The World is Flat

The World is Flat, Thomas L. Friedman‘s book about globalization in the 21st century, keeps popping up on my radar and triggering ideas. (See my previous posts: A New Business Model and Versatilists.) Last night, my Project Management professor treated us to a slide show about the book and today I read an interview entitled Wake Up and Face the Flat Earth: Thomas L. Friedman that Nayan Chanda, editor of YaleGlobal Online magazine did with Friedman in 2005. In the interview, Friedman says:

Well, let’s start with, what is the mix of assets you need to thrive in a flat world? Money, jobs, and opportunity in the flat world will go to the countries with the best infrastructure, the best education system that produces the most educated work force, the most investor-friendly laws, and the best environment. You put those four things together: quality of environment that attracts knowledgeable people, investment laws that encourage entrepreneurship, education, and infrastructure. So that’s really where, in a flat world, the money is going to go.

Friedman is talking about countries in this paragraph – what countries must do to be competitive in the flattened world of the 21st century. But suppose we translate the four points in this quote from the country level to a single firm. How can any one company incorporate Friedman’s ideas to ensure its own competitive position in the flat world? Here are my thoughts:

1. Quality of Environment: Firms need to make their companies great places to work. Several things contribute: comfortable and usable workspaces, good employee benefits, and positive organizational cultures. For example, employees are more productive when they have control over their working conditions – lighting levels, air temperature, noise level, furniture fit, etc. Including benefits such as health insurance in employees compensation packages attracts higher-quality employees and increases existing employees’ feeling of security. A culture that values intelligence, ideas, and collaboration generally achieves greater success than one that is based on power plays and inflexible ways of doing things.

2. Entrepreneurship: Firms need to encourage internal entrepreneurship by encouraging innovation, creativity, and risk taking and tolerating the mistakes that go along with exploration of new ideas.

3. Education: Firms must provide their employees with opportunities to learn new things by having in-house seminars, supporting continuing education efforts, or simply working learning time into weekly schedules.

4. Infrastructure: Firms will need to explore new types of partnerships with other companies, both local and global, to ensure that they can provide the best product or service to their customers. In-house, employees must be given the proper tools to do their jobs, be it computers that contain the right software, communication tools, or the physical tools needed to do the job.

In most cases, transitioning into the new flat world will require an initial expenditure of time and money and perhaps some radical and difficult revamping of organizational thinking. But, just as countries that fail to adjust will loose their competitive position in the world political and economic arena, firms that neglect or refuse to change will find themselves left behind in their marketplaces. Design firms are not exempt.

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