NdubuisiEkekwe is a founder of the non-profit African Institution of Technology. He recently edited Nanotechnology and Microelectronics: Global Diffusion, Economics, and Policy.
A few years ago, Thomas Friedman eloquently said that "the world is flat." Technology and globalization have made commerce a far more level playing field than it was many decades ago. The internet has unlocked opportunities, giving businesses access to previously unreachable customers. There's a sense of equal opportunity in markets, with geographical and historical knowledge becoming more and more irrelevant. From business schools to boardrooms, building global leaders has been identified as a crucial factor for organizational growth. That makes sense when competition can come from anywhere. Being globally-focused is now a prerequisite for survival.
Yet, despite increasing interdependence across the globe, the world is not necessarily flat. Customers have unique tastes and values, and local knowledge can be a distinct competitive advantage. Anyone who depends on deploying a one-solution-fits-all strategy across cultures and nations will lose. Being a global leader today goes beyond having a "global strategy." Fragmentation exists, and firms need "interface leaders" — or local leaders — to execute strategies.
Local communities appreciate great global brands, but they also treasure the relationships they have with their local brands. For any global brand to displace those local brands, they have to understand the customers and offer better value, in the local context. Why? When customers are making purchasing decisions, they're simply looking for value. What you're doing in your corporate headquarters is of no concern to them.
Future global leaders must be those who can develop local leaders with the ability to execute company-wide plans, across nations and regions, at the local level. Commerce is still communal in nature, regardless of the sophistication of the product or service. Intangibles like local fashion, language, and cultural norms must not be taken for granted at the physical interface where brands connect with customers.
Let me use an example of two companies from two different industries — Google and Coca-Cola — to illustrate some points on how next-generation global leaders can build their firms. Coca-Cola is an iconic global brand, and yet, it is the most successful local "Nigerian brand." Only, no one buys "Coke" in Lagos, and no one cares to know what the Coca-Cola executives are doing in Atlanta. The products are packaged and "bottled" in Nigeria, and few things are visibly foreign in the products or the business operations. Coke even has a Nigerian taste that differs from the U.S. version — possibly changed to satisfy the local preference.
In the case of tech giant Google, the global to local transformation is visible, though it's still in the early stages. In Africa, Google is local, and most of their managers are natives. When you interact with the team, you have the feeling that you're doing business with another local company. While Yahoo! delivers U.S. news feeds to most African nations, Google delivers local news via country-specific domains. Google understands that a virtual global marketplace requires a physical local presence. It's easier to run ads for customers in Boston by paying into a Google local Nairobi bank account than by wiring money to California.
Even within nations, global leaders need to have local plans. Consider Nigeria — what works in the predominantly Christian south may not work in the Muslim north. It's the same nation, but in commerce terms, they are poles apart because the people are so vastly different. The most successful national brands are also the best community or local brands. These brands have built an enviable "physical interface" with customers, at the point where they relate with the brands. They know the local area and can compete with local competitors. They understand that, in the end, the business needs to be distilled down to the community or local level, because understanding local markets still matters. Next-generation global leaders must know that to become successful, they need to develop local leaders who will represent them across communities and regions. You can have a global strategy, but it is the local one that customers experience. It's the local one that wins and loses customers. Indeed, the best global leaders are also the best local leaders.
This post is part of the HBR Insight Center, The Next Generation of Global Leaders.