Strategize Globally, Implement Locally

Your strategy becomes my tactics – but you have to stay in control of HOW and WHEN

We’ve been talking about the importance of developing good strategies and understanding Sign up for the China Solved China Negotiation newsletterwhere strategy ends and tactics begin.  I’m using a simple but workable set of definitions — strategies deal with goals, asset development & allocation, and longer time frames.  Tactics are methods for reaching goals, deal with spending or earning, and usually take place within a shorter time horizon.

Strategies should be developed at the Board or CEO level, and integrate on a global level.  Tactics must support and address your global strategy, but have to be adjusted for local business envirnoments and current economic realities.

Just as I was figuring out how to wrap up this discussion, a very nice young woman contacted me and gave me a great case study.  Miss P is a native of Jiangsu, but is about to finish up her MBA in a fine school from a neighboring state.  She asked me to look over her resume and speak to her about her job search.

Miss P is everything a senior manager in an MNC could hope for.  Smart, experienced, good language skills and hard working.  Her challenge, however, is that like most young people she views the world tactically (what must she say to get a good job by May?) — but business schools try to train their students to think  strategically (building the “leaders of tomorrow”).   She will do an absolutely fantastic job for the manager who understands how an MNC strategy gets transformed into a set of tactics what will be effective in 2nd or 3rd tier Chinese.  And that’s where many of you come in…

Strategize Globally, Transact Locally
The challenge for international negotiators is to craft the right strategies at home, and then build cross-cultural teams who can figure out effective ways of executing and implementing.

The happy  ending for those who can make this story work is an organization that can leverage its global brand, asset base and management team into new markets — where they can not only earn revenue but also develop category-busting products,  and recruit new managers with innovative approaches.

The dangers, however, are very real and very expensive.  Some people think that the tricky part is coming up with a global strategy that is broad enough to be relevant in a wide range of environments but distinctive enough to offer competitive advantages over local incumbents and other international players.   I suspect, however, that the real problem is on the other extreme.  The fault is not in the goals, but in the methods — or rather how the goals become the methods.

One destination — many ways to get lost.
The first problem is strategic drift.  Think of the children’s game of “telephone” where one end of the line whispers a message to a neighbor and so on until the final kid announces the garbled nonsense that he thought he heard — and everyone laughs and laughs.  The grown-up version is less funny — especially for shareholders.   The message may get garbled on the way down from the C Suite to the front line (Best Buy executed pretty well — if they wanted to build an interactive museum of consumer electronics.  Their stores were full and lots of people were trying stuff out — but they made their purchases elsewhere for lower prices.)   Other times the problem is that there is no reliable feedback loop and the strategy is not informed by local input (Google’s Mountain View HQ seemed to be the last to figure out that the company’s China strategy didn’t make sense and would never end well.)

Smooth Ride to the Wrong Place
Sometimes the problem isn’t that the strategy can’t be implemented — it’s that the plans hatched by the deep thinkers at HQ gets jettisoned and replaced by local managers with their own agenda.  Every premium brand that allowed local management practices to undermine quality (the meat departments at Carrefour and Wal-Mart – I’m looking at you guys) or value (Apple warranties, baby formula price fixers).  These companies had an implicit strategy about the value of their brand equity, but somewhere along the way they failed to make it explicit to their front line managers — and they squandered their most important strategic assets.

Like handing off an invisible baton
Knowing where your global strategy ends and your local Chinese tactics begin is the tricky bit.  It’s easy enough to know when someone fumbles it — and assigning blame is usually pointless and political.  Years ago when China was cheap and Westerners were assumed to be wise, you could count on getting multiple attempts to get it right.  But those days are long past, and now Shanghai is more expensive than NY — and few people are assuming that you are all-knowing.

Whatever method or magic you are going to use to decide how to turn HQ strategy into local gold, make sure your plan involves the following three steps.

  • 1.  Know your global strategy and be able to articulate it – often and easily.  Repeat until everyone understands what the plan is — and that they have to follow it.
  • 2.  Get your local managers and up & coming leaders to supply a range of tactics and methods for executing that strategy locally.  This is a cross-cultural activity that will be vetted by your China country head and the appropriate department heads back in HQ.
  • 3.  Have people from HQ and the local China offices develop a measurement and feedback loop – complete with objective benchmarks.

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read here-smallIf you haven’t already read the report “10 Common China Negotiating Mistakes”, please download it.  We are in the process of developing an interactive online course based on the report, and are looking for 10 beta testers.  If you are interested, please get in touch.

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