What Sri Lankan Organisations Must Do Today In The New Global Economy

By Gerard
D. Muttukumaru

In the new, evolving global knowledge economy, especially during a downturn or severe economic crisis, all organizations must realise that to survive and prosper they must develop a global mindset within, examine everything they have done in the past and redefine their organisations. They cannot stand still. How they did business yesterday will no longer work tomorrow. This is what my colleagues and I see in our work around the world.

The global economy was at the brink in 2008/2009. But thankfully, the new American President worked with economic powers such as Europe, China, Russia, India, Brazil, Japan among others and led the effort to prevent a global meltdown. Several of the world’s leading thinkers at the recent World Economic Forum in Davos have guessed, and I stress the word guessed, that the global economy may begin to grow only in 2010 or 2011. It has not. Europe is in a very precarious position. The world’s principal economy, the USA, has severe debt problems. China has it’s challenges with deep social problems and millions in poverty, but remains cash rich. India has 400 million people in poverty and remains politically unstable. Japan is in crisis. Let us not even attempt to ponder what the “Arab spring” will bring. But all agree that it will be a very different world tomorrow. Consider the impact of all this on Sri Lanka’s most critical foreign exchange earners: leisure and hospitality, tourism, apparel, tea, banking, foreign remittances from migrant workers etc.  No one knows what tomorrow will bring, but every organisation in Sri Lanka must be prepared for unprecedented challenges and opportunities. Sri Lankan leaders and managers must first understand the new realities and the “new normal” in the global marketplace and that they must compete with the best in the world. Part of this reality is that China and the USA are joined at the hip! Both desperately need each other for cash, human capital and consumers!
Doing more with less is a given in the new economy. The two fiercest battles in this new global economy are the battle for the right talent and the battle for the consumer’s mind.
Whoever imagined  three years ago that the stock value of the world’s largest and arguably most prestigious bank, Citibank, would drop to USD2 a share, become almost a penny stock and that the US government would have to rescue it along with the world’s giant insurer AIG? 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? That the world’s largest automaker, GM, will have to be rescued?
Sri Lankan organisations, both government and business, must now understand national cultures and the ways of doing business in the global marketplace. Several of the most admired organisations in the world derive 50 percent or more of their profits from markets outside their own countries. All local organisations 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 organisations in business and government must possess to effectively function in the new global marketplace. Leadership and management are two distinct tasks and both are required for organisational success across national boundaries. Leaders must lead. Managers must manage.

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. In the sexy world of mergers and acquisitions, the clash of national and organisational 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 organisations 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.

Relationship Skills

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 organisations 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 organisation 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 organisation should look for in it’s 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. Business and government must rethink their education system to prepare citizens for this “new world”.

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 revolutionised 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 – Becoming Customer Centric

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 organisation 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. Only a truly customer-centric organisation will prosper in the new economy. 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. This is part of what I will be addressing in my workshop on September 1 at the Galadari Hotel on “How to build a customer centric organisation”.
In conclusion, the global leader and manager of today and tomorrow must be part diplomat, part negotiator, part politician, and excel in the above competencies.
Only the right talent and right leadership within every organisation with the above competencies, among others, can take a company to where it should be in the new global economy. We have entered uncharted territory. Sri Lanka leaders and managers…get ready for the ride of your life!
Gerard Muttukumaru is Founder/Chairman, Center for Global Leadership Worldwide USA.

e-mail:gerardmuttukumaru@yahoo.com