Business in the New World

I just returned from a week of business in China. I spent two days in Penglai, a port industrial city and also the center of the Nava wine district, and then four days in Beijing. The extremes; from the ladies sweeping the streets with huge corn brooms to the miles of brand new shiny sky scrapers was amazing. I visited the Great Wall, the Forbidden City and some nightclubs that were nicer than anything in Vegas or anything I have seen in movies. China is a stunning place that has to be experienced, it can’t be adequately explained.
Knowing I was going on this adventure had me thinking of our global business world for the past couple months. I developed a belief that will be interesting to watch being proven out over the years to come. So the following are my thoughts on global business and its effect on North American companies.

For the past two decades, at least, we have seen a multitude of students from around the world coming to North American universities to learn how we do business. North America has been the largest block of consumers in the world since the Second World War and everyone has wanted their piece of that pie. The conventional belief was that to do business in North America you had to understand how North Americans do business. So the students came and the imports shifted the balance of trade. Products and services have been provided to North America from every corner of the world. Life was good.

My first hint of change was the students. They aren’t coming any more. Well to be fair, some still are but the wave that existed in the 70’s, 80’s and somewhat in the 90’s has subsided. Why would this be? Isn’t the world interested in the North American market anymore? Of course they are. But our business methodologies are no longer a mystery. Doing business with North America is relatively easy. But although they were my first clue, I don’t think the students tell the whole story. Something else has happened. It is no longer news that there are other markets emerging. Huge markets! China, India, South America and even Europe have consumer markets that are exploding.

This is where my concern comes in. North American business has an inherent arrogance. We have this belief that our way of doing business is the right way. After all isn’t that why all those students were flocking here to learn North American business? We are the center of the global economy right? Wrong! We WERE the center of the global economy. That balance is moving and moving quickly. The areas of the world I already mentioned are gobbling up products and services at unprecedented rates. The world has been thrown off balance just trying to meet some of the demands. A couple good examples of this are the global steel and concrete markets. Another example is the Auto market. While North American car companies are getting government handouts, Beijing alone is adding 1400 cars a day to its streets.

The problem is the rest of the world doesn’t do business “our way”. They have their own customs, their own rules, and they aren’t anything like ours. I believe the global economy will blend over the next two decades. Kind of a levelling of the playing field. This leads to my concern. Here it is in a nut shell. The resulting business practices are going to be a lot more like theirs than like ours. You see there are a lot more of “them” than there are of “us”!

So North America it’s time to swallow our pride and take a lesson from history. If we want to be successful in the new world we better learn how the rest of the world does business. Perhaps we should be sending more students to Business Schools in these emerging market countries. I am not suggesting that we adopt the business practices common in Asia or Eastern Europe as the North American standard. I am suggesting we better adopt those standards if we are doing business in their countries. After all it’s just not reasonable to expect them to play by our rules.

I believe if North American businesses are going to survive in the Global market we have to change. Change, now there’s a scary thought.