1994 INTERNATIONAL SYSTEM DYNAMICS CONFERENCE
Leadership in a Global Village: Creating Practice Fields to Develop
Learning Organizations
Stephen A Stumpf, Mary Anne Watson, and Hemant Rustogi
The University of Tampa
401 West Kennedy Blvd., Box 65F
Tampa, Florida USA 336061490
Tel: 8132536271 Fax: 8132587408
Abstract
For a practice field to be of greatest value in ping global leadership capability, it needs to be
constructed so as to combine meaningful cultural and national issues with realistic interpersonal
dynamics. This paper examines how two practice fields designed to facilitate systems thinking and
organizational learning Foodcorp, International and Globalcorp accomplish this task. Both are
management development tools called behavioral si i (not P i i each
creates a realistic context, a microworld, for people to interact on business and global issues. Both
can be used to: (1) surface cultural assumptions in a socialbusiness context where they can be
observed, tracked, and discussed relative to various effectiveness criteria; (2) create a team capable of
performing with a shared vision and common mental models; and (3) develop leaders who can create
as well as accommodate micro cultural norms.
Preliminary results using this practice field approach are supportive of these objectives. A growing
number of organizations (e.g.. Apple Computer, Citicorp, Dow Jones & Company, American
Express, AT&T, Northern Telecom, Glaxo) and educational institutions (e.g., University of
Michigan, Dartmouth College. Indiana University, New York University, The University of Tampa,
Defense Systems Management College) use such tools in their educational efforts. This permits a
rigorous examination of the utility of these tools in management development. This paper describes
the approach, provides two examples of how microworld practice fields are used, and shares the
results of the research underway.
Organisational L.
1994 INTERNATIONAL SYSTEM DYNAMICS CONFERENCE
Leadership in a Global Village: Creating Practice Fields to Develop
Learning Organizations
Global leaders must learn to lead multicultural microworlds through creating shared visions
and common mental models. They must manage diversity less by appreciating and utilizing
national and cultural differences, and more by establishing an organizational culture which
tr ds these aifte Program for developing global leaders must go beyond teaching
people to app date cultural diversity to the task of developing people capable
of creating an organizational culture which can cohere diverse groups (McBride, 1992). Peter
Senge (1990) has proposed one such approach -- a learning laboratory. We have used this
approach in the context of the global village ideas proposed by Marshall McLuhan (1964;
McLuhan & Fiore, 1968) to create a microworld practice field that facilitates systems thinking
and organizational learning.
For a microworld practice field to be of greatest value it needs to be constructed so as to
combine meaningful cultural and national issues with realistic interpersonal dynamics. This paper
examines how two microworld practice fields -- Foodcorp, International and Globalcorp --
accomplish the task of creating a global village. Both are management development tools that
are best thought of as behavioral simulations (not ) that create a realistic
context for people to interact on business and global issues.
Three objectives are typically shared when these practice fields are used to facilitate
systems thinking and organizational learning. These objectives are: (1) to surface cultural
assumptions in the simulated context where they can be observed, tracked, and discussed relative
to various effectiveness criteria, (2) to provide a practice opportunity for creating a global team
capable of performing with a shared vision and common mental models; and (3) to develop
leaders who can create as well as accommodate cultural norms worldwide. This paper describes two
practice fields and their common approach to facilitating systems thinking and organizational
learning. We provide two examples of how microworld practice fields are used and share the
results of the research underway.
Global Village Practice Fields
_ Behavioral simulations stand apart from computer simulations in that they attempt to
and that would normally be observed in a managerial
work environment, including some degree of political, cultural, and conflict activity (McCall &
Lombardo, 1982; Stumpf, 1988). The behavioral simulations that we discuss here are ones that
attempt to mirror the top management roles and responsibilities of a global company.
The reality of the organizational seine in a behavioral simulation is obtained through
the use of baskets for each lated role -- roles that
are ii d to reflect or 1 realities, The content of in-baskets as well as the
design for the organization is based on actual data and events collected from ongoing
organizations. It is through the realism of the materials provided that the practice field created
stimulates representative behaviors from its participants (Dutton & Stumpf, 1991).
A realistic microworld practice field creates the possibility for dynamic interactions
among partici s. These i i tend to be rep ive of the participants’ on-the-job
performances over the 6 to 10 hour duration of the simulation. By analogy, we would expect a
soccer team to be more inclined to exhibit game-like behavior on a true soccer field than in a
gymnasium. The greater the similarity of the practice setting to the performance setting, the
more likely the practice behaviors will be rep of the per g behaviors.
In the Foodcorp and Globalcorp simulations, participants are given a choice of several
roles that vary in terms of hierarchical position, product or functional responsibility, issues to be
addressed, and status. These roles create the organizational structure. For example, Foodcorp
International, a food facturing organization, simul 13 senior roles, three
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1994 INTERNATIONAL SYSTEM DYNAMICS CONFERENCE
levels of hierarchy, two product groups, and two subsidiaries (Sonny's Restaurants and Farm Fresh
Yogurt). Foodcorp's products (dry goods and frozen foods) are sold to distributors and retail
supermarkets throughout the U.S. and in 60 other countries through 30 manufacturing plants, 15
marketing affiliates, seven licenses, and six regional export sales organizations. Foodcorp is a
fairly large firm within its industry with 25,000 employees and $2.7 billion in sales.
Foodcorp uses a matrix organizational structure and has several committees to augment
this structure. New product development activity, internal corporate venturing, joint ventures,
international licensing agreements, and diversification/ consolidation activities are integral to
Foodcorp and the food processing industry. Consumer marketing (including brand development
and advertising) and production quality are key issues domestically and internationally.
In comparison, Globalcorp (an public version of the proprietary Financorp simulation) is
a diversified international financial services conglomerate of $27 billion in assets. Each of its 13
senior management roles has corporate strategy development and business portfolio management
responsibilities. The consumer banking sector is comprised of a branch banking group, a credit
card group, and a consumer credit group. The commercial banking sector includes an investment
banking group, an institutional banking group, and a transaction services group. The financial
product and services sector is comprised of an information/investment services group, an
insurance products group, and a research and development group. Each of the nine groups has
two or three lines of business that offer a full array of products or services with profit-center
responsibility.
Unlike the more ho line-of-busi: ituation and ional activity
common to Foodcorp, Globalcorp involves active coordination and competition across lines of
business. The three levels of Globalcorp are d bya that
tor and busi di ion of (e.g., who owns the
customer?), new business ventures, acquisitions, mergers, divesti and line-of-busi
direction.
Creating a Global Village Experience for Organizational Learning
Some of the attributes of Foodcorp and Globalcorp that make them more "life-like" than
other methods for teaching systems thinking and organizational learning are the presence of a
formal hierarchy among participants, division of labor, and realistic information contained in a
hefty in-basket. Several other characteristics enhance the real- life quality of the simulation, e.g.,
the existence of various standing that can be
attended, rescheduled, or ignored by participants; and the in-coming and out-going mail
throughout the simulation that is created by participants as they attend to or ignore various
issues,
The large number of issues contained (e.g., 18+ major issues and 30+ minor ones, with
each role confronting about a third of these issues) make it a rich environment and context. This
rich, interconnected, interactive context tends to minimize the dominance of any single
participant’s style and approach. The result is the creation of a group approach and culture. The
temporal and artificial nature of the training experience actually assists participants in creating a
microworld -- a smaller, more immediate world that takes on a life of its own during the
simulation and debriefings that follow.
The materials in Foodcorp and Globalcorp mirror real izational experiences. Prior
to the simulation participants self select a role and thereby assume an organizational title, an
associated status and position in the hierarchy, and role responsibilities. They are given a
corporate annual report, an organizational’ chart, and information describing the functions
performed by other role holders including their managers and direct reports. Participants devote
from five to ten hours each to reading, analyzing, and internalizing this material along with
dozens of pages of memos, corresp phone and reports that are unique to the
position they have assumed. While some of this effort is performed individually, small group
and are d to ghly familiarize each participant with his/her
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1994 INTERNATIONAL SYSTEM DYNAMICS CONFERENCE
position, its key issues, and significant company attributes.
Upon arriving at the i location ici are provided with individual office
space, desks, a conference room, in-baskets, and writing materials. As an initial structure to their
work day, they receive schedules of meetings, agendas of issues, budget reports, and memos
containing information about current and unsolved problems as well as various opportunities. In
addition, mail pick-ups and deliveries are scheduled throughout the day. All of these
are di d to support a belief that the simulation as a real and valid
experience.
Foodcorp and Globalcorp begin with a complex and ambiguous task: Participants are
asked to run the organization as they see fit. The simulation typically concludes at a specified
time six or more hours later with an address by the President and other key executives to the
other employees. What issues are explored or ignored, who gets involved in decision making,
how formal and personal power are used, what climate is created and how it affects the
participants, and the actions to be taken or not taken emerge from the participants within the
context of the simulation. These attributes of their Id are d by
tallied, and used as part of the feedback process during the debriefing sessions.
While an organizational structure exists and some meetings are preplanned at the start of
the simulation, participants are free to manage the organization as they choose. The fact that
each role is initially constrained by the content of the information in it (e.g., data in memos,
annual reports, and job descriptions) does not constrain how individuals interact to get additional
information or how information is interpreted, shared, or used. They may (or may not) keep
one another informed on possible actions on key issues, collect relevant information, summarize
its implications, and formulate, become advocates for, and convince relevant others to accept
new policy proposals.
As participants become involved in strategy-making activities during Foodcorp and
Globalcorp, they are confronted with the time pressures, uncertainties, and dependencies
associated with bounded rationality constraints (March & Simon, 1958). As they experience and
become more aware of their limited capacities to comprehend, they may feel threatened. This,
in turn, may reduce their adaptive capacities. Participants may restrict their information
processing, narrow their fields of attention, overlook details, and reduce contact with other
organization members in order to cope with the demands of a senior management position. To
the extent that these behaviors occur, they are noted by a trained facilitator who is observing the
process.
While each microworld that is created is unique, there are patterns that can be noted
across groups, particularly if the groups are all employees of the same firm. For example, in one
firm within which we have worked the decision-making power within the simulation (and in real
life) often becomes centralized. Policies become dependent on the overall vision and
comprehension of those occupying roles at the top of the 's
Subordinates get isolated and may even become alienated.
The importance of influence and interpersonal skills that enable the relevant participants
to be included in decision making becomes evident to these subordinates as well as observers. But,
it often escapes those occupying the most senior roles until it is raised for discussion in a
debriefing session. An irony in this process is that in order for senior management to maintain
an understanding of activities within the firm that have strategy implications, the they must
depend on the inputs of participants occupying roles lower in the hierarchy. These participants
are often feeling isolated and left out. So they focus their attention on local matters, ignore
opportunities to influence their senior management counterparts, and further cut themselves off
from a more strategic and global perspective.
In the eight to ten hours of feedback and analysis that takes place after the simulation
experience, participants become more aware of these dynamic inter-dependencies, how their
interdependencies evolved over time, and the behavioral roles which they and others enacted in
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1994 INTERNATIONAL SYSTEM DYNAMICS CONFERENCE
this policy-making process. They become aware of the systems dynamics within the microworld
that they created and the extent to which it was a viable global village. This legitimizes their
4 their busi secici B
exploring the cultural assumptions they held that infl their
reviewing these decisions and the thoughts and behaviors that lead to the decisions, participants
are able to explore how their collective cultural diversity lead to a mi Id of shared
perceptions. It is through this debriefing process that participants become eager to learn how to
improve individual and collective per in future end
Participant response to the Foodcorp and Globalcorp behavioral sii ions has been
uniformly positive. No one has dismissed the experi as listic or p ive. In
fact, facilitators of the feedback process encourage participants to discount those aspects of the
experience that are listic or ive to them. Post-feedback session evaluations of
the program have highlighted a tremendous amount of relevant learning that participants think
and feel they obtained. Follow-up research has confirmed these evaluations -- participants
remember the experience and the lessons they learned several years later. Eighty-six percent of
the more than 2,000 participants surveyed have expressed a desire to attend another behavioral
simulation to further their insights and development (Stumpf & Mullen, 1992).
Two Practice Field Applications
The growing awareness by organizational leaders of a need to develop global managers to
perform effectively in a global market place has lead to rapid growth in global training programs.
Several of these programs have chosen to focus on the development of management talent suited
to leading a diverse workforce and satisfying customers from different cultures. The
organizations sponsoring these programs know that their managers must learn to frame
experience in a way which allows for common interpretation and unified action (Peters &
Waterman, 1982, Pondy, 1976). These managers must learn how to effectively guide the
behaviors of a culturally diverse workforce through the creation of a shared vision and a common
di ding of the organization’s actions. One way of doing this is through the creation of a
microworld with a culture so strong that it coheres the actions of diverse groups around the goals,
beliefs, and practices of the firm. Developing managers who can build a unifying microculture
requires providing them with experiences to practice creating and shaping a microworld (McBride,
1992).
Two izational prog) > one ducted by Northern Telecom and the other by
Citicorp -- exemplify the use of Foodcorp and Globalcorp as practice fields for managers to
exhibit and develop leadership skills in creating a global village. By reflecting on how they
created a global village -- through the vision, values, behaviors, and actions of participants --
these managers begin a process of systems thinking and organizational learning.
While the similarities of the programs offered by these two firms far outweigh the
differences, the differences are particularly noteworthy. Northern Telecom, a midsize
| icati i head d in Canada, wanted a practice field
experience that placed their managers in a matrix organizational structure facing a highly
competitive, global marketplace with a line of products that had potential for rapid growth in
select markets. While some competition across product lines was desired, the practice field
needed to reflect a focused organization that was trying to grow in Europe, the Pacific Rim, and
South America. Foodcorp fit their needs.
In contrast, Citicorp, a large, international, financial services firm headquartered in the
U.S., wanted a practice field that reflected a decentralized, multi-product line firm that was
diverse in its product offerings. As there is little in common among many of Citicorp’s banking
and financial service businesses, it wanted a practice field to have a large number of profit centers
within it to parallel the Citicorp organization. Globalcorp reflects both the financial services
nature of Citicorp as well as its line-of-business profit center approach.
Both the Northern Telecom and Citicorp programs were conducted over a week with
particip i id focused on ping leadership skills with respect to global issues and
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1994 INTERNATIONAL SYSTEM DYNAMICS CONFERENCE
a diverse workforce, and included lecture/discussion components to set the stage for the practice
field session. Both programs included a multirater “feedback from home” assessment instrument
as part of the program so that participants would have manager, peer, and direct report views of
their skills based on previous job performances.
Participation in these programs was voluntary, prestigious, and limited to people who
managed other managers (middle and upper-middle managers) and/or to people who had
significant responsibility for a line of business or function. The enrollment in each program was
handled through the human resources function. Each program had, by design, a culturally diverse
group of attendees. This added to the challenges of managing a diverse workforce and attending
to a variety of cultural differences in the ways in which issues are approached and people interact.
Northern Telecom’s objectives in using Foodcorp were for participants to:
.
experience new forms of leadership behavior and the microculture they create as Northern
Telecom managers
. di d the interdependencies and tradeoffs inherent in modern organizational structures
(e.g., matrix relationships)
.
create and communicate a vision for that portion of the business for which each is responsible
.
develop greater personal of gths and devel 1 needs in light of Northern
Telecom’s mission, vision, and values
In addition, the week-long program was designed to:
endorse an i which supp people devel and i learning, and
outline their i to ! in people, pi and systems
identify the impact of global marketplace/workforce issues in executing their roles as leaders in
achieving the corporate vision and living its core values
.
describe the factors that contribute to effective, positive change, and determine ways to
resolve organizational barriers to facilitate change
demonstrate the ability to apply team skills in building organizational networks and alliances
The Citicorp program was d to help cope with the p of leading
effectively within the complex, fast-paced Citicorp culture. Issues such as dealing with ambiguity,
balancing action with control, choosing priorities, and operating within constraints are addressed
within the program. Specific objectives were to:
define the chall of ing effectively within the Citicorp culture
practice strategic leadership and differentiate it from strategic planning and tactical
management
build upon and learn from Citicorp experiences and processes across businesses and time
experience the process of creating a culture in an organization similar in size and scope to
Citicorp
+ identify, from a strategic perspective, the profitability and service dynamics of each business
. d the interplay between prodi offered, distribution systems used, and customer
segments served in different global markets
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1994 INTERNATIONAL SYSTEM DYNAMICS CONFERENCE
+ identify the interdependencies among business lines and the tension between internal structure
and external demands and perceptions
* develop a plan for applying the program learnings to the work place
Leadership in a Global Village -- The Results
Were the objectives in these two programs accomplished, and how did the behavioral
used help to sh them? Based on participant feedback following each offering
of these programs and subsequent follow-up interviews, the program objectives were substantially
met. Program evaluations of “the extent to which the program objectives were met” averaged for
each of the 14 program offerings (48 behavioral simulations involving 357 people) from 4.2 to
4.7 on a 5-point scale (“5” being the most favorable response).
In each program, and for each application of Foodcorp and Globalcorp, the participants
created their own global village; they became a separate entity with a distinctive culture,
approach to issues, vision, and values for the duration of the simulation activity. These
microworlds were the practice fields for the concepts espoused earlier in the program.
Based on participant and observer post-si ive practice efforts
were made by all but a few participants. These efforts were the behaviors that became the “raw
data” for many hours of g the i Their
practice efforts and the microworld they created were explored by them -- first individually, then
as a global village. Through discussion, participants were able to identify opportunities to
transfer both the successful and “still needs development” efforts of each person and their
microworld to their respective work settings.
As a closing activity for each microworld that was created, participants were asked to
summarize two generalizable personal insights and key learning points for their organization.
These were documented on ‘flip charts and fed back to other Participants in other simulations as
well as the parent For the 48 mi Id: d above, the following insights
and organizational learnings were shared by five or more microworld groups:
Insights Erequency of Mention
Those who say little may have the best ideas. 32
Creating a compelling image of the future is part of my job. 29
Blaming others is useless and destructive. 23
There are probably many right answers. 19
My personal style will dominate my skills if I let it. 15
Walking the talk is tough work. 12
Intentions and actions are not the same. ll
Life repeats itself until | learn; habits are hard to break. 9
I don’t have to do it all myself. 8
Organizational Learning Erequency of Mention
There is no one to blame, only problems to be solved. 34
Visions are of little value unless they are shared and compelling. 30
The enemy is us. 28
Simple solutions obstruct creative thinking. 21
Yesterday’s solutions are often today’s problems. 17
Structure must follow strategy. 12
Messy processes are not necessarily inferior to organized ones. 10
The past is not a reliable indicator of the future 8
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1994 INTERNATIONAL SYSTEM DYNAMICS CONFERENCE
Summary
Unlike other “practice sessions” where one or two program ideas are tried in a controlled,
simplified setting, the Foodcorp and Globalcorp simulations brought out each participant’s typical
approach to issues and people -- including their views of cultural diversity. Post simulation
discussions indicated that participants were trying hard to apply what they learned, but were often
overwhelmed by the complexity and realness of the simulati ivities and their i i
with each other as the leaders of the simulated company. Under stress, they did what came most
naturally to them. Many tried to create a microworld that paralleled their real world. Outdated
understandings and mental models of how things worked were hard to let go of -- even when asked
to do so as part of the program.
Without intending to do so, participants often recreated in their microworld an inferior
organizational system that was similar to the one that they had been living in, independent of the
program concepts or their expressed desire to change. It was not until participants were asked to
reflect on their actions and behaviors through a facilitated debriefing process that the above
noted personal and organizational insights emerged. It is these insights and organizational
learnings that are now being tracked in follow-up interviews. The interviews conducted to date
confirm the nature of the personal insights and have begun to identify how the organizational
learnings are being applied to specific business situations.
References
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