BUSINESSWEEK ONLINE : AUGUST 28, 2000 ISSUE
THE 21ST CENTURY CORPORATION -- THE NEW LEADERSHIP Custom-Designing the Global Corporation Pointers from some of management's masters The management of multinationals used to be a neat discipline with comforting rules and knowable best practices. But globalization and the arrival of the information economy have rapidly demolished all the old precepts. The management of global companies, which must innovate simultaneously and speed information through horizontal, globe-spanning networks, has become a daunting challenge. Old, rigid hierarchies are out -- and flat, speedy, virtual organizations are in. Teamwork is a must and compensation schemes have to be redesigned to reward team players. But aside from that bit of wisdom, you can throw out the textbooks. CEOs will have to custom-design their organizations based on their industry, their own corporate legacy, and their key global customers - and they may have to revamp more than once to get it right. Highly admired companies such as General Electric, Hewlett-Packard, ABB Ltd., and Ericsson have already been through several organizational reincarnations in the past decade to boost global competitiveness. While there are no clear maxims, the following pointers were gleaned in a wide-ranging survey of management experts for an article on global management in 21st century in the current issue of Business Week. The culture of a company is probably more important than the lines on an organizational chart. Nokia made its extremely high-speed environment work on the culture. I don't like organizational charts. They should be drawn in pencil. What works are deep cultural values. John Roberts Professor of Economics & Strategic Management Graduate School of Business, Stanford University In the coming years, global requirements will permeate organizations way beyond what was thought four to five years ago. One of the implications is the ability to adapt and be open to other people's values and traditions. That challenge requires a different mental attitude. It's not just a bridge that is needed. Companies can use cultural differences to spark new ideas and be more effective. Cultural differences generate new ways of thinking. Joseph Distefano Professor of Organizational Behavior IMD, International Institute for Management Development, Lausanne The main driver of a global company is the head of the business unit. CEOs have to make sure each can pursue a global mandate to the fullest and has the resources to do so. Call it the creation of the horizontal tiger. The role of the CEO is to pick and choose among the units and to make sure the business units are picking up ideas and intelligence worldwide. He has to ask: 'Are my businesses plugged into the right socket (i.e., the right market)?' That is the singular role of the CEO. The heads of international are all dead. You need many global heads today instead of having it all bottled up in one person. Spread it. Global thinking is no longer delegated. It's a thinking pattern that pervades the entire organization. From day one, even startups have to think global. If you are not globally wired, you risk losing your market position. Jean-Pierre Jeannet, Professor IMD International Institute for Management Development, Lausanne Country managers have gone from being king of the company to administrative coordinators and local ambassadors. They are nominally responsible to get things done, but they have no power. What we are seeing is the emergence of global customers that want a single point of contact around the world. That has prompted a shift to global account management. Swedish telecom-giant Ericsson reoriented around key accounts: You have 5 to 10 people dedicated to a key account, and their sole job is to keep that customer happy around the world. Those account managers report outside the traditional hierarchy -- you have to have a second line of reporting. It gets quite complicated. As global customers become stronger and stronger, companies will continue to shift from product mangement to customer management. Global service organizations could be the wave of the future. For now, big, traditional multinationals will have business units with global mandates, global account managers (apart from the business units), and small powerless country managers. Julian Birkenshaw, Professor London Business School _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS The New Leadership The Boss in the Web Age TABLE: The Boss in the Web Age TABLE: Now and Then: How CEOs Will Change over the Next 20 Years See the World, Erase Its Borders TABLE: Going Global: The Growing Importance of Worldwide Markets Up from Bean Counter TABLE: Desired Skills An Executive Whose Time Has Gone From Gearhead to Grand High Pooh-Bah TABLE: Not Just Any CIO Mining a Company's Mother Lode of Talent TABLE: What Does a Knowledge Manager Do for a Living? Hey, Are You Listening to Me? 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