Seven ways to embrace globality.
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):
- We need not only to move towards lower costs – we need to manage cost differentials.
- We need a new approach to people management where we grow people in a truly global environment.
- We need not only to go for rich customers – we must find new ways to serve the bottom of the pyramid.
- We need to network all aspects of the business – including management.
- Our well known business models will not work any more and we need to challenge our own business models.
- We must learn to innovate everywhere and everything
- 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?