Good morning. Will the attacks on Iran accelerate the push to decentralize global companies? This year’s Edelman Trust Barometer referenced the rise of the “poly-national”—a corporate structure that invests in long-term local relationships, compartmentalizing everything from talent to supply chains in individual countries. To stay ahead in a world that’s shifted from globalization to national interests, the argument goes, companies must “operate as a network of businesses with a U.S. center, but a local face.”
It’s a variation of a strategy long deployed by consumer-facing global giants like Coca-Cola and Procter & Gamble, which prioritize global experience in their leaders and connect strong regional operations. HSBC regionalized its operations at the start of last year, splitting its operations between “Eastern Markets” and “Western Markets.” And years of heightened tensions and tariff wars with China have long forced companies to alter what Singapore Prime Minister Lawrence Wong called the “invented in California; made in China” strategy that helped firms like Apple to scale so profitably.
There are other forces disrupting the model of a centralized company. I spoke yesterday with Christina Kosmowski, CEO of LogicMonitor, which monitors customers’ tech systems from data centers to the cloud. She is having more conversations with CEOs about doubling down on a regional strategy to build resilience. “When your systems go down, you can’t operate,” says Kosmowski. “The time frame to react is just within seconds, instead of hours and days.”
