a learning opportunity, compared to just 56 percent of businesses outside the top 10.
These leadership competencies are critical to helping companies overcome the adverse market conditions seen in many European countries in recent years. There is a strong need for inspiring, resilient leaders who can overcome setbacks quickly, motivate employees in difficult times and get their commitment with limited tangible incentives.
With the uncertain economic outlook continuing across Europe, all companies should ensure that they are developing leaders with these skills, to help take the organization forward.