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1 The material presented here is based on the intellectual output of PhD Rikke K. Nielsen 2 Why is global mindset important and for whom? Global mindset also comes at a cost. (global mindset is not for everybody) Global mindset is more than a managerial competence, because: 1. We become more international/global and not less so. YET, even the best and most experienced are still humbled by the challenges of creating the right kind of organization, i.e. acquiring, retaining, and motivating a global workforce, entering new markets, using global assets to foster innovation and not being held back by the added complexity of operating in different markets with their different cultures, laws and regulations. 2. Traditional boundaries have disappeared and competition springs from every corner of the world. This provides unprecedented opportunities but also major challenges. MNCs have to create globally integrated systems to satisfy diverse customer needs in diverse and complex global markets. In such environments predicting the future is impossible and rigid control counter productive. The ability of MNCs to operate and compete effectively depends to a large extent on their success in getting employees, managers, and executives to understand and adapt to such a diverse, complex and globalized world. Leaders who can bring a global mindset and experience to the table are in high demand and lack of such talent present a major barrier. 3. Having a pool of talented global leaders that possess a global mindset is not sufficient in itself if the organizational structures, processes and culture do not support the same principles. And particularly headquarter organizations are key in this regard. A global mindset at the organizational level refers to the extent to which a global company has learned to think, behave, and operate in global terms. This in turn means that a global mindset has become collectively held and embedded in routines, operational practices, and social relationships. 3 Objectives: • Provide state-of-the-art knowledge on the concept of global mindset as an effective lever for international collaboration and strategy execution • Offer inspiration from company-specific global mindset perspectives, i.e. how they unfold in practice and their organizational contribution • Clarify the potential contribution when working with global mindset in own organization • Identify enablers and barriers in form of practices and behaviors that either contribute or hinder the development of global mindset in own organization Overall goal: Strengthen your collaborative agility 4 The presentation focuses on the above mentioned 4 points. 5 Let’s get started with point 1 on the agenda: Why global mindset, what is global mindset and finally presenting the strategic global mindset capability model. 6 Based on McKinsey Quartely article: Understanding your ‘globalization penalty’ (July 2011) by Martin Dewhurst, Jonathan Harris, and Suzanne Heywood Strong multinationals seem less healthy than successful companies that stick closer to home. How can that be? The rapid growth of emerging markets is providing fresh impetus for companies to become ever more global in scope. Deep experience in other international markets means that many companies know globalization’s potential benefits—which include accessing new markets and talent pools and capturing economies of scale—as well as a number of risks: creeping complexity, culture clashes, and vigorous responses from local competitors, to name just a few. Less obvious is a challenge identified by our latest research: global reach seems to threaten the underlying health of far-flung organizations, even highly successful ones. In particular, we have found that high-performing global companies consistently score lower than more locally focused ones on several critical dimensions of organizational health—direction setting, coordination and control, innovation, and external orientation—that we have been studying at hundreds of companies over the past decade. Understanding this threat, and its causes, is a first step toward diminishing its 7 impact. Weaknesses The data to support this finding come from McKinsey’s organizational-health index database, which contains the results of surveys of more than 600,000 employees who assessed the health of nearly 500 different corporations. Within this database, we identified 20 “local champions,” which had outperformed their industries over the previous ten years, and 18 “global champions,” which had likewise outperformed their industries and met our composite criteria for full globalization.1 1.We compared the degree of globalization using four metrics: the proportion of sales originating outside a company’s home geography, the proportion of employees working outside a company’s home region, the geographic diversity of a company’s top management team, and the proportion of shareholders residing outside a com-pany’s home region. Of these, we weighted the source of sales and the location of management most heavily. We then compared these companies across the elements of organizational health, which we define as the ability to align around a strategy or change program, to execute, and to renew a company faster than its competitors can (exhibit).2 2.For more, see Scott Keller and Colin Price, “Organizational health: The ultimate competitive advantage,” mckinseyquarterly.com, May 2011. Highlights of this analysis included the following: High-performing global organizations are consistently less effective at setting a shared vision and engaging employees around it than are their local counterparts. These global leaders also find maintaining professional standards and encouraging innovation of all kinds more difficult. Because they do business in multiple countries, they find it more challenging than local leaders do to build government and community relationships and business partnerships. Read more on http://www.mckinsey.com/insights/organization/understanding_your_globalizat ion_penalty 7 This is a collection of statements from the participants during a workshop on the importance of global mindset. 8 9 10 11 In an article by Karl E. Weick co-authored by Karlene H. Roberts (1993) the concept of “collective mind” (also some times referred to as “group mind” or “organization mind” in the article) is advanced as a notion of collective or aggregate mental processes. 12 13 14 Global does not equal globetrotter, UN AND IF we move along to see look at only organizationally facilitated opportunity for enacting and development global mindset, you might speak of global mindset as a governance metaphor. I have tried to illustrate how global mindset governance is placed along a continuum of the classical poles of standardization-integration and localization-differentiation. (This is also sometimes referred to as the global vs. local dilemma (but since I operate with a somewhat different conceptualization of global than is assumed in this dichotomy, these are not poles here). I have chosen to contrast global mindset governance with what I call a global values governance style characterized by a strive for similarity through common values, synthesizing across operations and formulation of a ‘third way’. This is because this is open construed of as an alternative to 100% standardization as a principle (Disney, McDonald’s) or total differentiation such as a conglomerate or diversification view. IKEA would be an example of a strategy, where they are openly dedicated to diversity, ‘come as you are’party, BUT you are supposed to then integrated into the IKEA way of doing business. I see global mindset-governance as being different in that there is no ideal of homogeneity, rather cooperation when needed to counter complete fragmentation is the ideal. Alignment is not top-down harmonization, but rather 15 button up knowledge sharing on demand; middle managers are not implementing strategy formulated at the top, but they are strategy cocreators. There is no overall simplification, without amplification – that acknowledging complexity and heterogeneity when deciding what to simply and what not. Global values/’group values’ Homogeneity Simplicity ‘One company’ Ideal: Similar interpretation of values Alignment as harmonization 100% ‘Third way’, synthesis, compromise Hierarchy /HQ-subsidiary Simplification Global mindset/’group mindset’ Heterogeneity Complexity A group of similar businesses / a community of communities Ideal: Flexible cooperation through disciplined agility Alignment as knowledge sharing on demand and voluntary best practice proliferation ‘Just-enough’ cooperation Ambiguity, interim agreement, parallels Connectivity and network Simplification and amplification 15 First, I argue that global mindset is a meta-competence. Examples of typical meta-competences are change readiness, learning capacity, skill in working with others, knowledge of foreign languages and cultures or creativity. In the following, the theoretical concept of global mindset is seen as a meta-competence in that its generic version is transferable across organizations. As will be argued at a later point, the concrete application of the global mindset as a meta-competence may, however, be context-specific. Competence: Work-related competences are ‘the composite of human knowledge, skills, and aptitudes that may serve productive purposes in organizations.” (Nordhaug, 2003, p. 50). The term ‘competence’ is used to describe performance-enhancing abilities at the individual level (Holt Larsen, 2010). 16 4 perspectives on global, and global mindset as a meta-competence 1. The global collaborator as intercultural co-worker 2. The global collaborator as bridge builder and boundary commuter 3. The global collaborator as knowledge broker, networker and social capitalist 4. The global collaborator as paradox navigator 1. Global mindset is a meta-competence in that it assists and facilitates the enactment of other competences. 2. Next, it is a meta-competence, because it contains a variety of perspectives on global leadership competencies in it. A matrix-mentality. As I have tried to illustrate in this figure, global mindset combines several of the in-roads to global leadership in extant literature/ Different views on managing across borders and boundaries. I argue that global mindset is not just another word for cross-cultural leadership or intercultural competence. 3. It is a meta-competence, because global mindset is a paradoxical hybrid of both universalist and contextualist views of the world (best practice/’one size fits all’ vs. culturalism, comparative/institutionalist and MNC views). Both generic and situation-specific. 17 1. Global mindset is a meta-competence in that it assists and facilitates the enactment of other competences. 2. Next, it is a meta-competence, because it contains a variety of perspectives on global leadership competencies in it. A matrix-mentality. As I have tried to illustrate in this figure, global mindset combines several of the in-roads to global leadership in extant literature/ Different views on managing across borders and boundaries. I argue that global mindset is not just another word for cross-cultural leadership or intercultural competence. 3. It is a meta-competence, because global mindset is a paradoxical hybrid of both universalist and contextualist views of the world (best practice/’one size fits all’ vs. culturalism, comparative/institutionalist and MNC views). Both generic and situation-specific. 18 Where competences are individual, i.e. in this project held by the individual, capabilities are organizational and thus collective. 19 Conclusion: global mindset is individual, organizational and strategic The view that global mindset is strategic, a meta-competence as well as a capability is summed up in the strategic global mindset capability-model in this slide. The use of the word ‘strategic’ in connection with global mindset refers to the idea alignment of business strategy objectives, and management practices are seen as facilitators for the achievement of business objectives and performance. Global mindset as an individual meta-competence and organizational capability is a bridge between international strategy, strategy execution and potentially achivement of stategic objectives is depicted in the keyhole. In order to achieve the strategic objectives and thus desired company performance it requires individual and organizational enablers, and the resulting behaviours and supporting governance structure which facilitate enactment and development of global mindset. This model serves as the theoretical backdrop for the empirical analysis of global mindset. 20 After an introduction to why global mindset and what is global mindset, we will now present the enablers and barriers to global mindset development with examples from practice. 21 Examples of enablers and barriers for global mindset: Results from the PhD case study The analysis of data in the case company, both field notes from participant and participating observation of action, quantitative data, archival data as well as interviews with managers is summed up in a force field analysis-inspired diagram shown here. Forces driving global mindset, enabling global mindset on the left hand side, and restraining forces of barriers of global mindset in the right hand side. NB! Please remember – this is a middle manager take; this is not to say that there are no other factors or dimensions that are relevant, but these are the ones that they have pointed to. HR or top management probably would have come up with a different list. At this point, I would particularly like to highlight…. 1) Imagined communities: Corporate vs. common? Language & communication English skills – actually not a barrier, but effectively a stiffler 2) Corporate monopolization vs. going native – and the challenging conquest of ‘both-and’ 22 3) Quality of interaction 22 23 The two American professors are among those who have worked most intensly with mindset. Based on their research, they point to four different areas that cultivate global mindset. As you will notice, only few of these can be influenced only through a corporate university (Leadership Academy) such as for instance Solar Business Academy (the PhD case company). It requires a greater all-round effort where specific skills and HRM interventions generally only a part of the wider portfolio. 24 This part focuses on your own organizational pratice, where we ask you to reflect on your own practices, enablers, barriers and behaviors. 25 The outline of tomorrow’s workshop: Give examples from the panel debate 26 27 28 This is the final part of the presentation reflecting on what is global mindset and how can it contribute to global leadership and collaboration. Concluding with who needs global mindset in the organization. 29 30 Sources: #1: (Govindarajan & Gupta, 2001, p. 124) #2: Gertsen, M. C., Søderberg, A.-M. & Zølner, M. (2012): “Introduction and overview”, s. 1-14 in: M.C. Gertsen, A.-M. Søderberg og M. Zølner (eds.), 2012: Global Collaboration: Intercultural Experiences and Learning. Basingstoke: Palgrave Macmillan, s. 3. #3: no. 1: Pucik, V. (1998): Selecting and developing the global versus the expatriate manager: a review of the state of the art. Human Resource Planning, Vol. 21 (4), p. 41. no.2: Pucik, V. (2006): Refraiming Global Mindset: From Thinking to Acting. Advances in Global Leadership, Vol. 4, p. 88. 31 32 33