Consider consumer products. The need to localize varies by the type of product. At the extremes, trend or fashion products cannot be localized; trends are created by scale, and, as Louis Vuitton has demonstrated, a company’s ability to leverage a trend requires a relentless devotion to sameness. Bespoke products, by contrast, must be highly localized; by definition, they are made to measure. Sourcing and production can be centralized to some degree, but the product specifications will vary with each unit made.
Technology products, however, are susceptible to limited localization. Power requirements, keyboard configurations, instruction manual language, and warning labels compliant with local regulations are necessary to ensure that the product is usable in its target market, and understandable to and of interest to the customers in that market.
Although process scalability is where a firm’s greatest efficiencies can often be found, some processes cannot be centralized — not globally, not even regionally — and so need to be developed on a local level. The marketing communications mix is one obvious example; the optimum combination of television, radio, billboards, print, and online marketing will vary by country, heavily influencing media planning, vendor choices, and relative advertising costs.
People are, naturally, the greatest challenge. The competencies that make for a superior manager in Europe, or anywhere else, for that matter, are universal, and rarer than any senior executive would like. The best managers find ways to detach themselves from their nationality and from the particular customs and needs of the country in which they work. But they also benefit from diverse and complex backgrounds that permit them to recognize different needs and approaches. The best manager for the New Europe will have a cosmopolitan mentality and continually wonder about how products will be received in different cultures, and how best to work with people, both customers and employees, from different cultures.
Yet some functions, especially those associated with the human side of business, are best left local, because they are tied tightly to interpersonal relationships, trust, and the manager’s ability to persuade people how to act. Public relations, human resources management, and sales are among the areas where it may be best to think local and act local.
“Glocalization” is a wonderful buzzword. But in the New Europe, where opportunity and profit emerge from a sweet spot between the global and the local, the dynamism that derives from effective regional management is the ticket to sustainable success.
Reprint No. 04302
Pascal Cagni ([email protected]) is vice president and general manager of Apple EMEA, the Europe–Middle East–Africa division of Apple Computer.
This article is adapted from CEO: Chief European Officer, Business Leadership in Europe, edited by Robert Gogel, published by Booz Allen Hamilton, strategy+business, and the European Executive Council, August 2004.