Facing The Challenge Of Global Management.
Managing global organisations is nothing new – business history is littered with examples of success but accompanied by many failures. So what does the future hold?
The 1980s and 1990’s saw a rapid and ultimately unhealthy expansion of global activity but with little thought for a strategy – “Let’s get out there!” was the mantra and the passion but with little thought as to how, where, what and most importantly how?
The scope for development and opportunity is well-recorded and publicised;
- The McKinsey Global Institute speculates that 400 midsize emerging-market cities will generate nearly 40% of global growth over the next 15 years
- The IMF confirms that the 10 fastest growing economies will be in emerging markets
- Greater possibilities for global communication will stretch this further
- IBM expects to earn 30% of its revenues in emerging markets in 2015 up from 17% in 2009
- Unilever’s emerging markets are worth 56% of current revenues
This sounds very optimistic but, as ever, there are serious health warnings.
It is well known that organisational health suffers when the strategy is not taken seriously (McKinsey Quarterly July 2011) leading to serious strain on resources and capability. The chief culprit here is setting a poor strategic vision combined with a serious lack of encouragement for innovation.
In the excitement and drive to make a global presence work, and produce profit, often limited care is shown through a hurried and weak series of relationships built with partners and government agencies. This is a serious barrier to making international and global business a success.
Globalisation works well for organisations that provide R & D services and those that exploit and develop natural resources but there are many examples of limited success for Customer Service organisations. We only have to consider briefly the mistakes made in outsourcing Call Centres to see this in painful perspective.
At the end of the day it is the individual histories of companies that shape how well, or not, Globalisation is delivered.
So, what key questions emerge from the history of business globalisation?
- What is the strategic confidence and stretch; how flexible and adaptable can we are? Is this just too much of a challenge to do it well?
- People are an asset and a challenge; making the most of potential is a headache if not done carefully and systematically. Do we have the right people in the right places?
- Have we really considered the scale and the complexity of operations? The trick here is to try to standardise processes as much as possible without damaging the performance of the different global pieces of the corporate jigsaw.
- Just how much risk and uncertainty are we prepared to weather to get to where we want to be?
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