Practice:Leadership and Management

Development in the Baltics

Why leadership issue is important?• Whenever expanding or planning a change

– the leader issue is of key importance to all companies operating crossboarder

• Failures to run subsidiaries abroad – 20% inadequate financing– 80% failure to reach and attract leaders

• Lessons from expansion x-Baltic– Involve and adjust to new leaders – communicate vision

Leadership style perception

• Decision making (authocratic/consultative)

• Teamwork/individualistic orientation• Attitude to change (early adoption/

aggressive confrontation/ scepticism)• Communication habits

(formal/informal)• Openness

Availability of leaders

• Lithuania• Adequate supply for SME• For sizeable enterprizes – lack of managerially competent

leaders in specialized fields (e.g. IT, etc)• Latvia

• For SME – turnover of good leaders• For sizeable enterprizes the issue is at the mid-level

management• Estonia

• Adequate supply for SME• Lack of leaders for sizeabale enterprizes

Source of leaders

• Lithuania• Internal development (change averseness, loyalty to

organisation)• Multinationals is a source for other multinationals mostly

• Latvia• Internal development• Headhunting among companies (average stay rather short)• Other companies (loyalty to profession, not organisation)

• Estonia• Multinationals rotation • Sizeable state institutions & businesses

What Leaders Value• Lithuania

• Stability and long term commitment• New challenges and variety• Proximity to political elite (large institutions and companies)

• Latvia• Varying: e.g. Stability for state institution leaders, however

challenges, money, etc. in the private sector• Personal development and achievement• Status and power

• Estonia• The leaders expectation is first of all one’s own growth • Reasonable and trustworthy “stakeholders environment”• Technocratic/market rather than organisational goals

prevail

MD Process to grow leaders• Lithuania

• Integrated MD process is very rare in local companies• Interest in MD is growing• Succession planning quite rare so far, individual initiative

• Latvia• Quite a few companies (mostly international) have an advanced

MD process• Interest in MD is also significant and many companies started

implementation efforts• Estonia

• 3-5 local companies have the integrated MD process• MD Philosophy adopted in 10% of organisations• Few Leaders are coaching successors by personal initiative

Remuneration issues

• Lithuania• The opportunity to build own image overweighs money• In state companies amounts limited by governmental level

• Latvia• Highest remuneration in absolute terms in the Baltics • Large regional differences• Different types of remuneration including stock options, etc.

• Estonia• Salary and annual bonus• Almost non-existent 2+ years related option and bonus

schemes• The opportunity to build own image overweights money

Conclusion

• There are differences • However, more similarities