As organizations grapple with today’s multinational environment, and look to increasingly take more business processes global, numerous opportunities and pitfalls present themselves. Steelwedge recently explored these dynamics in a webinar entitled “The Pursuit of Growth: Is Your S&OP Glocal Enough?” The webinar was presented by Chris Turner, the co-founder of StrataBridge Consulting, and Nari Viswanathan, the VP of Product Management and Product Marketing at Steelwedge.
Early on in the webinar, Chris stated, “There is no one best practice approach for global S&OP. If anyone tries to sell you the ‘17 Steps to Perfect Global S&OP,’ you should definitely throw them out of your office.” This statement set a tone for the presentation, which offered principles to guide attendees’ thinking and help them avoid unintended cognitive traps around taking their sales and operations planning process global. Chris laid out a framework that strategy, innovation, and operations serve as fundamental laws that need to be recognized in any business decision-making.
What, exactly, does it mean to be “glocal”? The term was coined by Japanese economists in the 1980s, and refers to the simultaneity –the co-presence–of both universalizing and particularizing tendencies. As we all increasingly become global citizens, at the same time, our need to be different is heightened. Global and local are not mutually exclusive. In fact, they enable each other. It’s this unique balance that helps businesses find their way in diverse markets while trying to drive the economies of scale and the economies of scope and speed that come with size.
So what are the biggest cognitive traps and biases of going global? Chris outlined these:
A reluctance to admit complexity: A manager’s job is to cut through the complexity, get to the point, and rally people around it. But in a desire to do that, we often not only don’t want to admit to complexity, we end up being blind to it.
The desire to “jump to ‘algorithm’”: As humans, we like things to be neat, predictable, reliable, and repeatable. As you start to move into new territories, new channels, new geographies, new markets, however, some of your algorithmic roles that you’re carrying with you may not fit. You need to back off a little bit and being prepared to have a bit of trial and error and learn by doing.
Mechanistic approach: If you approach global business purely through process and technology, and you leave out the organic, or the “people part” of the equation, you will never be successful. In most cases, when moving into new territories, the cultural angle is much bigger than you expect.
The “duplication” trap: If you have an S&OP process in place at the country level, and you just repeat that process as you move into multiple countries, you will ultimately end up duplicating data and effort. Some of these decisions should be made at a different level.
How does a company ensure that it doesn’t fall prey to any of these traps when they embark on global expansion? According to Chris, these are the five key principles for strategic execution of global S&OP:
- Everyone has a good idea of the decisions for which he or she is responsible.
- Important information about the competitive environment gets to headquarters quickly.
- Once made, decisions are rarely second-guessed.
- Information flows freely across organizational boundaries.
- Employees have the information they need to understand the bottom-line impact of their day-to-day choices.
Blueprint for delivering on the five key principles for global S&OP
To ensure that a company can execute on these principles for successful global expansion, Nari advocated for developing a “blueprint” that is flexible and can adapt to local challenges. This blueprint is a fundamental technology enabler, which allows for a standard process, but also can have configurations created that are flexible to the local environment. Nari stated that in many of such engagements, Steelwedge leads the initial processes of scoping, design and implementation, and customers become involved at the validation and deployment stage.
“Adoption of blueprints is not purely a process issue but also a technology issue,” Nari said. “True blueprints are atomic and leveragable across not only companies in the same industry but also across industries.”
In future deployments or enhancements with these customers, the customer takes the lead and Steelwedge takes a backseat. “Getting truly globalized requires the company, through its own leadership activity, to look forward to future deployments for the solution,” Nari said.
You can learn more about becoming “glocal” by viewing the archived webinar here.
What is your experience with the challenges and opportunities inherent in taking your business global while keeping local concerns in mind? We’d love to hear from you in the comments!