Companies globalize in different ways and at different rates based upon their business environment and strategic choices. Firms globalizing at a rapid pace due to explosive revenue growth or as the result of mergers and acquisitions may suddenly find themselves with the imperative to develop a global mindset across the organization; other companies may evolve this mindset more gradually. Whatever path an organization takes, there are common requirements along the way to effective globalization. Employees who have been accustomed to designing products or initiatives for their home market and who now need to develop global solutions have to ultimately change their approach. Instead of seeing global solutions as an “add-on,” they must learn to think global from the start.
Customers with distinctive requirements and tastes, a supply chain that spans many countries, labor laws and employment conditions that vary dramatically from one location to the next – each of these complications that arises from doing business on a global scale requires a new level of understanding and day-to-day collaboration between business units and staff functions. Here are two examples:
A traditional retail firm with a very strong brand in its home market was seeking to expand into new markets where it was less well known, including China. The headquarters marketing staff members found themselves and their attempts to enforce company guidelines in direct conflict with their China-based counterparts, who sought to promote the brand in ways that ran completely counter to the brand strategy at home. Rather than the traditional low-key emphasis on quality and durability, which had long appealed to the firm’s domestic customers, marketing staff in China sought to promote the brand in a more eye-catching way through association with glamorous celebrities, special events, and flashy store presentations. As one Chinese marketing employee put it, “We’re just one brand here among many, and local consumers don’t have any idea who we are. So, we have to reach out and appeal to them by showing them we are special. The marketing strategy and campaigns created at headquarters are just not relevant to this market.”
An IT function for a high-tech firm went through an outsourcing effort, with the result that teams which formerly provided back office support for transactions in their home markets were now comprised of members from three or four different countries. The most experienced team members felt lingering resentment that their former colleagues had lost their jobs in order to make way for these new participants who required considerably more assistance and attention across distant time zones. Conflicts arose regarding how best to respond to customer issues – the previous team norm of rapid brainstorming and mutual criticism mixed with humor was not readily adopted by new team members who preferred more time-consuming data-gathering and analysis. Team members found that they needed to start over in establishing mutually acceptable norms for numerous activities that they had previously taken for granted: meeting process, decision-making, problem-solving, conflict resolution, escalation to higher management.
A global mindset across the organization requires that employees around the world, regardless of their location, have the shared purpose of balancing global efficiency, responsiveness to local customers, and the transfer of vital knowledge.1 Having a global mindset means that employees who are based at headquarters naturally consult with colleagues from other parts of the world at the start of major projects, and systematically cultivate knowledge and expertise regarding key growth markets. Subsidiary employees who have been focused primarily on serving the needs of their local customers must go beyond this important advocacy role to examine carefully how to build regional or global commonality into their solutions. Every company employee, regardless of location, needs to be able to “frame-shift” to address varying business conditions in different locations and generate balanced and innovative solutions.
Although it is tempting to try to identify a quick fix for challenges such as the ones described above – a kind of “global mindset transfusion” that will transform an organization overnight – the reality for most firms is that they must build such awareness and skills step by step. Taking a multi-faceted, coordinated approach is the best way to create momentum and achieve results over time while addressing situations such as the two cases outlined above. Here are a few ingredients of such an approach:
A veteran corporate strategist recalled the early days of this company in Asia: “Our operations there were growing at a higher rate than in the rest of the world – 20-25% per year. We were pleased with this pace of growth. There was a small local firm with a growth rate that was quite a bit higher than ours, but we weren’t too concerned about them because we were focused on our major multinational rivals. That small local firm is now bigger than we are, with a brand that has become a household name even in my country.”
Strategic planning needs to take into account levels of investment, growth, and hiring that are appropriate based upon local and regional opportunities rather than a home office yardstick. It is easy to err either through under-investing or over-investing when top decision-makers do not have a full grasp of the realities in major growth markets. Likewise, strategic decisions such as brand positioning, pricing, and product development priorities must be driven by a truly global view that integrates the needs and aspirations of customers in key markets.
What are the standard practices when a global project is initiated? Are goals set in consultation with matrix stakeholders who will be impacted? How do team members begin to establish trusting relationships? There are a few critical steps that global project teams can take during their start-up phase that will help them to address these questions and achieve their objectives by incorporating a more global mindset:
Employees are normally busy with many tasks and skeptical or even cynical about fresh initiatives. They have to hear the same global message in various ways before they will take it seriously, and they also need ready access to information which may support them in taking on more global roles. There are many electronic media that can be used to reinforce global awareness: live virtual company meetings, web-enabled video clips, webinars, e-learning modules, interactive language learning software, and web tools which provide ready access to information about local customs and business practices.
Global teams should experiment with new approaches like a “virtual coffee break” during which employees in different time zones can meet and chat together with visual and voice contact. Virtual videoconferencing technologies have become radically better at providing a forum for relationship-building and more nuanced communication between team members even a when face-to-face meeting is impossible.
Cultural training programs have value, especially when they do not depend only on generic information but also integrate the perspectives of global counterparts and make them come alive for training participants. This can be accomplished through several means: advance interviews and customization of materials, enabling virtual participation through phone or video conference, and direct engagement of colleagues from other countries in a program when circumstances permit. Ideally, global mindset solutions will also be multi-directional so that all sides of a work group will have a shared framework and language for analyzing cultural similarities and differences and bridging any gaps that may occur. Any one-on-one leadership coaching that takes place should be aligned with the cultural training to incorporate global objectives and insights.
There is no substitute for experiencing new market conditions first-hand. Executives who have become accustomed to particular patterns of customer behavior or getting things done need to see things with their own eyes in order to believe. A number of companies have found it worthwhile to have top executives or high potential leaders travel to key markets together and experience these themselves through meetings with local customers and benchmark companies, formal and informal time spent with employees, visits to local cultural sites, and training curricula targeted to enhance and reinforce lessons learned.
International assignments have value even in firms characterized by rapid change and cost-cutting. Companies need to create a closely integrated network of people across their global organization who know and trust each other, are well-versed in “frame-shifting” due to their experiences in different markets, and who are working together to blend global efficiency, local customer satisfaction, and the exchange of useful knowledge. Expatriates and former expatriates are most likely to be the nodes in this network thanks to their broad perspective and relationships with colleagues in other locations.
Short-term assignments that go beyond the luxury hotel environment can be valuable as well when a more traditional three- to five-year expatriate assignment is not feasible. It is one thing to travel to another country and another to actually live there, even for a few months – the latter requires a much more direct and unfiltered encounter with local employees, customers, and daily life: shopping, transportation systems, social life, neighbors, cultural events, and so on.
In Good to Great, Jim Collins talks about the flywheel effect that takes hold after a firm has labored over time to put a winning combination of factors into place.2 Rather than being mired in personnel issues or stumbling in search of a hit product, companies find that their growth begins to take on a momentum of its own. When a global mindset is deeply embedded into an organization it can become another accelerating factor. Previous struggles between locations or leaders with more parochial interests begin to give way to joint planning and problem-solving based on questions such as, “How can we use the resources we have to best serve our global customers?” “Who among our global employee base has the knowledge and skills we need?” Companies that have the foresight and patience to steadily implement the steps described above will enjoy the greatest rewards.
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