Summary of a speech of the IBM’s CEO, Samuel J. Palmisano at the INSEAD Business School about leadership in the 21st century

Highlights

What comes after globalization:-

  • Change in modern corporations model
  • The Laws of Global Integration: economics, expertise, openness
  • Trust

The subject is about leadership in the 21st century where globalization is pervasive and world gets connected. It isn’t about what defines a leader or leader’s skills but it’s about what is important to the leaders of the future is to understand enterprises and institutions they will lead in the years ahead.

Part of that is globalization that changes the fundamental model and the idea of the corporation, and the evolution of the modern corporation.

He discussed about three corporate distinct models. First was the international model of the 19th century. In this model, most operations were centered in the home country, with overseas sales and distribution. Second was the multinational model of the 20th century. In this model corporations created a small version of the parent company in local markets. This model helped companies gain access to local markets and sell without incurring tariff penalties. Third was, he called, the globally integrated enterprise. In this model “enterprise shapes its strategy, management and operations in a truly global way. It locates operations and functions anywhere in the world based on the right cost, the right skills, and the right business environment. And it integrates those operations horizontally and globally.”

The new model is formed following a phenomenon of work flow when world get connected. He defines the Laws of Global Integration comprising economics, expertise, and openness to define a path of work flow. Economics is a place lower in cost. Expertise is a place having high-skilled labors which help enterprise to differentiate from rivals using innovation. Openness is a concept nurturing collaboration such as open systems, open approaches, open sources.

Finally, another concept that is required following new model is trust among people who work in different places, maybe in different companies but virtually work for same company. One way used at IBM is to empower and enable people to make decisions and to act.

A new generation of leaders will need different skills, experiences and acumen. The new leaders need to find ways to handle these emerging phenomena.

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