NV ‘Tiger’ Tyagarajan, president and CEO at Genpact, outlines the ways in which resilient companies can adapt faster, strengthen their international operations and innovate by harnessing global opportunities and resources
There is no question that globalization has broken down geographic barriers and that, according to Lothar Herrmann, CEO Cluster ASEAN for Siemens, ‘with greater flexibility in the global supply chain, and a wealth of information easily accessible to anyone, today’s business powerhouse can come from any part of the world’.
In spite of this, many businesses neglect addressing, in a scalable and globally effective manner, several of the critical requisites to capitalize on globalization. They often fail to realize that their ability to adapt quickly and nimbly to globalization-driven market and business changes is firmly rooted in resilience, collaboration with partners, the importance of culture over strategy, and talent management and development. Indeed, the opportunities the current global marketplace offers to adaptive organizations are substantial. For example, a recent Economist Intelligence Unit Organisational Agility (2009) report found adaptive and agile firms grow revenue 37% faster and generate 30% higher profits than non-agile companies.
I believe there are three keys to organizational adaptability and resilience in a votatile world:
1) The resources you don’t have: Working with partners enables companies to extend their reach, capabilities, and scale – as well as gaining flexibility and speed of execution.
2) The resources you have, but that you cannot easily control through hierarchies and metrics: Emphasizing culture enables much faster organizational alignment even
in the absence of pervasive operating rules. Fast decision-making is a must-have in our volatile times. Enabling the organization to decide effectively in the “last mile” is what culture does well.
3) The resources you can have if you invest enough in growing them: The example of emerging economies, where despite the shortcoming of the education systems millions are trained into work and become productive, shows clearly that much more can be done with the people you have – globally.
By understanding the importance of these three key organizational resilience pillars, global champions embody what I call “intelligent enterprises”. They become resilient. They can adapt faster, strengthen their global operations, innovate by harnessing global opportunities and resources, and connect to global stakeholders.
Speed to collaboration with partners
While nearly every global services-focused publication, website and column carries daily announcements of deals inked between buyer and service provider organizations, they nearly as frequently publish stories of failed or limited success partnerships.
The reason for this is rarely due to ineptness of either party. Instead, most enterprises spend an inordinate amount of time during the initial selection and down select process – often on the order of a full year for both elements – and then, under pressure from their senior executives and board members, simply toss a plan over the fence to the selected provider, expecting its internal and external teams to execute.
The complete, and highly successful, antithesis of this approach is Google, which launches a product almost as soon as it conceives of it and then enables, indeed appeals to, users to offer input on what’s working, what isn’t and what they want or don’t want in it. That takes agility and resilience. The company excels in speed-to- market, and speed-to-collaboration, albeit that its partners are its end-users.
Rather than dwelling on the front end of the process, the most advantageous approach lies in swift selection of the third-party provider, and then focusing with laser sharp precision to create a plan that ensures the partnership will work and includes the elements that will lead to success with the provider.
An enterprise can move towards the desired outcome through collaboration with the provider on defining the long-term relationship, goals, strategy and tactics roadmap, and then execute upon it, adapting it throughout the lifetime of the engagement as necessary, in order to reap mutual success.
Why culture wins over strategy
According to business management fundamentals, strategy is vital to an organization’s growth and competitive ability. It must know where it’s going, why it’s going there, how it’s going to get there, who its competitors are, where the market is going and how it’s going to win in its market space. But enterprises often miss an all-too-critical point – the differentiation between companies is often not really their strategic paths, but rather the culture they embrace in order to be successful on those strategic paths.
Organizational culture refers to a system of shared meaning, how all internal and external team members behave with each other, how the buyer and provider parties solve problems together, how they approach challenges and opportunities, how they make required trade-offs, and how they evaluate and take risks. All of these are stalwart entrenchments of a business’s culture, and serve as key characteristics of its global services success or failure.
Another essential aspect of culture is that, unlike strategy, culture cannot be copied. Rather, culture – like resilience – is a differentiating trait that is rooted in each organization’s history, its legacy and the intrinsic, proliferating DNA upon which it has been uniquely built.
Consider Lean Six Sigma, the managerial concept that improves business efficiency and effectiveness. That an organization uses Lean Six Sigma – and virtually all do – is no longer a differentiator or a guarantor of success. The core of Lean Six Sigma’s value is in how a business works with it from a cultural standpoint, e.g., how it is championed and permeated throughout the enterprise, and how it rewards or rebukes advantageous or improper use.
Of course, there’s a symbiotic relationship between strategy and culture. The strength and flavour of a business’s culture is a key contributor to the extent to which it succeeds along its strategic path. For example, a high-performance culture, characterized in large part by flexibility and openness to change as required to address situations and business conditions that arise, was cited by respondents to the above-noted Economist Intelligence Unit survey as the second-most important trait of an adaptive, or resilient, enterprise.
Developing and nurturing talent
While the heart of every enterprise is its people, a 2012 report by the McKinsey Global Institute stated that by 2020, employers could face a shortage of as many as 13% of highly skilled workers – 40 million less than they require – and developing nations could face a deficit of 15%.
There are manifold reasons for this dearth of talent. Various technological innovations – such as e-commerce, mobile applications, cloud computing and social media – have altered the way businesses function, bringing technology to the forefront of their daily operations. Yet, while this global operational sea change unfolds, universities, especially in the growth (BRIC) economies of Brazil, Russia, India, China, are failing to teach these emerging skills to their students. As a result, BRIC organizations must spend as much time and money on training university graduates as they do on employees without university degrees. This lack of skills is also prevalent in advanced economies among both younger and older workers without higher education.
A solution in the BRIC regions is for organizations to work with educational institutions and governments around the world to ensure that relevant content is included in curricula, thereby helping to create worldwide talent supply chains. Developed economies, despite the obvious hurdles, will have to encourage immigration of highly-skilled workers, increase higher education enrolment and attract, and welcome, a greater number of educated workers into the workforce.
Overall, according to a 2008 report from the International Labour Organization (ILO), it is only “effective skills development systems which connect education to technical training, technical training to labour market entry, and labour market entry to lifelong learning that can help countries sustain productivity growth and translate that growth into more and better jobs”.
Of course, finding and hiring qualified talent is only one part of the equation. Enterprises must also employ ways to retain skilled, talented workers. The usual incentives such as equity, high levels of remuneration and team- or organization-wide appreciation are effective to some extent. However, the real gem is in providing a clear career-path, training and development opportunities to employees, thereby enabling them to pursue and achieve high levels of performance in their passion area, whether in a particular industry, domain, function or geography, and remain and grow in the organization.
For example, through Genpact’s “Education at Work” programme, which supports more than 10,000 employees in taking various MBA and domain-specific courses, a certified public accountant could switch career paths to deliver high-end financial work for global businesses, and relocate from his or her native Bangalore to Barcelona or Bucharest, as desired.
At the end of the day, in order to address the increasingly ubiquitous global talent shortage in every industry and every sector, enterprises need to think of themselves as – indeed become – knowledge companies and consider every worker a “knowledge worker”. A true knowledge company systematically builds continuous training and learning into its modus operandi, and supports on-the-job learning to help its employees move into more complex and senior roles through structured training and leadership development programmes.
Today’s “boundaryless organization” – a term coined by former GE chairman Jack Welch, as he wanted to eliminate vertical and horizontal boundaries within the company and break down external barriers between the company and its customers and suppliers – has significant competitive advantage at finger-tip reach. By embracing and proactively acting upon collaboration, culture and talent best practices, innovative and forward-thinking enterprises have the ability to build the requisite organizational resilience and adaptability, and therefore thrive in the global business environment.
NV ‘Tiger’ Tyagarajan is president and CEO at Genpact