Sunday, 4 November 2012

Companies need a geography lesson

Ahhh ! If only the world was as simple as 50 years ago. Global companies found it quite simple then to divide the world ; there were only three regions in the world - America, Europe and Rest of the World. If you were an American company, 70 % of your revenues came from America, 27% came from Europe (Oh god; we have to improve there) and 3% came from Rest of the World (where's that ?). If you were an European company, 70% came from Europe, 27% from America (the bloody Yanks) and 3% from Rest of the World (where's that ?) Quite simple.
 
Alas life has got a bit more complicated for global companies. How to cut the world ? A popular division is to split as America, Europe and Asia Pacific. That threw up a problem - what about Africa (where's that ?). So came EMEA - Europe Middle East and Africa. Right - President Americas, President EMEA and President APAC.
 
That threw up more problems - does it make sense to group France and Mali in the same group ? And Venezuela and US didn't seem the same either.  So companies moved to split as per the continents - North America, Latin America, Europe, Africa and Asia.
 
That threw up more problems. In Europe, Western Europe was dead and declining. Central & Eastern Europe was growing at 35% per annum. Lumping them together under the same management seemed daft - they required completely different strategies. And what to do about Japan & China. Japan was more like Europe. China was an altogether different story. And was Dubai Asia or Africa ??
 
So companies started inventing "clusters" - the world was North America, South America, Western Europe, CEE, Africa & Middle East, South Asia, North Asia and South East Asia & Australia. Each had a President.
 
But that's got its own problems. Australia was more like the UK than Asia. Japan and China got still grouped together. So what to do ??
 
So, how to carve up the world ? In the good old days, geriatric Brits (since Britain owned most of the world), in smoky pubs, took out a world map and drew some random straight lines - how straight the line depended on how many beers they had had.  That's how country borders were created - if you see a map of Africa for example, that's why many so many national boundaries are straight lines. Never mind that it divided tribes, or ran halfway through a lake , and so on.
 
Now the same thing has been going on in companies. Substitute geriatric Brits for political company bosses, and smoky pubs for company boardrooms, and exactly the same things happen. There isn't a single company where this is being rearranged every three years.  Empires are made and they fall, just like in the political world.
 
I suggest that company bosses enroll for Geography 101 with Sriram,  before they start to draw their lines ! They might become a little more educated on the world.
 
Meanwhile readers are invited to present their own pet carve up of the world !
 

16 comments:

gils said...

blogsvillela as such no map or boundaries..enna yaar venumnalum entha postla venumnalum freeya mokka podalam, like me :D :D but if at all there is a boundary drawing event..empire of thalai will be from B to T of blogspot server :D ur history is others geography :D
~ ippadikku thalaiyin vizhuthugal,charlotte kilai

Appu said...

You basically want the consultants to starve! why are you angry with the consultants ;)
I know one org which just changed its business unit structure(read that as names) like anything. still people ended up doing the samething reporting to same people. Never understood what difference it did to the business!

Sandhya Sriram said...

I Second Gils - ur history is others geography !!

I think it is a factor of 3 Ps

(i) Pipeline: How many do you want to Kick Upstairs (we must have berth upstairs for that)

(ii) Paisa: Are you making money to create many many layers

(iii) Publicity: You have to keep showing to the world that you have a strategy, even if it means your strategy is to keep finding one.

My Pet Carve out of the world will be split between the highly enlightened group and the others namely

(i) Ramesh and his Readers
(ii) Rest of the world

respectively.

Ramesh said...

@Gils - Ha Ha Ha. Charlotte Kilai thalaivarukku mikka nanri :):)

@Zeno - You better not become consultant after you pass out of B school :)

@Sandhya - OMG ; Totally floored. Just a problem that a division of 4 vs 6 billion seems a little lopsided :)

The 3P theory is perfectly correct. Might add a fourth P - where the worthy President to be is residing and where he likes to travel :)

gils said...

ur history..others geo :D itha t shirt quotea use panni unga perla oru franchise aarambichiralaamnu iruken :D

Asha said...

That is why i have enrolled with ramesh's business musings so that I might get more educated on the world.

@ Gils- sandadi sakkula t- shirt pottu business arambichiteengala. appo naan hyd kilai arambikkiren.

myfloatingthoughts said...

Ramesh sir - please also add 'Verticals' to the mix and watch the fun during the various reorgs :)

sriram khe said...

naanum oru changukku Gils maathiri englishified-thamizhla comment vidapporen :)
BTW, Ramesh, unnoda comment padi paatha, Gils vandhu Charlottela irukkirappila theriyarathu ...

OK, I give up ... it is way, way too difficult!

Yes, straight lines on maps are simply bizarre, and should immediately alert the reader that somebody messed up big time, and usually it is an outside agent. In nature, there are no straight lines, and a straight line is an awesome example of humans' thinking abilities and the abstractions we are capable of ...

in maps, as the comments have mentioned, history and geography can't be separated that easily .... a wonderful example I use to convey this is the same one you mention: the awful manner in which Africa was divvied up (http://en.wikipedia.org/wiki/Berlin_Conference) .... for those interested, a recent book-review piece in the New Yorker also is about this history/geography confluence: http://goo.gl/q4MK2

As for the topic of regional grouping ... no point consulting with geographers unless you want things to get even more muddled! Most geographers have simply given up on a regional approach anymore, for the kind of reasons you provide, too, from a business perspective ... some geographers even argue that continuing with regional groupings not only doesn't reflect current reality, but also tends to reinforce old stereotypes ... perhaps the business folks also need to do get rid of the regional groupings?

Full disclosure: I have no degree in geography, and have not taken any course in geography. My undergrad was in electrical engineering ... Yes, I teach in the geography department :)

gils said...

//englishified-thamizhla comment vidapporen :)
/

kalakitel pongo :D impressive beginning...apdiye continue pannidunga :) thanglish vaazhga

Ramesh said...

@Asha - Awwww. You know more about geography than I do - you are a travel writer after all.


@myfloatingthoughts - Oh yes - that is another interesting area all by itself. As they say, Organisation restructuring is the last refuge of the scoundrel :)

@sriram - Ha ha ha. Simply loved your attempt at Tamil :):)

Very insightful comment, but that is of course pretty normal for you. In multinational companies, it is now important to understand geography. Although to be affair, business travelers are probably the best at it.

Priya Ganesh said...

oh! when in doubt we need a meeting for the same. at the end of the meeting we should plot an agenda and next steps before we begin the great divide. Before we divide the contries, we need to visit each of them to understand the best cluster.

The Million Miler said...

And once upon a time, the company I used to work for had a regional unit called LACA- Latin America and Central Asia. NEAT, never seen any thing like that.

sriram khe said...

LACA .... hmmmm certainly seems "loco" to me ;)

BTW, Latin America to Central Asia might explain your moniker of "the million miler" eh :D

J said...

Geography is a strange animal - in many ways the world is shrinking and yet each subsequent edition of an atlas seems to show that we've divided it further adding new countries at a rate that I would have flunked my geography exams.

sriram khe said...

At the risk of sounding pedantic ...

The Oct 27th issue of the Economist has a special feature on, ahem, geography! On geography and technology ...
This lead essay (http://goo.gl/yvoL0) includes links to the rest of them.

Ramesh said...

@Priya -Oh Yes, Oh Yes, Btw whereabouts are you ? Drop me an email.

@kiwi - You wouldn't believe it, but the forerunner to LACA was Brazil, South Africa and India !!! No kidding !

@J - You touch upon a very serious point there - the fragementation of countries into tribal groupings. Can you believe the Scots want to become a separate nation !!!! Even in the most whisky fuddled brain, that must be the daftest of ideas !

@sriram - Yes, read that. Geography is even more important than what the Economist suggests. The nerd who coined the phrase Geography is history at the height of the dot com mania was a nut indeed.

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