We may be entering a new era for business and tech leaders where globalization is no longer the ultimate objective. Flexibility will be key for the future.
Since I started my career over two decades ago, globalization has been considered a laudable—and perhaps even preordained—objective at most organizations with which I've interacted. It was an article of faith that everything from raw materials to skilled and semi-skilled labor, should be sourced at the best balance of cost and quality, without much consideration to the country of origin. Much of the enterprise technology work I performed early in my career was to that end, from transitioning IT systems to accommodate the single European market and currency, to global planning and procurement systems that managed far-flung factories.
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Questioning long-held assumptions
Now it seems the tide is shifting away from globalization being the assumed solution to every problem, for a variety of political and practical reasons. Many suggest that we've reached peak globalization, to the point that everything about how global organizations operate is now up for reconsideration. Supply chains that were shattered by the COVID pandemic revealed fundamental flaws in long-unquestioned business practices like lean inventory management, and highlighted the value of geographically proximate suppliers and vertical integration, just as the uneven impact of the pandemic suggested the benefit of localized labor for key talent.
On the political front, a long-running march toward global trade agreements and loosening trade and immigration policies have been called into question in many countries. Seemingly mundane concerns like semiconductor production have taken on political importance, with political leaders even going so far as to call chip production "the new oil," implying that semiconductor supply has the same strategic importance as oil has held for the past century.
A time for flexibility
Generally, the best policy for leaders during times of societal and business upheaval is flexibility, and tech leaders are often on speed-dial to help create this flexibility. Many of us have been focused on speed and optimization over the last decade, honing our ability to create new tech-driven products to accommodate a changing market or deploying new analytics tools without making wholesale updates to our core business systems.
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As the future becomes less predictable, technologies and teams that can rapidly reconfigure core business systems will become valuable assets. If your focus has been on building e-commerce and web application capabilities at the expense of core enterprise software competencies, it might be a good time to evaluate either your talent mix and tech stack. That enterprise resource planning package that's been happily running since 2003 may suddenly shift from a huge asset to a massive burden if no one on your staff knows how to reconfigure production planning, and the documentation and knowledge about the current setup vanished a half-dozen retirements and staffing changes ago.
If the knowledge is long-gone, and the systems have grown a bit outdated and inflexible, it may also be worth investigating alternative technologies or accelerating planned updates. If nothing else, taking the time to understand what level of in-house competence and documentation you have on these core systems will allow you to quickly respond to requests for significant changes in the business processes that these systems support.
Consider your own supply chain
As technology leaders, we've received more than our fair share of impact from the pandemic: From facilitating a wholesale transition in where and how our employees work, to dealing with shortages of key equipment, to managing global resources that are experiencing wildly variable impacts from the pandemic. Take the time to consider how shifting thinking about globalization might impact how you run your technology organization. Will you manage the procurement of everything from laptops to cloud computing differently? Might you restructure your global teams to build some redundancy in key skillsets? Could you be forced to source talent differently due to a deteriorating political situation?
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Just as supply chain leaders are scrambling to build redundancy into how they source vital components, it's worth investigating how and where you position key talent. This doesn't necessarily mean trying to acquire every skillset within a dozen-mile radius. Still, if there are key skills that would impact your ability to operate, these skills should exist in multiple physical locales to provide an element of redundancy. Just as it makes intuitive sense to backup key infrastructure rather than suffering an expensive outage, it makes sense to backup key skillsets with the same processes as designing redundant infrastructure.
No one knows with certainty what the business environment of the next decade will look like, but it's reasonable to assume that it will be different than that of the last decade. Planning for flexibility in your talent and physical supply chains will accommodate whatever shift occurs and position you for success.
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