The ‘new’ globalization and the CIO

Globalisation is not a recent phenomenon, and yet it is still affecting the majority of organisations in one way or another. Given their unique pan-enterprise view, CIOs are increasingly being asked to drive globalisation initiatives for enterprises.

As I write, I have just returned from three weeks of travel that took me to Gartner offices in India, China and the UK, and the challenges of managing across borders and cultures are again top of mind.

Traditional notions of “cultural understanding” being a key competence are passé. Today’s successful globalisation initiatives have to go much deeper than that.

If you think it doesn’t affect you because you work for a local, home grown company, think again.

Earlier waves of globalisation were characterised by the one-way movement of production of goods or provision of services to lower-cost countries or regions, thus shifting the centre of gravity of these industries to these lower-cost regions.

The current wave of globalisation is increasingly characterised not so much by the decline of the West as by the “rise of the rest”.

For example, while we are seeing emerging countries provide the fastest growing and, in some cases, even the largest markets for global enterprises, we are also seeing the emergence of global brands like Huawei, ZTE, Haier Group, Infosys and Wipro from the emerging countries, which are competing with developed market brands on their own turf and globally, and consistently winning market share.

In this evolution, cultural understanding and the ability to bridge cultures, considered the “holy grail” for success in earlier globalisation initiatives, has become a hygiene factor. It is no longer a differentiator in itself, but a minimum requirement.

The CIO is rapidly being thrust into the spotlight in the ‘new’ globalisation because managing the supply chain, customers, brand perception, regulatory impact, mergers and acquisitions and business processes requires a pan-organisation view, and is also heavily technology-centric.

Gartner has identified a list of new competencies required of the CIO. Globalisation is impacting almost every aspect of an enterprise’s functioning, from market demand, as companies seek growth from emerging markets, to supply-side challenges, to threats posed by emerging market competitors.

IT has a role in all of this. Globalisation will invariably increase the need to establish alliances and partnerships and in many instances the CIO is the logical choice to be asked to suggest alliance partners, given IT’s engagement with a broader set of service providers globally.

However two of the more interesting aspects of globalisation are access to skills and talent, and increasingly, access to innovation.

The war for talent will be the biggest challenge for most enterprises globally for the foreseeable future. This seems like an anomaly, given the high levels of unemployment in various parts of the world. However, even in areas of high unemployment, there is often still a shortage of talent at the high end of the skill ladder. This problem is worse in the technology fields, and getting worse because technology is permeating every segment of the business.

CIOs have a strong opportunity to drive “reverse innovation” into the enterprise, by taking innovation coming out of their emerging market presence back into the developed markets.

The CIO has to lead the charge in this area. In an interview conducted at a recent Gartner Symposium, the CEO being interviewed mentioned that one of his challenges was to track innovations coming out of the emerging markets that might not be as visible to their business leaders in the developed markets.

-He mentioned that this is one of the critical areas that he expects the CIO to track and provide an “early warning signal” to the rest of the business in order to give it a chance to respond to or leverage the innovation.

Businesses across industries and regions have to accept that we now live in a globalised world. A key determinant of continued success or even long-term survival will be to create the capability and competencies to respond to globalised market forces. CIOs are the logical business leaders to take charge of these efforts, and this is being recognised by many of the CEOs. In instances where it is not, the CIO should proactively offer to take charge of the company’s globalisation efforts.

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