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As a global firm with a multi-cultural, multi-ethnic workforce and delivery centers, Murthy says the IT bellwether had taken several measures to create a high-level of diversity in its workforce by enhancing its recruiting efforts in different countries.

I think Infosys is doing a great job turning itself into a global company by hiring diverse workforce. But underneath these efforts to build diverse work force, Infosys or any other company vying to be Global Company primarily need to pay attention to their corporate culture. Most of the corporations have what I call “ethno-centric” corporate culture. Initially when Infosys was small, it had all its clients and employees in India. All its executives were and still are of Indian ethnicity (although there is some diversity in its board with 3 board members are not Indians). Therefore its corporate culture is mainly influenced by Indian culture (both ethnic and country). When they begin to open development centers in other countries, Indian corporate culture unknowingly percolates and influences the local culture. If those two cultures are diametrically opposite, creating a diverse work force may in fact hinder with employee productivity. So, ethno-centric corporate culture may curtail the ambition of any company to becoming global.

In my opinion, the only way to overcome ethno-centric corporate culture is to have multi-ethnic and multi-national top executives. Infosys needs to create diversity at the top executive level first. That will have a long term affect of neutralizing ethno-centric corporate culture and building a truly global organization. That is the only way for Infosys or any other company to achieve globalization strategy.

I have couple of example to show that this approach is winning globalization strategy:

Example 1: Sony Corp of Japan is a global company but its culture is strongly influenced by Japanese culture and that has lately affected Sony’s Brand negatively. To overcome stagnating sales, Sony in 2005 promoted Howard Stringer as its first non Japanese CEO. Born in Wales with extensive work experience in US, Stringer has been very active in trying to neutralize negative aspect of Japanese ethno centric influence on Sony (check out NY Times article). Diversity has been implanted successfully at the top executive’s level at Sony (Look at the bio of Sony’s top executive here)

Example 2: Lenovo, a Chinese based PC hardware company bought lucrative assets from IBM couple of years back and has been on a path to transform itself into a globalized company. Again check out the diversity of top management team at Lenovo here.

Management teams within Infosys are all Indians (Check out the profile of the management team here). Bottom line is simple. Internationally well known brand will not make a company Global. Global manufacturing/development center will not make a company global. Multinational, multiethnic employee by themselves may not enable the company to become global. It’s the “ethnic neutral” corporate culture that will unleash any company to become truly global. That cultural change can be brought about by the diversity at the executive and the top management level. I think Infosys should get busy hiring multinational top executives along with hiring multinational employees.

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CEO s generally agree that customer expectations of corporate social responsibility (CSR) are increasing. While customers have always cared about societal issues, their concerns are now more frequently turning into action and influencing purchasing decisions according to IBM Global CEO Study titled “The Enterprise of the Future”. “Genuine, not just Generous” is the last of the five characteristics that define the Enterprise of the Future (Read the summary of the report here).

In the recent CSR study, 75 percent of the companies surveyed say that the number of advocacy groups collecting and reporting CSR-related information on them has increased over the past three years. With talent in short supply, employers’ CSR reputations are an important tool to attract and retain employees. Companies are also recognizing that they are being held mutually accountable, along with the public sector, for the socioeconomic well-being of the regions in which they operate. CEO s are clearly conscious of their obligation to “do no harm” and are painfully aware of the regulators and nongovernmental organizations (NGOs) monitoring their every step. But they also see opportunity in CSR. CEO s talked about how CSR affects their brands — both at home and in new markets. CSR is also impacting both top and bottom lines and its extremely important to maintain current market share.

Here are some ways the Enterprise of the Future approaches CSR even more holistically.

Understands CSR expectations: Too many companies find themselves relying on assumptions about what CSR means to their customers. Only one-quarter of the companies surveyed in a recent CSR study said they understood customers’ concerns well.32 But the Enterprise of the Future knows what its customers expect. It uses facts and direct customer input as the basis for its decisions.

Informs but does not overwhelm: The Enterprise of the Future is transparent, but unobtrusive. It finds creative ways to provide relevant information, such as codes on packaging that allow interested customers to look up details — sourcing information, potential environmental impact and recycling instructions — while in the store or later at home

Starts with green: Given the price of oil and rising concern over carbon emissions, energy efficiency is critical for businesses as well as our planet. The Enterprise of the Future often begins its CSR changes with environmental initiatives. Through these efforts, it learns more about how to effectively collaborate on issues that affect us all.

Involves NGOs as part of the solution: Instead of being wary of activist groups — or simply reporting data to them — the Enterprise of the Future collaborates with them. For instance, it might enlist NGOs to help monitor and inspect facilities or to assist in establishing industry standards.

Makes work part of making the world a better place: Prospective and existing employees want to work for ethical, socially responsible organizations. But the Enterprise of the Future understands that workers also want to be actively involved in solving CSR issues. Its initiatives rally employees together in a cause that literally makes the world a better place.

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CEO s can no longer afford to invest money and scarce management resources in activities that are not differentiating: they intend to specialize. While 38 percent of CEO s plan to keep work within their organizations, 71 percent — nearly twice as many — plan to focus on collaboration and partnerships. Pursuing more collaborative models to gain efficiencies, fend off competitive threats and avoid commoditization. Their end goal is to offer customers a differentiated value proposition according to IBM Global CEO Study titled “The Enterprise of the Future”. “Disruptive by Nature” is the fourth of the five characteristics that define the Enterprise of the Future (Read the summary of the report here).

Business processes, as well as some products and services, are becoming more virtual. New delivery channels and electronic methods of distribution are overturning traditional industry conventions. And these advances are not just changing the way individual companies work — they’re creating entirely new industries according to the survey.

Bottom line is simple. If the company is not ‘disruptive by nature’ it will be very difficult avoid commoditizing of its products or services. Future organizations cannot just capitalize on existing product advantage they possess. They need to continually look for ways to disrupt their own products and services. If they are not willing to do it, it’s quite likely that their competitors will be working on those products substitutes.

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Labor arbitrage and riding the wave of economic growth in China and India — are being replaced by a new focus: global integration, according to IBM Global CEO Study titled “The Enterprise of the Future“. “Globally Integrated” is the third of the five characteristics that define the Enterprise of the Future (Read the summary of the report here).

Across the entire CEO sample, more than half plan to deeply change their organizations’ capabilities, knowledge and assets to take advantage of Globalization. More than 60 percent of CEO s are implementing a globally oriented strategy; the remainder are using either a local or blended approach. CEO s also stressed the importance of having a common corporate culture, while sustaining the diversity of local geographic cultures.

Even if an Enterprise of the Future never “goes global,” it still understands the capabilities available — and the competitors emerging —worldwide.

Here are some ways Enterprise of the Future capitalizes on global integration opportunities.

• Integrates capabilities globally to differentiate: The Enterprise of the Future searches worldwide for sources of expertise, resources and assets that can help it differentiate. Finding the right capabilities is much more important than finding the cheapest. These centers of excellence are integrated globally so that the best capabilities, knowledge and assets can be used wherever required.
• Builds a carefully calibrated global business design: The Enterprise of the Future crafts its globally integrated and optimized business design based on its particular mix of capabilities, industries and geographies. It has a strategic plan for which capabilities to keep in-house and where it will partner or acquire. And when it does acquire, it knows how to manage the acquisition so that anticipated benefits are fully realized
• Finds and eliminates integration barriers: Flexible assets allow the Enterprise of the Future to be more agile in the marketplace. Location decisions are made based on market and operational needs, not dictated by property deeds or restrictive leasing arrangements. Modular information technology, such as service-oriented architectures, enables rapid responses to new products and services opportunities and faster integration of new partners
• Grooms global leaders: In the Enterprise of the Future, global management development programs identify high-potential candidates throughout the company, not just from headquarters. These programs step future leaders through multiple global experiences, exposing them to a variety of cultures and markets
• Recognizes the importance of social connections within and across organizations: Social networking and realtime collaboration tools improve communication and close the distance between people in different locations. Good ideas develop and spread quicker, and problems are solved faster.

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According to IBM Global CEO Study titled “The Enterprise of the Future”, majority of the top executives surveyed agree that same go-to-market strategies, products and services will not work in the future. Thus, tapping into the new geographic and demographic segments will require a deeper understanding of these customers and a more tailored approach than what’s currently pursued. Innovation beyond Customer Imagination is the second of the five characteristics that define Enterprise of the future (Read the summary of the report here)

In addition to the diverse needs of new markets, CEO s also face rising expectations from increasingly informed and collaborative customers. Customers now have far more sources of information, and the enterprise is no longer the definitive authority. This informed and collaborative customer “can be both a threat and an opportunity,” but many CEO s consider serving the informed and collaborative customer as an opportunity to distinguish their organizations — a chance to justify premium positioning and price.

According to the survey, financial outperformers are currently devoting more than 30 percent of their total annual investments to capture opportunities from rising prosperity worldwide. Over the next three years, these new market investments will increase and outperformers plan to spend 36 percent more to serve these increasingly sophisticated customers

From the survey, here are some of the ways to innovate beyond customer innovation

• Finds ways to make offerings relevant to new markets and increasingly prosperous consumers: Global brands, products and services deliver economies of scale, yet each market has its own culture, needs and aspirations. The Enterprise of the Future constantly experiments and learns how to optimize the balance. It analyzes potential markets to find niches, white space and complacent competitors where it can capitalize on its core strengths.
• Understands timing and network effects: The Enterprise of the Future understands the need to introduce innovation that the market is ready to accept and works to perfect its market-entry timing. It exploits the network effects of early adoption to take a commanding early lead.
• Connects everyone to the customer: Employees at all levels — from designers to warehouse employees — connect with customers through real-time information, online interaction or, where possible, in person. The Enterprise of the Future also develops deep relationships with leading-edge customers and employees — those early adopters who determine market success or failure.
• Uses technology to anticipate shifts faster than the competition: Market insights are critical to the Enterprise of the Future. It recognizes the value of the information it collects through its many channels and actively mines it for insights. It uses emerging technologies, such as virtual worlds, to gain insights in new ways. It also puts systems in place that allow very fast feedback cycles. When customer preferences and demand start to shift, it knows before the competition.

It’s interesting to note that all the ways to differentiate by collaborating with customers as explained above aggrandizes the role of IT. As customers move towards to core of Enterprise of the Future, so does IT. In fact, right implementation of IT is a precursor to success of innovation through collaboration with customers. So, I think the role of IT developers becomes critical in the near future.

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According to IBM Global CEO Study titled “The Enterprise of the Future ”, there is a strong agreement that – The enterprise that is willing to change will dominate in the future. “Hungry for change” is the first of the five characteristics that define the Enterprise of the Future (read the summary of the report here).

While every CEO agrees that ‘Constant Willingness to Change’ needs to be a part of the company DNA to dominate in the future, larger percentage of those CEOs will not be able to implement change - according to the survey. The graph for this ‘change gap’ (ability to articulate change but inability to execute these changes) is as show below

From the graph it appears that more and more CEOs provide ‘lip service’ when it comes to ‘change management’. They lack vision, courage and focus to execute and implement those changes. So what’s causing this growing change gap? Companies are struggling with its accelerating pace of change according to survey. But in my opinion that’s only a part of the problem. Ability to execute ‘change management’ is a central characteristic of a leader and involves mainly changing the existing corporate culture. If ‘willingness to change’ is not baked in the organization’s culture, if the middle management is not rewarded for taking educated risk, if the entire organization is locked in ‘paralysis by analysis’, then even if the leaders can comprehend what change is they will not be able to implement change. It’s the corporate culture or the organization’s behavior that usually provide massive resistance to change. Louis V. Gerstner the ex CEO of IBM in his book ‘Who Says Elephants can’t Dance’ writes how he was able to successfully turnaround IBM in the early 1990s. He wanted to change several things at IBM and corporate culture was one of them. But he came to single most compelling conclusion during the process steering around IBM - “Culture is everything”. If you can successfully change the corporate culture every other change is easy. Therefore ‘Change management’ mainly involves changing corporate culture. This process is difficult and the results are painfully slow. The CEOs need persistence and tenacity to keep going in the face of resistance. That’s the only way to execute change. That’s what differentiates good leaders from mediocre leaders. So, even if large percentage of CEOs agrees that ‘change is important’ only few exceptional CEOs will be able to implement ‘change management’.

Clearly, the ability to change quickly and successfully is becoming more critical than ever. Here are a few thoughts about how the Enterprise of the Future approaches change from the survey.

Accepts change as a state of being: The Enterprise of the Future sees change within the organization as a permanent state. Because of the company’s culture, employees are comfortable with unpredictability. In an environment in which products, markets, operations and business models are always in flux, values and goals provide alignment and cohesion.

Change management cannot be informal, ad hoc or improvise: On the contrary the Enterprise of the Future defines and manages change as robust programs, structured around and driven to deliver defined business outcomes. Strong change management is a core competence at all levels and nurtured as a professional discipline, not an “art.”

Operates like a Venture Capitalist: The Enterprise of the Future establishes processes and structures that promote innovation and transformation. It actively manages a portfolio of investments, protecting and supporting the fledgling ideas, while systematically weeding out the weak ones.

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The Third biennial IBM Global CEO Study titled “The Enterprise of the Future” is now available (You will have to register to download this 79 page study). This research based on surveys of 1130 top executives from 32 different industries and from 40 nations with the sole purpose of ferreting out what the Enterprise of the Future would look like. These findings that transcends organization size, location and industry – paints a surprisingly similar view of the traits that will enable firms to be successful in the near future.

According to the study, The Enterprise of the future is:

1) Hungry for change: The Enterprise of the Future is capable of changing quickly and successfully. Instead of merely responding to trends, it shapes and leads them. Market and industry shifts are a chance to move ahead of the competitions

2) Innovate Beyond Customer Imagination: The Enterprise of the Future surpasses the expectations of increasingly demanding customers. Deep collaborative relationships allow it to surprise customers with innovations that make both its customers and its own business more successful.

3) Globally Integrated: The Enterprise of the Future is integrating to take advantage of today’s global economy. Its business is strategically designed to access the best capabilities, knowledge and assets from wherever they reside in the world and apply them wherever required in the world.

4) Disruptive by Nature: The Enterprise of the Future radically challenges its business model, disrupting the basis of competition. It shifts the value proposition, overturns traditional delivery approaches and, as soon as opportunities arise, reinvents itself and its entire industry.

5) Genuine, Not Just Generous: The Enterprise of the Future goes beyond philanthropy and compliance and reflects genuine concern for society in all actions and decisions

In my future blogs, I will dive deeply into each of the above criteria that enable The Enterprise of the Future.

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