Globalization . . . . . . . . . . . . . . . . .

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(No Transcript)
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Globalization . . . . . . . . . . . . . . . . .
(Only last ten years)
Change . . . . . . . . . . . . . . .
(Economic, Political, Societal, Organizational
and Individual)
Organizational Options . . . . . . . . .
(Choices)
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Current Reality
The Future aint like it used to be.
____________ Source Barry A. Macy, Successful
Strategic Change, Berrett-Koehler Publishers, San
Francisco, CA (forthcoming)
4
Competitors, unborn and unknown, will render
your present Business Models obsolete!
____________ Source Barry A. Macy, Successful
Strategic Change, Berrett-Koehler Publishers, San
Francisco, CA (forthcoming)
5
What is labors share of national income?

• Group of seven major industrialized nations
• Workers share of national income shrank to a
  record low of 54 in 2006
• Profits as a percent of national income rose to
  16 (from 10 in 2001)
• Like CEO Salaries now over 486 times that of
  the average workers (used to be under 100 times)
• As of January 2007, congress appointed a
  committee to investigate/consider legislation
  regarding CEO salaries (average total
  compensation of Fortune 200 CEO 127 million per
  year!)

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GLOBAL
COMPETITIVE
ENVIRONMENT
____________ Source Barry A. Macy, Successful
Strategic Change, Berrett-Koehler Publishers, San
Francisco, CA (forthcoming)
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Whats Changing?
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FACT OF LIFE
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The 21st Century Organization Shapers
Power shifts to buyers (customers - away from the
firm) they know they have power --- they have
learned how to use it. Result Organizations are
being designed around customers and/ or market
segments
1. Buyer Power
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The 21st Century Organization Shapers
Greater products/service/ variety/flexibility
and customization Result More issues/ much
finer Market segments more people brought into
decision making lower levels decentralization
2. Product/ Service Variety
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The 21st Century Organization Shapers
People and Management must be able to
re-learn and re-decide combin- ation of
product/service variety customization causes
more decisions (faster expand people capabilities
(de-central- ization) - Breakthrough change
NOT incremental
3. Constant Change
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The 21st Century Organization Shapers
4. Speed to the Marketplace

• Variety leads to wanting
• products/services faster!
• Result additional
• efficiencies -
• short lead times / cycle
• times /less inventory/
• more inventory turns.
• Decentralization
• More demands on IS/IT
• Electronic Information
• Systems

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Your Customers Are Looking For 1

• Fewer Suppliers Global Customers, Global
  Pricing, Global Sourcing
• Lower Costs by Emphasizing Value Chain
• (Product Supply and Demand Side Management)
• Globalization/Global Agreements/Global
  Product Supply
• Partnerships/Strategic Alliances
• ?Work Intimately Together to Increase
  Business
• Increased Organization Capabilities
  (Organizational, Teams and Employees)

____________ Source Barry A. Macy, Successful
Strategic Change, Berrett-Koehler Publishers, San
Francisco, CA (forthcoming)
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Your Customers Are Looking For 2

• Long Term Commitment
• ?Multi Year Agreements
• ?Stable Price
• ?Forecasting Capability
• Responsiveness to Competitive Environment
  ?Price/Service/Delivery /Intimacy/Custom
  ization
• Management Visibility/Intimacy
• Accessible/Strong/Empowered Sales
  Teams/Enterprise Teams

____________ Source Barry A. Macy, Successful
Strategic Change, Berrett-Koehler Publishers, San
Francisco, CA (forthcoming)
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Technological Innovation Examples
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Computing Power doubles/ triples every 18 months
MooresLaw
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New Kind of Computer LIQUID (No hard wired
semi-conductors)
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FORCES FROM THE STRATEGIC BUSINESS ENVIRONMENT
Markets
Workforce Trends
The Industry
Customers
Social Trends
THE ORGANIZATION
Special Interests
Competition
Labor Supply
The Global Competitive Environment
Vendor/Suppliers
Physical Setting
Technology
The Corporation
Governments
Financial Stakeholders
Stockholders Wall Street Owners
The Economy
Include in end of term case
(Local/ National)
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Industry and Competitive AnalysisKey Questions
Part 1

• What are the chief business and economic
  characteristics of the industry environment?
• What forces are driving changes in the industry
  and how important will these changes be?
• What competitive forces are at work in the
  industry and how strong are they?

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Industry and Competitive AnalysisKey Questions
Part 2

• Which companies are in the strongest/weakest
  competitive position and why?
• Who will likely make what competitive moves next?
• What are the keys to competitive success?
• All things considered, how attractive is the
  industry and how good are the prospects for
  above-average profitability?

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Customer Analysis

• Present and future customers
• Who are they?
• Where do they come from?
• Age / Gender / Race
• Likes / Dislikes
• Tastes / Wants / Desires

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The Global Changing Business Environment

• Historical
• Growing Markets
• Excess Resources
• Slow Change
• Domestic Competition

• Today
• Stable/NA Market/Expanding Asia Europe
• Scarce Resources
• Rapid Changes
• Global Competition

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FACTOIDS FOR PERSPECTIVE
THE WORLD IS 10 YEARS OLD in terms of
globalization
ENGLISH IS THE LANGUAGE OF BUSINESS
INDUSTRIAL SUPPLIERS AND CONSUMER RETAILERS ARE
RAPIDLY MOVING TO E-COMMERCE/B to B / B to C
THE MIDDLE CLASS IS A GLOBAL COMMODITY
THE ECONOMIC ELITE OF THE PRC IS OVER 50 MILLION
PEOPLE -- 1/5 OF THE ENTIRE US POPULATION
EU IS THE NEXT WEALTHIEST MARKET AFTER US AND
GROWS TO 500 MILLION
MUCH OF THE GRAIN CORN CROPS IN THE UNITED
STATES WERE GROWN WITH GENE MODIFICATION
67 OF FORTUNE 500 IN LAST 10 YEARS ARE NO LONGER
THERE!
CURRENT GLOBAL POPULATION IS 6 BILLION
MARKET GROWTH IS ASIA
Barry A. Macy, Successful Strategic Change,
Berrett-Koehler Publishers, San Francisco, CA
(forthcoming)
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GLOBALIZATION DYNAMICS

• Advancing Technology in Information Systems,
  Telephony Communication, Multi-Media,
  Genetics and Robotics/ Automation
• More People, More Demand
• More Knowledge and Innovation
• Demand for Uniqueness, Customization
  and Value-Added for the Global Market Place

-

• Growth is Primarily Non-US
• and External Marketplace
• More Competition with New
• Capital/Equipment
• Others are advancing their
• Technologies faster than
• you are
• Political Conflict Disrupts
• the Global Economy Daisy
• Chain (e.g., Iraq War)

Barry A. Macy, Successful Strategic Change,
Berrett-Koehler Publishers, San Francisco, CA
(forthcoming)
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GLOBALIZATION DYNAMICS - 1
The Players

• U.S. as the Superpower economics, security,
  democracy
• NYSE-NASDAQ-LSE, Nikkei Super Markets for the
  HERD
• Super-Empowered Individuals are Celebrities,
  Innovators,
• Media Charismatics, Terrorists

Wire Wireless/IP Protocol/Cable Broadband
Convergence New Business Model DeReg-based
The Drivers
Telephony Multimedia Computerization

• Technology

Entertainment Communication Links Learning Intelli
gence
Data Base Data Mining Precision Accuracy
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GLOBALIZATION DYNAMICS - 2 Continued
The Drivers

• Communication
• Mobility
• New Wealth - New Market Opportunities
• Population

Volume Multimedia
Face-to-Face Telephone Teleco/Video
Conferencing E-mail Virtual Conferences
Transportation Limited Trade Political
Barriers Capital Flow
Global Customers Global Sourcing Global Pricing
Density Ex-Urbanization in Sophisticated
Societies Migration to Urban Centers in
Developing Worlds Disease
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GLOBALIZATION DYNAMICS
FACTOIDS FOR PERSPECTIVE
The Players
THE WORLD IS 10 YEARS OLD in terms of
globalization

• U.S. as the Superpower economics, security,
  democracy
• NYSE-NASDAQ-LSE, Nikkei Super Markets for the
  HERD
• Super-Empowered Individuals are Celebrities,
  Innovators,
• Media Charismatics, Terrorists

ENGLISH IS THE LANGUAGE OF BUSINESS
CURRENT GLOBAL POPULATION IS OVER 5 BILLION
The Drivers
Telephony Multimedia Computerization

• Technology
• Communication
• Mobility
• New Wealth - New Market Opportunities
• Population

THE MIDDLE CLASS IS A GLOBAL COMMODITY
(Billionaires, too)
Entertainment Communication Links Learning Intelli
gence
IN THE 80S WE WERE AMAZED TO LEARN SINGAPORE IS
A MODERN CITY DUBAI IS A MODERN CITY SHANGHAI,
BEIJING CARIO ARE MODERN ANCIENT AT THE SAME
TIME
Data Base Data Mining Precision Accuracy
Volume Multimedia
Face-to-Face Telephone Teleco/Video
Conferencing E-mail Virtual Conferences
THE ECONOMIC ELITE OF THE PRC IS OVER 50 MILLION
PEOPLE -- 1/5 OF THE ENTIRE US POPULATION
Transportation Limited Trade Political
Barriers Capital Flow
EU IS THE NEXT WEALTHIEST MARKET AFTER US AND
GROWS TO 500 MILLION
Global Customers Global Sourcing Global Pricing
Density Ex-Urbanization in Sophisticated
Societies Migration to Urban Centers in
Developing Worlds Disease
ASIA IS REBOUNDING
67 of Fortune 500 in last 10 years are No Longer
there!
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The Top Ten Forces in the WIF

• When the Walls came down-the Windows went up!
• When Netscape Went Public
• Workflow Software My application to your
  application
• Open-Sourcing (open source chat room-free)
• Outsourcing -Y2K

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Top Ten Forces in the WIF (cont)

• 6. Off Shoring Running with the Gazelles,
  Eating with the Lions
• 7. Supply and Demand Chains - NOT just supply
  chains
• 8. In-Sourcing Toshiba Computers being
  packaged, repaired, and sent back by UPS
• 9. In-forming the world Google, Yahoo!, MSN
• 10. The Wireless Steroids Digital, Mobile,
  Personal, Virtual

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Globalization Its about-

• Governments
• Businesses
• People
• Work/Jobs
• Changes in work roles
• ? New Social, Political, and Business Models and
  org. designs!! The way we conduct business and
  Communication is forever changed!

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Where to Look
Make Change the Opportunity (Not the Problem)

• Demographic Changes
• Technological Changes
• Political Changes
• Competitive Changes
• Value/Taste Changes
• Cultural Changes

____________________________ Source B.A. Macy,
Successful Strategic Change, Berrett-Koehler
Publishers, San Francisco, CA (forthcoming)
32
Globalization . . . . . . . . . . . . . . .
(Only last ten years)
Change . . . . . . . . . . . . .
(Economic, Political, Societal, Organizational
and Individual)
Organizational Design Options . . . .
(Inputs and/or Transformation OST)
33
Competitors, unborn and unknown, will render
your present Business Models obsolete!
____________ Source Barry A. Macy, Successful
Strategic Change, Berrett-Koehler Publishers, San
Francisco, CA (forthcoming)
34
Change is like Risk in Business -- its
NOT Optional!
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The need for constant innovation and rapid
responses to Market/ Customer and Technological
changes virtually requires an organization and
its workforce to deliver higher performance
than their competitors.
B.A. Macy, Successful Strategic Change,
Berrett-Koehler Publishers, San Francisco, CA
(forthcoming)
36
An Approach to These Dramatic Environment Changes

• Future External Business
• Environment Trends
• Globalization
• Technological Changes
• Environmental Changes
• Labor Support/Talent
• Societal, Political and
• Economic Changes
• Demographics/Population
• Customers/Markets
• E-Marketplace

• Excellent
• Performance
• - - - - - - - - - - -
• Customer
• Financial/
• Business
• People
• Innovation
• Community

Organizational Responses and HPS Puzzle Design
37
____________ Source Barry A. Macy, Successful
Strategic Change, Berrett-Koehler Publishers, San
Francisco, CA (forthcoming)
38
Concepts for Breakthrough
? Theres plenty of evidence that if you
dont find dramatically new ways of doing
business, you are not going to be in
business. And if you dont intrude by
design into whats going on, you probably
wont come up with radical out-of-the-box
ideas. So clearly some intervention is
needed.
____________________________ Source B.A. Macy,
Successful Strategic Change, Berrett-Koehler
Publishers, San Francisco, CA (forthcoming)
39
Successful Organizational Transformation is a
Matter of Beliefs
Do you believe the Future is a BRICK WALL or an
OPEN DOOR?
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Lets admit it. Corporation around the world
are reaching the limits of incrementalism.
Squeezing another penny out of costs,getting a
product to market a few weeks earlier,
responding to customers inquiries a little bit
faster, ratcheting quality up one more notch,
capturing another point of market share - those
are the obsessions of managers today. But
pursuing incremental improvements, while rivals
reinvent the industry, is like fiddling while
Rome burns. Gary Hamel, Strategy as Revolution
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IMPLICATIONS

• Structural Changes
• Joint Decision-Making
• Higher Involvement/Empowerment/
• Direct Participation
• Better Communication
• New Leadership Roles - For All!!

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Delphi Study of Key International Organizational
Issues
Respondents were - Multi-international
Corporate Executives (33) -
International Government Officials (33) -
Multi-Country Academics (33)
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KEY ORGANIZATIONAL ADJUSTMENT STRATEGIES
Adjustment Type Rankings
Scale Values

• 1. Decision making more decentralized
• strategic control remains global 58
• Technology ( IT/Telecom, etc.) also as an
  internal driver of
• globalization through real-time
  interaction 51
• 3. Organization structures are flattening focus
  on
• entrepreneurship 49
• 4. Regional integration necessitates corporate
  presence
• in all major markets 43
• 5. Economic liberalization fuels offshore
  investment 43

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KEY ORGANIZATIONAL ADJUSTMENT STRATEGIES (continue
d)
Adjustment Type Rankings
Scale Values
6. Focus on core competencies and niche markets
39 (customers) 7. Ethnic and cultural
diversity increase their impact on
strategy 35 8. Needs of global customers
lead to new systems (Structures Processes)
such as global customer account management
(e.g., Enterprise Teams) 35 9. Creativity and
flexibility in recruiting and
employment 34 10. Use of less expatriates
more need for corporate acculturation
programs 24 11. Cultural training gains
renewed significance due to
diversity 22
Scale values were determined by multiplying the
likelihood of an event or issue with its impact
on international business, based on individual
responses. The result was then standardized on a
scale ranging from 1-100
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Culture

• The Way We Do Things Around Here!
• Past Norms, Events, Questions, Etc.
• Past History of the Firm
• Past Core Values, Rituals
• Past Decision/Decision Making
• Implied Goals!
• Shared meanings held by key members/leaders
• Intangible, implicit
• Based upon assumptions about people and the
  organization
• I only tell my boss the good news!! If I tell
  him the

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The Right People or the Right Organization?
Conventional View of Strategy

• What business are we in?
• How will be compete?

Strategy

• Marketing, manufacturing, finance,
• HR, etc.

Functional Strategies

• What critical tasks must get done to
• execute the strategy?

Key Success Factors

• Design practices and systems
• (recruitment and selection, performance
• management, training and development,
• etc.)

Organizational Alignment

• Monitor alignment and compliance

Senior Management Role
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The Right People or the Right Organization?
A Values-Based View of Strategy
Fundamental Values or Beliefs

• What are our basic Principles, Philosophies
• and Core Values?
• What do we believe in?

• What policies and practices are consistent
• with these Values and Philosophies?

Design Management Practices That Reflect and
Embody These Values

• What can we do for the customer better
• than our competitors?

Use These to Build Core Capabilities

• Given our capabilities, how can we deliver
• value (EVA) to customers in a way our
• competitors cannot easily imitate?

Invent a Strategy That is Consistent with the
Values and Uses the Talents Capabilities of
People/ Organization to Compete in New and
Unusual Ways

• Senior management manages the values
• and culture of the firm.

Senior Managements Role
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Core Values
Fundamental and deeply held beliefs with which
the organization manages, practices, and
follows with relentless honesty
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FORCES CAUSING ORGANIZATIONS TO TRANSFORM
Major Forces Causing Change
Result
Required Changes
Workforce Changes
Changes in Inputs and/or Execution Side Of OST
Model
Societal Changes
Innovation and Speed to the Marketplace
Technological Changes

• Customer
• Business Financial
• People
• Societal

Global Competition
The Organizational Design Puzzle Designing
a High Performance Organization
B.A. Macy, Successful Strategic Change. San
Fransisco, California Berrett-Koehler Publishers
(forthcoming)
50
Star Model How Organizational Design Affects
Behavior -2

• Major Drivers of High Performance
• 1. Commercial/Customer Changes
• 2. Technological Changes
• Organizational Changes
• Work Force and Societal Trends

Strategies
Culture
Abilities, Skills and mind-sets
Structures
People
Vision Direction
Systems
Work/ Tasks
Processes (Business People)
Rewards
Information
Motivation
Behaviors
Organization Effectiveness