The path to success for the globally-ambitious business has never been easy. Economic shifts, political protectionism, and infrastructure gaps in emerging markets have been obstacles for decades. These challenges are exacerbated for leaders in the twenty-first century by the requirement to be global and local at the same time and anticipate and respond to ever faster changes in the business environment.
Over 20 years ago, Bartlett & Ghoshal laid out the fundamental dilemma facing multinational firms: how to achieve global coordination while simultaneously being able to be locally responsive (Bartlett & Ghoshal 1998). The organizational solution to the global-local dilemma has typically been a global matrix across product lines, geographic markets, and functional groups. While the matrix creates clear points of connection across organization boundaries, it doesn’t always allow for the speed of change that the current context of rapid digitization, empowered customers, and protectionist governments demands.
Galbraith foresaw the need for organizations to become more “reconfigurable.” (Galbraith 2010). The power of the truly reconfigurable organization is that leaders can move work to where talent, capabilities, and capacity are, regardless of where they are located in the world. While this has been a goal for some time, the reality is that this type of organization at scale is only recently possible at scale. Customer relationship management (CRM) systems that make data and insights widely accessible and communication technology that allows the broad middle of the organization to work together are key enablers of reconfigurable organizations.
That the possibility of designing global, multi-dimensional organizations that can move fast exists, doesn’t mean it is easy. All organizations – even the digital natives, built for speed from the ground up – face challenges of making decisions and organizing work across boundaries.
In this article we share frameworks for designing organizations that bring the benefits of speed and scale, global direction and local focus, and give leaders the ability to better anticipate and respond to complex changes in the environment.