The CEO of a major European multinational remarked to me, “We are a global research company now.” That's great news for his shareholders and investors. He is accessing the best brains on the planet, wherever they are, and almost certainly saving money by not doing all the research in his backyard. “But ultimately,” he confided to me, “this is going to have implications down the road on jobs in my own country-maybe not this year but in five or fifteen years.” As a CEO and European Union citizen, “you might have a dialogue with your government about how we can retain capabilities in [our own country]-but day by day you have to make decisions with the shareholders in mind.”
Translation: If I can buy five brilliant researchers in China and/or India for the price of one in Europe or America, I will buy the five; and if, in the long run, that means my own society loses part of its skills base, so be it. The only way to converge the interests of the two-the company and its country of origin-is to have a really smart population that can not only claim its slice of the bigger global pie but invent its own new slices as well. “We have grown addicted to our high salaries, and now we are really going to have to earn them,” the CEO said.
But even identifying a company's country of origin today is getting harder and harder. Sir John Rose, the chief executive of Rolls-Royce, told me once, “We have a big business in Germany. We are the biggest high-tech employer in the state of Brandenburg. I was recently at a dinner with Chancellor [Gerhard] Schroeder. And he said to me, ”You are a German company, why don't you come along with me on my next visit to Russia“—to try to drum up business there for German companies.” The German chancellor, said Rose, “was recognizing that although my headquarters were in London, my business was involved in creating value in Germany, and that could be constructive in his relationship with Russia.”
Here you have the quintessential British company, Rolls-Royce, which, though still headquartered in England, now operates through a horizontal global supply chain, and its CEO, a British citizen knighted by the queen, is being courted by the chancellor of Germany to help him drum up business in Russia, because one link in the Rolls-Royce supply chain happens to run through Brandenburg.
Sort that out.
From Command and Control to Collaborate and Connect
Before Colin Powell stepped down as secretary of state, I went in for an interview, which was also attended by two of his press advisers, in his seventh-floor State Department suite. I could not resist asking him about where he was when he realized the world had gone flat. He answered with one word: “Google.” Powell said that when he took over as secretary of state in 2001, and he needed some bit of information-say, the text of a UN resolution -he would call an aide and have to wait for minutes or even hours for someone to dig it up for him.
“Now I just type into Google 'UNSC Resolution 242' and up comes the text,” he said. Powell explained that with each passing year, he found himself doing more and more of his own research, at which point one of his press advisers remarked, “Yes, now he no longer comes asking for information. He already has the information. He comes asking for action.”
Powell, a former member of the AOL board, also regularly used e-mail to contact other foreign ministers and, according to one of his aides, kept up a constant instant-messaging relationship with Britain's foreign secretary, Jack Straw, at summit meetings, as if they were a couple of college students. Thanks to the cell phone and wireless technology, said Powell, no foreign minister can run and hide from him. He said he had been looking for Russia's foreign minister the previous week. First he tracked him down on his cell phone in Moscow, then on his cell phone in Iceland, and then on his cell phone in Vientiane, Laos. “We have everyone's cell phone number,” said Powell of his fellow foreign ministers.
The point I take away from all this is that when the world goes flat, hierarchies are not being leveled just by little people being able to act big. They are also being leveled by big people being able to act really small—in the sense that they are enabled to do many more things on their own. It really hit me when Powell's junior media adviser, a young woman, walked me down from his office and remarked along the way that because of e-mail, Powell could get hold of her and her boss at any hour, via their BlackBerrys-and did.
“I can't get away from the guy,'' she said jokingly of his constant e-mail instructions. But in the next breath she added that on the previous weekend, she was shopping at the mall with some friends when she got an instant message from Powell asking her to do some public affairs task. ”My friends were all impressed,“ she said. ”Little me, and I'm talking to the secretary of state!“