July 2008 | By Javier Roza, Professor at IE Business School
The alignment of markets and companies is an inevitable result of globalization, but a highly motivated team can gain competitive advantages by breaking the mould.
Let us accept for a moment that multinational business sets the latest trends in management. In this type of environment, country managers do not normally generate product innovation or communication on an individual basis; they are usually not even responsible for production, and in some cases they do not produce their own organisational design. In this situation, local responsibility consists of implementing the strategies developed centrally.
Let us also accept that countries in the same geopolitical environment have a similar level of development and that the consumer pattern is one of convergence. Enterprises also converge in terms of the brands and products they market. Systems and processes are also global. Even the type and quality of employees are becoming more and more consistent owing to the similarity of recruitment and promotion processes. And to cap it all, competitors are the same in each country, complete with globalised strategies.
Furthermore, technical capacities are increasingly reaching the same level. It is becoming more and more difficult to gain a sustainable competitive advantage through technology. When a new product triumphs, competitors rapidly appear with similar products and more competitive offers.In view of this levelled scenario, we could draw the conclusion that innovation itself is not enough for success. The key lies in the speed at which the innovation is implemented. The competitive edge lies in maintaining the time difference in which the novelty is placed on the market in comparison with current or potential competitors. So, what are the key skills needed to achieve this? Talent, of course. But collective rather than individual talent. A critical knowledge mass is necessary to continuously feed the generation of innovation and maintain the material flow to guarantee that speed is not lost.
I return to the case of international enterprise. If products, markets, processes, systems and humans tend to be the same, why do some subsidiaries obtain much better results than others? Shouldn´t they also tend towards equality?
In my opinion, the difference lies in effectiveness and the capacity for execution. These variables determine the speed and, therefore, the advantage over competitors. The what is matched in importance by the how and, above all, by the when. It is the collective energy of people that executes, better and faster than others and, therefore, it is the genuine source of sustainable competitive edge. The difficulty lies in generating and managing that organisational energy based on people and their feelings.
That is the leader´s mission: providing the why that makes people give their best in their work. That should be the core of the reactor that generates the sense of doing in the rest of the organisation.
Throughout my professional experience, I have seen that magical state in some of my teams. They were highly qualified individuals and, as a team, they had a mission that was shared and assumed by all. The group worked on a self-regulated basis. They were capable of systematically surprising the market, customers, the organisation itself and, more importantly, competitors. The business results were spectacular and the merit was theirs. The only merit of management was the establishment of a vision, giving them the appropriate context for carrying it out and trusting in them. The rule was do first and tell us afterwards (delegation motivates, does it not?). In my opinion, the results were good because they enjoyed themselves, because it was a gratifying challenge and because their hearts ruled their heads.