What is the value of a global mindset?
2016 was certainly a fascinating year that has caused many experts to re-examine how they see the world. While the wave of localization sentiment (e.g., Brexit, President-Elect Trump’s nationalistic economic policies, etc…) surprised some political observers, we have been monitoring this movement – and its effect on our client’s businesses – for several years. It is no surprise that individuals and organizations around the world are reasserting local control over the decisions that affect them most directly. The short-term impact upon global markets has been minor, but the future is uncharacteristically vague. This emerging landscape has been called a geopolitical recession and it presents great risks and opportunities to those organizations that have the capabilities to assess, interpret and react appropriately. One capability that empowers organizations to successfully manage within this dynamic environment is a global mindset.
What are the costs and benefits of investing in a global mindset?
A global mindset incorporates several different and complementary skills. First, a global mindset includes demonstrating an awareness and understanding of international trends. Rising levels of nationalism, emerging market disruptions, or profound electoral decisions could all radically affect a firm’s local strategy or global aspirations. Maintaining an awareness of these movements is critical for all firms to sustain continued growth. However, while global knowledge can be useful, it is most valuable to a firm when it is applied to specific products or processes to support strategic decisions.
A global mindset can also include the ability to proactively work across traditional business units. This involves synthesizing multiple perspectives – across functional areas – to generate new opportunities. For example, working with different product lines to provide new services to clients; or seeding innovation in different parts of the world to build new corporate capabilities at the global level. These activities are essential to developing a global mindset where individual employees regularly consider the impacts of their decisions upon the full organization.
Our clients frequently identify a global mindset as one of their top priorities for employee development. And, as someone who regularly advises firms with international ambitions, I rarely object to their goals to increase their global perspective. However, there are limits to the value of a global mindset. In many instances, employees simply don’t need to be concerning themselves with market movements around the world. If the team is located in Asia, they may not need to follow the elections in Brazil. Most employees need to be radically focused on their own local market/product so as to become the recognized leader in that market. Realistically, there are very few truly global markets. In spite of all the predictions of universal globalization, the fact is that most of the world still orients their lives around a traditionally defined local culture/community.
2016 was a powerful reminder that the world is still influenced by powerful local interests. This durable and powerful local influence rewards specialization and local adaptation… and not necessarily global ubiquity. So, developing a balanced competency model that accurately prioritizes a global mindset relative to the nature of the product or service is critical. Furthermore, knowing which employees should be incentivized for demonstrating a global mindset is also critical. For example, it may be effective to require managers to be familiar with service offerings around the world, but to let line-level employees focus all of their time on local offerings. This may sound like common sense, but in the rush to accelerate global growth, we’ve seen some organizations spend lots of time and money on global initiatives that fail to deliver results.
As we begin 2017, our research team at Bâton has carefully considered what global trends from the previous year will carry over to determine our clients’ success in the future. We have compiled the main findings in our Bâton Global Research Brief that is divided into four main categories:
- Organizational Risk: Defining and measuring firm-specific risks vis-à-vis opportunities.
- Country Risk: Integrating country-level risk variables into strategic decisions.
- Structural Alignment: Purposeful selection of key outcome/impact metrics.
- Employee Engagement: Appropriate local adaptation of management models.
In our industry, we have a debate about whether the world is “Flat” or “Spiky”: Is the world headed toward greater integration or greater localization? The answer to this question always depends upon the project, product or geography under consideration. Having the right decision-makers – with a well-developed global mindset – is the first step towards creating the most opportunities in this new year!
Matthew C. Mitchell, PhD
Partner, Bâton Global