In global economy :

What must Sri Lankan organizations do?

Gerard D. Muttukumaru

In the new evolving global knowledge economy, especially during a downturn or severe economic crisis, all organizations must realize that to survive and prosper they must develop a global mindset within, examine everything they have done in the past and redefine their organizations. They cannot stand still. How they did business yesterday will no longer work tomorrow.

This is what I see in my work around the world. The worst is still to come, as the new American President has reminded us. Several of the world’s leading thinkers at the recent World Economic Forum in Davos agreed that the world as we knew it no longer exists.

Consider the coming impact on Sri Lanka’s most critical foreign exchange earners: apparel, tea, foreign remittances from migrant workers and tourism. No one knows what tomorrow will bring, but every organization must be prepared.

Whoever imagined six months ago that the stock value of the world’s largest and arguably most prestigious bank, Citibank, would drop to USD2 a share and become almost a penny stock?

That the world’s most admired and profitable car company, Toyota, would declare it’s first loss (according to CNN on January 29, 2009) of a staggering USD4.2 billion in 70 years? In addition to the world’s principal economy, the USA, the three other giants, Britain, China and Japan, are in severe crisis. Layoffs on an unprecedented scale globally, the worst in the last 50 years, have just begun.

China has laid off over 20 million migrant workers, the entire population of Sri Lanka, Malaysia or Australia! No country or organization is immune.

Sri Lankan organizations, both Government and business, must now understand national cultures and the ways of doing business in the global marketplace.

Several of the most admired organizations in the world derive 50 per cent or more of their profits from markets outside their own countries. All Sri Lankan organizations must learn from this.

For simplicity, I have selected five competencies, in addition to a deep knowledge of their business, which leaders and managers in Sri Lankan organizations must possess to effectively function in the new global marketplace.

Cross-cultural competence

Understanding other cultures is the key to global success in the new global economy. This is also critical for “thinking globally and strategically”. The world’s greatest brands have paid a tremendous price for overlooking this very basic fact.

Walmart, which has succeeded in China, struggled to “connect” with Japanese consumers. Coca Cola had a steep learning curve in Japan. India remains a great challenge.

Relationship skills

In the world of mergers and acquisitions, the clash of national and organizational cultures of the German Daimler and the American Chrysler, was a principal reason for the failure of Daimler-Chrysler. Even in the world of international relations, understanding the other culture is paramount.

It is critical that organizations develop cross-cultural competence - the ability to understand, respect, listen and learn from other cultures - in every one of their leaders and managers. In several cultures, not everything is expressed in words. All of this must be incorporated into the hiring process.

In most of the world, business and international relations are based on personal relationships. Connections or “guanxi” as the Chinese call it, are critical. Leaders and managers of Sri Lankan organizations must be able to connect with and build close personal relationships with decision makers in the local culture.

A Sri Lankan leader or manager can have all the technical and financial expertise, but if he or she does not have the patience and competence to establish and develop genuine personal relationships and trust, the individual and organization will not succeed in the local context. Yes, patience.

This must be factored into the hiring process. Can one teach patience? Some people are just patient by nature and some are not. I don’t think you can teach it in a business school.

In many parts of the world, western contracts and agreements mean little or nothing. Trust is key. One’s word is often the bond that makes things happen.

Language

English is the language of global business. But Sri Lankan leaders and managers must understand, that a knowledge of the local language in which a company wants to do business goes a very long way. It is amazing what can happen when a local national sees that the “foreigner” is attempting to speak in the local language.

Multilingualism is an asset that an organization should look for in its search for talent. Given the nature of the new global economy and the major players in it, a knowledge of Cantonese or Mandarin, Japanese, Spanish, English and a major Indian language can give one a real edge.

Collaboration

Little is accomplished in the new global economy without collaboration across national boundaries. In hiring leaders and managers to effectively compete in this new economy, companies must look for individuals who thrive on team work and global collaboration.

In the 24/7 world where time zones really don’t exist, virtual teams are running the world! Facebook, Skype, Google Talk, Yahoo Instant Messenger and the internet have revolutionized the world of global business.

Men and women are getting to know each other without even meeting physically, and collaborating on tasks and projects, across boundaries. There are no age, gender or racial barriers in this new world of global collaboration.

What is demanded is the ability to solve problems, get things done and sell products and services anytime, anywhere, new leadership and new thinking.

Global marketing

In the final analysis, everything has to be sold.

To be truly effective in the 24/7 time-zoneless world, companies should hire leaders and managers who are above all terrific marketers and sales people.

Nothing happens in any organization anywhere unless a product or service is sold. No one gets paid.

Listening to customers everywhere on this planet, bonding with them and helping them and employees achieve their dreams, is what distinguishes the winners and losers.

Financial, supply chain and technology systems must exist to focus totally on the customer.

Remember the words of the father of management, Peter Drucker, decades ago: “The purpose of a business is to create a customer”.

Little has changed. Today’s challenge is to retain and multiply them. Only the right leadership and talent within every organization with the above competencies, among others, can take a company to where it should be in the new global economy. We are in unchartered territory.

The writer is the Founder/Chairman, Center for Global Leadership Worldwide USA