Mind the Social Distance Gap

Johan de Nysschen (previously the successful head of Audi of America) was appointed to lead the Cadillac division of General Motors in 2014. When he joined GM, one of his first decisions was to place physical and psychological distance between Cadillac and Detroit, moving Cadillac’s headquarters from Motown to Manhattan in 2015. In New York, Mr. de Nysschen felt that Cadillac could attract top talent, follow consumer trends more closely, and gain new buyers.

Unfortunately, Cadillac, a brand that had begun to transform its outdated image, continues to struggle. Its sales plunged to 156,000 in 2017 (from 180,000 in 2013) while other competitors have become more successful. There are many reasons for his lack of success. Robert Lutz, a former Chrysler and BMW executive, has suggested that de Nysschen’s physical separation from Detroit made it harder to influence others (Ulrich, 2018). During his tenure at GM, Lutz recalled being able to march into a finance executive’s office if he had removed $200 worth of chrome that Mr. Lutz viewed as critical. “I’d say, ‘Where did the chrome go?” Mr. Lutz said. “You stare him in the eye, argue with him and get it fixed. Even in this day of electronic connectedness, distance matters.”

Based on my own experience as a global manager for many years as well as the hundreds of interviews I have conducted with global managers, social distance –the gap in the degree of emotional connection between individuals as well as among team members – is a key variable in the success of global managers and global teams. For example, quite a few expats I have met over the years have suffered from the “out of sight, out of mind” syndrome when they start to lose touch with their mentors or senior executives back in the home office.

Overcoming the disadvantages of distance in general is one of the key challenges facing global companies today. Multinationals expand overseas for compelling business reasons—to seek new markets for their products and services; to take advantage of countries’ resources (what the economists call factor endowments) as well as its human capital, such as an educated workforce or particular skill sets in that country; and/or to seek efficiencies. At the same time, there is no doubt that distance makes it more difficult for multinationals to manage their subsidiaries and overseas locations. Youssef and Luthans (2012) have pointed out that global leaders these days experience three types of distance: physical distance (due to geographical dispersion), structural distance (due to organizational factors like decentralization and span of control), and psychological or social distance (due to status or power differentials).

Specifically, social distance reduces global managers’ ability to network, their effectiveness in building trust, and their efficiency in getting the work done. Communication gets misconstrued, and it is much harder to influence others when you cannot see your counterparts’ non-verbals. It is also harder to get feedback and to learn from the other party. To reduce the social distance gap, it is important to recognize and address what I consider to be its five major barriers.

The first barrier is geography or physical distance. As Epley (2014) has pointed out, physical distance is an important aspect of our engagement with others. He cites evidence from war and battles that soldiers who are fighting are more reluctant to use their weapons when the enemy is close to them physically. MIT professor Thomas Allen created his Allen curve, which shows the relationship between frequency of interaction and physical distance:

My suggestion for global managers: Strive for face-to-face interactions with your team and with other stakeholders, when feasible; the most successful leaders make sure they establish personal connections. As Betsy Myers (2011) has pointed out in her book, making connections is one of the qualities of effective leaders. Managing by walking around (or MBWA), popularized by Tom Peters, is still a fundamentally sound practice. When Apple was designing its new headquarters (a circular structure with 12,000 employees), its executives made it a point to make sure that the physical layout of the building maximized face-to-face contacts among employees across functions. This design was heavily influenced by the late Steve Jobs, who believed firmly in manipulating space to influence behavior. Zappos founder Tony Hsieh has talked about encouraging “collisions;” in fact, in its headquarters office, he has closed all side entrances so that all associates have to go through one main door.

The second barrier is national culture. Even though globalization and the popularity of branded products universally may seem like national cultures are becoming less important, virtually all the successful global managers I have interviewed recognize how important it is to be aware of national cultural values and norms when managing workers in different countries. My suggestion for global managers: Develop your cultural competency by learning the cultural norms of the countries where your team members and other stakeholders are from. Carlos Ghosn, who led a successful turnaround of Nissan in Japan, has suggested that it was important for him to like the Japanese culture and show genuine curiosity about it. 

The third barrier is language. Yes, English seems to be the language of business these days, with 1.75 billion people on the planet speaking English at a useful level, and for many organizations (including organizations with roots in non-English-speaking countries such as Unilever and BMW), English is commonly spoken in their offices. In fact, when bringing together stakeholders such as customers, vendors, or managers from different parts of the world, English seems to be the default language used by these corporations. Many companies in Japan require candidates for manager positions to achieve a certain level of proficiency in an English exam before they are even considered.

However, not being able to speak the local language can be a barrier to reducing social distance. There are still many parts of the world where English is not spoken in the work place, or where employees, not feeling confident in their ability to speak English, may hesitate to express their opinions. Quite a few global managers hire a local translator, or rely on their local administrative assistant, for help in translation and interpretation. But these only go so far and certainly require quite a bit of effort. My suggestion for global managers: Take language lessons, or at least learn a few words in the local language; in parallel, be aware of assuming that a lack of fluency in English among your local staff means a low level of competency. Not only will learning a few words in the local language help you communicate better with your local team, but will also send a signal that you are interested in their culture, and that you are going out of your way to show that you want to connect with them on more than just a business level.

The fourth barrier is around structure, status and hierarchy. Research studies have documented how upward communication is easily squelched by high-power and high-status individuals in organizations. A recent example (one among many) is the emissions scandal at Volkswagen, in which “… experts and company insiders draw a direct connection between the scandal and Volkswagen’s rigid culture, in which mid-level managers and low-level workers were reluctant to question their superiors’ decisions, including the decision to cheat on emission tests.” (This is from a story about the VW scandal by Vivienne Walt published in the August 2018 issue of Fortune magazine). Hierarchy will always be present in large global companies and as much as some organizations have tried to flatten their structures, it will never go away. Furthermore, there are some cultures where “power distance” is valued, and where undue respect and deference is given to those in authority. My suggestion for global managers: In your interactions, make sure you do more of the following: ask for input and feedback, actively listen, acknowledge your ignorance, be accessible and visible; and make sure you do less of the following: punish employees for speaking up especially when it is about bad news, give orders unilaterally, and refuse to admit when you have made a mistake.  

The fifth barrier is identity. Many research studies have shown that individuals categorize themselves into different group memberships (e.g., race, gender, profession, function, nationality) and once they define themselves into these memberships, two things happen: they will tend to like those who they feel are “like” them in some way; and they will start to define those who are in their “out-group” and like them less. The stronger their identification with these categories or memberships, the more intense these things happen. However, even when categories seem trivial, such as a shared birthday – what psychologists term as “mere belonging” – a sense of connectedness begins to form quickly. This is because we are hard-wired to form and maintain social bonds. Neuroscience has shown that the medial prefrontal cortex (MPFC) is a spot on each side of our brain that helps our memory and decision-making; different parts of it get activated when we are making judgments about ourselves versus others. When others are those we consider to be distant from us, those parts of our MPFC do not get activated as much, and so we don’t think of others as compassionately as we might otherwise think of those who are closer to us.

Global managers who deal with virtual teams sometimes struggle with finding a sense of identity and cohesiveness for their teams. My suggestion for global managers: Establish a sense of community and shared purpose with your teams and other stakeholders by: aligning the team’s goals with the larger organizational goals, inspiring your team to have meaningful and challenging goals, and finding bases for team membership that reinforce a shared sense of similarity and identity.  In addition, global managers should not neglect the basics of managing virtual teams effectively, for example: scheduling regular one-on-one conversations with team members, establishing regular times and routines for your meetings; regularly sending updates and communicating information and interesting pieces of news (e.g., executives who may need a bit more convincing about the value of the work that the team is doing, or even rumors on changes in the home office) so that the team feels connected. Even though your team might be virtual, there are ways you can get members to get to know each other a little bit better and find some commonalities among them by, for example, setting up a virtual happy hour via Google Hangouts or a shared hashtag for Twitter (as suggested by PJ Camp Malik), or even build some time at the end of virtual meetings for non-work-related conversations (e.g., sports, music).

Epley, N. (2014). Mindwise: How We Understand What Others Think, Believe, Feel, and Want. New York: Knopf Books.

Myers, B. (2011). Take the Lead: Motivate, Inspire, and Bring Out the Best in Yourself and Everyone Around You. New York: Atria Books.

Ulrich, L. Cadillac Makes Great Cars. Too Bad Americans Want SUVs. New York Times, May 17, 2018.

Youseff, C. and Luthans, F. (2012). Positive Global Leadership. Journal of World Business, 47 (4): 539-547.

Building Resilience - In Individuals and Organizations

Paul was a successful executive whom I met a few times and, over the course of several conversations, learned his life story. Abandoned by his drug-afflicted mother, he grew up in an orphanage until he was adopted by a couple when he was five. Paul was sexually abused and at thirteen, he left home and stayed with friends until he finished high school. He eventually got a scholarship to go to college and found his passion in engineering. When I met him, he had become a senior executive in one of the major automobile companies and was widely respected and admired as an empowering leader. Or take Penn State’s former running back Saquon Barkley, who has just started his NFL career. His father had a drug problem and was in and out of jail, while his mother uprooted him when he was four, along with his four siblings, so they could have a better life. Despite it all, Saquon has graduated and by all accounts is thoughtful, self-aware and very personable.

Many others in Paul’s and Saquon’s situation might not have succeeded under similar circumstances. Psychologists and management theorists attribute part of their overcoming all these obstacles to “resilience.” Yes, resilience seems to be a term often invoked these days. Even the U.S. military has recognized the importance of resilience and has built this concept into some of its training. For example, Field Manual 6-22 points to resilience as a critical leadership attribute: “Resilient leaders can recover quickly from setbacks, shock, injuries, adversity, and stress while maintaining their mission and organizational focus.” (Sewell, 2011).

There have been a number of research studies attempting to identify the characteristics of resilient people. Marston and Marston (2018) write that they have identified six characteristics of what they refer to as Type R: adaptability, a healthy relationship to control, continual learning, a sense of purpose, leveraging support, and active engagement. Cacioppo et al. (2011) introduced an additional aspect of resilience with their concept of social resilience, which they define as “…the capacity to foster, engage in, and sustain positive relationships and to endure and recover from life stresses and social isolation.” (p. 44). Within communities and organizations, this collective resilience can be very powerful; workers who feel they are part of a larger whole can find strength when dealing with adverse working conditions or challenging situations. Rodin (2014) suggests that resilience is “the capacity of any entity – an individual, a community, an organization, or a natural system – to prepare for disruptions, to recover from shocks and stresses, and to adapt and grow from a disruptive experience.” (p. 3) She uses the term “resilience dividend” as the capacity to be more adept at managing disruptions and in creating new opportunities.

Coutu’s (2002) research has concluded that resilient individuals (and organizations for that matter) have three characteristics: a grounded view and acceptance of reality, a deep belief that there is meaning in what they are doing and what they are going through, and an uncanny ability to learn, adapt and improvise.

Let’s take her first characteristic, a grounded view and acceptance of reality. In my interpretation, this seems to be unrelated to optimism or pessimism. It simply means that you are unflinching in your view of what is going on (in his book Good to Great, Jim Collins explains this brilliantly). This is different from optimism, which is what others like Seligman (2011) argue is one of the key drivers of resilience. I tend to agree with the social critic Barbara Ehrenreich (2009), who took a cynical view of optimism and suggested that this was nothing more than wishful thinking. In my opinion, resilience reflects realism about the present, but optimism about the future.

A great example is Best Buy. A few years ago, many would have predicted, with the rise of e-commerce and monster competitors like Amazon, that Best Buy would eventually close shop, like Circuit City did a few years earlier. Best Buy was losing money and, in 2012, the CEO resigned in the wake of a scandal involving a romantic relationship with an employee. New CEO Herb Joly recognized the challenges; turning the company around was not going to be easy. One of his first decisions was to announce that he was going to match Amazon’s prices. Given Best Buy’s uncertain financial situation at that time, this was a bold move. Then he and his team tackled customer service by fixing delivery issues so that customers ordering on-line would receive their orders from the Best Buy location that could deliver their orders fastest rather than from centralized warehouses. They also offered free in-home consultations to customers who were considering making some purchases. Joly also reinstated employee discounts (a popular benefit for its workforce) and avoided mass layoffs. Today, Best Buy’s stock price continues to rise, and worker morale is up. In fact, Samsung, Apple and Microsoft have signed deals with Best Buy to feature their products on dedicated kiosks in branded areas within the store.

Making meaningful sense is what I would call Coutu’s second characteristic. The classic example, as many know, is Victor Frankl’s experiences in a concentration camp, as described in his masterpiece, Man’s Search for Meaning. Bennis and Thomas (2002) describe these experiences as “crucibles” that leaders go through (especially with traumatic and negative experiences) where they somehow find meaning in these experiences and become transformed by them. In organizations, we see employees who get inspired by the purpose of their work, and what their organization stands for. Some of these organizations have created mission statements that are intended to be inspirational, although for many, the reality does not live up to the promise. Nonetheless, organizations view this as a powerful motivator. For example, despite the negative press about the pharmaceutical industry, I know many employees in these companies who view their work as truly meaningful and of benefit to mankind, and this drives their passion and motivation.

Coutu’s third characteristic is making do with what you have and improvising to address your problems. A good example of this is Home Depot, which had been losing revenue and in fact under CEO Robert Nardelli had lost its market share to Lowe’s. When he left and Frank Blake took over, Blake realized that the company had lost sight of providing a great customer experience. It had expanded by purchasing Home Depot Supply, which was targeted to the commercial construction market. Home Depot Supply was increasing market share and was an important source of revenue for Home Depot (in 2006, its sales hit $12.1 billion); analysts argued that it was an important hedge against the soft housing market at that time.

But Blake decided that this business did not fit in with his plans to create a great customer experience. In fact, customer satisfaction ratings had been declining in recent years. He sold Home Depot Supply and began to improvise. He empowered regional managers to make decisions on what merchandise to stock based on their knowledge of the local markets. He invested more in employees and stores and reconfigured the incentive program so that more employees would be eligible to participate. And he hired over 3000 skilled tradesmen (e.g., plumbers, electricians) to train store employees so they would be more knowledgeable in answering customers’ questions. Blake retired in 2014, but the company continues to do well (despite a recent data breach); in 2016, Home Depot had a 24% market share versus Lowe’s’ 17%, and it has been operating on a higher margin with significantly more stores.

Here are three take-aways from the research and from my coaching experience with executives. First, resilient individuals share the following characteristics: a belief that they have some control over their situation; a propensity to bounce back and respond positively and improvise; and an ability to learn from adversity and failure. Of course, some individuals can find it hard to recover from setbacks when they get caught up with what Seligman (1991) refers to as the three Ps: personalization (a belief that we are at fault), pervasiveness (a belief that one event will affect all areas of your life), and permanence (a belief that the ripple effects of the event will last forever). As Sandberg and Grant (2017) have pointed out: “Hundreds of studies have shown that children and adults recover more quickly when they realize that hardships aren’t entirely their fault, don’t affect every aspect of their lives, and won’t follow them everywhere forever.” (p. 16)

Second, resilience can be learned and developed.  To build individual resilience (and it is both an attitude and a skill) requires focusing on what I categorize as all three aspects of your “self”: your cognitive (your mind), behavioral (your body) and emotional (your heart) selves. The following are three practices that help to develop this skill: learn to apply perspective-taking regularly (to help your understanding of what it’s like to be in the other person’s shoes); get out of your comfort zone (Eleanor Roosevelt once suggested to do one thing every day that scares you); and build empathy (to learn what they are experiencing). All these practices will help develop your capability to become more resilient.

Third, resilience can be developed not only in individuals but also in larger entities such as communities and organizations. And this is where leaders can play an important role – by encouraging resilience in others, as well as building resilience in their work groups.

To build resilience in their teams, I suggest that managers focus on these basic practices: treat employees with dignity and respect; help their team with creating some kind of shared meaning or higher purpose; and encourage a learning environment and a “try-it culture.”

Bennis, W. and Thomas, R. (September, 2002). Crucibles of Leadership. Harvard Business Review.

Cacioppo, J. et al. (2011). Social Resilience: The Value of Social Fitness with an Application to the Military. American Psychologist, 66 (1): 43-52.

Coutu, (2002). How Resilience Works. Harvard Business Review.

Ehrenreich, B. (2009). Overrated Optimism: The Peril of Positive Thinking. Time Magazine, October 10.

Marson, A. and Marston, S. (2018). Type R: Transformative Resilience for Thriving in a Turbulent World. New York: Public Affairs.

Rodin, J. (2014). The Resilience Dividend: Being Strong in a World Where Things Go Wrong. New York: PublicAffairs.

Sandberg, S. and Grant, A. (2017). Option B: Facing Adversity, Building Resilience, and Finding Joy. New York: Knopf.

Seligman, M. (1991). Learned Optimism: How to Change Your Mind and Your Life. New York: Pocket Books.

Seligman, M. (2011). Building Resilience. Harvard Business Review.

Sewell, G. (2011). How Emotional Intelligence Can Make a Difference. Military Review, March-April, 79-83.