With regard to the title, Harold Sirkin, James Hemerling, and Arindam Bhattacharya explain that "globality [is] the name for a new and different reality in which we'll all be competing with everyone, from everywhere, for everything." In a global business environment that Thomas Friedman characterizes as having become "flat," it is also possible (albeit theoretically) for companies to forge a strategic alliance with anyone, anywhere. They go on to suggest that as a new era emerges, "we call it globality, a different kind of environment, in which business flows in every direction. Companies have no centers. The idea of foreignness is foreign. Commerce swirls and market dominance shifts. Western business orthodoxy entwines with eastern business philosophy and creates a whole new mind-set that embraces profit and competition as well as sustainability and collaboration. Globality is a blockbuster new script - action, drama, suspense, and road picture all packed into one - with a sprawling cast of characters and locations in every corner of the world."
Sirkin, Hemerling, and Bhattacharya explain why and how a "tsunami" wave of competition from global challengers (i.e. rapidly developing companies) has risen up and challenged established players, what they call "incumbents." In fact, developed companies now find themselves struggling to compete successfully in terms of cost differentials; "growing people" and then positioning them in proper alignment; market penetration; "pinpointing" (i.e. connecting with customers, distributing complexity, and reinventing the business model); rapid growth (by scaling up, building brands, filling capability gaps, and bartering); innovating with ingenuity; and embracing "manyness" (i.e. many countries, economies, markets, locations, and facilities but no centers, no home markets, no foreignness, or hierarchy of location). New mind-sets are needed if incumbents are to respond effectively to these and other challenges.
Each of the co-authors is a senior-level executive with the Boston Consulting Group (BCG) and, together, they have dozens of years of close association and direct involvement with a number of companies - and have accumulated extensive research data on many other companies - among the "BCG Challenger 100." Thirty-four of these companies provide industrial goods, 17 are resource extractors, 14 make consumer durables, another 14 offer food, beverage, and cosmetic products, four make technical equipment. The remaining 17 operate in a wide variety of fields that include pharmaceuticals, mobile communication services, shipping, and infrastructure. For me, the most important material in this book is provided as the co-authors examine specific challenger companies and suggest what lessons can be learned from their initiatives. They include BYD, Johnson Electric, Wipro, ICICI Bank, Embraer, Barat Forge, Cipla, Tata Consulting Services, and Mahindra & Mahindra (M&M). As I read about them, I was reminded of Jack Welch's remarks during a GE annual meeting years ago when he explained the competitive advantages of such challenger companies:
"For one, they communicate better. Without the din and prattle of bureaucracy, people listen as well as talk; and since there are fewer of them they generally know and understand each other. Second, small companies move faster. They know the penalties for hesitation in the marketplace. Third, in small companies, with fewer layers and less camouflage, the leaders show up very clearly on the screen. Their performance and its impact are clear to everyone. And, finally, smaller companies waste less. They spend less time in endless reviews and approvals and politics and paper drills. They have fewer people; therefore they can only do the important things. Their people are free to direct their energy and attention toward the marketplace rather than fighting bureaucracy." Welch could well have been describing the mind-sets at ZTE, a challenger that competes successfully with incumbents that include Ericsson, Nokia, Alcatel, Siemens, and Motorola. Ten thousand of its 31,000 employees are engineers and their average age is 30. Like so many other challenger companies, ZTE is outgrowing the imitation stage, investing heavily in 14 research and development centers in China, the U.S. India, France, and Sweden. Its leaders are determined to participate in global standard setting, with ZTE having already applied for more than 5,000 national and international patents. If the cycle continues, ZTE will eventually become an incumbent and then struggle to compete successfully with challengers who may not even be in business today.
When concluding their book, Sirkin, Hemerling, and Bhattacharya assert (and I wholly agree) that however much the global business community has changed and will continue to change, essentially the measures of success will remain the same. Business leaders will continue to think about their place in the world, about sustainability and scarce resources. Those the co-authors interviewed "always talk about their dreams. They speak about people they have known, in their factories and boardrooms, retail outlets, and warehouses. They talk about their companies as if they were families. Above all, they say they want their personal and professional lives to be meaningful and rich journeys. They want to build something. And they want it to endure."
Meanwhile, the "tsunami" continues to surge....
Those who share my high regard for this volume are urged to check out Friedman's aforementioned The World Is Flat 3.0 and The Quest for Global Dominance by Anil K. Gupta, Vijay Govindarajan, and Haiyan Wang as well as Victor Fung, William Fung, and Yoram (Jerry) Wind's Competing in a Flat World, C.K. Prahalad's The Borderless World (Revised Edition) and The Fortune at the Bottom of the Pyramid, Kenichi Ohmae's The Next Global Stage, and Vijay Mahajan and Kamini Banga's The 86 Percent Solution.