Sensational headline, no? Thought I’d try and be a tabloid on Sunday rather than a blog. Jokes apart, an article on Rediff.com caught my eye. Yes, it’s originally from BusinessWeek but you try searching for the original on their site. Titled "What firms need to succeed in India and China", it’s an overview of the Boston Consulting Group’s study of companies and their activities and aims in these emerging markets. The article summarizes the survey findings and ends with these recommendations by BCG:
What should companies do to organize themselves to compete more effectively from Shanghai to Sao Paulo? BCG suggests six fundamentals. Companies need:
- A deeply engaged leadership;
- Continuous development of global talent;
- The ability of multinational staff at all levels to collaborate;
- Common business processes;
- Shared technology platforms, and
- Core corporate values that are shared by employees across the globe
What do you see missing from this "list of things to do to be successful in India and China"?
The customers, the users, the target audience, the consumer, the populace of these nations in which these companies wish to do business. Call them what you like, but where is the mention, in today’s so called ’empathy economy’ and ‘conceptual age’ of ‘social networking’ etc of the citizens of these emerging markets?
- Where is the bullet point that emphasizes the importance of understanding your local market, its cultural and social values, its environmental and infrastructural constraints?
For argument’s sake, one can say that these recommendations are on "organize themselves to be more successful", i.e. internal reorganization, but organizational change can also be oriented towards the customer, becoming more user centered.
Understanding your end users is paramount in successfully creating products and services for new markets. This is a well battered dead horse. Now we just need to educate the survey designers in global management consultancies on the subject.
To be fair, there is a paragraph heading in the article "Local knowledge" but it discusses the lack of diversity in the corporate headquarters. Here’s the requisite snippet,
What’s more, there is a misalignment ‘in the seniority of managers and the quality of resources that companies put on the ground,’ the study argues. Of the 100 largest corporations in the U.S., 85% have sales abroad. Yet only one out of five has at least one foreign-based director on its board.
In short, this is not a portrait of a corporate America that is coming to grips with the competitive challenges ahead. "If you expect 30% sales growth, but 1% of your senior management and none of your directors [are] from emerging markets, that’s an issue," says Hal Sirkin, the head of BCG’s global operations practice. "You won’t be able to understand what is going on over there, and you will end up making the wrong decisions."
That is very important too, but methinks that when you’re a business trying to increase sales away from your home market, understanding your customers is far more important.