Global is one thing, integrated is another

Many organizations have been global for a long time. They had operations and people spread around the world.

However, in an era before easy communications technology and business systems that could coordinate complex global supply chains and other operations, they tended not to be very integrated. National and regional organizations had a lot of autonomy, functions were often subordinate to geography but these were the two major “vertical” dimensions that shaped organizations and people management structures.

Today, global integration is the watchword as economic considerations and the power of systems and communications technologies make it both possible and imperative to break these traditional vertical silos and release the synergies, cost savings and value creation opportunities across a global business.

It all looks great on paper but it inevitably causes tensions between the legacy vertical power structures and the increasingly powerful horizontal structures that drive supply chains, global accounts and more integrated global business functions. These tensions often get played out within some sort of matrix organizational structure with multiple reporting lines and collaboration that crosses functions and geography.

This represents a major change in the way organizations work and a step up in complexity. The reward for being a great company is to grow and operate in more locations; globalization is a result of success and it earns you the right to experience much more complex business problems.

The strategy is clear, structure is now starting to catch up; more quickly in core processes like global accounts where customer demand drives change fastest and central functions like IT where the opportunities are clearest, more slowly in sales where many customers are still local.

Global systems alignment is big business with SAP, Oracle or Microsoft ERP and systems projects costing tens or hundreds of millions of dollars and taking 5 years or more for a large global organization.

However people systems also need to catch up. Goal setting, appraisal, metrics and career development need to take account of both the vertical and horizontal integration of the business. There is often a time lag when the old legacy systems obstruct successful integration.

And finally skills and people. We need to manage the change, build the skills and also transform our ways of working.

Skills training is part of it but it is also about transforming and embedding change in the way we collaborate, develop people and carry out the daily transactions of global working from meetings to travel and involvement and how we make decisions. Changing the way people work on a global scale is much more difficult than running a global systems project but is often initially neglected in the prices of becoming a globally integrated organization.

It’s likely that skills and the ability to manage change in ways of working will be the ultimate constraint on how quickly we can develop a truly integrated global organization.

To find out more about how we can help you manage the change, build skills and embed new ways of working please contact us.

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