There are no ideal global company structures, but we are seeing some interesting experiments and changes underway. These are usually driven by cost pressures and the desire to strip out layers rather than a bold vision for the future, but they are worth looking at nonetheless. There are three main approaches that multinationals are taking:
1. Link market accountability to regional accountability and make the chief executive of the key market in the region also the chief executive of the region.
2. Decentralize, from direct global to local governance, with global category leadership and evangelism.
3. Create zones that reshape the old four regions to reflect high-growth markets, Africa and the decline of Europe, reporting directly to the global chief executive.
If the aim is purely cost-cutting, these changes will fail. Organizations reject change without a vision – a vision backed by financial change and changes of leadership.
If the aim is a better and more direct connection between the global vision and national adoption and adaption, it is more likely to succeed. It stands even more chance if the financial structure reinforces the new direction and changes of personnel follow.
These changes reflect how we now communicate internally as global companies. We no longer need package steamers dispatched to a regional ambassador – democratic and empowered companies demand more direct accountability between their global and national leadership and product innovation.
In some ways, the structure is incidental and a distraction to the main goal. You may have short-term cost savings, but at the price of the long-term effectiveness of the organisation. Nirvana is having people in the center as talented as the people in-market, and having both the center and local markets facing in the same direction and working to the same goals.
Whatever your structure, there are three golden rules:
1. Know how your business operates between the forces of branding and performance. This is as important as the global debate.
2. Have one spine to fuse the company’s mission and a singular approach. Do not fiddle with services to the level where everyone is confused. Try the new – we have to be able to react quickly – but don’t become a chaotic mosaic. Have a belief, a philosophy, a backbone. Integrate.
3. Keep the global esprit de corps – don’t create such crazy regions and structures that your global identity is lost.
We will always have cost pressures, and we will always have new challenges from micro-content or programmatic. But if we focus on global and national talent equality, one mission and an integrated but adaptive model, we will not go far wrong.
Nick Emery is the global chief executive of Mindshare
This article first appeared on campaignlive.co.uk.
