Creating a consistent employee experience anywhere in the world.
Webber Kerr’s President Adam Lloyd meets with Kurt Ochalla, former Senior Director of Global Portfolio Management at Philips, as they discuss global expansion, and engaging with consistency in various regions around the world. It’s about finding a balance between company brands and cultural adaptation, and of course enough coffee.
Kurt is a global executive who has spent over 20 years leading real estate initiatives in Fortune 500 companies, as an end user with Philips, and as a consultant with top tier consulting firms. Most recently, he had overall responsibility for Philips’ global real estate performance across 900 properties located in 80 countries and was the leader of the Global Portfolio Center of Excellence.
AL: Kurt, you were responsible for Philips’ performance across 80 different countries, how do you represent one “Philips” in such varying regions? Where did you start to establish this when first entering new markets?
KO: One thing I have learned over the years in providing consulting services to many different Fortune 500 companies is that a “one size fits all” approach is difficult to implement across a global organization.
In multinationals that have primarily grown through acquisition, you tend to inherit a wide variety of spaces, in both quality and configuration. This creates a challenge when attempting to provide consistent branding across such a diverse portfolio. In my experience, the M&A integration timeline can vary greatly across different companies, with some making changes within 6-12 months of acquisition while others may let the acquired company operate independently and maintain their own identify for several years.
From a performance management perspective, there are a number of ways to achieve improved cost metrics that provide flexibility across different cultures. I tend to focus on Total Cost of Occupancy (TCO) / User, which has multiple components to it. From a pure calculation standpoint it looks like this:
In evaluating this equation, you can reduce your Cost per Head by pulling multiple levers. In cultures where working from home is acceptable, you can increase sharing ratios by implementing flexible work programs and desk sharing. In locations where it is common to sit many people close together, you can improve cost by increasing density through compression and improved design layouts. You can also improve operating costs by evaluating service level standards or minimize occupancy costs by moving to low cost centers or spending less capital on buildouts. The key is to determine which lever to pull that the local culture will find most acceptable in order to achieve the shared goal of reduced TCO/User.
AL: How important is it for companies to find a balance between adapting to local cultural preferences and keeping a consistent brand identity? How do you know when you’ve achieved the right ratio?
KO: When viewed in the context of the workplace, I think you need to strike a balance between global standards and adapting to local culture. The most effective programs I have seen follow the 80/20 rule. This means that 80% of the configuration of a given space is essentially fixed according to the global standards, but you allow the local team some flexibility in designing the remaining 20%. For this portion of the design, you can allow the locals to have some control over the types of space offered, such as more conference rooms, privacy areas or drop-in spaces. In addition, you can give them some choices on items such as color schemes, furniture, or anything else that allows the space to be better aligned to the local culture. By striking this balance, the local employees feel engaged and part of the design process, yet you can still maintain strong corporate brand identity as well.
AL: From your experience in consultancies and corporations, what key things should global customers look for during their site selection decision making process, regardless of location?
KO: This largely depends on the type of business the company is in. For large manufacturing and logistics companies, they would evaluate items such as easy access to transportation systems (highway, rail, port), energy and utility costs, availability of technical labor and the tax and regulatory environment. For high tech and services companies, there are a number of key drivers that companies would consider in today’s war for talent. Site selection for companies focused on knowledge workers might include workforce availability of a skilled talent pool, strong telecom infrastructure, quality of life and proximity to a like-minded ecosystem surrounded by companies in a similar industry. The priority and weighting of these factors will vary depending on the goals and objectives to be achieved through the location decision.
AL: What are some of the attributes you look for when hiring internal talent in different parts of the world? How important is it for global multinational companies to have employees with multicultural experience?
KO: The first place to start in evaluating talent is to seek individuals who will best fit into the culture of the company. For example, if the company is highly driven by financials and numbers, you would seek somebody with strong capabilities in data analytics. If decisions are made based on consensus, then you would want individuals who have experience in facilitation and collaboration. Because global teams typically work remote, it is important that they are fluent in the standard business language of the company, but can also speak and read/write in the local language when it comes to negotiating and interpreting legal documents. Having team members with this type of multicultural experience will certainly help them to assimilate easier, but also improve productivity and efficiency as there will be fewer starts and stops or misunderstandings. One example I have seen work effectively in a manufacturing environment is to build a leadership team at a new plant through a combination of expat assignments from corporate and hiring local expertise so all perspectives and cultures are well represented.
AL: What advice would you give to organizations that have plans of global expansion? How can they maintain a level of brand consistency and local relevance as they expand and hire?
KO: I would strongly recommend that organizations do their homework before entering new markets. It’s less relevant if they inherit properties and people through acquisition, but if they are expanding organically, tap into local resources to really understand both the culture and regulatory environment to determine how well they fit in with the business drivers of the organization. There are several strong service providers that have their feet on the ground in many markets that can quickly help to identify the cultural fit with your company and the potential impacts on your business. Finally, don’t underestimate the importance of coffee. That seems to be the one unifying attribute that bridges cultures across the globe – provide your employees with a solid cup of coffee!