3 Ways to Minimize Your Globalization Penalty

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3 Ways to Minimize Your Globalization Penalty

Post by Sam Holt, VP, Global Client Solutions

In 2011, McKinsey issued a report on ‘understanding your global penalty’. They defined a global penalty as any negative impact to organizational health as a result of being a global business. The report analyzed the potential challenges an organization faces when globalizing their business functions and entering new and emerging markets. The findings indicated that strong multi-nationals seemed less healthy than their local competitors in key areas such as shared vision, capabilities and innovation.

Fast forward to 2016 and understanding the impact of globalization is more important than ever. International markets with strong economic trends, rising GDP, growing middle class populations and increasing disposable incomes represent huge opportunity for business growth. However, exploiting the potential of these markets is complex and while external market factors certainly complicate matters, internal organizational barriers can present the biggest challenge to overcome.

We’ve leveraged our 10 years of experience running global performance marketing campaigns to create a list of the most important factors to consider when delivering great global programs.

Shared Vision & Local Empowerment

Having a shared vision across geographies is essential for employee focus and motivation. It brings teams together, helps them share their struggles and successes in achieving a common goal and ultimately, sets the organization up for success. A clear, shared vision needs to come from senior leadership, and it’s imperative all departments across the globe are aligned. The mechanism in which the vision is socialized and implemented across the organization is also key. We have seen that organizations with a clear structure, defined accountability at each level and global governance typically outperform companies that do not.

Another key aspect to success is empowering those with knowledge to make decisions. If governance is too strong and local nuances and opinions are not considered, it can lead to macro-level decisions being made that simply don’t work locally. The end result is a program that does not allow for the speed and flexibility that is required to win locally.

Centers of Excellence

All organizations should identify the best talent within their business and entrust and incentivize them to share their knowledge and contribute to improving capabilities globally. At Performics, we have invested in creating global Centers of Excellence (COEs) that both our own network and our clients benefit from. Performics COEs are responsible for accelerating the growth of our agency capabilities across our key products and services as well as looking for better ways of working and proactively sharing those innovations. In line with our own experience, organizations who champion digital thought leaders and channel experts not only improve their level of understanding internally, but also get the most out of their agency through their ability to provide better briefing, their understanding of the role of performance media in their business and, more generally, by elevating the discussion beyond the basics.

Knowledge Management

Whether it be cloud-based technology, quarterly face-to-face forums, an online community or a combination of all three, we have found that organizations that have set-up a regular, well managed system for sharing knowledge, increase their chance of succeeding.

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