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3 Critical Areas to Pay Attention to When Expanding Your Business Globally

Posted by Doug Halbert on Aug 29, 2018 3:00:00 PM

Expanding Internationally: Big Differences and Big Rewards

Your business is booming and now you’re contemplating expanding internationally. You’ve done your homework; global markets are ripe for what your company has to offer and it’s exciting to think about the opportunities that await from expanding your business. However, before taking that leap, make sure you’ve done your due diligence.

 As part of your research, did you effectively evaluate your target market’s cultural and operational norms? What worked domestically may not work elsewhere; something you can’t afford to find out when customers and profits are at risk. As business leaders, it’s our responsibility to ensure all initiatives are properly vetted and understood domestically as well as internationally and that in addition to financial considerations, all performance targets are being met. Success requires an open mind; a willingness to learn and adapt to business protocols unfamiliar and otherwise considered unusual. Here are some things I have learned through the years about introducing new products and services globally that are focused on three key areas: 1) Culture, 2) Operations and 3) Teamwork.
 

Culture

From business meeting etiquette to workday routines, the way people work in different countries can vary tremendously. Fortunately, there are numerous resources available that can educate you on cultural norms so you know what to expect in advance. A simple Google search for ‘international business culture’ will bring up hundreds of them. However, I’ve learned that no matter how well-read I am about appropriate/inappropriate business behavior, there’s no substitute for personal experience.

The best way to learn is to listen attentively and observe obsessively. Few things can scuttle an opportunity faster than an egregious cultural mistake, no matter how innocent. Here are just a few that to us may be innocuous, but in other cultures can be highly offensive: sitting down at a meeting in the wrong place or at the wrong time; attempting to negotiate before sharing pleasantries -or- being so forward as to share pleasantries instead of just getting down to business; asking the opinion of someone when their superior is in the room; insisting on an early morning meeting or refusing an invitation to after-hours cocktails; or assuming that a nod of the head means “yes” or “no.”

Of course, before you have an opportunity to visit in person, your best resource is a trusted local acquaintance. They can tell you how to approach a situation beforehand and, if things go awry, how not to make the same mistake twice. I’ve slipped up from time to time – on one of my first international assignments I greeted the president of Samsung with a salutation you’d only use with a peer. Although he was very gracious about it, I could have avoided that uncomfortable – and potentially damaging – situation with a little cultural reconnaissance beforehand.

Operations

Everyone has had that “a-ha” moment when they realize they’ve misunderstood something about their internal business process. Moving to international business requires that you fully understand not only your operations but those of your business partners in every country you’re entering.

Following the paper trail can be highly educational as you move your business from one country to another. And by “paper,” I don’t necessarily mean financial – although that’s certainly a good idea. Here, I mean process. How do orders come into a company? How and when do they proceed through sales, procurement, shipping and invoicing? How are currencies, taxes, and customs handled? What are the service level agreements, and what is the process for correcting mistakes? What are the local laws governing marketing, labor, conflict minerals and recycling? How do IT systems interface? And most importantly, who is your contact at every point along the way?

Most of us live in a homogenous country in a heterogeneous world. As the companies I’ve worked for have moved into new geographies, I’ve found that you can’t ask enough questions – it’s the ones you don’t ask that can get you into trouble. For starters, when you expand into a new country, you’re now talking about their processes and systems, not yours. Years ago, when I was managing logistics in Europe, we made typical mistakes like designing solutions with blinders on regarding local value-added taxes (VAT) and customs regulations. We ended up with penalties until we could fix the problem. “Think globally, act locally” could be reinterpreted as “think globally… then ask a local expert who knows what’s going on.”

Teamwork

Working internationally also requires knowing how to navigate organizations in a new way. Often, a company that is in expansion mode doesn’t have the same organizational structure and hierarchy in place governing international decision-making, approvals, etc. Knowing how to work effectively in a matrixed environment – from building cross-border, cross-functional teams, to influencing others to simply getting things done efficiently – is critical. So is patience and a healthy respect for time zones. Business still needs to move at a rapid pace, but there will be a learning curve.  

In any matrixed environment, it’s vital that you acknowledge who has the expertise and make sure they’re involved in the process to come up with a solution. That may require reaching across the company or across the country. You can talk global, but nothing happens unless you have the regional/country people participating. That said, it’s important to understand the cultural nuances you’re dealing with. I’ve made mistakes where I’ve gone directly to an individual contributor when I should have gone through their supervisor first. I’ve also gone straight to a supervisor when I should have talked to the individual contributor first. You don’t want to alienate people by speaking with the wrong person in the organization to solve a problem.

Stay Competitive by Staying Humble

22 countries and two million miles of air travel later, I still learn something new every day. Doing business internationally, and being successful at it, really comes down to being clear-eyed and humble about what you don’t know while being confident about what you do. Study cultural and operational norms with the same zeal you study your competitors. Seek to understand and honor local culture and practices. The result will be a global business solution that leverages the best of what our world has to offer. Becoming adept at entering and navigating new geographies not only broadens your horizons; it gives you the flexibility to balance the ebbs and flows of business. A world of opportunity awaits.

Tell Us Your Story

I shared my top three lessons but would be interested to see if you learned something different. Tell us about your experience expanding global and what you learned as a result.

About the Author

Doug Halbert is the vice president and general manager of Supply Chain Management and Integration Services business within Tech Data’s Global Lifecycle Management Services practice. He's responsible for the development and profitable growth of customer solutions that include high-volume labeling and configuration services, complex converged and hyperconverged integrated solutions, and industry-leading supply chain management services which range from 3PL to fulfillment solutions.

Tags: Global, International, operations, culture, teamwork, expansion, services

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