Ram Charan - Global Tilt: Leading Your Business Through the Great Economic Power Shift

Also by Ram Charan

Board of Directors and Corporate Governance
Boards That Deliver
Boards at Work
Owning Up
E-Board Strategies (coauthor)

Growing Your Business Profitably
The Game Changer (coauthor)
Leadership in the Era of Economic Uncertainty
Every Business Is a Growth Business
Profitable Growth Is Everyones Business
What the Customer Wants You to Know
Confronting Reality (coauthor)
Strategic Management (coauthor)

Leadership and HR
Know-How
The Talent Masters (coauthor)
Leaders at All Levels
The Leadership Pipeline (coauthor)

Business Acumen
What the CEO Wants You to Know

Getting Things Done
Execution (coauthor)

In-Company Books
Action, Urgency, Excellence
Business Acumen
Solid Line, Dotted Line, Bottom Line

Copyright 2013 by Ram Charan

All rights reserved

Published in the United States by Crown Business, an imprint of the Crown Publishing Group, a division of Random House, Inc., New York.

www.crownpublishing.com

CROWN BUSINESS is a trademark and CROWN and the Rising Sun colophon are registered trademarks of Random House, Inc.

Library of Congress Cataloging-in-Publication Data

Charan, Ram, author.
Global tilt: leading your business through the great economic power shift / Ram Charan.First Edition.
pages cm
Includes bibliographical references.
1. Economic developmentDeveloping countries. 2. International cooperation. 3. LeadershipDeveloping countries. 4. Organizational change.
I. Title.

HD82.C4623 2013

338.90091724dc23

2012033678

eISBN: 978-0-307-88914-0

v3.1

Dedicated to the hearts and souls of the joint family of twelve siblings and cousins living under one roof for fifty years, whose personal sacrifices made my formal education possible

GLOBAL TILT :

A DEFINITION

global tilt (gl-bl tilt) 1. The shift in business and economic power from countries of the North to those below the thirty-first parallel; 2. the greatest change in business history; 3. a call for leaders to abandon old mind-sets, rules of thumb, and assumptions about the North and South and the relationship between the two; 4. the result of unstoppable forces, including the unleashed energies of the South, demographic shifts, the volatile global financial system, and digitization; 5. the opening of mega-opportunities for those who can handle complexity, speed, volatility, and uncertainty; 6. the spur to radical changes in strategic thinking, leadership, and the organizations social system.

L ate on November 24, 2010, I landed in Dubai, where I would be speaking at a corporate meeting for Indias number one telecom company, Bharti Airtel. I had left New York twelve hours earlier, after three days of appointments with companies along the east coast of the United States. Some of the problems and questions Id heard that week were still on my mind. The CEOs and senior and midlevel managers alike were wrestling with how the fallout from the debacle in Europe would affect their businesses. How deep and how long would the recession be? Like everyone, they felt battered by the headwinds of a slowing global economy, global competition, and fast change.

Arriving at the hotel, I freshened up and headed to the conference room, passing through the lobby, where 160 of Bhartis top managers were mingling. Forty-six of them were Africans who were new to the company following Bhartis acquisition just a few months before of Zain, a collection of telecom assets in fifteen African countries. They were now part of the managerial mix of Bharti Airtel, along with leaders from Sri Lanka and Bangladesh, where the company had expanded the year before. Many wore typical Western business garb; others wore traditional African clothing. All were speaking English. The majority appeared to be in their thirties, and some looked even younger than that.

But youth alone didnt explain the unmistakable difference between this group and the leaders Id seen just hours earliera physical and psychological ocean away. There was energy, optimism, and excitement in the air. This company, already among the top five mobile operators in the world in terms of subscribers, was on the move, and its leaders knew it. Bharti had grown from nothing to a multibillion-dollar global leader of its industry in a matter of fifteen years. Why wont it win in the United States or Europe at some future point in time? I wondered. Yet its phenomenal growth and the entrepreneurial verve of its founder, Sunil Mittal, are all but unknown in the northern hemisphere.

That moment crystallized for me an unmistakable truth: The world has tilted. Its economic center has shifted from what have traditionally been called the advanced or Western countries of the northern hemisphere to fast-developing countries including China, India, Indonesia, Brazil, and others in the Middle East and even parts of Africa. For decades the standard view was that the transfer of technology, managerial know-how, and capital was from West to East, from the United States and Western Europe to Japan, South Korea, and the Asian tigers. But today the flows are generally from North to South. In geographic terms, the dividing line is the thirty-first parallel. The division is roughfor example, Japan and South Korea are essentially Northern countries in their economies and business practicesbut its a simple shorthand way to view the tilt.

Wealth is moving from North to South, and so are jobs. Companies in the South, big and small, have a fierce entrepreneurial drive. Many are reveling in double-digit revenue growth, bringing jobs and prosperity to their home countries. They are building scale and challenging companies of the North on all fronts. They have huge momentum, while the old heavyweightssome of which have dominated their industries for decadescan barely eke out low to middle single-digit growth. The South is driving change. The North is afraid of it.

Many business leaders in the North are blind to the magnitude of trends. Some are accelerating the tilt by transferring their technology, brands, know-how, and real assets to the South, all in the search for much higher growth than they see in their own home base. Some blame such things as cheap labor, currency manipulation, and protectionism for their struggles. These are problems, but much bigger forces drive the tiltand the Northern leaders have not yet come to terms with the world as it is today and as it is emerging. How, then, can they devise a clearheaded response? Understanding the new dynamics of global competition and economic behaviors is an unconditional requirement for business leaders from the North and the South, even in companies that are smaller or consider themselves domestic. Very few businesses are immune to the changes.