Expanding body & soul of corporations in a global world
Aravind Sitaraman, VP & Managing Director, Cisco Development Organization, India
Traditionally, companies focused on investments in research and development, marketing, and sales for one purpose -- to make customers successful. By pouring money into research and innovation aimed at increasing value of their products, managing product life cycles, evangelizing product suites and capabilities, and motivating their channels and sales force with appropriate incentives, companies and their customers were immensely successful. Corporations grew, stock prices rose, and the overall value of the company increased.
With the new wave of globalisation, companies in developed countries can no longer rest on laurels of past successes and business practices. Markets, customers, and requirements are changing. Therefore, previous time-tested models will no longer work, especially in newer markets in emerging economies driven by growing affluence due to job creation, creation of a large middle-class segment, and expanding consumer spend on durable, productivity-enhancing, and luxury goods.
For companies in developed nations to grow, they have to reach these new opportunities and this unprecedented opportunity in the emerging nations. Besides, the companies in developed nations have also to compete with companies in emerging economies which enjoy local brand recognition and loyalties. Many of these companies in emerging nations are aggressively growing their market-share, capacity, revenues, and brands through acquisitions of companies several times their size in the developed world. Hence, in many ways, the emerging countries are driving this change.
Regardless of where companies are located, they need to address this changed landscape. To be successful, they need newer skill in addition to traditional emphasis of productivity and profitability. Companies now need to evolve their organizational capabilities very fast to scale across geographies, markets, and technologies so their customers continue to like the offerings of companies in an experiential manner. The new world requires companies to evolve beyond their traditional organizations boundaries and assimilate cultures of other organizations that are quite different from it.
In this new globalised world, companies would have to rely on locally available support systems such as universities, partners, financial institutions, and non-government organizations to reach these new customers and to make them successful. Apart from the traditional feature list that companies compete on, they also have to adapt to competing on newer parameters such as providing solutions versus product suites, scalability of these solutions, and field-quality of equipment to work in much harsher and non-sanitized environment. Sometimes, customers also expect companies to understand their market and business processes as well as vertical market complexities. The companies that will be able to deliver on these changed parameters in addition to the traditional practices that are commonly employed for customer success will be the ones that will successful in the new world.
Because of their historical experience with colonization, several emerging countries continue to be skeptical about multi-national companies. They do not want another wave of colonization to happen through the current phase of globalisation. Similarly, developed companies are skeptical about MNCs from developing nations as they afraid of losing their way of life, losing their jobs, and getting sub-standard products or solutions. Hence, companies must adopt different business, economic, operational, and social goals for different countries they operate in. For instance, they need to address social needs of the countries they reach so as not to look opportunistic. They may have to look at partnering as an option for developing new products instead of traditional make-it-yourself or acquisition strategy. In some cases, they may have to rely on universities to drive behavioral changes in the market place.
To handle these increasing moving parts, companies need to better understand the best practices of these partners and possibly transform their organizations to imbibe some of these cultures. By institutionalizing these processes and capabilities and organizing to execute in this new flat world, companies can go beyond narrow profit oriented goals to being successful corporations of the future.