The Borderless

Workplace

Terence Brake

TMA World Director of Learning & Innovation

The global

stage is in

a state of

perpetual

motion.

Kenichi Omae, Next Global Stage: The Challenges and Opportunities in our Borderless World. NJ: Pearson Education, 2005

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Visualize a game of soccer at kickoff. Two teams of 11 players are facing each other on a field whose outer boundaries are marked in white; a line across the field marks the half-way point. The players on each team are distributed in their half of the field depending on the position they play. At each end of the field are goal posts, and there are also white lines that mark penalty areas. It all looks very orderly. Now imagine that after the kickoff whistle has blown a lot of the white boundary lines disappear, and other teams with an unlimited number of players can run onto the field to compete; imagine also that the goals and penalty areas are moved continually or even disappear. Imagine also that obstructions appear randomly on the field, and numerous referees can join in – each one with a different set of rules.

You get the picture. This is today’s business environment.

The nature of change has changed.

This has been driven by two powerful and interdependent forces in the business environment:

Change Past

Definable

Predictable

Continuous

Change Present/ Future

Undefinable

Unpredictable

Discontinuous

new information can impact the rest of the globe at the speed of the Internet, and information is being created 24/7.

As Eric Schmidt of Google said,

There is more content being created in 48 hours today than was created from the beginning of time ‘til 2003!

gone are the days when globalization was simply multinationals from advanced economies spreading their power and influence across borders. Companies from emerging markets are wielding much more power.

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Digital technologies Multi-polar globalization

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Think of:

Lenovo (China) – now the world’s largest maker of PCs.

Tata (India) – a conglomerate with a market capitalization of $90 billion that earns 58 percent of its revenues outside of India. The Reputation Institute ranked Tata as the 11th most reputable company in the world.

While Lenovo and Tata are becoming well-known names, there are many other emerging market companies becoming ‘global challengers’. The Boston Consulting Group (as reported on the US TV station CNBC on January 22, 2013) just issued a report on 100 fast growing and fast globalizing companies from emerging markets. The companies included Alibaba (the largest e-commerce company in China), Trina Solar (the world’s 4th largest solar panel manufacturer), Naspers (a South African media giant). While China and India dominated the list, there were also companies from Egypt, Colombia, Qatar, Saudi Arabia, and Chile.

While the digital revolution and globalization have been with us for some time, how are businesses doing in their response? According to research conducted by Accenture and the Economist Intelligence Unit:

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Strikingly, only 11 percent of business leaders surveyed believe that their companies are

significantly advanced in their strategic response to the disruptive business environment

brought about by the intersection of the multi-polar world and developments in IT.

From global connection to global orchestration: Future business models for high performance where technology and the multi-polar world meet. Accenture, 2010.

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What are some specific business realities triggered by these powerful forces?

Multi-polar globalization means competition is coming from here, there, and everywhere. This means there is a continuous need to be proactive, responsive, and agile. We experience rapid changes in the marketplace requiring continuous adaptation in strategy, decision-making, and action. It is increasingly more difficult to plan for change often leaving us feeling disoriented, overwhelmed and unprepared.

Diverse – yet often interconnected and conflicting - business models, management systems, legal and regulatory systems, customers, suppliers, stakeholders, geographies, employees, and socio-political systems make up a complex business environment. Often, complex problems cannot be managed with existing knowledge and know-how; they require collaborative solutions and innovation.

Information technologies have long been used to create efficiencies and productivity. Advanced virtual communication and collaboration technologies are going further by enabling business transformations. The ‘connected’, ‘networked’, ‘matrixed’, ‘latticed’, and ‘borderless’ enterprise are names for organizational forms enabled by the digital revolution.

Being more digitally connected doesn’t mean we are more culturally or psychologically connected. In a world of virtual and face-to-face interactions across borders we often experience difficulty in understanding what is happening or in identifying what is significant. There is an increased chance for misreading situations because the reality might be interpreted in more than one way.

Competition

Complexity

Connectivity

Cultures

What do these business realities mean for organizations?

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Four organizational capabilities stand out as being of highest priority at this time:

The ability of an organization to change rapidly in response to changes in the environment, e.g. the emergence of new competitors, disruptive technologies, and sudden changes in market conditions.

Based on research by both McKinsey and The Economist Intelligence Unit, 90 percent of executives rank organizational agility as critical to business success. Research at MIT shows that agile firms grow revenue 37 percent faster and generate 30 percent higher profits than non-agile companies.

Organizational Agility

The willingness and ability of networks of people and teams to manage complex problems, make decisions, and innovate by working together across internal and external boundaries.

The story of Procter & Gamble (P&G) is telling. In early 2000, the company’s share price had fallen nearly 50 percent, resulting in the loss of $85 billion in market capitalization. Despite huge spending on R&D, only 35 percent of new products reached their financial objectives. The new CEO, A.G. Lafley, was confident that collaboration was the key to the company’s future value. He wanted to make P&G the company that “collaborates inside and out, better than any company in the world.” A study showed that P&G’s most profitable innovations came from internal collaborations across business units or from external collaboration with researchers on the outside. Twenty cross-functional ‘communities of practice’ were established within P&G, and Lafley determined that 50 percent of P&G’s products, ideas and technologies would be developed externally.

By 2008, P&G had improved its R&D productivity by 60 percent, and more than doubled its innovation success rate.

Technologies facilitate collaboration, but they are by no means sufficient. As Jim Whitehurst, CEO of Red Hat said, “collaboration is a culture, not a set of tools.”

Collaboration

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While face-to-face relationships are – and always will be - important in business, digital relationships are increasing in significance – digital relationships between colleagues, and also between the business and customers, partners, suppliers, and distributors. The traditional view has always associated information technology with efficiency and productivity, but the real value lies in the productive, value-added relationships enabled by technology. According to IBM:

Digital Know-How

The view that technology is primarily a driver of efficiency is outdated; CEOs now see technology as an enabler of collaboration and relationships – those essential connections that fuel creativity and innovation.

Leading Through Connections: Insights from the IBM Global Chief Executive Officer Study, 2012.

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The ability of people in an organization to handle the uncertainties and ambiguities that are inevitable when vertical, horizontal, regional, national, professional, functional, and linguistic boundaries are crossed.

Research points to cultural and language differences as being particularly challenging:

Adaptable People

Managing Virtual Teams: Taking a More Strategic Approach. Economist Intelligence Unit, 2009.

The single most common challenge, selected by 56% of executives polled, relates to the misunderstandings that emerge as a result of cultural and language differences from teams operating globally. “

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Based on these critical organizational capabilities, four specific capabilities emerge for people development –

Global Working

Collaborative Working

Virtual Working

Cross-Cultural Working

people with the thinking and behavioral agility to produce high levels of performance in a competitive borderless organization

people with the mindsets and skills to manage complex problems, innovate, and achieve shared goals

people with the ability to perform alone and together across distances via technologies

people with the adaptability to bridge and leverage differences between individuals and groups

The Critical4:

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In summary,

Business Realities

Competition

Complexity

Connectivity

Cultures

Organizational Capabilities

Organizational Agility

Collaboration

Digital Know-How

Adaptable People

People Capabilities

Global Working

Collaborative Working

Virtual Working

Cross-Cultural Working

The Borderless Challenge

Environmental Forces

Digital Technologies

Multi-Polar Globalization

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