Leadership in the Age of Globalization: The Global Mindset
Contributed by Jack S. Katz
Albert Einstein was right when he said: “We can’t solve problems by using the
same kind of thinking we used when we created them.” Our business leaders
should have been aware of the warning signs over the last thirty years of the
drastic changes in the way business would operate in a globalized world and the
effects of these on the way they are doing business. But unfortunately they were
Unlike past periods of massive transitions that were centered regionally or
nationally, we are experiencing global business transitions of unparalleled speed
and dimension relating to the economy, manufacturing, employment, trade,
immigration, outsourcing and globalization.
Leaders that want to stay competitive will have to develop a global mindset. The question is what kinds of skills and business models are required of the global leader and what does a ‘‘global mindset’’ really mean?
What is a Global Mindset?
- Global leaders realize that the world economy, not their individual country economies, is beginning to dominate the market. The world economic environment is in the process of rapidly changing to where the movement of capital along with trade is the real driving force.
- Global leaders know that production has become separate from employment even while they struggle with individualism versus collectivism within the workforce.
- The focus of the global leader should be wealth creation, organizational value, and providing real value to their customers. To do this requires them to leverage themselves and their company beyond their comfort zone and go global; otherwise, they will gradually lose their market position. If a company is limited only to their home market then available jobs will be scarce and workers will have to look abroad for greater opportunities.
Underlying Forces of Globalization
There are two main forces that underlie the globalization of markets:
- Falling barriers to trade and investment
- Technological innovation.
These two conditions are increasing competition among nations, companies and individuals. Global leaders understand this and have determined what business models are now required to win market share and to take action to stay competitive.
They know that it is now possible to produce more goods and services with fewer people and to shift work anywhere in the world and have done so. They also realize that in order to succeed they have to understand and use new methods of innovation and technology designed for fast-change, uncertainty and complexity brought on by instant communications, collaboration, and a mobile workforce. They use the knowledge and tools to bypass their competitors who have become inflexible, complacent, and unable to compete.
Creating Customer Value on a Global Scale
Sustainable profit and growth requires that companies now turn the challenges imposed by rapid change into new opportunities to create and deliver value to their customers. The question for most business leaders will be how to do it globally. Traditional business leaders whose organizations are based on execution, order, and control will find it difficult competing with an agile global leader whose organization is team-driven, adaptable, innovative and conducive to speed of both individuals and ideas. Global organizations are flatter, culturally diverse, and borderless with more specialization based on the team model where operational rules and differentiation are based on talent making them better able to compete globally. The result is a leadership focused on capability, action, and creativity.
Unfortunately, most workers are not ready for today’s pace of change and globalization where jobs come and go and skills quickly can become irrelevant. The global leader manages employees in a different manner than what others are doing because they know that there is a global war for talent.
The global leader faces many new challenges from how to scale innovations from the local to the global level, to determining how their organizations can build a globally engaged and invested talent pool to enabling long-term career growth, to capitalizing on opportunities in high-growth markets while balancing these new requirements with their current organizational structure and culture. The global leader will need to know how to do determine when local market differentiation outweighs the benefits of scale.
If today’s business leader can change their perspective to address the needs of a globalized world, then they are on the right track to success. The bottom line is that the leader with the most knowledge and innovation will win in global competition.