Developing a Global Developing a Global MindsetMindset B D SINGH

Sr. Prof & Associate Dean (MDP & C)

IMT,GHAZIABAD

Market success is only part of globalisation. We must Market success is only part of globalisation. We must globalize every activity in the company. We’ve made globalize every activity in the company. We’ve made some progress in sourcing products and components so some progress in sourcing products and components so critical to survive and win in a price- competitive critical to survive and win in a price- competitive deflationary world, but our challenge is to go beyond deflationary world, but our challenge is to go beyond that – to that – to capitalize on the vast intellectual capital capitalize on the vast intellectual capital available around the globeavailable around the globe. – John F Welch Jr. CEO. – John F Welch Jr. CEO

There are no German or American companies. There There are no German or American companies. There are only successful or unsuccessful companies - are only successful or unsuccessful companies - Thomas MiddlehoffThomas Middlehoff

BackgroundBackground The two most dreaded obstacles in the way of human progress- i.e. The two most dreaded obstacles in the way of human progress- i.e.

Time & Distance have almost been eliminated, due to Time & Distance have almost been eliminated, due to technological revolution technological revolution

Mind boggling pace of changes have shrank the wide world to a Mind boggling pace of changes have shrank the wide world to a “global village”. “global village”.

We live in We live in interconnected, interdependent, world economyinterconnected, interdependent, world economy.. Globalization has made free flow of goods & Services – possible Globalization has made free flow of goods & Services – possible

opening the new visa of opportunities – for corporate and opening the new visa of opportunities – for corporate and individuals – age of mega mergers & acquisitions individuals – age of mega mergers & acquisitions

A global business manager must have a global business perspective A global business manager must have a global business perspective and understanding of how the world works – and understanding of how the world works – Learning, unlearning Learning, unlearning and relearningand relearning are integral part of the knowledge intensive global are integral part of the knowledge intensive global business. business.

A global manager must develop a A global manager must develop a global mindset – global mindset – the capacity to the capacity to analyze, appreciate & leverageanalyze, appreciate & leverage the beliefs, values, behaviors and the beliefs, values, behaviors and business practices of individual and organization from different business practices of individual and organization from different part of the globepart of the globe

The 19th and early 20th centuries were marked by intense nationalism , building Empires & Colonies & second half of 20th century intense witnessed a phenomenon known as “cold war” - bi - polar world.

During the last 25 years the world has become borderless & multi polar –

Wars, if at all fought, are for acquiring economic supremacy--- mostly fierce commercial/marketing competitive wars are seen – Global business Olympiads taking place every day.

Technology and business sans frontiers- no one is permanent foe or friend – the traditional enemies have become friends and allies – European countries, India & China, Korea & Japan.

Leveraging onLeveraging on diversities and contradictions – thriving on chaos diversities and contradictions – thriving on chaos Diversities likeDiversities like multi – ethnic, multicultural, multilingual, multi multi – ethnic, multicultural, multilingual, multi

religious challenges. religious challenges. Contradiction & paradox likeContradiction & paradox like– – Global peace vs. global terrorism Global peace vs. global terrorism globalization vs. localized block – (UNO, WTO, ILO, WTO, vs. EUs, globalization vs. localized block – (UNO, WTO, ILO, WTO, vs. EUs,

NAFTA, SAFTA etc.) NAFTA, SAFTA etc.) Talent hunting jobs vs. job hunting talent – BPO, KPO. Talent hunting jobs vs. job hunting talent – BPO, KPO. Companies seeking talents & talents seeking global companies Companies seeking talents & talents seeking global companies Business hunting money vs. money hunting business. Business hunting money vs. money hunting business. Ruthless competitiveness vs. business alliancesRuthless competitiveness vs. business alliances Locals/ natives vs. outsiders Locals/ natives vs. outsiders In above back drop, it is important & imperative for corporate as In above back drop, it is important & imperative for corporate as

well as individuals to develop global mind sets to take maximum well as individuals to develop global mind sets to take maximum – advantages.– advantages.

What is mind set?What is mind set? Mind set is a condition where an individual is over Mind set is a condition where an individual is over

sensitized to some part of information available at the sensitized to some part of information available at the expense of other parts . it sensitizes us to the patterns expense of other parts . it sensitizes us to the patterns which have enables to solve problem as was done in which have enables to solve problem as was done in the past the past

It produces fixation & stereotyping in problem solving It produces fixation & stereotyping in problem solving behavior behavior

Drucker – investigated how past experience may block Drucker – investigated how past experience may block productive problem solving – functional fixation productive problem solving – functional fixation

This mind set can create difficulties for manager when This mind set can create difficulties for manager when they are faced with new problems. they are faced with new problems.

Other Barriers in creative / global thinking Other Barriers in creative / global thinking Perceptual blocks – prevents individual receiving a true Perceptual blocks – prevents individual receiving a true

relevant picture of outside work / world relevant picture of outside work / world Cultural blocks, which result from influence of the Cultural blocks, which result from influence of the

society – cross – cultural clashes society – cross – cultural clashes Emotional blocks – such as fear anxiety / chauvinism Emotional blocks – such as fear anxiety / chauvinism Intellectual blocks – I know all- we are the best Intellectual blocks – I know all- we are the best

How Mindset Works?How Mindset Works? The concept of mindset, also referred to as The concept of mindset, also referred to as cognitive scheme, cognitive scheme,

mental map, or paradigmmental map, or paradigm Mindsets evolve through an interactive process. The current Mindsets evolve through an interactive process. The current

mindset guides the collection and interpretation of new mindset guides the collection and interpretation of new information. To the extent that this new information. To the extent that this new information is information is consistentconsistent with the current mindset, it reinforces that mindset. with the current mindset, it reinforces that mindset. From time to time, however, some elements of the new From time to time, however, some elements of the new information appear to be truly information appear to be truly novel and inconsistentnovel and inconsistent with with the existing paradigm. In this event, we either reject the new the existing paradigm. In this event, we either reject the new information or forge a change in our mindset. The likelihood that information or forge a change in our mindset. The likelihood that our mindsets will undergo a change depends largely on how our mindsets will undergo a change depends largely on how explicitly self- conscious we are of our current mindsets : the explicitly self- conscious we are of our current mindsets : the more hidden and subconscious the cognitive schema, the more hidden and subconscious the cognitive schema, the greater the likehihood of rigidity . greater the likehihood of rigidity .

What is a global mindset?What is a global mindset? Every mindset represents a knowledge structure, and the two primary Every mindset represents a knowledge structure, and the two primary

attributes of any knowledge structure are attributes of any knowledge structure are differentiationdifferentiation ( the number of ( the number of elements in the person or organization's knowledge base) and elements in the person or organization's knowledge base) and integrationintegration (the person or organization's ability to synthesize the various elements). (the person or organization's ability to synthesize the various elements). Differentiation in knowledge structures refers to the narrowness versus Differentiation in knowledge structures refers to the narrowness versus breadth of perspective that the individual or organization brings to the breadth of perspective that the individual or organization brings to the particular context. For instance, think of the proverbial functional expert with particular context. For instance, think of the proverbial functional expert with almost no exposure outside one functional areas. almost no exposure outside one functional areas. “tunnel vision”“tunnel vision” – a – a classic case of low differentiation in knowledge structure. In contrast, a classic case of low differentiation in knowledge structure. In contrast, a manager with significant experience in multiple functional areas has a more manager with significant experience in multiple functional areas has a more highly differentiated knowledge structure. In contrast, a manager with highly differentiated knowledge structure. In contrast, a manager with significant experience in multiple functional areas has a more highly significant experience in multiple functional areas has a more highly differentiation in knowledge structure and is unlikely to exhibit the tunnel differentiation in knowledge structure and is unlikely to exhibit the tunnel vision syndrome. vision syndrome.

On the other hand, integration in knowledge structures refers to the extent On the other hand, integration in knowledge structures refers to the extent to which the person or organization is able to rise above and integrate the to which the person or organization is able to rise above and integrate the various perspectives or knowledge elements. various perspectives or knowledge elements.

Integration becomes a critical attribute of mental templates in those context Integration becomes a critical attribute of mental templates in those context where differentiation is high – removing the undesirables /indigestible & where differentiation is high – removing the undesirables /indigestible & adopting desirables adopting desirables

We would define a global mindset as one that We would define a global mindset as one that combines an openness to and awareness of diversity combines an openness to and awareness of diversity across cultures and markets with a propensity and across cultures and markets with a propensity and ability to synthesize across this diversity. ability to synthesize across this diversity.

Global managers have exceptionally open minds. They Global managers have exceptionally open minds. They respect how different countries do things, and they respect how different countries do things, and they have the imagination to appreciate why they do them have the imagination to appreciate why they do them that way. that way.

They sort through the debris of cultural excuses and They sort through the debris of cultural excuses and find opportunities to innovate.” they remove carbon to find opportunities to innovate.” they remove carbon to get spark.get spark.

What is a Global Mindset?

Open to Diversity Across Cultures and Markets

Knowledgeable about diversity across Cultures and markets?

Able to Integrate Diversity AcrossCultures and Markets

Global Mindset

Yes

Yes

Yes

How a Global Mindset Differs from a Parochial or a How a Global Mindset Differs from a Parochial or a Diffused MindsetDiffused Mindset

Parochial Global

Mindset Mindset

Parochial Diffused

Mindset Mindset

Closed to Diversity Across Cultures and Markets

Open to Diversity Across Cultures and Markets

Unable to Integrate Diversity Across Cultures & Markets

Able to integrate Diversity Across Cultures & Market

Key advantagesKey advantages An early mover advantage in identifying emerging An early mover advantage in identifying emerging

opportunities: opportunities: Greater sophistication and more fine-grained analysis Greater sophistication and more fine-grained analysis

regarding the trade-off between local adaptation and regarding the trade-off between local adaptation and global standardizationglobal standardization

Smoother coordination across complimentary Smoother coordination across complimentary functional activities distributed across borders:functional activities distributed across borders:

Faster roll-out of new product concepts and Faster roll-out of new product concepts and technologies technologies

More rapid and efficient sharing of best practices More rapid and efficient sharing of best practices across subsidiariesacross subsidiaries

Lower failure rate in expatriate assignmentsLower failure rate in expatriate assignments

If a company is in the early stages of becoming systematic about If a company is in the early stages of becoming systematic about cultivating global mindsets, the highest returns would come cultivating global mindsets, the highest returns would come from focusing on these more at senior levels. from focusing on these more at senior levels.

Development of Global MindsetDevelopment of Global Mindset ..

Development of a Global Mindset

Articulation of current mindset

Exposure to diversity and novelty

Curiosity about how the world works

Integration of new knowledge and the development of a new mindset

Time

An explicit and self-conscious articulation of current An explicit and self-conscious articulation of current mindset mindset

Exposure to diversity and novelty Exposure to diversity and novelty A disciplined attempt to develop an integrated A disciplined attempt to develop an integrated

perspective that weaves together diverse strands of perspective that weaves together diverse strands of knowledge about cultures and markets.knowledge about cultures and markets.

Curiosity about the world and a commitment to Curiosity about the world and a commitment to becoming smarter about how the world works.becoming smarter about how the world works.

Cultivating Knowledge Regarding DiverseCultivating Knowledge Regarding Diverse Cultivating a global mindset at the level of individuals is a slow Cultivating a global mindset at the level of individuals is a slow

process that can take years of learning through experience in process that can take years of learning through experience in multiple culturesmultiple cultures

Cultivate literacy of and enthusiasm for diverse cultures and Cultivate literacy of and enthusiasm for diverse cultures and markets.markets.

Formal education : Formal education (language skills and Formal education : Formal education (language skills and knowledge building regarding diverse cultures and markets) can knowledge building regarding diverse cultures and markets) can take place in the form of self-study courses, university-based take place in the form of self-study courses, university-based education, or in company seminars and management education, or in company seminars and management development programs. development programs.

Participation in cross – border business teams and projects – Participation in cross – border business teams and projects – Consider, for example, a leading U.S. bank creating a “Euro” Consider, for example, a leading U.S. bank creating a “Euro” team to coordinate the company’s response to introduction of team to coordinate the company’s response to introduction of the new European currency.the new European currency.

Immersion experiences in foreign cultures – Immersion Immersion experiences in foreign cultures – Immersion experiences can range from two-to three month training experiences can range from two-to three month training assignments to more extensive cultural learning programs. assignments to more extensive cultural learning programs.

Emerging HR challenges & Practices Emerging HR challenges & Practices One aspect – sourcing One aspect – sourcing

““Advancement in technologies has new resulted in follow Advancement in technologies has new resulted in follow the sun’ models,the sun’ models, which dictate that the work never stops. This enables teams across countries which dictate that the work never stops. This enables teams across countries to work as one unit, cutting across every cultural and physical barrier. They to work as one unit, cutting across every cultural and physical barrier. They work with one goal and hence, come up with faster solutions – work with one goal and hence, come up with faster solutions –

Old business and hiring structures are both being replaced by Old business and hiring structures are both being replaced by a global a global sourcing modelsourcing model that places emphasis on doing the work where it makes most that places emphasis on doing the work where it makes most sense, sourcing resources from where they are the cheapest and of the best sense, sourcing resources from where they are the cheapest and of the best quality, and delivering where there is the best client interface. This has led to quality, and delivering where there is the best client interface. This has led to the formation of a the formation of a global workforceglobal workforce that collaborates that collaborates

Seamlessly to create profit for the host country, and the country where the Seamlessly to create profit for the host country, and the country where the organization is headquartered. organization is headquartered.

““Globalization Universalisation of IT has led to extensive movement of Globalization Universalisation of IT has led to extensive movement of professionals from one country to another. Though this has been largely professionals from one country to another. Though this has been largely characterized by migration from the East to the West (specifically the USA), characterized by migration from the East to the West (specifically the USA), the reverse trend is also now being seenthe reverse trend is also now being seen

This has led to the This has led to the governmentsgovernments concerned concerned interfacinginterfacing with with each other (in areas such as labour regulations, visa rules, work each other (in areas such as labour regulations, visa rules, work permit quota, etc.) to enable to smoother flow of professional permit quota, etc.) to enable to smoother flow of professional from one country to another,” from one country to another,”

As companies seek talent and talent seeks global companiesAs companies seek talent and talent seeks global companies ““Companies increasingly encourage and expect employees to have Companies increasingly encourage and expect employees to have

cross-cultural competencies and international experience. It cross-cultural competencies and international experience. It indicates an added dimension of appreciation for cultural diversity, indicates an added dimension of appreciation for cultural diversity, different approaches to communication and different ways to different approaches to communication and different ways to solve common problems,”solve common problems,”

Technology also has the potential to change culture and economic Technology also has the potential to change culture and economic structures. These changes in behavior, technology, demographic, structures. These changes in behavior, technology, demographic, resources and global competition are forcing businesses to resources and global competition are forcing businesses to strategically adapt to new ways to fill talent scarcity gaps.strategically adapt to new ways to fill talent scarcity gaps.

The talent forces that are emerging to fill scarcity gaps in our time The talent forces that are emerging to fill scarcity gaps in our time are from every conceivable part of the globe and are adapting to are from every conceivable part of the globe and are adapting to the flat world faster than you think.the flat world faster than you think.

The IT talent hunt begins: Technology has enabled recruiters to use The IT talent hunt begins: Technology has enabled recruiters to use several innovative methods to reach out to a diverse candidate pool. several innovative methods to reach out to a diverse candidate pool. The global talent has created an entirely new generation of recruiters The global talent has created an entirely new generation of recruiters who work in different time zones and who need to connect across who work in different time zones and who need to connect across multiple cultures. Some of the specific competencies that recruiters multiple cultures. Some of the specific competencies that recruiters have developed include change management, flexibility/ adaptability have developed include change management, flexibility/ adaptability and contextual thinking (the ability to see the bigger picture) etc. and contextual thinking (the ability to see the bigger picture) etc.

RPO – Recruitment process outsourcing : RPO has turned out to be a RPO – Recruitment process outsourcing : RPO has turned out to be a growing global trend. The emergence of RPO has solution is growing growing global trend. The emergence of RPO has solution is growing at a very steady pace and even in India, it promises to be the way of at a very steady pace and even in India, it promises to be the way of the future. the future.

E- Recruitment, job portals: According to industry estimates, 30-40 E- Recruitment, job portals: According to industry estimates, 30-40 per cent of junior and mid – level placements in India are now made per cent of junior and mid – level placements in India are now made through the internet. According to experts, the job search market through the internet. According to experts, the job search market including print medium and placement consultants will grow from Rs. including print medium and placement consultants will grow from Rs. 1,500 crore in the financial year 2006 to over Rs. 2,800 crore in 1,500 crore in the financial year 2006 to over Rs. 2,800 crore in financial year 2011.financial year 2011.

ConclusionConclusion The economic landscape of the world is changing The economic landscape of the world is changing

rapidly and becoming increasingly global. rapidly and becoming increasingly global. How successful a company is at exploiting emerging How successful a company is at exploiting emerging

opportunities and tackling accompanying challenges opportunities and tackling accompanying challenges depends crucially on how intelligent it is at observing depends crucially on how intelligent it is at observing and interpreting the dynamic world in which it and interpreting the dynamic world in which it operates. Creating a global mindset is one of the operates. Creating a global mindset is one of the central ingredients required for building such central ingredients required for building such intelligence. intelligence.

CaseCaseCultivating a Global Mindset: The VeriFone Approach- Cultivating a Global Mindset: The VeriFone Approach-

Circa 1997Circa 1997 VeriFone was a market leader in the automation and delivery of VeriFone was a market leader in the automation and delivery of

secure payment and payment-related transactions. Officially secure payment and payment-related transactions. Officially headquartered in redwood City, California, the company was headquartered in redwood City, California, the company was founded in 1981 and was acquired by Hewlett – Packard in June founded in 1981 and was acquired by Hewlett – Packard in June 1997 for 1.29 billion. VeriFone’s stated mission was “To create and 1997 for 1.29 billion. VeriFone’s stated mission was “To create and lead the transaction automation industry worldwide.” In 1997, the lead the transaction automation industry worldwide.” In 1997, the company had tree thousand employees based at more than thirty company had tree thousand employees based at more than thirty facilities in North America, South America, Asia and Australia, facilities in North America, South America, Asia and Australia, Europe, and Africa. Here are some highlights of how VeriFone Europe, and Africa. Here are some highlights of how VeriFone cultivated a global mindset among its people and more broadly at cultivated a global mindset among its people and more broadly at the level of the entire company: the level of the entire company:

Hatim Tyabji, Verifone’s CEO, disdained the idea of an all-powerful Hatim Tyabji, Verifone’s CEO, disdained the idea of an all-powerful corporate headquarters and preferred to view the company as a corporate headquarters and preferred to view the company as a network of locations. Many corporate functions (for example, network of locations. Many corporate functions (for example,

Human resource management and management information systems) were Human resource management and management information systems) were managed in a decentralised fashion out of multiple global locations such as managed in a decentralised fashion out of multiple global locations such as Dallas (texas), Bangalore (India), Taipei (Taiwan), and Honolulu (Hawaii).Dallas (texas), Bangalore (India), Taipei (Taiwan), and Honolulu (Hawaii).

Virtually all employees of the company were provided with laptops and were Virtually all employees of the company were provided with laptops and were connected to each other electronically. Every company facility was also connected to each other electronically. Every company facility was also equipped with videoconferencing facilities. Upon signing on to their e-mail equipped with videoconferencing facilities. Upon signing on to their e-mail systems, employees automatically saw a list of holidays and local times at systems, employees automatically saw a list of holidays and local times at various verifone locations. various verifone locations.

The top management team, consisting of the CEO and his ten direct reports, The top management team, consisting of the CEO and his ten direct reports, met for five days every six weeks at a different location around the globe. met for five days every six weeks at a different location around the globe.

The leadership was dedicated to instilling the company’s core values The leadership was dedicated to instilling the company’s core values (commitment to excellence, dedication to customer needs, promotion of (commitment to excellence, dedication to customer needs, promotion of teamwork, recognition of the individual, a global mindset, and ethical teamwork, recognition of the individual, a global mindset, and ethical conduct) among all employees. The CEO wrote the corporate philosophy conduct) among all employees. The CEO wrote the corporate philosophy manual himself. This manual was then issued in a number of languages manual himself. This manual was then issued in a number of languages including English, Chinese, French, German, Japanese, Portuguese, and including English, Chinese, French, German, Japanese, Portuguese, and Spanish. When rolling out corporate programs, senior managers traveled Spanish. When rolling out corporate programs, senior managers traveled personally to various locations to get local input and to provide guidelines personally to various locations to get local input and to provide guidelines regarding how the program could be tailored to the local context. regarding how the program could be tailored to the local context.

Prior to its acquisition by Hewlett- Packard, VeriFone published Prior to its acquisition by Hewlett- Packard, VeriFone published the CEO’s letter to Shareholders (in its Annual Report) in the CEO’s letter to Shareholders (in its Annual Report) in multiple languages.multiple languages.

The company conducted recruitment on a global basis and The company conducted recruitment on a global basis and instituted structure around the globe. instituted structure around the globe.

One of the company’s recognized core competencies was its One of the company’s recognized core competencies was its ability to leverage know – how from various locations in order to ability to leverage know – how from various locations in order to serve customers or pursue new opportunities. As an example, serve customers or pursue new opportunities. As an example, one of the company’s sales reps in Greece learned from a large one of the company’s sales reps in Greece learned from a large customer that a competitor had raised concerns about customer that a competitor had raised concerns about VeriFone’s expertise in debit cards. The sales rep sent out an e-VeriFone’s expertise in debit cards. The sales rep sent out an e-mail request to colleagues within the company for information mail request to colleagues within the company for information and references on debit installations. Within twenty-four hours, and references on debit installations. Within twenty-four hours, he had sixteen responses and ten references including the he had sixteen responses and ten references including the names and phone numbers of established customers with debit names and phone numbers of established customers with debit card installations. The next day armed with this information and card installations. The next day armed with this information and able to say that VeriFone had 400,000 installations worldwide, able to say that VeriFone had 400,000 installations worldwide, the rep closed a major deal with the customer. Stories such as the rep closed a major deal with the customer. Stories such as these not only these not only

Provide a concrete illustration of VeriFone’s already well-Provide a concrete illustration of VeriFone’s already well-developed global mindset, they also serve to reinforce the developed global mindset, they also serve to reinforce the notion of what constitute desirable attitudes and behaviors notion of what constitute desirable attitudes and behaviors within the company – thereby leading to a further deepening of within the company – thereby leading to a further deepening of the global mindset. the global mindset.