The past and future of global organizations – Mc Kinsey


Here some statements from thoughtful leaders at a well-run company, speaks to the difficulty of the global corporation’s perennial challenge: how to capture scale across borders while differentiating products and services to suit the needs of local customers—all without letting complexity get in the way of speed and agility:

“We typically lose out when a market commoditizes and we no longer differentiate, further aggravated by us being too slow or expensive.”

“The matrix is too slow—we are in a very turbulent market with great potential, and we have far too many low-cost competitors. We need very short communication lines, quick decisions, alertness—we’ve got to be able to adapt fast.”


We’re starting to see glimmers of global organizational redesign reflecting these new realities. One international engineering company, for example, has restructured to put its commercial-project process (including decisions about whether to bid on a contract and then the preparation of the offer) at the heart of the organizational structure. This model enables more effective team-based problem solving that transcends organizational silos and geographic boundaries, in part through the use of collaborative technologies.

It’s still too early to paint a definitive picture of what the global organization of the future will look like as efforts like these become more commonplace. What we’re confident about is that “process-centric” thinking will be a more prominent feature of organization design than it has been in the past, even if the peculiarities of culture suggest that each process-based structure is likely to be a custom fit.

Leaders should bear in mind these principles as they pursue their own solutions:

-Tomorrow’s answer will be different from today’s. As markets, competitors, and strategies evolve, so will the structural, people, and process elements of a coherent design system.
The specification of globally consistent roles and processes should be kept to a minimum. The most effective companies allow business units to tailor their organizations to local conditions so as to better achieve their wider commercial goals.

-Technology has made location less important than it used to be—but it still matters. While videoconferencing and social media keep far-flung executives connected, co-location brings additional benefits. Companies should always seek ways to bring people physically together.

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