"Globality," Reviewed in Brief

Title: Globality: Competing with Everyone from Everywhere for Everything Authors: Harold L. Sirkin, James W. Hemerling, Arindam K. Bhattacharya
Pages: 292
Price: $26.99
Theme: Globalization is complete. Here's what it means.
Who should read: Anybody who cares about their business, company or job.

Quote: "We look forward and see a new era emerging. We call it globality, a different kind of environment, in which business flows in every direction. Companies have no centers. The idea of foreignness is foreign. Commerce swirls and market dominance shifts. Western business orthodoxy entwines with eastern business philosophy and creates a whole new mind-set that embraces profit and competition as well as sustainability and collaboration."

Praises: "Globality" offers a cogent thesis, well-supported and generally well-written. While blunt about the challenges of a globalized business environment, it does not cry wolf to the West, and in fact offers some excellent examples of how Western firms are competing effectively in emerging markets. It also offers deep insight into the operations and strategies of some prominent firms in the emerging world, many of them manufacturers. Similarly, it contains a number of provisions for how to operate in a global economy.

Peeves: It occasionally devolves into the least interesting kind of business self-help book, most notably in the laundry list the authors offer as their final chapter. There is at one point the subtle suggestion that one big component of success in the emerging world is the ability to run sweatshops with impunity.

Big Think Breakdown: "Globality" is a wake-up call for Western executives who think they're better than upstart competitors in the developing world. It drives home that the best firms outside the West are well-managed, innovative, and strategically excellent -- in short, fully capable of competing head-to-head and winning. Even in the wake of the downturn, it's close to essential business reading.
UPDATE: Globality reviewed in full. A defining moment in Globality comes when Whirlpool creates a $150 washing machine to sell in Brazil. First, the company had to figure out that Brazilians wash clothes differently than Americans -- they use small loads. Then it had to comprehend the market - washing machines are a status symbol for their owners, a kind of Brazilian iPhone. But they're a status symbol that shouldn't cost more than about $150.

Whirlpool's first effort to sell washing machines in Brazil involved stripping down one of its U.S. models. It fulfilled neither the dreams nor the budgets of Brazilians, and failed. So Whirlpool got smart -- it came up with a washing machine designed from the start for the Brazilian market, by Whirlpool's Brazilian engineers and designers. It was manufactured in Whirlpool's Brazilian plants. It took some five years, but they came up with a product, the Ideale, that sold for $150, and created a massive new market.

This mini-case study on Whirlpool epitomizes two key arguments that the authors of "Globality" want to make:

• There are giant new markets emerging in the global economy;
• Even high-cost Western companies can win in low-cost markets, if they're willing and able to adapt to these markets, rather than trying to make the markets adapt to them.

The authors, Harold L. Sirkin, James W. Hemerling and Arindam K. Bhattacharya, all of Boston Consulting Group, have a sweeping vision:

We look forward and see a new era emerging. We call it globality, a different kind of environment, in which business flows in every direction. Companies have no centers. The idea of foreignness is foreign. Commerce swirls and market dominance shifts. Western business orthodoxy entwines with eastern business philosophy and creates a whole new mind-set that embraces profit and competition as well as sustainability and collaboration.

A Wharton School discussion of Globality that features Harold Sirkin.
One strength of the book is the way it breaks down the operating strategies of fast-rising companies in China, India, Brazil and elsewhere. There are deep insights into how the big companies in the developing world operate. We see their disadvantages (Chinese firms have no choice but to sometimes do what the government tells them, whether or not it's good for business) and their advantages (even if wages for typical Chinese workers grow at 8 percent a year and those for U.S. workers by 2.5 percent a year, by 2040, Chinese labor on average will still cost one-quarter what it does in the U.S.A.).

Another strength is that it breaks down myths. For instance, the idea that the developing world is only good for cost-cutting. There's a chapter on some of the genuine, world-beating innovation taking place in emerging markets. It will be clear to readers why many of the Challenger companies are gaining market share in the West, and even buying iconic Western firm. Challenger firms are well-run by ambitious, creative leaders who've got effective strategies for global expansion. Translation -- they're set to clean the clocks of Western firms who take it for granted that they are better run than some firm in a former backwater like Brazil.

Most executives will also appreciate chapters on how to develop and keep talent in a global environment, how to delve deeply into the business environment in emerging markets, and on 'pinpointing,' Sirkin et al.'s term for making the invisible hand both visible and tactical.

There are plenty of ways Western companies can stop themselves from being swamped by what the authors refer to as a tsunami. Whirlpool is just one of a number of examples of Western businesses innovating in emerging markets. One big plus of "Globality" is that it doesn't think Western firms should panic, nor threaten their inevitable destruction at the hands of the world's Challenger companies.

For all its strengths, the book is sometimes an uneven read. One bad point is where Sirkin et al. quote Zhou Susu, a top executive at ZTE, the biggest Chinese maker of wireless networking equipment, as saying "Our local staff usually works twelve to fourteen hours a day. It sounds terrible to our competitors." It ought to sound terrible to Zhou, especially given that the authors note (much, much later) that "as many as 20 million kids are left at home alone for weeks and months while their parents take jobs in cities or at distant work sites."

Perhaps ZTE is not the Chinese version of Armour and Swift, inspirers of "The Jungle." But Sirkin et al. say nothing of the sort. Instead, they go on to cite a piece in the Atlantic in which an anonymous American executive says "There's none of this 'I have to go pick up the kids' nonsense you get in the States." If globalization means sweatshopization, that's not a good thing for anybody.

The bigger flaw in the book is that the authors must tell Western CEOs how to respond to their vision, which means they end up writing a self-help book, and those are only compelling to people who know they need the help. The last chapter, which should inspire action, instead becomes a "Honey-Do" list for Western CEOs.

Still, "Globality" is a near-essential read for Western executives. The world economic crisis may even accelerate its themes, barring a return to protectionism. It would be good if the authors could add a chapter to a future edition assessing what the credit crisis means to companies in the developing world. For instance, Cemex is one of the book's stars, but its use of debt to fuel acquisitions has caused it major problems. It is not the only company in the list of Challengers that may founder on the shoals of the capital crunch. All-in-all, "Globality" looks like a reliable map to the way business will be in the years to come.