Many are the articles, posts, comments, and other interventions all over social media, TV, magazines, newspapers, and other forums about the current crisis, by opinionmakers from all walks of life, experience, and more or less legitimate backgrounds.
However, we like facts and, when assumptions, that they are based on robust and consistent arguments.
We are facing a crisis without precedent, no doubt about it. But, as in all crises before and after this one, it’s not only the crisis that has an impact on the businesses.
Crisis, at the same time, bring to the spotlight hidden problems companies and organizations usually have that impact business more than the crisis in itself: Management fragilities, bad decisions or based on insufficient or no information at all, lack of structure, organizational problems, deficient businesses models, among others.
Everybody’s also talking about the crisis as a source of business opportunities for new or re-invented businesses, distribution models, and new ways of reaching the paying client, if not for success, at least to keep afloat.
Mutatis Mutandis, this is old news and, as a matter of fact, no news at all, except to spread some optimism to society at large, minimizing the fear effect that’s over everybody’s head.
I truly believe the real opportunities crisis can promote are two and interconnected. As usual in an open market economy:
- Darwinism: It cleans the market of the feeble and week, unable to adapt and thrive, at the same time that exposes the truly strong and capable;
- Evolutionism: It gives room for companies with visionary leadership and a flexible structure as well as market-oriented business models to quickly reinvent themselves, adapts to new circumstances, adjusts processes and strategies, to conquer the empty ground left behind by the previous ones.
We are seeing this happen even in strongly impacted sectors by this crisis like hospitality, aviation, and tourism.
What are you going to do to take care of your business, get back on track, to fulfill the gap others are creating in the marketplace? What’s your excuse?
During the COVID-19 worldwide lockdown, one of the key issues national economies faced was the breakdown of international logistics channels, creating an alert at the national and regional level to the dependency of international supply lines.
With China being the world’s manufacturing hub, with 28% of the world’s manufacturing output (as per UN Stats), the effect of the shutdown in China alone lead to supply constraints in various industries all around the globe, not to mention China’s located 81% of technology assembly and 65% of technology components production.
The breakdown of these supply chains was as critical as the pandemic itself as it showed the dependency from China even for such things as surgical masks. For governments worldwide, this should not happen again!
This catalyst effect will break the world into three main regions, that will re-invent themselves, production-wise: Europe (and the EU at its core), the USA, and the Asian Pacific Region (APAC), with the two first ones, swiftly looking for, at least, some autonomy at key sectors production level: Food, Medicine R&D and Health, with the remaining economic sectors on the go, taking advantage of internal discrepancies to keep production prices as low as possible.
Looking at Europe alone, we are already seeing the injection of billions of Euros in the economy, to rebuild the local industrial capabilities of this economical giant, that will spread around their low-income, high-productivity, and highly qualified workforce countries like the southern and former eastern block countries, based on the same rationale that took the production industries to China in the last decades.
This is a huge opportunity for such countries, to rebuild their industrial capabilities for European autonomy, led by the German giant, that is also taking advantage of this opportunity as a leading factor to effectively lead Europe and the European economy, through their weight in the European institutions.
The overall challenge though is not to undermine the Chinese market, not anymore as a low-cost production country but as a consumer market of 1,2 billion, where the European high-end products and brands can keep on answering to their consumption demands as it already happens, due to brand awareness building for the last decades, being the real risk to the effectiveness of this strategy the Chinese government and their centralized decision-making policies, that will definitely react to the new European market strategies, unless Europe will leave behind such sectors as technological R&D and production, at the same time “killing” the American giant, that will lose economical ground due to the new Keynesian policies pushed on by the Trump administration.
We are looking at a time of great opportunities, mainly in Europe, if only Germany can out-weight their liberal rivals in the EU and, at the same time, manage to deal with the socialist southern countries, like Portugal, Italy, Greece, and Spain.
Pains and Gains of thinking internationally
(Sharing with you my presentation in the Get In The Ring Global Meetup 2018)
The Lego dilemma: How to be global without losing local connectivity?
– Very few rules and processes
– Simply organized and communicated around a common ground accepted and recognized by all parts involved with room for local “imagination” to grow and thrive: – The Lego brick!
We will be talking about 7 major key points, or principles, that my experience on the field identified as instrumental to be successful in an international environment:
1 – CHANGE THE MINDSET
– Give up control and centralized decision making
– Identify and Manage the essentials, the key aspects of shared culture and values
– Accept flexibility on the ground, but always around key elements that make it possible to recognize the original idea
2 – EVOLVE
– Be ready to Adapt, Adopt and, therefore, Evolve
– Keeping the focus on essentials and key patterns recognized everywhere by everyone
3 – OPEN UP
– Speak a Common Language: But adapt it to local dialects
– Integrate and Share: Solutions found in a particular context or geography can be easily adapted at large, if translated (adapted) to the local needs, without losing identity
– Spread the Word: Allow imagination, but with the “brick”. Make contextualization the globalization concept
4 – LIVE BY THE RULES
– This is Key: the “Brick” is the rule!
– In some countries, they use some brick formats and not others, some colors and not others. Imagination rules when it comes to using the brick
– This way the entire business will be interconnected and integrated
5 – BUY-IN
– Each country or Business Unit should be responsible for its own P&L and collaborate defining it
– Without local responsibility and rewards, no commitment is achieved
– If not, your “disconnecting” the bricks
6 – INTEGRATION
– Keep alert and identify common, structural aspects of the business
– This will be the common ground for understanding and manage diversity
– It may be complex, but must not be complicated
7 – BE FLEXIBLE
– Draw the Business map and draw it again
– Build to change, not to last – “bricks” will come and go and patterns will change, be refined, and expanded
– Eventually, Growth will be incremental, not only because it will support itself but because it should be based on learning from successes and the unavoidable mistakes