Training Industry Quarterly - Fall 2008 - (Page 28) leaders must ensure their teams are focused only on value-adding activities rather than administrative tasks. Global Collaboration: The New Source of Competitive Advantage Friedman believes that new global leaders are driving change. The leaders of globalization are no longer Europeans and Americans, but come from developing countries such as China, India, Brazil and Russia. The implications for business are manifold. Companies used to think that they were in competition with other organizations. In Friedman’s flat world, organizations compete against networks, such as a group of supply and production chains working together to maximize the benefits of spreading their operations across the globe. All the research shows that organizations with access to the best networks out-perform their competitors. Their flexibility and ability to quickly scale resources up or down ensures they continue to out-perform them in the future. However, the strength of a network not only lies in how strong its members are, but also how well its members are organized and how they interact. According to The Boston Consulting Group’s paper Achieving a Global Talent Advantage, while most companies are wrestling with this supply-and-demand imbalance, a fortunate few have figured out how to take advantage of the global market for talent. These companies have improved their bench strength, adopted new delivery models, accelerated growth and boosted innovation by carefully aligning their talent strategies with key business objectives. In the process of doing this, they have created a lasting advantage. As Friedman notes, we cannot halt the flattening of the world. However, with the right kind of innovation and motivation, we can begin to manage it. Lessons from Intelligent Enterprises The most successful companies learn from the best practices of others. The pioneering flat-world business Li & Fung Ltd teaches many lessons about leveraging the most out of the flat world. Li & Fung evolved from a Chinese trading company into what it now calls a “network orchestrator.” Its performance has been spectacular. Over the last three years it has doubled revenue and tripled profits in an industry with an annual growth rate of just 2%. Li & Fung Trading produces more than $9 billion in clothing, toys and other goods for some of the best-known brands in the world, yet they own no factories nor employ a single seamstress. Instead, they tap into a network of small to midsized suppliers around the world, often handling different stages of production in different factories and different locations. When an order comes in, the supply chain is designed to deliver the right product at the right time, in the right place and for the right price. For example, when an order comes in for 300,000 men’s twill cargo pants, the buttons may come from China, the zippers from Japan and the yarn from Pakistan. The weaving and dyeing of the fabric may be done in China, and the garment sewn together in Bangladesh. If the customer needs quick delivery, the order might be spread among three factories, but the final product from each factory must be identical. If the same order was received a few weeks later, a completely different supply chain might handle it. In contrast to Henry Ford’s assembly line, where all the manufacturing processes were under one roof, the entire world is Li and Fung’s factory. The company doesn’t own this supply chain. It orchestrates it by drawing on a vast global network of highly specialized providers. Li & Fung and other companies like Cisco have confirmed that network orchestration is a new capability that creates a competitive edge. The orchestrator designs the overall supply chain, drawing together multiple suppliers at different locations to deliver the products desired by customers at the quality and prices determined by the customers. The customer is the center of gravity in the network. Competitive Edge — Welcome to the Network Orchestrator In the business context, Li & Fung provides a powerful example of a new kind of sophisticated orchestrator coordinating a very broad process network. Orchestrators have been around for quite some time in a number of indus- Takeaways Companies used to think that competition rests against competing organizations. In a flat world, competition is against networks. Companies are being forced to deal with increased operational complexity as a result of intensified global competition and growing expectations, and HR will need to partner in driving achievement of business goals. In a world with just one time zone which is “now,” organizations must source talent, logistics, content and innovation wherever they are best available. A company that practices “world sourcing” can create value 24 hours a day utilizing global “zonal” capability. 28 The real challenge in the flat world is to balance the benefits of being part of a single cluster of networks with the benefit of being part of a multiple clusters. The strength of a network rests not just on how strong their members are; it also draws strength from how they are organized and interact. According to the authors of Competing in a Flat World, Li and Fung believe that “networks can work ‘smarter’ than the individuals or firms that are part of them. Orchestration is what makes smart networks smart.” Training Industry Quarterly, Fall 2008 / A Training Industry, Inc. ezine / www.trainingindustry.com/TIQ http://www.trainingindustry.com/TIQ
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