Seven ways to embrace globality.

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Boston Consulting Group partners, Sirkin, Hemerling and Bhattacharya claim in a recent book, “Globality – competing with everyone from everywhere for everything”, Business Plus 2008, that what comes after globalisation is globality.

Internationalisation was the process where domestic companies developed their export business.

Globalisation is competing in all markets based on a global manufacturing setup to achieve maximum scale and lowest possible costs.

Globality, according to the authors, is competing with everyone from everywhere for everything, i.e. competing globally for talent, ideas, technologies, resources, and of course, for customers. In conventional globalisation, the established (western) companies (incumbents) look upon local competitors in, say China, as inferior, only able to address the low end of the market. In globality, companies in rapidly developing countries challenge incumbents by offering high value products also in Western markets, often after having bought troubled Western brands such as Jaguar or Land Rover. The challenge of globalisation could be met applying conventional business wisdom: companies were used to comparing manufacturing costs at different locations as a basis for deciding where to put the next factory and how to integrate it into the company’s global supply chain. Globality, however, requires a different mindset. Here is a summary of 7 aspects of a new mindset (my conclusion, partly based on the book):

  1. We need not only to move towards lower costs – we need to manage cost differentials.
  2. We need a new approach to people management where we grow people in a truly global environment.
  3. We need not only to go for rich customers – we must find new ways to serve the bottom of the pyramid.
  4. We need to network all aspects of the business – including management.
  5. Our well known business models will not work any more and we need to challenge our own business models.
  6. We must learn to innovate everywhere and everything
  7. We need to leave the concept of homogenity – we must manage manyness, i.e. great varieties in products, markets, cultures, environments and people.

What are your thoughts?

12 kommentarer til “Seven ways to embrace globality.”

  1. Frank Calberg

    Thinking about # 6, I learned by reading the blog of Gary Hamel that most businesses were never built to change, they were built to do one thing exceedingly well and highly efficiently – forever. Here’s some more information about the management dilemma “efficiency vs. trying out something new” http://frankcalberg.blogspot.com/2009/07/management-dilemma-efficiency-vs-trying.html

  2. Frank Calberg

    Regarding # 3 and # 5, I think that MyC4 are doing good work. https://www.myc4.com/

  3. Frank Calberg

    Regarding # 7, I read this on the website of Johnson & Johnson:

    “We recognize that differences in age, race, gender, nationality, sexual orientation, physical ability, thinking style and background bring richness to our work environments. Such differences help us connect better with the health needs of people in communities around the world”.

    http://www.jnj.com/connect/about-jnj/diversity/?flash=true

  4. Sini

    Realy interesting and open-minded thougths. I agree completely with you.
    This morning I watched to a discussion about globalisation in the world. The last 30 years have been used by big inter-/multinational companys to live with globalisation and to take its advantage out of it. The next step in globalisation would be that our governements are going to fit into the new globalized world-order where no more frontiers exist. Your take-outs from the book are dealing with company-based facts. But what do you think about the public/countries? what are your thoughts about globalizing and connecting not companys but countries in the future?
    A question on the book, are there some negative aspects about globality? Are there any risks or negative aspects on competing everyone everywhere?

  5. Frank Calberg

    One challenge for governments could be to involve the people even more. Besides using, for example, Twitter and blogs, open innovation portals could be used.

  6. Frank Calberg

    Speaking of innovation, how about turning the library into a digital learning center with a coffee shop
    http://frankcalberg.blogspot.com/2009/09/turn-library-into-digital-learning.html

  7. Frank Calberg

    In this blog posting, Vijay Govindarajan shares some very interesting thoughts about governing the present as well as governance for the future.

    http://www.vijaygovindarajan.com/2009/09/obamas_challenge_communicating.htm

  8. Lars Kolind

    @ Frank, Thanks for the above link to Vijay Govindarajan’s blog. Interesting!

  9. Frank Calberg

    You’re welcome, Lars.

    Here’s a good 7 minute interview with Vijay Govindarajan about creating an innovation mindset
    http://www.youtube.com/watch?v=sNzkmZdM4A4

    Mr. Govindarajan talks, for example, about bringing in fresh voices from outside the company.

  10. Frank Calberg

    Regarding bringing in fresh voices from outside the company, how about using Web 2.0 even more? A McKinsey Global Survey shows, for example, that 69 percent of respondents report that their companies have gained measurable business benefits from Web 2.0. Over half of the companies in the survey plan to increase their investments in Web 2.0 technologies.

    http://www.mckinseyquarterly.com/Business_Technology/BT_Strategy/How_companies_are_benefiting_from_Web_20_McKinsey_Global_Survey_Results_2432

  11. Erik Ernst

    Va helveg mand, så snak dog dansk!;)

    Anyways, I found it rather amusing to read about the feeding of the bottom layers of the pyramide, and it made me question the value of this book.

    Point number 5, saves the day though…

    “Our well known business models will not work any more and we need to challenge our own business models.”

    I would just repeat that over and over and forget about pyramids.

    The Idea that globalisation have brought anything positive about, is completely idiotic but also dangerous.
    I do not understand, how in times like these, anyone would opt for globalisation. PLease have a look at the american economy, and dwell for a moment at the fact, that they have lost their means of production, they are no longer able to sustain themselves and no one in their right mind, is willing to trade their goods for dollars.

    Globalisation means the destruction of nation states as we know them, Im not entirely behind that idea.

  12. Frank Calberg

    Vijay Govindarajan wrote an interesting posting on reverse innovation http://www.vijaygovindarajan.com/2009/10/what_is_reverse_innovation.htm

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