Suggested read: "Global Prices and Earnings"

Since 1970 UBS publishes comparisons of global prices and wages. The report is based on surveys in more than 70 cities and includes rankings of purchasing power, living standards, wages, and many more. E.g. Oslo, Zurich, and Tokyo are the most expensive cities, Delhi is the one with the lowest living costs. The purchasing power is demonstrated with practical examples, e.g. in Oslo an average wage-earner has to work 36 hours to buy an iPhone, in Delhi 370 hours.

The report facilitates the selection of the right place to establish centralized hubs in multinational companies. The current issue covers the year 2012 and is definitively a recommended read for global decision makers.

Link: UBS Prices and Earnings

Keep hubs independent (part 2)

This article is a follow up to: Keep hubs independent

A reader is curious about my statement “Never let local forces spoil your global organization.” He asked, “sounds nice, but how should I avoid that local forces manipulate and direct the hub on their site?”

Take care already at the very beginning, during hub setup:

1. Let a local manager setup the hub; i.e. a manager with long term working experience on the local site. He has a large local network and knows which team members and stakeholders to bring on board to make the hub successful and accepted by the local site. Do the setup with the local manager as project leader; don’t establish a line organization for the hub yet.
2. Once the setup project is over, integrate the hub into the company’s line organization and put a headquarters manager at the helm for a while (e. g. 12 months). With his global background he will convince the team and the local stakeholders to support the global processes. Make sure the headquarters manager is physically delegated to the local site.
3. Finally a local manager can take the leadership of the hub. Meanwhile the global processes are established and not questioned anymore; the local stakeholders will follow the global processes.

Once the hub has reached this stage, the hub’s manager will – and should – also take requirements of the local stakeholders into account. Now it’s no threat for your global organization anymore.

Note: the whole process takes about 12~24 months.