Read the full script of Module 2, Episode 7 of the Global Growth Master Class below. Want to get certified on global expansion? Simply click here to access the complete course today.

For legacy companies, innovation is the responsibility of Headquarters. Global Class Companies, on the other hand, are able to tap into a diverse global workforce and key learnings in local markets to help bring solutions across a global footprint.

In this way, Global Class companies create a culture of continuous improvement, where information and best practices flow freely between headquarters and local teams. This bidirectional flow of information allows for the creation of a shared understanding and a common language that unifies the company, regardless of location. 

The result is a company that is more adaptable and responsive to changing market conditions and customer needs. The focus is on sharing and collaboration, with the goal of creating a better outcome for the company as a whole, rather than an us-versus-them dynamic that is often present in legacy companies.

In conclusion, the traditional concept of HQ as a command and control center is being replaced by a more enabling role for HQ, which focuses on supporting local markets

Companies are adopting a more decentralized approach, with decision-making being distributed among teams located in different locations. Companies are also fostering an environment of bidirectional innovation, where insights and best practices can be gathered from any market, not just HQ. Global Class Companies recognize that the best ideas don't always come from HQ and set up a culture of best practice sharing and mechanisms to uncover local nuances with global impact. This new approach to HQ is still in flux, but it represents a significant shift in how companies organize themselves in the global marketplace.

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As we have explained, because Global Class Companies understand that the best ideas don’t always come from HQ, they set up a culture of best practice sharing and mechanisms to uncover the local nuances that can have a large global impact.

Facilitating Two-Way Innovation & (Feedback Loops)

Two-way innovation is a secret weapon of Global Class Companies. Instead of relying on centralized innovation efforts driven and communicated by HQ, Global Class Companies realize the innovation can occur at any level and across any part of a global footprint. In fact, these globally-minded companies understand that often the best innovation comes from local markets since they are closer to end customers. 

Slack facilitated Two-Way Innovation through its Small Hands meetings. Instead of waiting for “All Hands” meetings facilitated by HQ, regional leadership connected with each other, sharing best practices and localizations, without HQ needing to facilitate. Flexport’s regional General Managers met monthly to share best practices as well.

Salesforce’s HQ directly facilitated two-way innovation through its Ambassador program where an executive who had experience in a specific market was aligned with the local team, and was a sounding board to help navigate internal challenges, but most importantly provide visibility into local innovations to the rest of the leadership team.

How To Create Two-Way Innovation

Companies can foster two-way innovation by establishing lines of communication between local teams and those responsible for innovation at HQ. Creating formal programs that give local teams the license (and stage) to share innovations is an empowering ingredient. 

Ultimately, creating two-way innovation is pretty straightforward; give local teams a voice, provide a channel for them to communicate best practices, and have structures and processes, like the LRT, for these ideas to be operationalized and implemented across the global footprint (or in targeted markets where the idea best fits the local context). 

Amazon’s Seller Flex Space initiative, for example, didn’t come from HQ in Seattle. It was born in India. The supply chain in India was not nearly as developed as it is in many other countries, so establishing the same type of massive fulfillment center footprint wouldn’t work. Last-mile delivery in India has very different dynamics. To address this, the Amazon team in India launched an initiative to get full coverage of the country by leveraging small stores, which often have space for additional inventory. The initiative turned these small shops into micro Amazon fulfillment centers. Given Amazon’s ability to harness two-way innovation, this strategy has since been implemented in many other regions with similar supply chain environments. 

As we have explained, because Global Class Companies understand that the best ideas don’t always come from HQ, they set up a culture of best practice sharing and mechanisms to uncover the local nuances that can have a large global impact.

NOTE: Don't miss out on the next episode! If you want to continue learning about global expansion strategies and dive deeper into the course material, simply click here to access Module 2, Episode 8 of the Global Growth Master Class.