UPfront: Going Global Is People Driven

In today’s competitive business environment, if you are not leading change you’re not leading effectively. It’s an issue that affects all organisations, but it is particularly relevant to enterprises attempting to build global operation and do business around the world. Consider New Zealand’s biggest company, Fonterra.

Glen Petersen, Fonterra’s group director of human resources, recently explained the challenges facing his company as it moves to adopt responsible and people-oriented approach to globalisation to Deloitte HR Executive Forum.

Fonterra has undergone immense change in its first nine months of life. It has, according to Petersen, transformed the New Zealand dairy industry, and is becoming the face of this industry at home and abroad. It is now the world’s fourth largest dairy company.

The challenges it now faces are critical to its future success. Fonterra is entering new markets and expanding rapidly in existing ones. It has more than 20,000 staff working in more than 40 countries. Many are ‘inherited’ through the company’s aggressive strategy of expansion by acquisition and joint venture.

More of its people work and live outside New Zealand than in it. It trades with more than 120 countries, operates over 30 manufacturing and processing sites offshore, and converses in many languages, the most used being English, Mandarin, and Spanish. It is now ‘global’ organisation.

But Fonterra is striving for more than globalisation. It wants global integration and, according to Deloitte HR partner, Brenda Sayers, this has as much to do with process, procedure, operation and infrastructure, as it has to do with people, and organisational culture and values.

According to Sayers, studies show that organisations are more likely to thrive and meet challenges head on where people are respected, challenged and engaged; where they understand the goals of the firm and where, with their individual expertise, they can make valuable contribution to the goals. But how do leaders motivate and unite workforce in this way when the business transcends vastly different cultures, religions, experiences, social and economical influences, languages and values?

Fonterra is asking itself how it can:
* reward everyone appropriately to common standard?
* measure performance when currency differences and the commodities market inherently affect your business?
* develop corporate identity and ‘ethos’, which is meaningful to everyone?
* be consistently good ‘corporate citizen’ when ‘normal’ business practices vary from country to country and may even be considered ‘corrupt’ by Western standards?
* uphold good corporate governance practices across so many different regions?

While Petersen says that Fonterra is keen to pursue internationalisation, it is also understood that much of Fonterra’s future success will lie in its cultural diversity. The company will need to ‘play to its strengths’ in individual local markets to meet the globalisation challenge.

It’s an interesting concept. According to Sayers Deloitte, as global player, continually faces challenges that are symptomatic of doing business internationally. “The advantages of being global practice include the opportunities it opens up for our people, their experiences, and their career paths.”

She suggests that for New Zealand enterprises it is perhaps no longer question of whether or not to go global, but more question of how to ensure that “we do that responsibly and in sustainable way”.

“To develop organisations that are made up of talented, motivated, engaged individuals who are willing – and able – to rise to all the challenges of an international marketplace, requires HR strategies to be integrated with global business strategies. It is after all, people doing business with people all around the world,” she adds.

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