The world’s largest corporations are embracing a greater push for globalization. Experts from global management consulting firm Hay Group weigh in on this year’s survey results to identify the newest trends that will determine their success.
As highlighted in Hay Group’s recent book Leadership 2030, six powerful megatrends are transforming the global business environment as we know it: globalization 2.0, environmental crisis, technology convergence, individualism, digitization, and demographic change. These six megatrends are also fundamentally changing how people work and what they want from their employers.
Based on the survey* we conducted in connection with the 2015 World’s Most Admired Companies (WMAC) ranking, the megatrends and the challenges they present are very much on the minds of senior leaders in these organizations. Globalization, in particular, is at the forefront of business planning and strategies.
That’s because a new economic order is emerging, which we call “Globalization 2.0.” Power continues to shift to fast-developing markets in Asia – to India and China, in particular. In fact, the International Monetary Fund predicts that by 2050 only three of the top 10 world economies will be in the West – U.S., Germany and the U.K. To exploit opportunities, companies will need to increase local participation in strategic and operational decisions.
The labor market will also go global, with increasing cross-border competition for talent. And big collaboration will be key. Companies will need to put in place the cultures, platforms, and processes to make collaboration easier and equip people with the right skills to foster effective cooperation. Only 55% of employees worldwide currently give their organizations high marks for effective collaboration across departments and functions, based on Hay Group’s global employee opinion norms. Globalization 2.0 will take the collaboration challenge a step further, and based on this year’s survey scores, the WMACs are already planning ahead.
Globalization is seen to be a much more pressing issue by the WMACs than by peer organizations. Seventy-two percent of WMAC respondents report that globalization will have a “very important” or “important” impact on their organizations, as compared with 52% of peer company respondents. A key challenge will be “balancing domestic vs. global business opportunities and allocating resources effectively amid quickly changing consumer consumption behaviors,” according to one U.S. executive.
Sixty-one percent of WMAC respondents see globalization as one of the top three megatrends impacting their strategic workforce planning (i.e., the future composition of the workforce), versus 46% of peer company respondents. Likewise, 58% of WMAC respondents see globalization as one of the top three megatrends influencing their employee engagement strategies, versus 44% of peer company respondents. One European executive, for instance, points to enhanced opportunities in a global labor market to access motivated employees: “more employment will move to international locations in emerging markets, and also target immigrants with higher aspirations and work ethics.”
Who’s getting Globalization 2.0 right?One of the nine attributes of reputation on which companies are evaluated as part of the WMAC rankings is Effectiveness in Conducting Business Globally. These are the leaders in 2015:
1. Walt Disney
8. Toyota Motor