Reverse Innovation

CHAPTER THREE

Changing the Mind-Set

The very organizational best practices that have made global corporations so successful to date actually get in the way of innovating in emerging markets.

IN THE 1970S AND 1980S, most global corporations divided the world into three segments: the United States and Canada, Western Europe, and Japan. If there was a fourth segment, it was “the rest of the world”—and it was regarded as inconsequential.

The rest of the world is no longer inconsequential. Yet, developed-world multinationals—especially the most successful ones—consistently struggle in emerging markets. Why? The simple answer is that global corporations ...