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Study Shows That, Globally Speaking, Firms Have a Lot to Learn

Life sure was easier when the world was round—at least for North American companies. Back then, U.S. and Canadian firms tended to have a lot of advantages over their foreign counterparts: more capital investment, better-educated workforces, wealthier customers, freer markets, better infrastructures, and so forth.

But now that "the world is flat," as Thomas Friedman has famously argued in his book by that name, life is tougher for a lot of corporations. Global companies based in North America must compete on what Friedman argues is a relatively level playing field, and some observers suggest that those businesses are not faring as well these days.

Newsweek recently published an article titled "Is America Losing at Globalization?" It points to the success that many competing nations had against the U.S. on the field of Olympic play and argues that this is occurring in the marketplace as well. The dazzling and innovative architecture and ceremonies on display in China, for example, "reflect the deep economic trends of a decade in which our competitors have raised their game and we haven't," noted the Progressive Policy Institute's Edward Gresser, director of the project on trade and global markets (Gross, 2008).

Of course, things are never really that simple. It isn't so much nations that compete in the marketplace as it is companies. And quite a few North-American-based enterprises are doing quite nicely in today's flat world, thank you.

Still, it's true that most organizations hit rough patches as they strive to compete on the world's playing field, finds a 2008 study conducted by the Institute for Corporate Productivity and commissioned by the American Society for Training & Development  (Institute for Corporate Productivity, 2008). In fact, only about a quarter of responding globally competitive companies said that their organization's transition to "global or multinational operations" has gone smoothly or very smoothly. The rest said that they've encountered some rough spots, with 10% saying it's been either "pretty rough" or "chaotic."

Most responding companies are headquartered in North America, but a majority have operations in Asia and Europe, and those two regions are also the top two destinations for expansions within the next three years.

So, what can organizations do to raise their games and avoid or at least lessen rough patches on this global playing field? The  survey, to which there were 317 respondents from global organizations, showed that one major answer to this question is, "Get a whole lot better at global learning." Not even a third (29%) of responding organizations said that learning initiatives in their global operations have been successful to a high or very high extent.

The good news is that there's much they can do to improve things. First, companies can get learning professionals involved more—and earlier—during global expansion plans. For example, only a fraction of respondents (23%) said that, to a high or very high extent, at least one member of the learning function joins his or her organizations' project team during initial plans to expand operations beyond national borders. Yet this strategy is strongly correlated with the success of learning initiatives in global operations, and it's also significantly and positively related to the smoothness of the transition to global operations.

That's just one example of where organizations are failing to do enough in regard to global learning. A mere 17% said that their organization trains "trainers in regional learning differences" to a high or very high extent, yet nearly two-thirds said that their organization should do so.

The chasm between what companies do and what they should do extends to various other culture-related activities as well, including educating people at headquarters about cultural differences. Only 14% of respondents said that their company "familiarize[s] HQ employees" with the culture of the new region to a high or very high extent, but 67% said it should do this.

This highlights what seems to be a common theme in the study findings: Despite being "global," companies have a lot to learn from and about other cultures. Global organizations are a lot more likely to emphasize "core values" in their organizations than they are to accommodate local ways of learning. For example, only 36% of respondents said that, to a high or very high extent, their organization develops a "glocal" (combination of global and local) way of training, development and learning. And about the same percentage engage in "train the trainer" programs. Yet, these two practices are strongly and positively correlated with the success of learning initiatives in global operations.

Companies that pay attention to local conditions might reap real benefits. The more that an organization performs "training needs analysis at the local level," the more likely it is to say that its transition to global operations went smoothly.

So, in a flat world where global competition is at an all-time high, what's hindering organizations from getting better at global learning? The study indicates that there are resource problems. Many respondents cited budgetary restraints and insufficient training staff. But another part of the problem can be linked back to leadership attitudes. Thirty-one percent of respondents reported that, to a high or very high extent, learning is not a top priority in their organization. Yet, this one factor is strongly and negatively correlated with both the smoothness of global transitions and the success of global learning initiatives.

So, priorities seem to matter. If companies wish to become learning organizations at a global level, not only do they need to get learning professionals more involved earlier in the planning and expansion processes, they also have to demonstrate their commitment to learning objectives in a culturally diverse workplace. By doing so, organizations might be able to raise their games on today's increasingly level playing field.

Documents used in the preparation of this article include the following:
  • Gross, D. (2008). Is America losing at globalization? Newsweek. Retrieved from http://www.newsweek.com/id/156343
  • Institute for Corporate Productivity. (2008). Survey results: Learning in a global workplace.