Multinational companies often test new or improved processes by rolling out a limited pilot in one or several markets. New research identifies how to maximize the chances of success for these high-stakes dress rehearsals.
Multinational companies are under more pressure than ever to maintain their competitive edge. One way they try to meet the challenge is by implementing global headquarter-driven strategic initiatives designed to leverage their global scale with new or improved processes. Such strategic initiatives as harmonizing sales processes, launching a new global service for customers, building a shared service processing center or introducing standardized operations processes can create economies of scale and scope in operations. Successful initiatives may also make it possible to compare process performance across locations, uncovering new opportunities.
To try to improve the chance of success for such initiatives,1 companies often conduct a field test of the global initiative in a restricted part of the business, such as a single country market or a small group of country markets. If this pilot succeeds in demonstrating the value of the new practice, top management will roll out the initiative regionally or globally to realize its full economic and strategic value.
Senior executives sometimes regard learning as the primary goal of piloting a global initiative. They assume that if anything does go seriously wrong, the stakeholders will be forgiving because the pilot is just an experiment. Our research, however, has found that the stakes are actually much higher. (See “About the Research.”) During the pilot, the country market managers next in line to implement the strategic initiative form their own attitudes about it. Their assessment of the pilot often determines the extent to which it will be eventually adopted within the organization. In this way, a pilot is much more like a dress rehearsal than an experiment. If the performance fails to impress the country managers, they are likely to adopt the initiative in a perfunctory way, without genuinely integrating the processes within the organization.2 Or if the pilot’s performance is truly terrible, managers from across the organization may band together and refuse to even start their implementation.