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Is The World Truly Flat? Almost…

August 6, 2009

Recently, I started to read Thomas Friedman’s The World is Flat, a really great book on Globalization 3.0. I picked up the book because I have many interactions with global off shore development teams. When Mr Friedman writes about a “flat world”, he means the playing field has been leveled. This book did open my eyes to how companies can successfully develop new products by leveraging talent on a global level.

So is the world truly flat? This is a question I asked a colleague the other day. We were talking about his experiences working with groups of off shore developers on various projects. He had some bad experiences with his team of off shore developers. I’m not going to mention the country or firm. He is not the only person out there experiencing challenges, I hear the same horror stories all the time. I have been working with off shore teams on several projects of various sizes and I can say that I have encountered many challenges along the way. This conversation inspired me to write this brief article.

Through the 1990s and much of the 2000s, off source information technology (IT) services firms grew rapidly—and largely at the cost of European competitors and US. The reasons behind this are well-documented—cost, quality, the availability of expertise and the growth of communication networks. In Friedman’s book, he opines that a number of events ranging from the fall of the Berlin Wall to the rise of the Internet have flattened the competitive landscape worldwide by increasing globalization and reducing the power of states.

But the world is not flat, argues HBS professor Pankaj Ghemawat, a leader in globalization strategy. Think of it as partly globalized, or “semiglobalized.” Pankaj has identified several interesting points. Check out his book, Redefining Global Strategy: Crossing Borders in a World Where Differences Still Matter.

“Strategies that presume complete global integration tend to place far too much emphasis on international standardization and scalar expansion,” Ghemawat argues. While identifying similarities from one place to the next is essential, effective cross-border strategies will take careful stock of differences as well.

As he sees it, important realities dotting the landscape for business can be grouped into 4 basic areas: cultural, administrative/political, geographic, and economic. Discussions of globalization tend to overlook these factors. And companies that wish to make headway should consider 3 broad ways of dealing with distance: adapt, overcome it, and exploit it.

See his interview with Havard Business Review.

I have to agree with Ghemawat, we are living in a semiglobalized world, one where differences between countries and regions continue to matter. There are many successful companies utilizing globalization within their business processes and strategies. The key here is adapting and understand the core benefits. Having a “Precise Dialogue” with your global operational groups is also extremely important. And finally, how you plan to manage your global operations will be the primary driver to your success.

So as I researched this topic, I couldn’t help to think about the old Bugs Bunny cartoon. The one about Christopher Columbus, called Hare We Go. Nicely titled, because I think we have some time to go before we achieve a completely flat world. Enjoy the video clip.

So is she a round or is she a flat like a pancake? I would love to here your thoughts on the matter. More to come on this topic.

See also Pankaj Ghemawat’s blog, What in the World, and his Web site, www.ghemawat.org.

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