Finding your strategy in the new landscape, by Pankaj Ghemawat, Harvard Business Review, March 2010

Initially I thought that this article was too broad and theoretical for this blog but I changed my mind as I read it through. I will however be selective in the points I bring out, focussing mainly on those with learning and HR implications.

The author starts with a statement that quite surprised me; that during the recession most international companies have been concentrating much more on home markets and have been toning down their global ambitions, as evidenced by a significant drop (51% to 31%) in the number of companies emphasising globalisation in their communications to shareholders. His further argument is that these companies will need to adjust this approach quickly if they are to take advantage of the major growth markets post-recession, particularly India and China.

He also argues that those who are to succeed in global markets in the future will need to be much more selective about where they invest and, once they have chosen, they will also need to adapt much more closely to the different requirements of countries and to regions within countries. Only in markets where globalisation provides economies of scale - for instance sectors where large advertising and research investments are required - will the multi-nationals have any advantage over local competitors.

This will mean that there will have to be careful adaptation of products to local needs and this will place much more reliance on local management talent. No longer will headquarters in New York or London be able to determine what will be provided for which segments of the market. There will need to be much stronger regional control; General Motors and IBM are quoted as companies who have already set-up regional headquarters in China and it is expected that dual headquarters - one in Asia, one in the West - will become the norm.

The prediction is that global structures will wither and the power will flow back to country managers as they resist attempts to standardise and insist on meeting the needs of their different markets. The present imbalance of top personnel will change as companies realise that American and European top management cannot deliver in increasingly complex markets; they need people with regional knowledge to develop and implement effective strategies. There will therefore be a need for companies to rethink their recruitment and talent management practices.

Companies will also have to change their approach to communications, using the new collaborative tools of the Web to enable people in the looser organisations to keep in touch with each other. There will also have to be a rethink about language use as it may be unrealistic in the future to expect Chinese and Indian managers to listen to English delivered with Western accents.

This is not an easy article to read but it is one that is thought provoking and insightful. A must read for any HR person who is likely to be faced with this sort of challenge in the future.

To read this article go to:

http://hbr.org/2010/03/finding-your-strategy-in-the-new-landscape/ar/1