(4 mins read)

A long long time ago all companies operated locally and there were many happy people who did not know what Coca-Cola or Snickers was. I know it’s difficult to imagine, but that was the case. Then globalization came and disrupted every single area of our life. Our personal and professional life, ways of communication, shopping habits, vacations, literally everything. Ways of doing business and companies’ cultures had to evolve as well. It was required because there are significant differences in doing business on a national level and globally.


When you do business on a country level or you manage a cluster of countries with similar cultures, it is rather straightforward. Your strategy is being operationalised on an ongoing basis, communication or management processes are not too complex. We could say that people talk ‘same language” and there is not a lot of room for misunderstanding or miscommunication. 


Globalization took our business requirements to a different and significantly complicated level. Many companies decided to enlarge their operations and benefit from a process of globalization. There was a key driver and temptation to all business executives. Imagine that one day you have access to billions of customers or consumers globally. Your products or services are available in America, Europe and Asia. It creates massive business growth opportunities. Many companies decided to do it and over the years they have been extremely successful. Coca-Cola or Pepsi are available almost in every place in the world. There are many people using iPhone, Samsung or Huawei phones. We consume avocados from Mexico, coffee from Kenya or oil from Saudi Arabia. Business executives of those companies which decided to go global, had to adjust their operational models. Global strategies were executed locally with little adjustments. Almost every area of operations was defined and managed by specific policies and rules. The policy-based approach helped executives to manage and control all business operations. So it was less about a culture and more about establishing a model which was operating in a very well defined well across all countries globally. This approach requires lots of people employed in control functions and investment in systems. Thousands of people spent their working hours on training and controlling, auditing. However, even within such a controlled environment, many companies collapsed based on wrong-doing or integrity scandals. Let’s name a few: Enron (hiding billions of dollars in liabilities through special companies they controlled), Volkswagen (emissions scandal of their diesel cars), Lehman Brothers (subprime mortgage crisis in 2008), Facebook (allowing external company harvesting private data from millions of Facebook users without their permission) and many, many others. 


Disruptions to globalization and internal challenges linked to a permanent pressure on cost and personnel reductions forced business executives to explore a different operating model. The key question was how to establish a model which will be ‘globally consistent and locally relevant”. How to empower local leaders and organizations to run a local business in line with global expectations or guidelines, however without massive control. A GLOCAL mindset was a solution to all the above challenges. Local teams were empowered to act in line with some rules and to take a full responsibility for end results. Everything was based on two critical elements of this new approach: culture and principles. Culture is based on trust, integrity, empowerment, collaboration and focus on meeting customer needs and expectations. Culture defines the way you run the business, how you engage with individuals or groups, how companies engage with clients. Cultural attributes have a significant impact on all recruitment processes. During interviews candidates were asked questions probing how they behaved in some specific situations and what type of behaviors they expressed. Additionally, many policies had been replaced by principles. A principle-based approach ensures their employees follow some global guidelines and there is no need to control them on an ongoing basis. It was such a big change in ways of doing businesses.

To ensure that the global model works well, two additional elements were introduced: new leadership capabilities and communication. Every company has a specific and selective process of promoting people to executive positions. They need to be role models, authentic, walk the talk and they need to express leadership capabilities. When senior leaders engage with country teams, the focus goes to listening and helping in data and market analysis and taking most optimal decisions. Finally, communications. There are company global websites or internal town halls where global leaders engage with the entire organization and share their thoughts, reflections and decisions. Of course all is super aligned with the culture and principles.

The world is changing constantly and we live in a permanently changing environment. Recently, the changes accelerated and pushed business executives to challenge and change the way we engage, collaborate and support our clients. GLOCAL is a solution which if implemented in a smart and consistent way, will bring a significant impact on all business operations.

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