By Terence Brake
In today’s global business environment, the very nature of change has changed. This has been driven by two powerful and interdependent forces:
- Digital technologies: New information can affect the rest of the globe at the speed of the Internet, and information is being created 24/7. As Eric Schmidt of Google said, “There is more content being created in 48 hours today than was created from the beginning of time ’til 2003!”
- Multi-polar globalization: Gone are the days when globalization was simply multinationals from advanced economies spreading their power and influence across borders. Companies from emerging markets are wielding much more power.
How are businesses coping?
According to research conducted by Accenture and the Economist Intelligence Unit:
“Strikingly, only 11 percent of business leaders surveyed believe that their companies are significantly advanced in their strategic response to the disruptive business environment brought about by the intersection of the multi-polar world and developments in IT.”—“From Global Connection to Global Orchestration: Future Business Models for High Performance Where Technology and the Multi-Polar World Meet,” Accenture, 2010
Business Realities
What are some specific business realities triggered by these powerful forces?
- Competition: Multi-polar globalization means competition is coming from everywhere. We experience rapid changes in the marketplace requiring continuous adaptation in strategy, decision-making, and action.
- Complexity: Diverse—yet often interconnected—business models, management systems, legal and regulatory systems, customers, suppliers, stakeholders, geographies, employees, and socio-political systems make up a complex business environment. Often, complex problems cannot be managed with existing knowledge and know-how; they require collaborative solutions and innovation.
- Connectivity: Information technologies long have been used to create efficiencies and productivity. Advanced virtual communication and collaboration technologies are going further by enabling business transformations such as the networked enterprise.
- Cultures: Being more digitally connected doesn’t mean we are more culturally or psychologically connected. In virtual and face-to-face interactions across borders, we often experience difficulty in understanding what is happening or in identifying what is significant. There is an increased chance for misreading situations because the reality can be interpreted differently.
Strategic Imperatives
Four interlinked strategic imperatives stand out as being of highest priority at this time:
1. Organizational agility: The ability of an organization to change rapidly in response to changes in the environment, e.g., the emergence of new competitors, disruptive technologies, and sudden changes in market conditions.
Based on research by both McKinsey and The Economist Intelligence Unit, 90 percent of executives rank organizational agility as critical to business success. Research at MIT shows that agile firms grow revenue 37 percent faster and generate 30 percent higher profits than non-agile companies.
2. Collaborative culture: The willingness and ability of networks of people and teams to manage complex problems, make decisions, and innovate by collaborating across internal and external boundaries.
In early 2000, P&G’s share price had fallen nearly 50 percent, resulting in the loss of $85 billion in market capitalization. P&G’s turnaround was the result of a laser-like focus on borderless collaboration. CEO A.G. Lafley wanted P&G to be the company that “collaborates inside and out, better than any company in the world.”
By 2008, P&G had improved its R&D productivity by 60 percent, and more than doubled its innovation success rate.
Technologies facilitate collaboration, but they are by no means sufficient. As Jim Whitehurst, CEO of Red Hat, said, “. . . collaboration is a culture, not a set of tools.”
3. Digital relationships: While face-to-face relationships are—and always will be—important in business, digital relationships are increasing in significance—digital relationships between colleagues, and also between the business and customers, partners, suppliers, and distributors. The traditional view always has associated information technology with efficiency and productivity, but the real value lies in the productive, value-added relationships enabled by technology.
“The view that technology is primarily a driver of efficiency is outdated; CEOs now see technology as an enabler of collaboration and relationships—those essential connections that fuel creativity and innovation.” —“Leading Through Connections: Insights from the IBM Global Chief Executive Officer Study,” 2012
4. Adaptive people: The ability of people in an organization to handle the uncertainties and ambiguities that are inevitable when vertical, horizontal, regional, national, professional, functional, and linguistic boundaries are crossed.
Research points to cultural and language differences as being particularly challenging:
“The single most common challenge, selected by 56 percent of executives polled, relates to the misunderstandings that emerge as a result of cultural and language differences from teams operating globally.” —“Managing Virtual Teams: Taking a More Strategic Approach,” Economist Intelligence Unit, 2009.
The Critical 4
From these strategic imperatives, four critical capabilities emerge for people development:
- Global working: People with the thinking and behavioral agility to produce high levels of performance in a complex borderless organization.
- Collaborative working: People with the mindsets and skills to manage “wicked” problems, innovate, and achieve shared goals
- Virtual working: People with the ability to perform alone and together across distances via technologies.
- Cross-cultural working: People with the adaptability to bridge and leverage differences between individuals and groups.
Excerpt from e-book “The Borderless Workplace” by Terence Brake.
Terence Brake is the head of Learning & Innovation, TMA World (http://www.tmaworld.com/training-solutions/), which provides blended learning solutions for developing talent with borderless working capabilities. Brake specializes in the globalization process and organizational design, cross-cultural management, global leadership, transnational teamwork, and the borderless workplace. He has designed, developed, and delivered training programmes for numerous Fortune 500 clients in the United States, Europe, and Asia. Brake is the author of six books on international management, including “Where in the World is My Team?” (Wiley, 2008). For more information, visit http://www.tmaworld.com/news-insights/books/
