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The International Entrepreneur – What Makes a Great Leader… Anywhere?

Angela Merkel, Germany, International Entrepreneur, International Business

German Chancellor, Angela Merkel

This week I accept the challenge from long-time professional contacts, Sandip Sen and Linda Hughes to write about what I think makes for a great leader. As many of you know, anything I write needs to be as applicable in Buenos Aires as it is in Helsinki. With that in mind, here is my criteria for a great leader:

Great Leaders Build Trust
How people build trust varies between cultures. But one thing is for sure: a leader knows how to most quickly and effectively build trust in their own culture. For instance, a leader in Germany will focus on logic and facts to show his or her expertise. That might help in other places too, but in Mexico a leader builds trust by showing his or her ability to show compassion and take care of others. In India a leader is trustworthy by showing how much he cares about outcomes. Whatever the culture, trust is the common characteristic.

To build trust, you also need consistency. Followers need to know that they can count on their leader. How much trust would there be if a leader lost his composure when the company’s key client decides to go elsewhere or when the investor walks minutes from when they were supposed to sign the papers? That’s when the rubber meets the road and you learn exactly what type of leader is in charge.

Great Leaders Drive the Train
Sometimes there is confusion around a leader’s true role. But the bottom line is this: a leader sets the vision and the direction. They decide which track the train is going to ride. They don’t collect the tickets and they don’t fetch coal from the coal car. The leader needs to bring in the right resources to keep train moving towards its destination.

Sometimes it may be hard for a leader to let go of certain functions they’ve grown used to managing. This is especially true for many entrepreneurs. They used to write the code or answer online chats. And now they focus on resources like the next round of investment funds. Even a great leader can slip backwards into tasks they should be delegating. But it’s never too late to focus on the track and arriving at the destination safely and on time!

Great Leaders Communicate the Right Messages to the Right People at the Right Time
That’s actually a very tall order. But great leaders master this art of message and timing. It’s about communicating vision and strategy. But it’s also about communicating hope and the plans in times of crisis. Recently my company decided to walk away from a bad investment deal. It was the right decision, but had serious implications for staff who were counting on increased budgets and additional staff. Our Founder and CEO brought everyone together in a company-wide meeting. He told us the news and then put it into context that we could understand why it was better for the company in the long run. The CEO answered questions about how the news would impact employees and various projects. No one left the company from the news and everyone continued to work hard moving the company forward.

Some rules for this messaging: First, anything written or said must be sincere. People know when they are being misled or else they eventually find out. Communications need to be clear and focused. And there needs to be a way, direct or indirect to find out if the message was received in its intended way. Feedback loops are key and often ignored by most leaders.

I hope you found this article interesting. Please feel free to comment to add to this discussion!

Best wishes in all of your business efforts,
Becky

The International Entrepreneur – Interview with International Export Expert, Ed Marsh (Part 2)

Ed Marsh, International Entrepreneur, International Business

Ed Marsh, Consilium Global Business Advisors

Two weeks ago I posted Part 1 of my interview with international B2B sales and marketing expert, Ed Marsh. Today I share the rest of Ed’s insightful answers.

Q3: What’s the biggest mistake you see companies making in their online marketing for global markets?

A3: Most US companies make the same fundamental mistake globally that they make domestically. Their entire marketing and sales approach is built on who they are, what they do/make from their perspective. And that’s functionally irrelevant to any potential prospect in the world, including at home in the US. It makes them ideal 3rd bid participants, but not dynamic growth engines.

The solution is to really understand their buyers – and often assumptions are so firmly embedded in a company that outside assistance is critical to really understanding buyers’ challenges, perspectives, goals, etc. Buyer personas must be rigorously built, and then a complex “3D buyers journey” constructed. That’s the foundation for successful market development domestically which is, in turn, the foundation for global success.

But that’s also where trouble arises, because companies proceed to use that same foundation globally. Partially because it’s a lot of work to build it properly in each case, and partially because it takes deep market familiarity and extensive interviews to construct – it doesn’t get built for target markets. Then they compound that with translation.

Effective global content isn’t translated, or even localized. It’s trans-created, or created in the local language based on the local persona and optimized around the native and intuitive keywords which describe the market specific business challenges prospects there face.

So exporters need to think of digital marketing as a process of continuous improvement and innovation – instead of a website. They need to really nail their domestic program first. Then they can incrementally internationalize what they have – experimenting and adjusting based on metrics each step of the way.

Q4: What are you recommending to U.S. clients worried about the strong dollar affecting their export potential?

A4: Interestingly I don’t hear many concerns expressed about the strength of the USD. Certainly today’s cross is less favorable than the rates over the past several years, but I don’t have the sense that it’s impacting projects…at least yet.

But I suspect that specific concern may be implied in uncertainty around the bigger topics of foreign exchange and payments. Those are perennial areas of considerable worry to US companies. Often the resources to whom they naturally turn for advice, their accountant and commercial banker, are unfamiliar themselves. That creates a real barrier to export success.

So in general I recommend that they find other resources/advisors/service providers for that expertise, and further that:

  1. They embrace hedging – it’s neither some whizz kid MBA complicated thing, nor some dastardly Enron approach. It’s simply agreeing today to buy currency at some point in the future for a given price. Companies can easily and inexpensively lock in today’s margin on a deal and let the FX market do as it will. A good currency trading resource will be inexpensive, responsive and proactive with business recommendations. And international customers will appreciate your flexibility to work in their currency.
  2. They secure foreign receivables insurance – not every deal can get done with cash in advance. Banks push clients into L/Cs which can be appropriate, but are expensive, complicated, often have gaps…and ultimately are more in the bank’s interest than the clients’. Insuring foreign receivables (details vary by policy) not only protects the seller against buyer default and other risks such as non-convertibility of currency, but it also allows companies to use a higher portion of receivables in the asset base upon which their borrowing capacity is calculated.

Q5: Any last advice you’d like to share with growing B2B companies currently expanding in international markets?

A5: Four things. The first is a small, simple one. The way to grow exports is to look for profitable customers to add. It needn’t be some huge, expensive, protracted project with an ephemeral payoff years down the road. Make it easy for the right buyers to find you, work through the transactional details, and start making money globally.

The second is a bigger, more strategic topic. A huge percentage of US SMBs are owned & managed by baby boomers. They’ve grown accustomed to a sellers’ M&A market over the past few years. But research shows that a majority plan a transition over the next five to ten years – and when they simultaneously move in that direction, suddenly the inertia will shift and it will be a buyers’ market. That means that companies need to move proactively to achieve key strategic positioning steps which will help to competitively distinguish their company from many others in a crowded market. That’s where global diversification is key. Not only should their global sales contribute rising revenue and profits (key to valuation, particularly among competitors with stagnant or anemic earnings) but also the diversification itself will create value – perhaps even enough to position a company as a strategic acquisition target for acquirers seeking further global diversification themselves.

The third is practical. Current US debt levels will almost certainly result in increased tax burdens on SMBs, particularly on pass-through entities commonly used by privately held SMBs. That means that tax reduction strategies should be at least part of business planning – and exports could be hugely beneficial through the IC-DISC structure that’s been around for years and was recently made permanent. It offers companies nearly 16% savings on profits from export sales. That’s probably appealing just based on today’s rates – but almost certainly will be more so as rates are likely to rise.

Finally is the value of lessons learned. 1:2 babies born in the US today is Latino. But there is no monolithic Latino culture – rather it’s a diverse group of cultures and languages from throughout Latin America and the Caribbean. There’s no better way to learn how to successfully market and sell to those US consumers than to dive deeply into the markets from which they come. And there are many other product, service and application lessons which can be learned in foreign markets which will spawn R&D and successful new product offerings for the domestic market.

About Ed Marsh

Ed was going to be an architect because he loved the nexus of engineering and design. That was before he was going to be an engineer; before he graduated from Johns Hopkins; before he was an Army Infantry Officer (Airborne Ranger); before he set B2B industrial sales records; before he was partners with a German capital equipment manufacturer; before he founded a distribution/rep company for industrial products in India; until he decided that managing a business and employees wasn’t what he enjoyed. Now that Ed’s got all of that out of his system he runs a consultancy that helps US manufacturing companies grow by applying process excellence to business development,  completing the full circle back to an engineering & design combination. His practice is built on a unique methodology which combines powerful digital marketing methodologies (a HubSpot partner) with his extensive international biz dev experience. Ed is also Export Advisor to American Express

About Consilium Global Business Advisors: Consilium assists American manufacturers in applying process excellence to their business development. In other words we help lean, well managed companies with rock solid bottom lines effectively and consistently grow their top lines to match. We work primarily with mid size industrial manufacturing companies, guiding them through a journey of designing and executing business grade B2B inbound marketing and focused, profitable global market expansion.

The International Entrepreneur – Interview with International Export Expert, Ed Marsh (Part 1)

Ed Marsh, International Entrepreneur, International Business

Ed Marsh, Consilium Global Business Advisors

This week I have the pleasure of interviewing one of the top independent experts in the international business consulting field, Ed Marsh, from Boston. If you need expertise particularly in B2B manufacturing markets, Ed is a tremendous resource. His articles are an excellent read too. Here are Ed’s answers to my questions:

Q1: What are some of the changes you’ve seen in global markets over the past few years? Any important trends?

A1: I’ve seen three major changes shift the global sales growth environment. First, the concept of emerging markets is now a bit outdated. Most markets have emerged and are now developing. There are a few comparatively “green field” markets remaining in Africa, but most of the others, including many that most US companies consider too different, are actually fairly well developed. Chinese, German and other exporters are often already active, and so the growth play is no longer to seize a beachhead but rather to leverage the favorable “Made in USA” cachet as domestic consumer demand grows.

Second, nearly every country is undertaking export promotion efforts – from large, developed and wealthy nations down to recently emerged. And nearly every company is actively importing, even if they’re not yet exporting. That means that global trade is far more fluid. It no longer takes a large company infrastructure to manage the process. Logistics, payments, communications & travel are now essentially ubiquitous. In other words, it’s more feasible for small companies to export now, than ever. And therefore the barriers are more commonly internal (e.g. mindset) than external. And it’s also increasing competition in every market – including at home. So many companies can leverage export to overcome stagnating domestic sales.

Third, the internet. Ten years ago a company that wanted to export faced a lengthy, expensive and laborious journey that started with extensive research; then an educated guess (or gamble) on a market; then a long process of establishing a presence and building relationships, credibility and awareness. In contrast, today, with smart phones leapfrogging internet access into areas still lacking hard wire telephone, companies are growing rapidly – and any one of those rapidly growing companies is a prospect for US exporters (as well as Chinese, German, Indian, etc.) That creates a huge shift from a cumbersome market based approach to an ideal (profitable, long-term) prospect approach. In essence companies today can build a business by helping profitable buyers find them, regardless of passport or country code (almost) – rather than the herculean task of building markets.

Q2: Where do you think manufacturers are missing opportunities in key international markets?

A2: They’re not accounting for demographics. Most companies select target markets based on news headlines reciting population and GDP statistics. And companies that build their export growth on inbound results, or helping profitable buyers find them, will often develop concentrations in today’s most dynamic markets. But once a global sales capability has been developed within a company, then it’s appropriate to supplement initial activity with strategically selected market development. Diversification against regional concentration risk, and political and currency risk is built on a deliberate process of market analysis and selection. And that selection needs to anticipate the future – which is largely demographics driven.

Many of today’s active markets have demographic trends which point to substantially diminished future significance. That doesn’t mean that there won’t be profitable sales originating in those markets – but if a company plans to invest in a market anticipating success in ten years, that market should be one which demographics indicate will be growing and vibrant.

They also often overlook important opportunities in smaller markets, or metro concentrations (vs. pan national efforts.) For US companies with a domestic market of 330MM pax, markets like Colombia (48MM), Vietnam (93MM), Turkey (74MM) and Lagos (21MM) in the latter category not only punch above their weight economically, but represent substantial incremental market opportunity (15%, 30%,23% & 7% respectively.) And I recommend comparing that to US markets that they might have eagerly worked long and hard to enter. Charlotte (2.3MM), Seattle (3.6MM) and Dallas (7MM) for example. So companies looking to exports for revenue growth opportunities should not reflexively chase the BRICs. There are compelling markets with much lower barriers to entry.

Tune in next week for the rest of Ed Marsh’s interview!

About Ed Marsh

Ed was going to be an architect because he loved the nexus of engineering and design. That was before was going to be an engineer; before he graduated from Johns Hopkins; before he was an Army Infantry Officer (Airborne Ranger); before he set B2B industrial sales records; before he was partners with a German capital equipment manufacturer; before he founded a distribution/rep company for industrial products in India; until he decided that managing a business and employees wasn’t what he enjoyed. Now that Ed’s got all of that out of his system he runs a consultancy that helps US manufacturing companies grow by applying process excellence to business development, completing the full circle back to an engineering & design combination. His practice is built on a unique methodology which combines powerful digital marketing methodologies (a HubSpot partner) with his extensive international biz dev experience. Ed is also Export Advisor to American Express

About Consilium Global Business Advisors: Consilium assists American manufacturers in applying process excellence to their business development. In other words we help lean, well managed companies with rock solid bottom lines effectively and consistently grow their top lines to match. We work primarily with mid size industrial manufacturing companies, guiding them through a journey of designing and executing business grade B2B inbound marketing and focused, profitable global market expansion.

The International Entrepreneur- An Interview with Global Talent & Leadership Expert, Joanne Flynn

Joanne, Flynn, Phoenix, Strategic PerformanceToday I have the honor of interviewing Joanne Flynn of Phoenix Strategic Performance. Joanne is a thought leader in the areas of strategic organizational alignment, organizational agility, business resilience, human capital gap analysis, leadership challenges for the new workplace and change management. Here is what Joanne had to share:
Q1: What are the biggest mistakes you see companies making in terms of global talent management?

Over the decades the same, obvious mistake continues to happen. We don’t take into account the cultural nuances of the international business culture we are either doing business in or with. From an American perspective, we continue to think that other cultures will naturally adapt to our American business culture and we stumble every time. We must understand and then acknowledge the differences, teach them and then incorporate them into the business operating style, mentality and practice of every person responsible for interacting on a global level. If employees can’t make that leap – they should not be allowed to play on the global playing field.

 

Q2: What are the traits you look for in a successful global corporate leader?

I look for a global citizen with global business acumen, cultural business acumen and the ability to adapt leadership style and practices to the local cultural needs. If an organization is committed to global growth, it needs to develop a bench of global leaders before there is a specific need. A crash course in working globally doesn’t necessarily create the true multidimensional global / cultural mindset that a true global leader needs. The worst scenario takes place when an organization has a global post that needs to be assigned. The leader assigned is a home office SME but has never worked internationally. This person is “immersed” in everything local in the 2 weeks prior to being reassigned, and we consider that person fit for purpose? Consider that an emergency measure, not a long-term global strategy.

 

Q3: How important is cultural competency in international business hiring/promotion decisions?

Cultural competency is a fundamental strategic and operating skill. If that skill is missing, then the strategic business impact can be both damaging and derailing. I have seen instances where lack of cultural competency sidelined an organization’s growth for 5 years. Can we afford those types of mistakes in a highly competitive global marketplace? I don’t think so!

 

Q4: In your opinion, which works better: moving expats into key overseas positions or hiring local?

If your operation is a start-up, you should begin with moving culturally sensitive, well-versed expats into the new organization. They bring with them corporate knowledge and the network to get things done quickly. However, you need to immediately plan to onboard local talent as quickly as possible.

If your operation is sustainable business, then hiring local talent should be the goal, only using expats when necessary and for the short term.

 

Q5: What advice can you give a growing company about hiring locals for positions in foreign subsidiaries?

If you can find local talent who can understand your organization’s goals, it is best to hire locally. However, you must bring that person into your central operating hub so the local hire has the advantage of learning about your organization first hand and understanding your operating culture. I have seen examples of when the local person is hired in and then left to figure things out. That normally does not end well.

If you cannot immediately find local talent, then you must send a non-local employee to start the process but immediately construct a plan to find and develop local talent. Be sure that whoever the non-local employee is, they have the ability to work in a local and global environment.

 

About Joanne Flynn

Joanne Flynn is the Managing Director of Phoenix Strategic Performance, a strategic human capital advisory firm. She focuses on human capital relative to strategic initiatives, business growth, value creation and business development. Since 1989, Joanne has headed up the consulting practice of Phoenix Group International. Previously, from 1980 to 1989, Joanne was Vice President of Global Learning & Development for Goldman Sachs, Inc.

Joanne is experienced in all aspects of organizational development and training on a global level. Her consulting engagements have included the design and delivery of training and development programs on the topics of strategic leadership, business development, client account management, strategic selling, management development, and executive coaching. Her consulting clients range from global investment banks, small private equity / venture capital firms to small to mid-sized companies.

Joanne holds a Master of Arts degree in Business Management from the University of Oklahoma. In addition, she graduated summa cum laude and holds a double degree major in History and German from the College of St. Elizabeth in New Jersey. She also holds certificates from a variety of leading professional training and development organizations.

The International Entrepreneur – Structuring Your Website for International Markets

 

url, international website, international business, international entrepreneurIn today’s business world, a website is your company’s front door. And with few exceptions, effective search engine optimization (SEO) and a well-branded experience are the difference between long-term success and bankruptcy. Managing the transition of a website into international markets can be crucial.

Most companies initially set up their websites in one of two ways. One is to create a website with a generic Top Level Domain (TLD) such as www.company-name.com. The second is to choose a domain and TLD that’s specific to their home market (ex. www.britishcompany.co.uk). But there comes a time in a company’s foray into international markets when decisions about structural changes should be made. Company leaders ask:

Do we ignore differences between markets & leave our website strategy alone?

OR… Develop a sub-domain structure or subdirectory structure within our company site to accommodate for the new foreign markets?

OR…. Localize with TLD Country Codes to create market-specific sites?

As with most international business questions, the answer is, it depends!

 

The Main Website Internationalization Options

  1. Leave the Website Alone

Let’s start with the easiest option, which is essentially to do nothing fundamentally different with the website structure. The typical international fix is include an international contacts page listing local distributors. If I had a company called “Great Idea”, then my company website domain might be www.GreatIdea.com in order to stay geographically neutral.

  1. Develop a Sub-Domain and/or Sub-Directory Structure within Your Website

Some companies choose to manage their websites all within the same TLD. Websites with Sub-Domains are actually considered separate from their parent sites. In the Great Idea Company, a subdomain could be www.french.GreatIdea.com or www.France.GreatIdea.com.

A Sub-Directory Structure would involve a directory structure like: www.GreatIdea.com/France/ or www.GreatIdea.com/french/. What some companies don’t realize is that sub-domains and sub-directories can be used together, if the situation is right.

  1. Localize with TLD Country Codes

In this approach, your company would create separate sites for each market. For Great Idea Company, I would create a site for each of my key markets: www.greatidea.com, www.greatidea.co.uk, www.greatidea.cn, www.greatidea.de, etc. You would also have the option to rebrand your product or subsidiary name locally: www.buenidea.es, www.goedidee.nl, www.brilliantconcept.co.uk , etc.

What are the Trade Offs Between Approaches?

There’s no right answer about which approach is best, only that certain situations call for one approach over another. I have been working with a Canadian services company with a company.ca TLD. As they look to expand into first the American market and then further into European markets, their Canadian country code TLD will become increasingly confusing to their markets. They will need to decide how to move forward. Here are some of the trade offs that this company and all internationalizing organizations should consider:

  • Better In-Country SEO – This is one of the top reasons to add country-specific sites. The SEO for Google.fr, Google.ca, etc. is much higher for TLDs with Country Codes. There is some benefit for the sub-domains and sub-directories. And non-altered sites get very little in-country SEO.
  • Control Over Localized Customer Experience – Customers in other countries may approach the buying process in completely different ways than in your home market. There may be different influencers, a different level of comfort with online sales, and different motivations for buying. With separate sites, and to some extent sub-domains and sub-directories, you can tailor this experience.
  • More Websites to Manage – Additional websites with TLDs varying country codes OR new sub-domains will take more effort to manage than sticking with your original single website. There are staffing time considerations.
  • More Expensive to Register and Maintain – Multiple sites mean more domain registrations. There may even be cyber squatters who have registered your brand’s domain name under other country codes. (This has actually happened to my domain name in Hong Kong and Mainland China.)
  • Local Market Expectations – Do foreign market customers look for your type of product or service mainly in their own language and country code? A recent survey by Smartling found that 9 out of 10 of B2B industry professionals only looked for products and services in their own language.
  • Local Support Expectations – When the website TLD is country specific, there can be an expectation that customer support is local and that support is in the local language.

These are just a few considerations when deciding how to structure your website to support international markets. If your company has not yet chosen an international website approach) keep in mind the future so as to not create extra work developing a domestic-only site without the flexibility to expand into the world.

The International Entrepreneur – Startup Stage Planning for International Expansion

International Business ExpansionRecently I presented and mentored at the Phoenix Startup Week, where I met many technology entrepreneurs. While most companies start expanding into international markets as part of their growth stage, there are many reasons why even the earliest startup stage company should begin planning for international as early as possible.

Start With the End in Mind
As with all entrepreneurial ventures, it’s important to start with the end game. Do you plan to sell your company to private equity investors in five years? Do you want to have an Initial Public Offering? Or do you plan to keep building this company until your retirement and then pass it on to your children? Each exit leads to a separate set of international expansion decisions.

Start by asking:
What role(s) would international expansion play in the company’s growth?
International expansion could be a growth accelerator, building your company for the long term. Expansion could also mean lowering risks of depending on one market even in economic downturns. And international markets often expose a company’s leaders to new product ideas and business practices that can improve overall company success.

Can the profits be maximized before the exit?
Alternatively, international operations may not be fully profitable by the time the company gets acquired and therefore counterproductive. Again, it’s all about the exit strategy!

What do you want as future positioning against your competition?

Especially in some niche industries, being the world industry leader is key to stronger branding and better negotiation positions with suppliers. I have also seen many companies expand internationally by acquiring their former competitors in other countries.

Preparations Start Now
It is hard to imagine this future global company when the current challenges are issues like being able to write payroll checks at the end of the month or getting the new product release to market. But if these early stage efforts are successful, international clients will come knocking on your door very soon. Here are some simple, proactive steps you can take now to be a little more ready:

1. Outside Resources Should Be Internationally Scalable. Can your accounting firm handle international transactions and overseas reporting? If it’s a firm with an expanded international presence, they can. If you use someone that is lower cost and local, then it’s fine for now. But be ready to switch when the time comes. That’s true for legal counsel, IT, marketing services and suppliers.

2. Talent Management Needs to Include Global Competency. As your company begins to add staff, be sure to seek talent that has international experience or at least interest in building a global company. Few job descriptions in the startup and even growth stage companies even consider cross-cultural skills and experience.

3. Prepare Products and Services for Expansion. Sometimes it’s something simple like using Metric System in product design instead of the American-centric English Measurement System. But it can also include product sizing and packaging sizing. As products are packed into shipping containers, it helps when they all fit efficiently into those spaces. This is usually an afterthought.

Most technology startup companies I know began their international expansion as a reaction to an overseas client approaching them to purchase products or services. Then a second client comes in. After several of these international clients discover the company’s offering, the company’s leadership team starts to wonder if there are more international markets.

When the international clients begin to find you, it’s time to get serious about international expansion planning. When you are ready for this next step, please contact me if I can be of assistance in market research, expansion planning, or finding the right in-country introductions.

The International Entrepreneur – An Interview with Christian Spaltenstein of AFEX

Christian Spaltenstein, International Business, International Entrepreneur

Christian Spaltenstein, General Manager, Americas for AFEX

This week I am pleased to share an interview of Christian Spaltenstein, General Manager-Americas from AFEX. Foreign exchange and risk management are strategic factors in doing international business. As an expert in these areas, Christian had much to share.

Christian, based on what you’ve seen what are some of the biggest misconceptions that companies have about international trade and risk management?

In my experience, one of the biggest misconceptions is that companies believe hedging currency risk is speculating, when in fact it is crucial for all businesses involved in international trade, not just speculators, to understand the very real impact of volatility in foreign exchange markets. Companies are often unaware that it is possible to create a strategy to protect against currency fluctuations. There are many hedging strategies available today, using a variety of different products like FX Options, Forward Contracts and cross-currency trading services, to name a few.

Secondly, many companies assume that they can only rely on banks to facilitate their foreign payments, often with little or no visibility of the price they’re paying. When companies instead use a foreign exchange specialist for their international payments, there is usually cost savings in addition to receiving expertise and guidance.

What mistakes do you see companies making when sending global payments?

The most common mistake companies make when they process global payments boils down to strategy. Many companies view making international payments quite simply as a necessary part of their operations, where they have no control or opportunity for savings. Rather than making ad-hoc payments, irrespective of market conditions when payments are due, I challenge companies to hedge against currency risk by planning ahead for their exposure and purchasing currency in advance. This allows companies to have a fixed price for their global payments and often provides cost savings as an added benefit. Foreign exchange specialists can provide invaluable guidance about expected movements in currency markets, allowing companies to get the best possible price.

What do you predict will happen in the 2015 foreign currency markets? How will this affect companies doing business overseas?

In 2015 we will see the return of market volatility, particularly in foreign exchange, at levels unmatched in the last couple of years, and there will be an uncoupling of some currency pair correlations. Last year there was a strong “buy USD” trend. This year, as geopolitical events drive economic conditions and traders search for carry trades, various regions will grow stronger or weaker against the greenback. It will be crucial for companies doing business overseas to take steps to hedge their FX risk, wherever possible.

Additional regional pressures will come from key central banks entering different phases of their quantitative easing (QE) policies. The Fed is scaling back; the Bank of Japan promises further QE; and the ECB has recently announced unprecedented stimulus through a bond-buying program. Businesses will have to be more diligent in their risk management policies to protect against the volatility ahead, and they will have choose wisely where they want to do business. This will be particularly important for companies who did not consider foreign exchange risks at the time of their investments.

What opportunities do companies overlook when it comes to foreign exchange?

When foreign exchange is not part of a company’s core business operations, the opportunity to use FX as a place to add value to their service offering and differentiate themselves from the competition is frequently overlooked. By working with a foreign exchange expert, a company gains the ability to send or receive any tradable currency, often without ever converting back to their domestic denomination. What this means is that a US exporter can take payment from a European buyer in their foreign currency. It’s a huge opportunity to add value for their clients while hedging FX risk.

What are your thoughts on using the Bit Coin in international transactions?

A commodity must have specific characteristics to be called money. Particularly in international payments, there needs to be a reliable store of value or medium of exchange. Bitcoin simply does not have those attributes and, unless some major changes take place, probably never will. For example, if you wanted to hedge against volatility, you couldn’t do so with Bitcoin because there is no applicable interest rate. Bitcoin has no central regulator or issuer, which makes security very problematic. Reasons like these help explain the stock price plummeting from $1200 in 2014 to under $200 today and why Bitcoin isn’t a likely contender in the arena of global payments, but anything is possible.

Any final risk management advice for growing companies expanding into new international markets?

Navigating the seas of international laws and currency regulations is no simple feat. It takes a team of industry experts with a truly global footprint to understand the intricacies of sending and receiving funds across each country’s borders. Being legally capable of doing business in a given country or region does not mean that currency will flow in and out as easily as you expect. All countries have different laws regarding their currencies, and they are certainly not all created equal. The laws are subject to change at any time and vary from one country to the next. Especially in emerging markets, governments face immense pressure to protect their currencies against the central banking policies of more developed countries, most notably the US Federal Reserve. My advice? Either do your homework, or work with a trusted business partner who can do it for you so that you can focus on your core business.

About AFEX

AFEX is a global payment and risk management solutions specialist. The company has a client base of more than 24,000 clients including importers and exporters, educational and financial institutions, small businesses, multinational corporations and individuals. AFEX trades more than $15 billion annually in foreign exchange. Their website is: www.afex.com

 

The International Entrepreneur – Leadership in International Teams

international leadership, international business, The American department leader stands up to give his opening remarks to the department’s new fiscal year. He confidently strides to the front of the room. His staff has been flown in from around the world to develop a sense of unity with the company headquarters and to energize the staff for the coming year’s goals. As he begins his speech, the home office staff laughs appreciatively at his jokes and appreciates his style of confidence mixed with casualness. But among the international staff members, this leader’s comments make him seem less like a leader and deflate energy. So what’s going on here?

Never All Things to All People

Many leadership traits are culturally defined. The French want their leaders to be all-knowing and never admit to a lack of information. Indians expect their leaders to be conscientious to the point that they’ll verbally reprimand their subordinates for any mistakes. Latin American leaders must personally know about their staff. But in Great Britain, don’t ask about anyone’s personal time spent away from the office. Filipinos want to be told what to do at work, while the Swedes want to have more equal input with their bosses.

As a leader of an international team, you’ll never please everyone. So here is some advice that helps to balance out an international team and get the most out of all staff.

  1. Build off of the company culture.

Even within any given culture there is variance among its members. Hiring practices should help to choose those people within any culture who can more easily fit with your specific company.

  1. Focus on the Company Goals & Objectives

This may sound obvious, but setting and communicating shared goals is the cornerstone of international business leadership. No matter the cultural differences, everyone needs to hear and understand the company and department’s goals. Business cultures have vastly different ways of reaching goals. A German colleague may spend more time in planning than execution. A Chilean may multitask several projects but still finish them all on time. But as leader, it is your job to make sure that these goals are set at the right level and that everyone is working towards their completion.

  1. Know the Cultures Involved

If your company has staff from just a few countries or a concentration from a single country, then focus on knowing the leadership expectations from that culture. For instance, many IT companies have an office in India. India is a much more hierarchical work culture, where the boss is not normally to be questioned. That means that you may have difficulty getting straightforward feedback from employees because they don’t want to deliver bad news. Research the business cultures in your company mix to better understand what adjustments might need to be made or expectations set.

  1. Input from Team Members

As a leader, it is so critical to have the information and perspectives necessary to make important decisions. This is why it is important to build relationships and communication patterns with these staff members. When part of your team is from a foreign office, it’s helpful to have an office/country manager who can act as an interface between the headquarter’s culture and the local team. Use whatever blend of techniques between cultures that works most effectively for communications. This may include private meetings, visits to foreign offices, and reporting.

  1. Internationalizing Team Communications

Now back to the original American leader speaking to his entire international staff. When speaking to a larger group of your team or company, there are some general adjustments you can do to make it more internationally friendly (compared with American only). First, error on the side of formality over casualness. The American business culture tends to be less formal than most of the world.

Next, assign no direct blame and admit no guilt for things gone wrong. These conversations should be reserved for private meetings instead of group shame. Many cultures “save face” and any blaming will backfire.

Tell no casual jokes or make local references to sports or movies. Humor varies greatly from culture to culture. It tends to create confusion, along with American cultural references.

I hope you find this article useful. Please contact me if you would like to talk about your company’s international leadership.

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The International Entrepreneur – 5 Tips for Improving International Customer Service

Courtesy of Biswarup Ganguly, Kolkata

Courtesy of Biswarup Ganguly, Kolkata

The products have been conceived, developed and commercialized. Marketing has identified potential clients, sales closed the deals and accounts receivable has collected payments. Now is when we reach the moment (or moments) of truth as service takes over the core customer relationship and responsibilities.

Customer service for clients around the world has never been as critical as it is today. As advertising and other forms of promotion grow steadily less effective each year, customer satisfaction and repeat business becomes more important. When asked, customers often give relevant input to product development to improve a company’s offering. And highly satisfied customers are more likely to refer your company to their network contacts.

Adding in the international context, how do you continually improve your company’s customer service?

1. Ask for Customer Input
This may seem simple, but many companies avoid or forget to ask their own customers for feedback. If your company has a small customer base, then you should be talking with each account at least once each year to follow up on their satisfaction. Internationally, you’ll need to adjust questions to fit in with local cultural norms. For instance, focus groups are less effective in Asia where participants only say what they think the group wants to hear. In-person individual conversations work best in Asia. Americans and Canadians often prefer a quick online survey so as to not waste unnecessary time giving feedback.

2. Upgrade Company Culture to a Higher Cross-Cultural Service Level
There may be a team or department in your company dedicated to post-sale implementation and service. But oftentimes customers will have interactions with a variety of company staff, from the accounts receivable manager, to shipping clerk to a company administrative assistant. Everyone in the company needs to be trained on how to interact appropriately with the company’s customers. This may sound like a given, but hundreds of horror stories lead me to believe that it is not.

3. Locally Define Service Success
Service expectations vary from place to place. What’s important is to learn how a certain market defines the customer experience. I own a Mini Cooper, which is a British-made car. When I take it in for maintenance, I sit in a comfortable waiting area and am always offered a bottle of water. Everyone is always extremely pleasant. But my American cultural irritation stems from being made to wait longer than the estimated time. I would gladly give up all other perks for fast service. As we say in the U.S.: time is money.

4. Know the Cultural Faux Pas
Customer service is an area where misunderstanding can create big problems. For instance, it is not uncommon in the U.S. to end a successful customer service call with a pitch to sell additional services. In many places, this would alienate your customer.

5. Balance Service Value With Costs
While we would all like to give excellent customer service for a rock-bottom price, this is far from practical. Realistically, excellent service truly does come at a high price. One way to help this alignment is to let clients choose their own service level at the appropriate price points. Keep in mind that in some cultures (Middle East, in particular) this is an area where customers are going to want to get more for less cost. Set pricing with room to come down and still be able to make a profit.

I hope this article was helpful to you. If you need help to developing cost-effective customer service programs for international markets, please contact me.

The International Entrepreneur – Global Entrepreneurship Thrives in MNCs: An Interview with Greg Gustafson of IBM

Greg Gustafson, Global Operations Leader at IBM Global Technology Services

Greg Gustafson, Global Operations Leader at IBM Global Technology Services

Normally we think of entrepreneurs as those who create start-ups and fast-growing young companies. We expect entrepreneurs to be creative, determined, and focused on reaching lofty goals. So what happens when one of the world’s largest technology companies, IBM, incorporates entrepreneurial concepts and encourages innovation and risk-taking? The result is “International Intrapreneurship”, taking entrepreneurship and applying it in a large, multinational corporation’s environment.

This week I had a chance to talk with international intrapreneur, Greg Gustafson. Greg is a Global Operations Leader in IBM’s Global Technology Services division. Here is our interview:

The International Entrepreneur (TIE): Greg, can you tell us about your role at IBM?

Greg Gustafson (GG): In my role, which is highly global, I lead and work with our teams that deliver IT projects and services worldwide. Just this morning, I was working with a team on a project, which involves the U.K., Malaysia, Philippines, Poland, the U.S. and Mexico. My focus is on service delivery, particularly on IT infrastructure projects. I help clients with their technology strategy and work to make technology globally seamless. I am a troubleshooter for clients’ IT service delivery challenges. And I help to put new standards in place for our global teams that build on best practices.

TIE: Who is your division’s target market?

GG: We provide IT technical support and services to those B2B businesses that outsource some or all of their IT infrastructure and functions to IBM. We leverage our teams in the U.S. and experts across the globe to support those functions.

TIE: How would you define “international intrapreneurship” in your context?

GG: We focus on partnering with our customers to provide the technical services they need to run their operations more effectively. That means globally integrated services. We use a matrix organizational structure that is both project and results driven. It is critical to have common goals. We break down country reporting structures to facilitate the entire operation. In this model, “wild ducks” are allowed to fly. Intrapreneurship means cutting through internal red tape to stay focused on what’s truly important for the customer.

TIE: How do you as an IBM group leader encourage innovation within your team?

GG: I believe that this concept of Intrapreneurship can happen when a penalty-free environment exists for trying new ways to meet customers’ needs and for creating new capabilities. Teams should to be able to access global expertise and resources without regard to national borders or country-based reporting structures.

TIE: What are the misconceptions about large multinational corporations in terms of entrepreneurial culture?

GG: Some believe that MNCs stifle entrepreneurial creativity. While that may be true in some MNCs, experience shows that there are plenty of creative and innovative people in larger organizations.

I think there’s also the misconception that an entrepreneur can only be happy in a startup environment. Instead, I believe that people with an entrepreneurial mindset can also take advantage of a large company’s resources to do incredible things.

TIE: Can you give advice to others in MNCs about developing a more global entrepreneurial environment?

GG: Find a need and then go create a solution. Take risks. Don’t accept the status quo. Always ask yourself: why can’t we make it easier, or better for our customer, or faster?

One of the risks of an MNC-based career can be getting insulated from the rest of your field. To break out, you can participate in trade groups, read industry articles, build your professional network, and even volunteer for your chosen causes.

For the global aspect, it’s absolutely essential to build your own cultural awareness. It is important to understand the cultural mindset and behaviors of your international counterparts. Keep in mind that concepts like leadership, entrepreneurship, time and risk taking vary greatly from one culture to another.

TIE: Thank you Greg, for sharing your insights and entrepreneurial approach within your dynamic multinational environment.

NOTE: Much of what we know today about cross-cultural management framework was originally derived decades ago from Dutch anthropologist, Dr. Geert Hofstede’s groundbreaking research studying IBM employees’ cultural traits worldwide.

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