A story based on true life experiences of Latin American companies becoming global players. The author shares his knowledge and experience consulting to 3 of the 4 Colombian companies in the ranking of the top 25 most global in Latin America and 5 of the 10 of the largest Colombian companies.

2. NON-BOX GLOBAL MANAGEMENT
FOR A NON-FLAT WORLD
Based on true life stories

3. This is Arturo.

4. He’s a CEO
He runs a successful company
He has operations in the U.S., Peru, and Brazil
They wanted to continue expanding…

5. But first… he had to
manage the companies
acquired and created to
become a global
organization.

6. But how?

7. He had been told the world was the same everywhere…
That he could compete the same everywhere.

8. THE REALITY:
He Hadn’t Been Told The Truth

9. HERE
HERE
HERE
For Arturo & His Company to Succeed

10. HERE
HERE
HERE
EVERYWHERE

11. He had to accept…
“THE IMPORTANCE OF DIFFERENCES.”

12. Cultural Differences

13. “The whore”,
in Spanish

14. Administrative Differences

15. 53
Apr 23, 2012 Wal-Mart
shares fall 4.7 percent
after bribery allegations.
The company continues
to face government
probes into allegations
of bribery at its
Mexican unit.
4
USA
Mexico
Ease of Doing Business Rank
Source:: The World Bank. Doing Business. June, 2011.

16. Apr 23, 2012 Wal-Mart
shares fall 4.7 percent
after bribery allegations.
The company continues
to face government
probes into allegations
of bribery at its
Mexican unit.
12
2
USA
Mexico
Ranking of corruption as a problem
to do business
Source: World Economic Forum, The Global Competitiveness Report 2011–2012.

17. Geographic Differences

18. “It’s cheaper to move a load from
Buenaventura Port (in Colombia) to Los Angeles (USA) than to Bogotá”.
-Universidad del Rosario

19. Economic Differences

20. Dinamarca
Cundinamarca
GDP per Capita = $59,928
GDP per Capita = $7,132

21. Arturo should not fight the differences…

22. Arturo needed a strategy
to make the most out of
any differences!

23. Adjusting for
Differences
Adaptation
Arturo’s Needed Strategy
Arbitrage
Exploiting
Differences
Fuente: Managing Differences: The Central Challenge of Global Strategy, HBR
Aggregation
Overcoming The
Differences

24. What Was Needed Implied Team Work

25. But, over time, corporate &
subsidiaries had grown apart, did
not work well together, and they
had very negative perceptions of
each other.

26. Subsidiaries’ Opinion on Headquarters
“They are expensive, slow, bureaucratic,
won’t respond”
“Everybody intervenes in his own way; there are
many touch points; they request too much
information”
Headquarters’ Opinion on Subsidiaries
“They do not understand the role and value of
headquarters; they refuse to be controlled; don’t
follow policies and instructions; do not give the
information requested”
“They request everything at the last minute, they
want it now, tailor-made, and free”
“Don’t understand that we are different”
“Their practices are complicated, inefficient, and
do not apply to us”
“They are small but demand too much attention;
we already have enough handling our own
business”

27. Why?

28. A dysfunctional governance had led to
power games, behind-the-back work,
meeting-itis, committee-itis, bad decisions,
poor performance, slowness, uncertainty,
and conflict.

29. And that in turn had prevented optimal…
Strategic
alignment
Value creation
Risk
management
Resources
management
Empowerment

30. Arturo Needed Managerial Governance

31. Managerial governance consists
of actively allocating decision
rights and responsibilities in order
to achieve results.

32. First, Arturo understood
the context.

33. Then he followed
3 Easy Steps

34. Understand Value
in the Context or
Strategy
Understand
Where to
Intervene to
Capture Value
Define
Managerial
Governance

35. He explicited all the value that headquarters and
subsidiaries could bring to the table
Portfolist
Understand Value
in the Context or
Strategy
Strategy
guide
Operation
guide
Operator
To manage
and control
the business
To execute
under
supervision
Value added
by
headquarters
Managing
the
investment
portfolio
Creating links
and synergies
among
subsidiaries
To provide
knowledge
and
experience in
technical and
commercial
matters of the
subsidiary
Value added
by subsidiaries
To deliver
financial
results
To execute
what is asked
To execute as
asked

36. He decided to intervene only those processes where there was
value to be captured
Understand Value
in the Context or
Strategy
Information Integration
Coordination
Unification
Diversification
Replication
Understand
Where to
Intervene to
Capture Value
Define
Governanace
Process Standardization

37. He decided to intervene only those processes where there was
value to be captured
Understand Value
in the Context or
Strategy
Information Integration
Coordination
Unification
Diversification
Replication
Process Standardization

38. He allocated decision rights and responsibilities in a way that would
promote the convergence in the operating model and the
materialization of al value
Key decision and responsibility domains
Key decision instances
Decision rights and responsibilities
allocation to decision instances
Define
Managerial
Governance
Interaction
Model
Coordination
mechanisms
Authority relationships
between headquarters
and subisidiaries
Economic
Model
Decision
Model
Economics signals
between companies
in the group

39. Process &
IT
Strategy &
Capabilities
Incentives
PEOPLE
Organizational
Structure
ARTURO THEN EXECUTED A ROADMAP TO TRANSFORM THE
ORGANIZATION AROUND MANAGERIAL GOVERNANCE

40. It Was Hard Work

41. He provided executive leadership along the way.
He promoted participation – although not
democracy.
He designed governance actively.
And, above all, he was disciplined in implementation.

42. Arturo and his business
now thrive in globalization.

43. His business acts as the whole
and not as the sum of the parts

44. They materialize all
value there is.

45. Headquarters know when to intervene…
and when not to.

46. HERE
HERE
HERE
His Employees Work Stronger As a Team…

47. HERE
HERE
HERE
EVERYWHERE

48. Thank You!
Carlos Henao
ch@caplica.com