This past week, I found myself in Kings Canyon and Sequoia National Park. I went with the idea that I would relax and enjoy the long holiday weekend… and I did. However, as I observed a forest with both old and new growth, I also could not help notice the trees ravaged by sickness and fire. I found myself thinking about what the forest has to teach us about business…
The forest is a global entity made up of individual components with very different characteristics, yet at the same time is very interdependent upon one another. In business, the term “Think Global/Act Local” was originally based on the idea of customizing standardized products and services for regional consumption in accordance with the local language, currency, culture and regulatory climate. The challenge arose as we lost sight of our interdependence as a global entity. Not surprisingly, localization encourages each country of operation to develop its own customized solutions and operational procedures. This results in data silos around the world and companies operating with huge information blind spots across the spectrum – the forest can not thrive as it should. It can take weeks, even months, to collect, reconcile, translate and analyze regional performance – much less consolidate a global view of the corporate picture. As I looked around and considered this, it occurred to me that if global is seeing the forest, then local is tending the trees. With only a view of the forest as a whole, it is possible to overlook the trees that need attention. Up close, it is easy to focus on the detailed care of each tree, but lose sight of its contribution to the overall forest. Balancing both viewpoints is critical to keeping the trees in the forest healthy. Global corporations are like a forest – a sum of its parts – consistent, meaningful and effective local practices must contribute to the success of the whole.
In addition to the above issues, business today is facing new challenges. There is an under-acknowledged reality in global organizations today: easier access to international markets is creating limitless sales opportunities on a worldwide basis, but is also creating numerous challenges in how those products and services are presented in local markets. Escalating costs and increased competition are also placing companies under increasing pressure to improve innovation and raise shareholder value – on both the global and local levels. The new reality is that companies must think and act both global and local simultaneously, while recognizing that without the healthy trees and their unique characteristics they will be unable to adapt and overcome the challenges inherent in the diverse environments that we must all traverse.
Success in the global marketplace requires common business practices and processes across the enterprise. The challenge is to re-engineer processes to be globally efficient, yet locally accountable. A multinational company may have global processes, policies, and procedures, however they must still adhere to in-country requirements set by foreign governments, as well as honor the business traditions, etiquette and customs which are the underpinning of successful and long-term relationships in the local markets. The goal, therefore, is to establish shared services and global practices, which simultaneously have the flexibility and robustness to meet local market criteria, while leveraging the power of the global market.
However stringently a global corporate culture is imposed, to gain a true competitive edge it is critical to be able to implement effective global solutions with the flexibility of a local interpretation. Determining the local subset of required functionality and how it integrates with the whole is not for the faint-hearted. In-country offices will defend every aspect of their local operation as essential. In reality, it will be a mix of real and manufactured needs that the discerning global leader will be required to effectively evaluate and strategically calculate in order to determine the method of change to be employed.
When put into perspective, global is about the size and strength of a business. Local is about the people the business touches – where they live and work, how they think, what they value, and what moves them to action. Acting local demonstrates a respect for local perspectives, priorities and traditions and demonstrates an understanding of how to compromise to bridge the gap and create an environment where both global and local thinking are simultaneously integrated into the fabric of the global organization.
Locally effective global businesses take into consideration how local attitudes and behaviors differ from those of the company’s home country and other local markets and create a puzzle that fits nicely together – all the pieces are different, but interconnected. Something as simple as observing local seasonal or religious holidays when timing the launch of a new global product or service can have a direct impact on the success or failure of the initiative.
In order to be effective on a global scale we must both see the forest through the trees, while at the same time understanding that without the trees, there is no forest. Can you see the forest and the trees?
You can contact me at SheriMackey@gmail.com. Check back soon for the next installation on Global Leadership Across Boundaries & Borders.