Here’s a familiar story: There comes a day when a big, but nationally-rooted company decides to ‘go global'. There are several reasons for this decision, some of them come from the CEO, the Board of Directors, or both. Perhaps the decision is based on the personal aspirations of one person, or on some pressure from market analysts, the stock market, or a move by one of the organisation’s competitors.
Internal and external pressures put this matter up on the table for discussion. Business planning starts. Human Resources executives hurriedly search for and coach people to fulfill the new ‘global profile’ the company needs. “Will we look inside, developing our own people? Or use a shortcut by finding and hiring outsiders?”
Deciding whether to do it organically or through acquisitions becomes a recurrent agenda for the CEO's team and to the Board. Among all these issues, discussions and opinions, “to become a real global company,” becomes a mantra amongst middle management.
Curiously, many companies, like our fictional one, begin this huge pipeline of projects and initiatives but leave behind one simple, but strong question:
“What does it mean to be global?"
Political scientists, sociologist and several human sciences scholars have been studying ‘the global concept’ for decades. And the truth is that it still remains a 'fill in the blank' question with several possible - correct and wrong - answers.
Were the Empires of the Middle Ages global enterprises? I would say yes, much more than any of the world’s current global companies. Can you give a better example of a global geopolitical machine than the Hanseatic League? It has been running since the 14th century, crossing new borders, several wars and all contemporary international political institutions. The English, Spanish and Portuguese worldwide discovery and commerce industries were good examples of how to be global - even without an integrated international financial market, Bretton-Woods Institutions, the United Nations or the internet - it worked fine!
Let’s bring this thought-for-the-day into today. Let´s talk about real companies. Starting with Berkshire Hathaway, Warren Buffet's multinational conglomerate, headquartered in Omaha, Nebraska, USA. Is this a global company? In Buffet’s words:
“Today Berkshire possesses (1) an unmatched collection of businesses, most of them now enjoying favorable economic prospects; (2) a cadre of outstanding managers who, with few exceptions, are unusually devoted to both the subsidiary they operate and to Berkshire; (3) an extraordinary diversity of earnings, premier financial strength and oceans of liquidity that we will maintain under all circumstances; (4) a first-choice ranking among many owners and managers who are contemplating sale of their businesses and (5) in a point related to the preceding item, a culture, distinctive in many ways from that of most large companies, that we have worked 50 years to develop and that is now rock-solid”.
I guess we are talking about a global conglomerate, able to acquire and to manage assets throughout the world, leveraging it hundreds of times, enriching their shareholders, investors, paying many taxes everywhere. Proudly based in Omaha, Nebraska.
Is Johnson & Johnson a global company? Are Band-Aid and Tylenol global brands? No doubt about it. 250 companies, located in 60 countries around the world. Are J& J a nowhere company, or an American symbol? Does the same apply to Unilever, Coca-Cola, Google, Apple, Microsoft, Oracle, AB Inbev, Shell, Airbnb, Uber, P&G, John Deere, Volkswagen, Citigroup, Boeing?
Perhaps “to be global” depends not on organisational structure, legal model, business activities, planning, strategies, products, brands, facilities or tangible assets. Of course, all of these aspects shape the businesses, but will probably not make a company global, per se.
Being ‘global’ has much more to do with a certain set of behaviors displayed by an organisation’s shareholders and people. As Mr. Buffet says, “a culture distinctive in many ways…” Culture alone is not the answer, but a track to be followed to find some good tips on how to overcome that “how to be global” challenge.
What links the Hanseatic cities to contemporary global brands and conglomerates? The behavioural systems of the people that are working over the tangible assets, processes and brands.
One may call this culture. I believe the term ‘meta-culture’ would better describe it. All of the global examples I have cited balance a really simple set of values that bond their people throughout the world, whilst developing a special expertise that makes it feasible for them to deal with local cultures. Not only adapting their way of doing things from place to place, but also influencing their global behaviours positively with local inputs.
At the end of the day, what it means to be global may, in fact, be the sum of a small group of behaviours, rather than a transnational corporate policy. More than any management tool or mantra, it is the minds and behaviours of people that form the engine behind global corporations.
It is behaviours that write the global story.
<a href="http://www.berkshirehathaway.com/SpecialLetters/WEB%20past%20present%20future%202014.pdf" name="_ftn1"></a> Berkshire – Past, Present and Future.
Humberto Branco is a senior consultant with Walking the Talk in Brazil.
You can follow him on twitter