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The Next Global Stage: The Challenges and Opportunities in Our Borderless World (Hardcover)
by Kenichi Ohmae
| Category:
Globalization, Business, Change |
| Market price: ¥ 318.00
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¥ 288.00
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| MSL Pointer Review:
A thoughtful, insightful, well-written and easily understood rendering of the post-globalized world. |
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Author: Kenichi Ohmae
Publisher: Wharton School Publishing
Pub. in: March, 2005
ISBN: 013147944X
Pages: 312
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Origin of product: USA
Order code: BA00507
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- MSL Picks -
In the early 1900s, German physicist Werner Heisenberg laid the foundations for quantum mechanics, a set of rules showing that at the subatomic level Newtonian physics was irrelevant. Just as quantum mechanics upstaged Newton, says strategist Kenichi Ohmae, a radical new model is upending old notions about the global economy. In this sprawling book, Ohmae warns that governments, businesses, and leaders that cling to their Newtonian approaches will become irrelevant themselves.
The heart of Ohmae's thesis will be familiar to readers of his previous books, including The Borderless World (1990) and The Invisible Continent (2000): In the new global economy, the nation-state, and the protectionist economic thinking that goes with it, is obsolete. Nation-states have borders, armies, flags, currencies, and a development-stifling instinct to protect their economies from the outside world. As global economic players, they're being displaced by "region states"-borderless centers of vibrant economic activity that welcome global trade and investment, like the Shutoken metropolitan area of Japan and Guangzhou in China.
If the rules of the old economy no longer apply, Ohmae ventures, then neither do the old rules of business. Fair enough. The problem is, he says, no one knows, or can know, what the new rules are: "By the time any rule book or user's manual appears...the 'new rules' will already be obsolete." What business leaders can be sure of, Ohmae argues, is that massive change without requires massive change within. That means wall-to-wall rethinking of corporate mission, strategy, and organization. Companies must cut loose from their "ancestry" and, for instance, compete by selling the very products that threaten them. Clinging to the core, as Kodak did in the face of predation by digital-camera makers, is a recipe for failure in this new age.
Companies must cast off their sentimental attachment to the nation-states where they're headquartered and jettison their hierarchies and old approaches to markets. Their leaders must become visionary facilitators without preconceived attitudes about their roles-ready to embrace even the idea that the best leader may be a team, not an individual. There can be no half measures in this radical transformation, Ohmae says, no testing the waters before taking the plunge.
It's a strong prescription. Unfortunately, this lively book can't, by its own admission, give business readers what they want most: practical advice for competing in the global economy. But it does remind executives to pry their gaze from the present and set it firmly on the future. As Heisenberg well understood, the more doggedly you map where a moving target is, the less you know about where it's headed.
(From quoting Gardiner Morse)
Target readers:
Executives, Managers, Entrepreneurs, Government leaders, Strategists, Consultants, Academics, University lectuers, and MBAs.
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Kenichi Ohmae, one of world's leading business and corporate strategists, has written over 100 books, including The Mind of the Strategist, The Borderless World, The End of the Nation State, and The Invisible Continent. After earning a doctorate in nuclear engineering from MIT and working as a senior design engineer for Hitachi, he joined McKinsey & Company, rising to senior partner where he led the firm's Japan and Asia Pacific operations. Ohmae currently manages a number of companies that he founded, including Business Breakthrough (a distance learning platform for management education), EveryD.com (a click-and-mortar grocery delivery platform), and Dalian Neusoft Information Services (a BPO platform for data entry in double-bite languages). He is Chancellor's Professor of Public Policy at UCLA, Distinguished Visiting Professor of Korea University and Professor Emeritus at Ewha Women's University in Korea, Trustee and Adjunct Professor of Bond University in Australia, as well as Dean of Kenichi Ohmae Graduate School of Management of BBT University in Japan. In September 2002, he was named the advisor of Liaoning Province and Tianjin City in China.
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From the Publisher:
A radically new world is taking shape from the ashes of yesterday's nation-based economic world. To succeed, you must act on the global stage, leveraging radically new drivers of economic power and growth. Legendary business strategist Kenichi Ohmae¿who in The Borderless World, published in 1990, predicted the rise and success of globalization, coining the very word¿synthesizes today's emerging trends into the first coherent view of tomorrow's global economy¿and its implications for politics, business, and personal success.
Ohmae explores the dynamics of the new ""region state,"" tomorrow's most potent economic institution, and demonstrates how China is rapidly becoming the exemplar of this new economic paradigm. The Next Global Stage offers a practical blueprint for businesses, governments, and individuals who intend to thrive in this new environment. Ohmae concludes with a detailed look at strategy in an era where it's tougher to define competitors, companies, and customers than ever before.
As important as Huntington's The Clash of Civilizations, as fascinating as Friedman's The Lexus and the Olive Tree, this book doesn't just explain what's already happened: It offers a roadmap for action in the world that's beginning to emerge.
New economics for a borderless world: Why Keynes' and Milton Friedman's economics are history and what might replace them.
Leveraging today's most powerful platforms for growth: From Windows to English to your global brand.
Technology: driving business death and rebirth: Anticipating technological obsolescence¿and jumping ahead of it.
Government in the post-national era: What government can do when nation-states don't matter.
Leadership and strategy on the global stage: Honing your global vision and global leadership skills.
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Introduction
Ideas do not emerge perfectly formed. They are awkward amalgams of experience, insight, hopes, and inspiration. They arrive on stage, blinking under the bright lights, hesitant, unsure as to the audience's likely reaction. They evolve and develop, alert to changing reactions and circumstances.
I have been rehearsing the arguments that form the backbone of The Global Stage for over two decades. My previous books, including The Borderless World and The Invisible Continent, examined many of the issues I am still exploring. Ideas, as I say, do not emerge in a state of perfection.
In its genesis, The Global Stage has been shaped by two forces.
First, bearing witness to changing circumstances. Over the last two decades, the world has changed substantially. The economic, political, social, corporate, and personal rules that now apply bear scant relation to those applicable two decades ago. Different times require a new script.
The trouble is that far too often we find ourselves reading from much the same tired script. With the expansion of the global economy has come a more unified view of the business world. It is seen as a totality in itself, not constricted by national barriers. This view has been acquired, not by the traditional cognitive route of reading textbooks or learned articles. Instead, it has come directly, through exposure to the world, frequent travel, and mixing with the world's business people. Paradoxically, perhaps, this breeds a similarity of outlook.
Opinions and perspectives are shared; the type of developments in the political and economic worlds that are held to be important are shared too. With shared outlooks come shared solutions. But a common view of the world will not produce the unorthodox solutions and responses required by the global stage.
Over the last 30 years, I have traveled to 60 countries as a consultant, speaker, and vacationer. Some countries, like the United States, I have visited over 600 times; Korea and Taiwan, 200 times each; and Malaysia, 100 times. Recently, I have been averaging six visits a year to China and have started a company in Dalian, as well as producing 18 hours of television programs seeking to explain what is really happening there in business and politics. I also spend a lot of time on the Gold Coast in Australia and in Whistler, Canada. Of course, as a Japanese national, I live in Tokyo and travel extensively within Japan.
As you can see, I believe that nothing is more important than actually visiting the place, meeting with companies, and talking to CEOs, employees, and consumers. That is how you develop a feel for what is going on. For some of my visits, I have taken groups of 40-60 Japanese executives so they can witness first hand regions that are attracting money from the rest of the world. I have taken groups to Ireland to see how cross-border Business Process Outsourcing is reshaping its economy. I have taken them to see Italy's small towns that are thriving on the global stage. We have also visited Scandinavian countries to find out why they have emerged as the world's most competitive nations and Eastern Europe to see how they may be positioned in the extended 25-member European Union. The group has also visited China and the United States twice, as well as India, Vietnam, Malaysia, Singapore, the Philippines, Korea, and Australia.
The executives who join me on these trips change their views of the world. Even in the days of the Internet and global cable news, walking around, listening, looking, and asking a question is still the best way to learn. Seeing what is happening in the world first hand changes perspectives. Having witnessed the global stage, executives then begin to read news- papers and watch television with different eyes. Gradually, their views broaden and they feel comfortable in their roles as actors on the global stage. It does not necessarily come easily. New skills are required.
The second defining force behind The Global Stage is that, over the last 20 years, I have witnessed some of the pioneers of the global economy first hand.
One of the first business leaders to be sympathetic to the notion of the truly global economy was the former CEO of Smith Kline Beecham, Henry Wendt. He saw cross-border alliances as a potential savior for the American pharmaceuticals industry and recognized that internationally based strategic alliances would become important, if not vital.
Henry realized that there were three dominant markets in the world – the US, Japan and the Far East, and Europe. No single company could deal with and service all these markets effectively, no matter how powerful and dominant it might feel. No corporation could hope to cover a market of 700 million people that had a per capita GNP income in excess of $10,000.
Companies traditionally used a marketing strategy that depended on a sequential penetration of each market, whether it was a region or a country. Once you established yourself and your product in market A, then (and only then) you moved on to market B. But Henry Wendt proposed that when you have a good product you have to adopt a sprinkler model, penetrating various markets simultaneously. One way to achieve this is through strategic, cross-border alliances.1
Henry Wendt entered into negotiations with Beecham, a company with a particularly high reputation in R&D, and a strong presence in Europe, and in time these negotiations led to a merger. Not only did he opt to go down the merger path, but also, with powerful symbolism, he moved the company's corporate headquarters from Pittsburgh to London.
Henry Wendt had foresight and vision. His notion of cross border alliances was truly innovative. In those days, such alliances and mergers were difficult since each large company was embedded in its domestic markets. These companies were also under the thumb of their respective domestic governments, with which they were closely linked and with which they closely identified. It is very difficult to abandon your home turf. (Witness the more recent outcry about outsourcing.) For one thing, there may be government resistance (as we have seen in merger talks across Germany and France). There are also media commentators, like mammoths or dinosaurs stuck in a freezing swamp, who describe such moves as unpatriotic and unprincipled. They tend to report on one or other side "winning" in any merger – witness Daimler Chrysler.
In a world where borders were weakening, cross-border alliances were the only way for a company to survive and prosper. In the pharmaceuticals world, drugs were becoming more standardized. The important and potentially profitable compounds and formulas became less distinct. This was accompanied by an astronomical rise in the cost of R&D. New regulations piled on both costs and delays. Yet the amount of money invested in R&D only had an indirect link to the level of success that could be achieved. A company could build up the best-equipped laboratories, staffed with the optimal mixture of experience and youthful brilliance. This never guaranteed success. There was still an element of chance whether the right leads would be pursued and the breakthroughs realized.
The dilemma is that when the R&D is successful and a super drug is born, you may not have adequate sales forces in the key markets of the world. So, the amortization of R&D money is less and, at the same time, you may have to keep expensive people in the field even when you don't have drugs to sell. This is the problem with industries like pharmaceuticals where high fixed costs demand size to justify them. That is why you need to seek strategic alliances and, sometimes, to go one step further to total cross-border mergers. In the mid-1980s, examples were few and far between. But now we see examples of cross border alliances and M&As almost daily in banking, airlines, retailing, power generation, automobiles, consumer and business electronics, machinery, and semi-conductors.
Size and capitalization did play a part. A medium-sized pharmaceuticals company might well spend $1 billion in R&D and have no results, but a larger company might be able to sink $3 billion, maybe more, into R&D. It could afford to miss the target more often and still remain profitable. Cross border alliances allowed more companies to do this. It was only possible, though, once they saw beyond their home markets. Today, the concept of cross border alliances is no longer a novelty. Henry's path breaking role deserves recognition.
Another early pioneer of the global economy was Walter Wriston, former chairman of Citibank. He saw globalization as an imperative, not because of management or business theories, but because of technological break- throughs. He prophesized that competition between banks would no longer be based on banking services, but on acquiring better technology. Effectively, the company able to make decisions quicker, often in the fraction of a nanosecond, would be the winner.
Walter Wriston understood the future shape of banking – and of the global economy. It was to be based in a world without borders; it would float around decisions made in a split second, maybe sometimes by non-humans. Technology was to be the key to success in banking, and so the person at the helm of Citibank had to be technology savvy. But his vision left him in a minority. Twenty years ago, most top bankers were traditionalists. They saw relationships of trust and confidentiality forged among business and governmental hierarchies as the key to success, rather than technology. Technology was all very well, but it was for whiz kids, not bankers.
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Robert Morris (MSL quote), USA
<2007-01-10 00:00>
Ohmae has written a number of books in recent years (notably The Mind of the Strategist, The Borderless World, and The Invisible Continent) in which he identifies and then analyzes what he believes will be significant trends in the near future. In this most recently published book, Ohmae examines many of the same issues while developing his ideas about them in much greater depth. He also explores other global issues whose importance seems to increase each day.
For example, which "radically new rules" are now necessary to achieving success in politics, business, and career. Also, what are "potent new drivers" of growth and economic power and how can they most effectively be leveraged? Also, as the importance of nation states declines, what will replace them? What new strategies and leadership in "the borderless economy" are necessary? Ohmae is uniquely qualified to respond to these and other questions and, in this book, he does so with both insight and eloquence.
As he explains in the Introduction, in its genesis, The Next Global Stage has been shaped by two forces: "First, it bears witness to changing circumstances." Cleverly, he introduces the "script" metaphor and suggests that a new one is needed. "The second defining force behind [his book] is that, over the last 20 years, I have witnessed the pioneers of the new global economy firsthand." Indeed he has. Ohmae is by no means the first person to assert that there is a new global economy. Moreover, it made its appearance on the international "stage" years ago and that performance will continue for several more. To me, Ohmae's function is to help the global "audience" (i.e. his readers) realize that his book " is part of [an on-going] process of understanding the new rules that apply in this new world - and often, there aren't rules to adequately explain what we now experience on a daily basis. [His book] is not an endpoint, nor is it a beginning, but I hope it is an important step forward for companies and individuals, as well as regional and national leaders."
Ohmae carefully organizes his material within three separate but interrelated Parts: The World Tour, Opening Night, and The End of Economics. He introduces and then reiterates a number of key points.
1. Begin with a precise definition of mission.
2. Next, formulate an appropriate strategy.
3. Then develop a business plan that spells out the nature and extent of human and capital resource allocation.
4. Finally, develop a time frame for implementing that plan.
Although Ohmae is obviously excited about the new opportunities created by the new global economy, he clearly recognizes (and identifies for his reader) the new problems and barriers which must be overcome to achieve success in that economy. To me, Ohmae has always seemed to be both a visionary and a pragmatist.
His discussion of the Japanese phrase kosoryoku offers an excellent case in point. "This is what you need in developing strategy. Kosoryoku is something like 'vision,' but it is also the notion of 'concept' and 'imagination'...It is the ability to come up with a vision that is necessary and, at the same time, implement it until it succeeds. It is a product of imagination based on realistic understanding of what the shape of the oncoming world is and, pragmatically, the areas of business that you can capture successfully because you have the means of realizing the vision."
I strongly recommend this book to decision-makers who have a compelling need to understand the new global economy, the coming shape of the geopolitical maps of the future, the key levers that can "pull" their organizations through to eventual success, and the dynamic business business domains within which there is the greatest promise of that success. Once you have absorbed and digested the contents of his book, Ohmae concludes, "Now it is your turn to climb onto the the global stage and perform."
Meanwhile, I offer to Ohmae both "Bravo!" and "Encore!" |
Rolf Dobelli (MSL quote), USA
<2007-01-10 00:00>
This book is part reflection and part promotion. Author Kenichi Ohmae not only reflects on the course of globalization, but also takes the time to promote his distance-learning business and spotlight some of his friends. Ohmae, recently named advisor to Liaoning Province, particularly praises the province's former governor. Some of Ohmae's reflections are valuable bedrock information about globalization, but some seem curiously dated. He describes how surprised he was when he learned that people with whom he was dining had "Googled" him and could speak knowledgably about his life and work. He explains how capital moves unimpeded around the world, notes that ATMs and credit cards are important new mechanisms, and introduces a new business class whose members attended similar schools and all speak English. He teaches that regions should not cut themselves off from the flow of international capital and ideas, but instead should tap into it. Japan should be less protectionist and less centralized. And, yes, China is growing rapidly but treats workers horribly. We recommend this book to those who are new to globalization and need a prompt understanding of these fundamentals, plus ample background information and a bonus of more sophisticated interpretive insights (just not enough of them). |
Gerard Kroese (MSL quote), Netherlands
<2007-01-10 00:00>
Kenichi Ohmae is one of the world's leading business and corporate strategists. Ohmae was senior partner at McKinsey & Company leading Japan and Asian Pacific operations and has written numerous bestselling books such as The Mind of the Strategist and The Borderless World. This book was first published in March 2005 and consists of three parts, whereby each part consisting of 3-to-4 chapters.
The Introduction explains that this book has been shaped by two forces: "First, it bears witness to changing circumstances... Different times require a new script... The second defining force... is that, over the last 20 years, I have witnessed some of the pioneers of the global economy firsthand." The following Plot highlights that we now live in a truly networked and interdependent world, united by a global economy, and the author hopes with this book to provide a script to negotiate through the shifting plot lines.
In the 3 chapters of Part I - The Stage - Ohmae looks at some of the areas of explosive growth ("the excessive capital in developed countries is looking for opportunities to breed") and identifies some of the characteristics of the global economy (4 C's - communications, capital, corporations, consumers). It then looks back at the birth point of this new era. "For me, 1985 is the annus domini, and the date system I like to use in a light-hearted way is AG and BG - after and before Gates". The author refers to William Gates, who had established computer company Microsoft which launched the first version of the new computer operating system Windows in 1985. This part ends with an examination of the failure of traditional economics - and economists - to make sense of the global economy. "Let us repeat that the global economy is a reality - it's not a theory...The global economy has yet to produce its theorist, its answer to [John Maynard] Keynes...What we need now is a means of understanding, a theory to make sense of the global economy, stage directions for the global stage."
The four chapters in Part II - Stage Directions - examine the major trends emerging on the global stage. The opening section of Chapter 4 explores the development of the nation-state ("the most obsolete of these notions in the nation-state") and the dynamics of the region-state, the most useful and potent means of economic organization in the global economy. "The ongoing development of the global economy will lead to an inevitable undermining of the nation-state in favor of the region." In the fifth chapter Ohmae introduces the idea of platforms, such as the use of English, Windows, branding, and the U.S. dollar, as global means of communications, understanding, and commerce. "The challenge for all of those operating on the global stage is twofold: to understand the importance of platforms and to be able to utilize them as effectively and as early as possible." Finally, I explore what parts of the business have to change in line with the emerging economy. These include business systems and processes (such cross-border business process outsourcing, "x-BPO"), and products, people, and logistics. "The logistics revolution has had an impact on many areas, bringing them closer together, collapsing traditional barriers such as time and distance."
The 3 chapters in Part III - The Script - provide analysis of how the changes and trends will impact governments ("now, however, central governments will find that a lot of their power has gone"), corporations ("the emergent corporation will be homeless") and individuals ("we have to become more adaptable and more willing to proactively take part"). Ohmae also looks at some of the regions that might be the economic dynamos shaping the world beyond the global stage. "... Hainan, British Columbia, the Baltic corner, Ho Chi Minh City, Siberia, Sao Paulo, and Kyushu is nothing but a small example of the global potential". In the final chapter, the author revisits his 1975-book `The Mind of the Strategist' and thinks through the need for changes in the frameworks we use in developing corporate strategy on the global stage. "Although a lot of the comments on strategic thinking and the approaches and tools I proposed in the book are still useful, the very definition of strategy using three C's [company, competition, and customers] is no longer valid." Ohmae introduces the Japanese phrase `kosoryoku' [= something like "vision", but it also has the notion of "concept" and "imagination"] for developing strategy. First, you describe the vision. Second, you spell out strategy. Third, you develop the business plan. He believes that the mental process for the new type of strategy development is a clear departure from the traditional business school type of teaching of strategy development and in order to develop this type of talent "we need to nurture future business leaders in the same way we develop world-class athletes and artists."
Yes, this is a very interesting book and highlights some of the main levers organizations can pull to tap into the global economy. It discusses some of the essential new rules that apply and provides readers with an important step forward to approach The Next Global Stage. Although Ohmae provides a decent framework, it still requires a lot of thought from companies and individuals. The author uses his traditional clear writing style to simplify extremely complex subjects into understandable text. I recommended this book to government officials, (global) business leaders and economists. |
Robert Steele (MSL quote), USA
<2007-01-10 00:00>
I have not in my lifetime seen a table of contents more exquisitely detailed and provocative. My very first note on this book reads: "TOC: Holy Cow!" This book earned five stars with the table of contents and got better from there.
I recommend that this book be read AFTER reading C. K. Prahalad's The Fortune at the Bottom of the Pyramid (a book that I earnestly hope wins the author the Nobel Peace Prize), and Stuart Hart's Capitalism at the Crossroads. Whereas those two books are essential background and strategically transformative, showing the four trillion in potential revenue from four billion people whose individual disposable income averages $10 a year, this book is more operational, a handbook for global profit.
The section on reinventing economics is a very useful preamble to the remainder of the book, where the author dissects both governments and business practices before going on to discuss platforms for progress inclusive of technologies and languages.
The last third of the book provides the "script" for future global prosperity. The most valuable and actionable pages are from 255-268, where the author concisely identifies the following areas as potential break-out zones for enormous profit: Hainan Island, Petropavlosk-Kamchatsily in Russia, Vancouver and British Columbia, the Baltic Corner, Ho Chi Minh City, Khabarovsk, Maritime (Primorye) Province and Sakhalin Island in Russia, Sau Paulo, and Kyushu in Japan. If I were a major multinational interested in doubling my gross and profit in the next ten years, I would immediately commission a single General Manager for each of these areas, and send them to build an indigenous networked business from scratch in each of these areas.
The author, who I am reminded wrote The Mind of the Strategist as a young man in the 1970's, has an extraordinay intellect that has been very ably applied to a most important topic: creating stabilizing wealth.
Wharton School Publishing has impressed me greatly with these three books. I have toyed with earning a third graduate degree in either environmental economics or Bottom of the Pyramid (BOP) business management, and while I will probably not do so, what these three books make clear to me is that Wharton is a happening place and clearly making a difference. Good stuff!
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