The World Just Became More Local, And More Global Too
One of the most fascinating and controversial issues in the COVID-19 crisis is the balance between global and local control. And this brings the world of business performance and politics into conflict.
Thomas Piketty the famous economist has shown us that the economy was becoming “more local” over the last decade, and now politicians are trying to pull in their reigns and protect their country sovereignty. Neil Irwin of the New York Times believes the world is moving toward an even more nationalistic view, where “no country wants to be reliant on another.”
After many weeks of talking with some of the world’s largest companies, I have a different perspective.
While politicians are becoming very nationalistic (to win votes and attract attention), I actually believe the business community is going in the opposite direction. Large and small companies are becoming highly integrated global enterprises, increasing talent mobility, driving new levels of diversity and inclusion, and gaining real-time data about employee and business issues around the world.
Last week, for example, I talked with Nokia, LVH, Novartis, and IBM about their global response to the COVID-19 crisis. These companies are doing amazing work to identify real-time infection issues, understand how different global groups are dealing with work at home and family issues, and how their local country policies are changing. And to me, this is muscle companies are building to become more resilient, responsive, and more successful. They are becoming “more global” and “more local.”
So despite the fact that politicians and trade policies seem more protectionist, well-run companies are going the other way.
Pitney Bowes, for example, now operates in “pods” where local service centers can hire, manage, and take care of their people at a local level. Unilever and Nestle operate with many local business entities that build highly localized products for country and regional tastes, yet have centralized services for supply chain, marketing, and other services. Companies like Novartis are able to empower physicians to work in local volunteer efforts in their country on an as-needed basis with global policies for safety. Workday has built a highly distributed model for employee wellbeing and citizenship, which lets employees in different countries do what’s most relevant to their location, using global policies and funding to build coordination.
Analia MacLaughlin from PVH told me “if we had not empowered our local business leaders to make decisions quickly we would not have spotted the problems in Italy quickly enough.” They have been working for several years to build a global HR model that facilitates local control.
As individuals, we are more connected to our local neighborhood than ever. Thanks to the “locked in at home” situation in most places, people are spending far more time with neighbors (often across the street) than ever (Nextdoor data proves this). We’re not traveling, we’re hanging around the house, and we’re chatting with neighbors.
But this does not mean countries are becoming more isolated and protectionist. Rather the opposite.
If there’s one thing this virus is teaching us, it’s the fact that every person on the planet is connected to everyone else. You can get on a Zoom call and talk with people all over the world in about two seconds, and what you find is that every face, home office, and feeling is pretty similar. And the infection doesn’t care what country you’re in. As soon as we start getting back on airplanes we’re going to remember that this is one big planet, and each of us must relate to each other as humans first, country citizens second.
From a business and HR standpoint, I’m very convinced that resilience is one of the biggest lessons from this crisis. As I discussed in a previous article, Black Swan events are far more frequent than you realize, so if you don’t create a culture of “global community,” with associated talent mobility, relationships, and empowerment, your company won’t do that well in the next economic cycle.
The reason the politics feel otherwise is that our politicians feel threatened, so they’re jockeying for position to see who’s the new “world leader.” The Trump administration refuses to believe that the US may not be the center of world power anymore, so they’re threatening everyone else. Ditto China, Russia, and even India. As business leaders we have to move beyond this.
Let’s just face the real truth: the world is far more interdependent and interconnected than ever. Virus molecules can travel quickly; airplanes and Zoom meetings bring us together faster than ever, and we all have the same human anxieties about health, safety, and community.
In all our discussions about The Big Reset, I think one of the important themes is that we are all on this planet together. We all contribute to the reduction of infection, we all contribute to global climate change, and each one of us impacts the other. High performing companies operate this way already, and the trend is going to push us further to be “more global” and also “more local” in every single business.
What I call the model of “distributed control with central coordination” has to be the future. It impacts how you run your business, your HR department, and your team.
Lots of learning going on in this crisis, I welcome your thoughts.