Globalization is alive and well…

Sometimes it just smacks you right in the face. You’ve known it all along – at an intellectual level – but then you have this moment when two or three pieces of information collide. And these past few days have been a big smack for the continuing transformation of world commerce – i.e. globalization.

Story #1 – February 11 2011 – Nokia and Microsoft unifying their efforts to provide a great user experience. Two tech giants – one of European lineage, one American – trying to transcend cultures, languages and technologies to make an impact on a world market. If they can pull it off – and many doubt they will – it will be huge on many many fronts.  Maybe my memory is shot, but I’m trying to think of a major merger or collaborative tech deal between giants in the last 30 years that even comes close to this cross-border, global deal.

Story #2 – February 15 2011 (deal specifics announced) – The German exchange Deutsche Boerse announces it’s merging with the New York Stock Exchange. Many pundits initially decried this merger as the loss of an American icon. The truth is that foreign investors have long been part of the ownership structure of the NYSE and there is also significant investment by US firms (e.g., Blackrock) in the Deutsche Boerse. Nonetheless, it is a significant combination of two powerhouse exchanges that further facilitates the free flow of capital around the world.

Story #3 – February 15 2011 – CNBC’s Erin Burnett interviews Oleg Deripaska – one of Russia’s wealthiest investors. What are they talking about?  Deripaska’s investment in China!  The Russians investing in China.  OK so maybe this is not so new. There was probably a time during the Cold War when Russia supported the then struggling, agrarian economy of China thinking that they might win China into the universe of Soviet countries. That didn’t happen and there was a frigid period in the Sino-Soviet conflicts that ensued. But Russian investors, just like any other investors in the world, now go where the opportunity is… and there is undoubtedly opportunity in China.

 

Three data points that reinforce the notion that we are in the throes of globalization and that it is a “force” that we should get comfortable with.  These cross-border, cross cultural, icon-crumbling deals ARE the new normal.   Get used to it!

Smack!  OK…I got it!

If only we could communicate…

I’ve always wanted to learn another language, but after a couple of failed attempts in high school, I pretty much gave it up.  I considered myself doomed to single language hell and never destined to have any international business responsibilities for lack of another language.

But alas, if Jay Walker, founder of Priceline.com and speaking at the TED (Technology, Entertainment and Design) conference is right, I will soon be joined by 2 Billion people learning to speak English!  Hallelujah!  Global business (and a whole lot more) will be possible!

The emotions tapped by Jay  in this video really make you believe that we really can solve the world’s toughest problems!

Doing business globally

I am constantly amazed at the subtle but continuous ‘globalization’ of doing business.  It wasn’t that long ago that the way to start a company (especially in Silicon Valley where I live) was to sell and market your product in your home country then “go international”.  To go international meant selecting a target market, setting up an office in that country, then selling and marketing your product in that region.  Rinse and repeat for the next country, etc.  It was fair to call this “international” (as in do you have any “international” sales?), but it doesn’t hold a candle to the notion of doing business globally.

Globalization 1.0  could loosely be defined as the era when companies “outsourced” certain functions to “offshore” companies based in India, China, Brazil and Eastern European countries.   This used to be hard and complex.  It is now relatively simple and straightforward.

In today’s environment, at least one or more aspects of your business might involve doing business globally (do we dare say: Globalization 2.0).  You might own a company site in a low cost software development region like India or Brazil.  You might manufacture goods at your facility in China or another low-cost region.  In a few years, your company’s financial statements will use International Financial Reporting Standards (IFRS) – promulgated by the International Federation of Accountants in 2007 – instead of the unique accounting standards currently in use in each of more than 100 countries, including the U.S.

In subtle but profound ways, this globalization trend is transforming the way that businesses develop.  It changes the landscape of competitors, pricing, service delivery and recruiting.  It changes the internal ingredients of success as well like:

• having a good internet network that transcends the proxy servers of China and the Middle East
• having an effective means of communicating with employees across many languages and cultural inferences
• making decisions about the number of languages you will support (because each one has a translation cost associated with it!)
• figuring out secession plans for senior managers who have responsibilities for multi-cultural regions and must have multi-cultural sensitivies

Doing business globally holds enormous potential for the firms that get it right.  But the process of transforming your business (or starting a new one) and becoming a truly seamless global enterprise is a journey and this is where it starts.   This is the process of becoming global.

The goal of this blog is to engage the community of business professionals that are working through these challenges in a larger conversation from which we can all benefit. I hope you will engage, contribute and prosper as a result.