“Cultivating a global mind-set” by Cirilo P. Noel (November 14, 2011)

Business World (11/14/2011)

In my recent articles, I had written about how the face of global business is rapidly changing, with young, dynamic and innovative new multinationals quickly spreading out of fast-growth/emerging markets, primarily from Asia, Africa, the Middle East, Latin America and Eastern Europe.

In fact, some of our own homegrown brands and companies have already joined the ranks of these new global competitors.

Given the speed, however, at which these companies are transitioning from domestic to global markets, and, conversely, the entry of more nontraditional, non-western multinationals into our shores, it may be an opportune time for leadership to evaluate whether their current corporate cultures are sufficiently competitive on an international level.

Certainly, many companies already have the right vision for growth — hence, their rapid expansion.

However, in addition to strategies for building capital, recruiting teams and installing infrastructure for global operations, it may also be useful to consider if the company’s human capital have been given the right vision to compete on a cross-border level.

Ernst & Young recently conducted a Global Growth Forum in Washington, D.C., where senior global executives and delegates from the World Bank and the International Monetary Fund shared their insights into how today’s business leaders can cultivate this necessary global mind-set in their organizations.

While these insights are not definitive and may not apply to all organizations, they can serve as useful benchmarks.

They suggest that leaders should learn to integrate multiple perspectives. Frequently, operating in multiple markets will generate contradictions in processes and systems. Strategies that work in one country may fail dismally in another.

The challenge is for executives to find the right balance between cultural differences and organization-wide policies and processes — having a different set of practices for each market will only lead to fragmentation and will fail to gain cross-border synergies that draw on global capabilities.

One way is to adopt an interdependent approach to decision-making, realizing that decisions made in one region will affect another.

This requires the adoption of a systematic approach to decision-making that takes into account multiple perspectives and incorporates into the decision-making process a period of reflection and consultation with diverse management teams.

Leaders should also create a widespread system of values or principles as a way of bridging cultural differences.

Most global organizations are driven by a clear set of corporate values that are disseminated in all countries. Through these values, global companies can find a dynamic middle ground between local autonomy and centralized control. Values provide a defined framework where companies can globalize, even while managers have the freedom to make local decisions to take advantage of market-specific opportunities. Leaders should also remember that, to be effective, these values should be simple yet flexible. In SGV, for example, our values include integrity, quality, enthusiasm and always doing the right thing — concepts that are clearly defined, yet can be brought to life in ways that make it easier for different groups to embrace.

It is important to note, however, that these values should evolve with the organization. In a global mind-set, we must realize that the values that helped us in the past may burden us in the future. They have to change with the world and the times.

Another critical point in developing a global mind-set is valuing the expression of diversity. Many companies understand that diversity is good for business, yet often struggle to put this belief to action.

Few companies have management team members that come from outside their home markets, and even when they do, there is often the perception that they should conceal their differences to fit in, rather than celebrating them. A situation like this can be unfortunate, since research has shown that diverse perspectives lead to innovation and more effective collaboration.

This is perhaps one area where we Filipinos have a slight advantage.

On the average, we are more familiar with dealing with cultural, national or geographical diversity than our neighboring countries.

This is driven in part by our history, as well as by the diaspora of overseas Filipino workers, who not only carry a part of our culture with them wherever they go, but who also become adept at assimilating different ideas, cultures and practices out of necessity.

Moreover, rapid growth of the business process outsourcing industry has also helped drive the concept of accepting diversity, creating a generation of Filipino professionals who speak and interact with foreigners on a daily basis.

Whether a company is already operating internationally or is still at the level of planning for global expansion, cultivating a right mind-set should be an elementary part of the agenda.

Just like other preparations, creating this global culture requires a set of strategies to ensure that it takes root — and thrives — in the spirit of the organization.

Becoming one of this generation’s new multinationals requires more than just crossing borders and expanding markets.

As I mentioned in a previous article, the term, “multinational”, has come to mean “multidimensional” in today’s economic climate.

Leaders have to be able to simultaneously focus on far-ranging markets and customers, sustain a diverse work force, create efficient and adaptable supply chains and build relationships with governments and communities at all levels.

By having a global mind-set, they are better able to remain flexible in times of adversity, and successful in moments of opportunity.

(Cirilo P. Noel is the Chairman and Managing Partner of SGV & Co.)

This article was originally published in the BusinessWorld newspaper. It is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinion expressed above are those of the author and do not necessarily represent the views of SGV & Co.