“We Aren’t In Kansas Anymore” Going Global
Finding and serving customers around the globe used to be the province of larger companies. It was difficult for small to mid-sized companies to move beyond their home regions. Often it required massive resources and investments. Today, it’s high on the “to-do” list of most entrepreneurs and start-ups.
But going global is challenging. Whether a North American, European, Asian, African, South American company; success depends on building and executing a sound plan. In working with our clients, we’ve discovered a few things:
- Are you ready to expand out of your home country? I mean REALLY READY! Too often we see companies wanting to globalize far before they are ready. Too often, young companies want to globalize right away. They are impatient to grow and see opportunity from around the world. They may have gotten that email from someone 7-8 time zones away, that one email, and say “there’s demand for our products in other countries, let’s globalize.” Most executives underestimate the amount of management time and attention required to successfully launch in a new region. Make sure your operations in your home country are rock solid. If you are a start-up, just establishing yourself in your home markets, don’t stretch yourself and the resources in your company too thin. Expanding too soon will threaten you both in your home geography and the new countries.
- It’s not the same as your home country. This may seem obvious, but in virtually every project, we see the same thing. Executives take the practices, policies, programs, and processes that have been successful in their home countries and “cookie cutter” them, applying them to new geographies. We take what made us successful as a Chinese company in Shenzhen and do the same in France, or what made us successful in the US and do the same in Brasil. Sure we may modify the language and we recognize legal differences, but we do everything else the same. It’s not! Things are very different. How people buy, how we market and sell to them, expectations of service and support are very different. In Germany, what you can do with email marketing is very different than in the US. In France, I ran a start-up. Just introducing myself to French companies and executives required a very different protocol. Channels of distribution in China, Japan, and sub Saharan Africa operate differently than they do in Europe. Do your homework, spend time in the countries you want to expand into. Understand your customers, understand how they buy, understand how you find and acquire them, what they need for support. Discover what success entails in the region, don’t just replicate what you have done in other geographies.
- Don’t delegate your success. Too many organizations delegate their success. They find a partner, a master distributor, an agent and delegate the success of the company to them. Getting help–the right help, having partnerships can be a very strong part of your globalization strategy. But you can’t abdicate your responsibility for developing, managing, and executing your plan to them. They are there to help you, but they serve their interests, not necessarily your company’s. Nothing wrong with that, we all do that. But they won’t have the same vision, priority, culture, and ambitions. Many are glad to take your money, but will not do much more than executing what you have contracted them to execute. Some will be better. Make sure you get great partners, but stay actively involved in developing, implementing, and executing the strategies you have established for the new region. If you can, have a senior executive in your company live in the region for a period of time, get close to your new customers!
- Don’t underestimate the time and resources required for success. I’m constantly amazed at the mentality of many leaders in developing their plans to globalize. They tend to think of globalization as an extension and expansion of what is currently being done. It’s a sure recipe for failure. Think back, what has it taken you to establish your success in your home markets? Think in terms of management time and attention, resources, investments, risk, and time to revenue/success. Globalization is similar to starting up all over again. It requires management attention/focus, resources, investment and time. Too many try to take shortcuts, thinking “Our partners will make the investment.” It’s short-sighted and doomed for failure. Your partners will make some investments, but you have to invest in them and in the markets yourself. There’s no getting by “on the cheap!’
- Eat the globe one bite at a time. Again, too many leaders try to launch globally in one initiative. A European company, for example, might want to grow out of its own home country or region. Naively, they develop launch plans for the rest of Europe, North America, and Asia. Or a North American, Asian, South American, or African company might to similar things. It’s impossible. No company has the bandwidth and resources to support a global expansion of that magnitude. Likewise, if you are established, the same goes for product launches. Eat the globe one bite at a time, choose the next region, focus on it, once you’ve become established and are running smoothly, choose the next region, and repeat until you have conquered the world.
- Differences are important. While this may seem redundant with an earlier point, we don’t pay sufficient attention to them. It’s not just about language and having the right power adapters. I’ve spoken about differences in how you reach customers and how they buy, let me focus on building your own organization. There are great differences in operating around the world. Cultural, comfort with risk, values, attitudes about time, attitudes on decision-making are just a few. As you set up operations around the world, it’s important to recognize those differences. I had a painful experience with a company I started in Europe. I have launched several US companies. I knew how to build the strategy, recruit the right people, empower people to makes decisions and to be accountable, collaborate, and execute. The first company I established in Europe was a great learning experience. I tried to replicate the practices I had established in North America. For example, I tried to create a culture of empowerment, pushing decision-making, risk and accountability down in the organization. I struggled to make it work–it wasn’t. Finally, I talked to CEO’s of other start-ups. I learned comfort with empowerment, risk taking, and decision-making was very different. I was asking people to do things they did not want to do and were not prepared to do. When I aligned my expectations with what was culturally more appropriate, performance and results skyrocketed. Likewise, in establishing a China subsidiary, I made similar missteps until I learned the differences.
- Finally, and this may seem a minor thing. But operationally, it is so important. Be sensitive to time–by that I mean time zones. Your people and partners will be remarkably polite. They’ll tend to want to talk to you in the business day in your time zone. They will be reluctant to bother you outside those hours. Depending on how far flung your operations are, this means the “windows” for talking can be very small. The problem becomes, critical issues aren’t surfaced fast enough. Problems linger and grow far longer than they should. We become unresponsive to our people, partners and customers–all unintentionally. Reverse the paradigm. Make it your responsibility to call your people, partners and customer during the business day in their time zone. It seems almost trivial, but it’s amazing how important and appreciated this simple action can be.
Globalization is a great opportunity to grow and expand your markets. Small and start up companies can exploit these new markets with great success! But you have to do it correctly, there are no shortcuts but properly done, there is huge opportunity!