Paul R. Cerotti

1. A Global Mindset“’We all want to go toward a bigger place than self interest…the flow of natural human activity is about trying to understand the larger world”Yo-Yo Ma Cellist Paul R. Cerotti

2. Talent • Recruiting, retraining and developing the right talent within an organsation has become a critical differentiator for global competitiveness. • Serving important stints in OS locations as a means of equipping staff with the experience to respond to local needs on a global basis

3. Talent • Foreign secondments • Global talent development • Mobility • Greater diversity of skill sets • “The most successful companies and the most successful countries will be those that manage human capital in the most effective fashion” -Gary S. Becker, Nobel Prize winning economist who coined the phrase ‘human capital

4. AT&T • Richard Bahner – former global human resources director stated that “Employees who can take in a broad scan of information and know enough about their marketplace to integrate that information into new products and services have tremendous abilities to leverage the company’s success around the world.”

5. Rosabeth Moss Kanter • Debated at the WEF what company’s would be like in 2020…. • “The values will be courage, compassion, competency and integrity…In this new and burgeoning information age, a company’s human assets are tis most valuable….People will build a culture of shared ideals in which personal and business goals will become increasingly interwined in pursuit of a progressive and prosperous partnership for the future”.

6. Kenichi Ohmae and The Global Face • “Maintaining a corporate identity in a global environment is different…most important is a system of values that all employees in all countries and regions unquestionably accept. A global company must be prepared to pull out of a region where its core values cannot be implemented.” • The Next Global Stage

7. Trust • “When your core values are black and white, then all the people in your company understand what’s expected of them and you’re that much closer to doing what you say you’re going to do 100% of the time. That means you’re that much closer to being a trusted brand”. – Moser, co-founder of Goldberg Moser O’Neill • EG Avon case study

8. Global Mindset important • “If you get the insight right, there will be a universal market and not just a rural or urban market”. S. Gupta, CEO, Coca Cola India.

9. Global OOPs • Reebok discontinued a line of women’s shoes called Incubus as it referred to a demon that attacks women in their sleep • Electrolux discontinued the use of its Scandinavian slogan in the US “Nothing sucks like an Electrolux” • Chinese auto spare parts company stopped using its literally translated name in the US – “White Elephant Auto Parts”

10. Global Assignments Critical • “You find that business is a lot more complex overseas. You introduce cultures, currencies and a new set of regulations. All of those things go into managing the company so you really lack something if you have not had the experience”. • “If you’re working at a multinational and you have not been out of the US, you’re really handicapped in your ability to be in a management role” Thoughts of Daniel O’Bryan CFO of Avery Dennison

11. Global CapabilitiesAndrews and Tyson

12. Global Mindset • Research conducted on the global corporation at UM • Three things that keep Global CEO’s awake at night: • People development • Setting business priorities to make sure that the short term doesn’t drive out long-term • Setting the tone for creating a global mindset

13. Three Tasks • Discovering new market opportunities • Establishing presence in key markets • Converting presence into global competitive advantage • A Global Mindset is a pre-requisite for global industry dominance.

14. Jacques Nasser- Ford Motor Company • Ford can’t build the company if it holds on to a mindset that doesn’t respond swiftly to consumers’ needs or pay attention to the capital markets. So that’s why we are in the process of reinventing Ford as a global organisation with a single strategic focus on consumers and shareholder value. That’s not to say you wipe out national cultures or eliminate the idea that it makes sense to have people with expertise in one function or another, but it does mean you strive for some sort of Ford-wide corporate DNA that drives how we do things everywhere. That DNA has a couple of key components: a global mindset, as I’ve said, an intuitive knowledge of Ford’s customers, a relentless focus on growth, and the strong belief that leaders are teachers.

15. Corporate DNA • Have a look at what Jan Soderstrom has to say and note her reference (half way through) to Jacques Nasser and corporate DNA

16. International Consortium for Executive Development Research • Survey of 1,500 global executives • Rank performance along dimensions deemed vital to sustain competitiveness • “The respondents rated their ability to cultivate a global mindset in their organisation last – 34th out of 34 dimension”

17. Coca Cola • Q. What’s your most underdeveloped market? • A. The human body. People can do without most things for an entire day. But every day every one of the 5.8 billion people on this planet must consume roughly 64 ounces of fluid to live. We currently account for less than 2 of those ounces.

18. Ways in which Mindsets can be changed? • A change in the mix of individuals composing the firm such that the mindsets of incoming individuals differ from those of outgoing ones. As is well known, the need for a fresh mental template is one of the most common reasons for involuntary changes in CEO positions.

19. Global Mindset • Defined as one that combines an openness to and awareness of diversity across cultures and markets with a propensity and ability to synthesize across this diversity.

20. What is a Global Mindset? Open to Diversity Across cultures and Markets? Knowledgeable about Diversity across Cultures and Markets? Able to Integrate Diversity across Cultures and Markets Global Mindset

21. Percy Barnevik architect of ABB and first CEO • “Global managers have exceptionally open minds. They respect how different countries do things, and they have the imagination to appreciate why they do them that way. But , they are also incisive, they push the limits of the culture. Global managers don’t passively accept it when someone says, “You can’t do that in Italy or Spain because of the Unions, or you can’t do that in Japan because of the Ministry of Finance. They sort through the debris of cultural excuses and find opportunities to innovate”

22. Home Décor Inc (disguised name) • US based household accessories company • Five star customer base • Supplies Neiman Marcus, Bergdor Goodman and Saks Fifth Avenue • Strategy: Combine Chinese costs with Japanese quality, European design and American marketing. There are other Chinese competitors in the market but along with Chinese costs, what they bring is Chinese quality. On the other hand our American competitors have excellent product quality but their costs are too high. We can and do beat both of them.

23. Do you have a Global Mindset? • Diagnostic questions that individual managers or companies can use to assess the extent to which they have a global mindset. • Complete the survey

24. The Value of a Global Mindset • The central value of a global mindset lies in enabling the company to combine speed with accurate response.

25. Who produces high quality global managers? • Professor Moore at McGill Uni, has identified 10 nations as generating above average cluster of superior global leaders: • Canada Sweden • Switzerland Holland • Belgium Denmark • Singapore Australia • Norway Finland Why these countries?

26. Reduce Risk by Cultivating Global Mindset • Benoit Potier, CEO of Air Liquide, stated that “risk taking is culture specific. That is why we need diversity in management” • Discuss Air Liquide • Which cultures would be big risk takers and which cultures would be low risk takers?

27. Global at the top • Howard Stringer 1st foreign born CEO at Sony- 2005 • Chip Goodyear 2nd US CEO at bhpbilliton • Jorma Ollila – Chairman of Royal Duct Shell • Arun Sarin – Indian born head of Vodafone(replaced Sir Christopher Gent • Carlo Gutierrez CEO of Kellogg, now US Commerce Secretary

28. Arthur C,. Martinez, CEO Sears Roebuck and Co. • I think the order of difficulty is geometric because you are dealing not only with the translation of your format, you’re dealing with different business practices and different sourcing strategies. The degree of difficulty in a global strategy is very great…It’s tough. You have to understand distribution patterns. You have to understand how goods are advertised, the role of promotions in driving your business. The whole dynamics are different. So it’s not simply a matter of picking up your store and dropping it in a new environment. The degree of complexity represents a major challenge. I know it looks tempting because of all those consumers over there, and because we have too many stores in America. But a lot of people are going to stub their toes.

29. David D. Glass, Former President and CEOWal-Mart • “We are confident that the Wal-Mart concept is ‘exportable’. … If Wal-Mart had been content to be just an Arkansas retailer in the early days, we probably would not be where we are today. State borders were not barriers, and people and ideas moved freely from one area to another… We believe the successful retailers of the future will be those that bring the best of each nation to today’s consumer. We call it global learning. We are committed to being a successful global retailer and we believe the attributes that made us successful in the USA will also lead to success internationally”.

30. Value of Global Mindset • Greater sophistication and more fine grained analysis regarding the trade off between local adaptation and global standardisation • Smoother co-ordination across complimentary functional activities distributed across borders.

31. Value of Global Mindset • Faster roll-out of new products, concepts and technologies • More rapid and efficient sharing of best practices across subsidiaries • Lower failure rate in expatriate assignments

32. Dell and HP • What type of companies are these? • Read Page 243 and discuss

33. Global Mindset • Does every company need a global mindset? • Does every employee need a global mindset?

34. Cultivating a Global Mindset • Curiosity about the world and a commitment to becoming smarter about how the world works • An explicit and self conscious articulation of the current mindset • Exposure to diversity and novelty • A disciplined attempt to develop an integrated perspective that weaves together diverse strands of knowledge about cultures and markets.

35. Cultivating Knowledge Regarding Diverse Cultures and Markets • Formal Education • Participation in cross-border business teams and projects • Utilization of diverse locations for team and project meetings Verifone eg. • Immersion experiences in foreign cultures • “An attractive working environment is like a mosaic made up of many pieces of different sizes, colour and shapes – Krause CFO BMW

36. Expatriate Assignments • There are powerful…rewards for an international manager on transfer overseas who chooses to get involved in the local community. When such people approach the new country with an open mind, learn the local language, and make friends with colleagues and neighbors, they gain access to a wealth of a new culture…Unfortunately my experience in Mexico indicates that many expatriate managers live in golden ghettos of ease with little genuine contact with locals other than servants… The lesson for global companies is to give each international manager a local “Mentor” who will open doors to the community. Ultimately however, it is the responsibility of individual managers to open their mind, plunge into their local communities, and try to make them their own. • Gurcharan Das former head of Procter and Gamble India.

37. Integrating Diverse Knowledge Bases • Defining and cultivating a set of core values throughout the corporation • Widespread distribution of ownership rights on a global basis • Cultivation of an internal labour market driven by pure meritocracy • Job rotation across geographic regions, business divisions and functions.

38. Integrating Diverse Knowledge Bases • Cultivation of interpersonal and social ties among people based in different locations

39. Lenovo • Chinese computer owned Co – headquartered in NYC with factories in Raleigh and Beijing will have a Chinese Chairman, an American CEO, an American CPO, and a Chinese CFO and it will be listed on the Hong Kong stock exchange. • Would you call this an American or Chinese Co. or a global company?

40. The last word – Rolls Royce • RR customers in 120 countries • Employs 35,000 people, 21,000 in UK • Half of RR business is generated outside the UK

41. The last word - Rolls Royce • In the UK we are a British Co but in Germany we are a German Co In the US we are an American Co, in Singapore we are a Singaporean Co – you have to be in order to be close to the customer but also to the suppliers, employees and communities in which we operate.