The term global operations covers an expansive but critical set of capabilities that support the business strategy and value chain of a company. These include talent management, information technology, customer relationships, supply chain, organizational processes, leadership and culture. Decisions regarding the way these capabilities are deployed around the world have direct consequences on the health and vitality of a company; how they are able to deliver the current strategy; and how well prepared they are for the future.
A firms competitive essence should be an idea, a vision, an inspiring rallying cry that everyone -- employees, customers and collaborators -- can understand easily and that is difficult for competitors to imitate. A firms competitive essence should act as a magnetic pole that guides operational decision making, helping to evaluate choices and trade-offs in a way that remains true to the companys strategic direction. The accumulation of these operational decisions dictates the shape of the international operating model; the guidance of its competitive essence verifies that investments are prioritized effectively.
Competitive essence may sound like a familiar and intuitive concept, but its surprising how few companies are able to drive this essence across the breadth and depth of their operations, let alone remain focused on competitive essence during times of serious market change. Those that do so improve their chances of achieving high-performance.
Most executives we interviewed for our survey (76 percent) believe their global operations are geared towards delivering something distinctive to customers; a competitive essence. Most (77 percent) also agree their boards are aligned with that definition but few are satisfied with how their operating model is positioned to bring their competitive essence to life in a way that leads to high performance.
As previously noted, less than one fifth (17 percent) believe they are capitalizing on their international expansion. The conversion of a clear and differentiating competitive essence into business results is getting lost in the translation.
There are, of course, exceptions to this general rule: Companies such as Apple, Cisco, and Huawei are examples of such exceptions. Each has distinct value propositions and well-defined competitive essences. Because of this, each ranks among some of the industrys most revered and highest performing firms.
A firms competitive essence should drive operating model decisions, and there needs to be flexibility in how these decisions are made. As their competitive and technology environments continue to evolve, firms need to adapt their operating models more frequently to ensure they are organized for success. Yet only 21 percent of our survey respondents strongly agreed they are well positioned to respond rapidly and effectively to changes in the global market. Therefore, its imperative to build flexibility across the entire operating model; across management technologies and processes, organizational structures, people and leadership.
All this must be done while remaining true to competitive essence. This is not an easy feat. But stagnation is a losing proposition in this industry.
Industry executives know that global operations offer a treasure-chest of opportunities during the next few years. But in an environment of continued uncertainty and change, they are searching for guidance on how to prioritize their investments to attain these opportunities.
One smart way to begin is by using diagnostic tools that assess the overall health of your firms global operations. By applying such tools to its existing operating model, a company can gain deep insights into what capabilities it needs to attain operational excellence, the shortcomings it should address, and the business benefits of doing so.
The application of diagnostic tools can reveal to a firm, for example, that they need to re-prioritize their investments in areas such as supply chain or talent management. These assessments can help firms identify where and how to align their investments with their competitive essence. Using these tools, opportunities can be identified in many parts of the organization whether in design, sales, leadership, performance management or human resources. The key to the success of such diagnostics is their ability to offer new investment choices without negatively impacting performance.