Few would argue that we live in a global world. Yet, exactly what we mean by “global” varies widely depending on whom you are talking to and what you are talking about. Globalization can mean simply that a company has offices outside their home country and sells their products and services in other countries. There may be little communication or sharing across these offices, but the company is operating globally nonetheless. On the other hand, globalization can mean that a company offers one global service or product to the world, and each of the country offices serve as conduits to the local market. And, of course, global can also mean anything along the continuum between these two extremes.

Likewise, few would argue against the assertion that the world is becoming increasingly more global. Yet there is a growing awareness of greater instability and uncertainty in the world than ever before. The current financial crises with subprime interests rates in the U.S., the political instability in the Middle East and Asia, the growing imbalances between the rich and poor, and global warming are some of the factors affecting our world and causing some retrenchment – some people might even say breakdown – in globalization.

According to Pankaj Ghemawat, global strategist, Harvard professor, speaker, and author, too many people are spouting off about the flattening of the world, the death of distance and the disappearance of differences across countries. These rantings are what Ghemawat calls “globaloney” – the illusion of a borderless, flat world and hence the tendency to overestimate the extent of and process of globalization. The fact is that most economic activity – including direct investment, tourism, and communication – happens locally, not internationally. In addition, the differences across countries and cultures are larger than many people realize. Ghemawat goes on to explain that in our “semi-globalized” world, one-size-fits-all strategies don’t stand a chance. Instead, companies must expect cross-border differences and be able to reconcile the discrepancies in a way that makes sense for them based on their culture, business goals, and current state of international development.

The problem is that globalization isn’t easy – in fact it’s downright complicated. Cross-border integration, various languages, multi-cultural communication, diverse people, organizations, and business practices make understanding and managing the process of globalization a difficult task – difficult, but not insurmountable. To be successful we have to think about globalization as a process – a journey to a final destination of complete cross-border integration that we may never reach, or not reach within this century. So the questions we should be asking ourselves is how global should we be? What are the important areas of the HR function to make global and what areas should be left local or regional? How do we reconcile the seemingly paradoxical differences across countries and businesses?

Ghemawat offers an approach he calls the AAA Triangle which focuses on strategies optimized for adaptation (adjusting to differences), aggregation (overcoming differences), and arbitrage (exploiting differences). The three A’s represent three distinct types of global strategy that companies can pursue. Adaptation seeks to improve performance by maximizing the company’s local presence. Aggregation is a way for companies to expand beyond their home country, delivering economies of scale by emphasizing regional and global operations; this involves standardizing product and service offerings and grouping together development and production processes. Finally, Arbitrage is the exploitation of differences between national and regional markets, often by shifting separate parts of the operations in different places, for example, call centers in India, manufacturing plants in China, and research and development offices in Poland.

What is your company’s global strategy? What are you doing in HR to support it?

In one of my previous posts*, I talked about the emerging Collaborative Transnational Organization as the organization of the future. To help you get started with building such an organization, I offer the six C’s of collaboration: competency, capacity, connection, convergence, culture, and collective.

Competency

The first step is to assess, understand, and then build the necessary skills and competencies for working effectively in the collaborative, transnational age. Some of the most obvious skills and competencies needed include agility, adaptability, business acumen, technical savvy, customer focus, teamwork, and a global mindset. The HR/HRIT professional also needs to develop competencies around Service-Oriented Architecture (SOA), Web Services, Software-as-a-Service, collaboration and publishing tools (e.g., wikis, blogs), and social networking software (e.g., Facebook, Linked-In).

Capacity

Second, we need to build organizational and human resource capacity by making effective use of alternative delivery models, such as shared services, outsourcing, offshoring, and on-demand infrastructures. For HR and HRIT we need to have a global enterprise architecture built on a flexible SOA platform to provide a solid technology foundation that supports the delivery of both centralized and decentralized services, both onsite (physical) and remote (virtual) services, based on business needs and organizational competency and capacity.

Connection

Third, we need to provide an infrastructure that connects individuals across the organization in an ever more mobile, global, virtual, digitized world: voice-over-internet-protocol (VOIP), social networking software, and new modes of communication, such as wikis, blogs, and RSS feeds. For HR and HRIT this means embracing and integrating connectivity in the way we provide services, such as with dynamic workflows, automated approvals, real-time calendaring, online documentation, just-in-time training, ongoing assessments – services that cross organizational, geographic, and system boundaries.

Convergence

Fourth, we must manage the convergence in the workplace of myriad, disparate technologies from telephones to computers to handheld devices. Free, open technologies, such as Skype and Facebook, allow organizations to easily operate across borders without having to build costly centralized infrastructures. Mashups – a lightweight method for integrating web applications – provide a seamless user experience, allowing us to link and deliver services globally or locally, centralized or decentralized, depending on business needs.

Culture

We need to promote a culture of openness, transparency, sharing, trust, accountability, and respect for global diversity. The HR/HRIT professional must understand the global regulatory environment and the differences in business practices in cultures around the world in order to put in place a global governance framework – one that meets both corporate and local business needs and that holds individual business units accountable for local regulatory compliance along with global organizational performance.

Collective

Finally, we must hold every worker individually accountable for the collective success of the organization by developing metrics that connect local activities to global success. This can happen only by first “thinking locally” and then “acting globally” and implementing organizational metrics that focus each individual on their role in the collective performance and success of the global organization. Accountability at the local individual level is the source of success at the global enterprise level.

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*The full text for this article can be found in the current issue of the IHRIM.link magazine.

What are your New Year’s Resolutions for 2008? Harvard Business Online did a quick poll of managers in the Boston area to find out what their workplace New Year’s resolutions were for 2008. The responses they received centered around:

• being more effective and productive by driving better communications and solutions, and
• putting a strong focus on talent management through greater team responsibility, training, hiring good talent, and promoting from within.

This is great news for us in the HCM industry!
So, besides loosing those infernal 10 pounds, here ’s what I’m going to do in 2008 to improve my workplace environment:

• Create development opportunities for my team, encouraging them to stretch an reach new goals.
• Communicate, clarify, and connect strategic goals to tactical business results.
• Be a better listener, “listening as an ally” to enhance understanding.
• Foster great teamwork through respect, consensus, and accountability.

Now, what are you going to do?