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Is Europe Meeting its Potential?

Post-crisis economic recovery, are European leaders stepping up?

What will it take for European leaders to succeed and rebound in its economic recovery? Personality tendencies play a significant role in how leaders are navigating this turnaround.

“While European leaders show strong strategic flexibility in the face of shifting dynamics, this advantageous style is countered by a less thoughtful and planful execution approach. Their risk, then, lies in being adept in the realm of strategic ideas compared to global peers but unable to translate these concepts effectively or quickly into execution.”

Is Europe Meeting its Potential?

Europe’s Economic Outlook

The momentum of European recovery, post crisis, has lagged behind other western economies, like the United States, due to a complex range of geopolitical factors and structural weaknesses (e.g., Euro reform). Several influences continue to slow the turnaround:

  • Margin pressures associated with sluggish rebound and weakening of emerging markets, (e.g., Russia).
  • Productivity, innovation, and the dynamics of change are constrained by heavy labor regulations (e.g., France).
  • MNCs struggle to overcome regional/business unit parochialism, and drive synergies and efficiencies.
  • Traditional organizational structure and leadership hierarchies prevail (e.g. Germany, Eastern Europe).
  • Conservative mindset in financial and manufacturing sectors.
  • Cultural, language, and ethnic insularity.

We matched common business challenges confronted by European leaders, drawn mostly from multinational corporations, to their collective personality profile. We compared them to global peers in their predispositions to overcome these market challenges and accelerate the economic rebound.

Evidence

Despite the cultural and linguistic diversity in the sample, Europe’s leaders show a similar personality profile to global and U.S. peers. However, European leaders operate within a much more structured economic environment. To thrive in this constrained context, they may need to draw on stronger enabling attributes and better-mitigated derailing tendencies than global peers in more progressive markets.

Collaboration and Diversified Networks—European leaders are more competitive (expressed as independence and ambition), display higher self-promoting tendencies, and are less naturally empathetic. Combined, these patterns suggest dispositional challenges, creating and leveraging enterprise opportunities across company and country boundaries. European leaders may succumb more easily to business silos and be less open to capitalizing on new markets.

Decision Making and Execution—While European leaders show strong strategic flexibility in the face of shifting dynamics, this advantageous style is countered by a less-planful execution approach. Their risk, then, lies in being adept in the realm of strategic ideas compared to global peers, but unable to translate these concepts effectively into execution.

Driving Innovation—European leaders are innovative, being less perfectionistic and more strategic, creative, energetic, and comfortable acting independently. However, the question remains whether this is sufficient to overcome European market barriers to innovation and lower effectiveness at the execution phase.

Action

  1. Emphasize an enterprise perspective, capitalizing on cross-functional and business unit potential, which demands purposeful, consistent approaches to a “silo” orientation. European companies must equip leaders to champion an enterprise vision by rigorously aligning corporate strategy, performance metrics, and people systems (e.g. compensation).
  2. Cultivate agile change leaders who help associates embrace and balance the paradoxical priorities of greater innovation vs execution, and collaboration vs independent decision making. All are essential to create and sustain the collective ideation, confidence, ownership and outcome focus needed to turn the tide for Europe.
  3. Develop and support behaviors associated with optimizing partnerships, strategic influence, and respect for diversity. Heighten leader preparedness for the reality that their biggest challenges will be best conquered alongside partners, and that little can be accomplished in isolation.
  4. Select and promote leaders who shrewdly evaluate, develop, and deploy talent. Complexities inherent in today’s global business and matrix structures require leaders who leverage resources to play their position in the organizational mosaic. For example, where there is an execution imperative, identify those with the conceptual breadth to drive strategy focus, alignment and accountability to drive results.
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High Resolution Leadership
A Synthesis of 15,000 Assessments into How Leaders Shape the Business Landscape

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