Accenture New Imperatives in a Multipolar World

7/27/2019 Accenture New Imperatives in a Multipolar World

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Smarter, swifter, safer

New imperatives for achieving high performance

in a multi-polar world


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Remapping the world

Todays high performers in

transport and logistics1 owe

their accomplishment to

exceptionally astute global

growth strategies and masteryof internal process techno-

logiescore capabilities that

will retain their importance

well into the future. The

evolution of globalization,

however, is remapping the

world economy. And this

paradigm shift is changing

the way we assess high per-formance in all industries.

Research rom the Accenture Institute

or High Perormance2 confrms that high

perormers rom both developed and

emerging markets conront new impera-

tives in a multi-polar and increasingly

complex and competitive global economy

that is changing at unprecedented speed.

The intensiying battle or resources,

customers, talent and capital now

requires not several but a multitude o

geographic options. The talent that drives

innovation, or example, resides today

in markets worldwide. To leverage it

successully, companies need to become

authentically local in dierent environ-

ments. Just being there is no longer

good enough. Ironic as it may seem, in

order to really master the operation o

global markets, companies must increas-ingly embed themselves in the customs,

regulations and politics o local markets,

working closely and collaboratively with

external stakeholders in those markets

to ensure that their value proposition

attracts both talent and customers.

Companies also need to develop excep-

tionally exible and networked organiza-

tions. Superior execution across multiple

locations requires the ability to move

people, resources, capital and know-how

to the right place at the right timeand

very quickly. The old, top-down approach

to governance will not acilitate this

ow, or ensure understanding o the risks

inherent in such high-speed networks.

A multi-polar world requires a multi-polar

mindsetand multi-polar leadership.

To achieve high perormance companies

will need to look consistently outward,

constantly re-assessing their business

priorities in a vastly expanded value chain.

They will need to make act-based,

ocused choices about where and withwhom to engage or compete. And this

will mean expanding their horizons to

include broader based, external capa-

bilities. The most important o these

capabilities are:

Intellectual Leadershipto sustain

smarter and more adaptable ways o

thinking

Network behaviorto enable swifter

more synchronized operations

Understanding of inherent risk

to ensure safer network management

All industries will need to create these

capabilities. But thanks to its historic role

as an enabler and acilitator o inter-

national trade, transport and logistics is

writing the new multi-polar playbook

earlier than most. The industrys eorts

to tackle the new challenges and achieve

high perormance will be well worth

watching.

Intellectual leadership

As the essential link between providers

o goods and services and their consum-

ers, transport and logistics operators

have always been pioneers. Whats

more, their arsightedness, the ability to

discern practical challenges ahead o

others and act switly to resolve them,

has always been sustained by a deep

appreciation o conditions, both global

and local, likely to aect business. Indeed,

todays mantraact global, think ocal

is second nature to an industry that has

been eectively globalized since

Roman times.

Today, as global markets enter a radically

dierent era, truly transormational

intellectual leadership is more important

than ever. It hinges, as it always has, on

deep customer and market insight. But

the unprecedented speed o change in

modern markets also demands an out-

standingly rapid response. Transport

and logistics operators need to think

dynamically, continually reappraising

both customers and conditions. They

must not only understand the relevance

o their business to the shiting cultural

and social conditions created by global

integration. They must also seize everyopportunity to re-defne their value

proposition.

A.P. Moller-Maersk group, or example,

has built on the dramatic productivity

gains made possible by containerization

since the 1970s to become a leader in

combining the speed and efciency

o containers with ast ocean reight,

integrated port acilities and an interna-

tional network o empowered managers.

In the frst phase o globalization, Maersk

led the development o integrated plat-

orms or the production, organization

and transport o goods. The Danish

company then took advantage o the

explosion o global economic activity

ater 1990 to develop its own network

o harbors and logistics concerns, as well

retailing and oil productiona global

network o more than a dozen business

units in 135 countries. A new globalservice center located in Chengdu, China,

is helping tie the network even closer

together.

By identiying with local needs and

aspirations while defning a new global

marketplace the worlds largest shipping,

harbor and logistics group has become

a household name in the countries in

which it operates. Maersk runs its own

management training school, tailoring

programs to the needs o individual

company units while stressing multi-

cultural skills and cooperation across

1 Achieving high perormance in the reight or-warding & logistics industry, Accenture 2008

2 Strategies or achieving high perormance in

a multi-polar world, Accenture 2009


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the network. Meanwhile, the exibility

o its organization has enabled Maersk

to adapt switly to the challenges o the

global economic downturn. In November

2009 the company announced a redeploy-

ment o resources away rom ocean

shipping and toward energy production,

logistics, ports and retailing.

Network behavior

In a multi-polar world value chains are

eectively endless. Transport and logistics

operators need to be able to operate

beyond established categories o time

and space. And that requires dynamically

integrated solutions and new, more

decentralized concepts o networkbehaviorideas that borrow rom other

industries, and specifcally the successul

example o the World Wide Web.

The Web, o course, empowers many

rather than just a ewa challenge or

companies wedded to centralized com-

mand-and-control structures. I looser

structures also establish uniorm stan-

dards or corporate governance, however,

relinquishing central control can actually

enhance operational efciency.

FedEx, or example, has developed a

network o logistics distribution centers

worldwide that is helping to revolutionize

the efciency o its global supply chain.

From its headquarters in Memphis,

Tennessee, FedExs global reach now

extends into 220 countries and territories

worldwide under one uniying theme:

Whatever it takes to meet the customers

needs. Network behavior in the orm osharing inormation and collaborating to

sustain a single brand identity or work-

orce, customers and investors is second

nature to everyone working or the

company.

FedEx calls this knowledge-sharing The

Power o Access. As defned by FedEx,

access is a catalytic process that enables

interactions, contacts, and exchanges

among people, businesses, and nations.

As time, space, and inormation converge

toward perect access, these constituen-

cies derive increasing benefts in terms

o expanded participation, choice, and

improvements in the ultimate levels o

opportunities or all participants.

Synchronizing inormation with service

across the network and treating inor-

mation technology as a core enabler

supports FedExs role as a pioneer o

network behavior. The companys unpar-

alleled tracking systems, or example,

enable customers around the world to

see every detail o a packages move-

ment rom the moment a label is pre-

pared until the package arrives on the

doorstepa capability that or many

customers has become as essential as

actually receiving it.

Understanding inherent risk

In a multi-polar world, where the

growing complexity o global networks

requires high-speed systems and equally

swit decision making, and where peror-

mance pressures are mounting, inherent

risk is a growing and probably intractable

problem. But while it may not be possible

to eliminate inherent risk altogether, it

can be better understood and managed.

Deutsche Bahn, or example, which is

building a rail reight link rom Germany

to China that will pass through six

national jurisdictions, has ormed a

joint venture with the Russian railroad

operator RZD to help manage the con-

siderable inherent risks involved.

The rail option is actually more expensive

than moving cargo by sea, but it is also

considerably astera transit time o17-20 days, compared with up to 30

days by sea. Improvements in the rail

corridor, including a large-scale expansion

o inter-modal container inrastructure

now underway in China, promise to boost

demand or the service. And eventually

many other logistics providers are

expected to participate.

The Russo-German joint venture, Trans

Eurasia Logistics, owns most o the

containers that will be shipped along the

approximately 10,000-kilometer route,

though the rolling stock is owned and

operated by the national rail companies

o the countries through which the

service will move. It will require meticu-

lous advance planning to overcome major

dierences in railroad inrastructure and

hugely divergent regulatory systems, as

well as ongoing investment challenges.

Already, however, several ad hoc con-

tainer trains have completed the journey

successully.

Transport and logistics operators have

greased the wheels o commerce or

centuries. But in an increasingly inter-

dependent global economic geography

the relationship between trade and

transportthe twin pillars o the world

economyis changing rapidly.

In the uture, as globally integrated

supply chains replace traditional hub-

and-spoke networks and local authen-

ticity becomes the measure o success,

high perormers will require truly excep-

tional powers o intellectual leadership,

much more exible concepts o network

behavior and a deep understanding o

inherent riskas well as the internal

efciencies that have driven their per-

ormance to date.

A ew leading transport and logistics

operators are showing the way orward.

But all companies aspiring to achieve

high perormance can learn rom their

example. They will need to adapt to a

new kind o value chain, recruit and oster

talent right across their networks and

fnd new models o command and control.

About the authors

John Kornblum, a ormer United States

ambassador to Germany and now an

Accenture strategic advisor who helps

clients achieve high perormance in a

multi-polar world. He can be reached at

[email protected]

Marcus Fromm, an Accenture strategist

who helps clients across the transporta-

tion and travel industries to improve

their perormance. He can be reached at

[email protected]


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All rights reserved.

Accenture, its logo, and

High Perormance Delivered

are trademarks o Accenture.

About Accenture

Accenture is a global management

consulting, technology services and

outsourcing company, with more than

176,000 people serving clients in

more than 120 countries. Combining

unparalleled experience, comprehensive

capabilities across all industries and

business unctions, and extensive

research on the worlds most successul

companies, Accenture collaborates with

clients to help them become high-per-

ormance businesses and governments.

The company generated net revenues

o US$21.58 billion or the fscal year

ended Aug. 31, 2009. Its home page

is www.accenture.com.

Accenture New Imperatives in a Multipolar World

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