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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 – 3 Ideas for Building Rapport with International Contacts

international business rapportHave you ever been working with an international partner or client and suddenly found yourself in an unexpected conflict? This often happens in cross-cultural communications. It can lead to awkwardness and strain in the business relationship. This happened to me last year when working with a team of Chinese business professionals. Unfortunately I couldn’t directly ask the group what was wrong, but clearly things had gotten off track. It took a while to realize that what I had requested from the group’s leader was actually impossible to get and caused him to lose face. The entire group dynamic was shot for the day and I worked furiously to get us back to a pre-embarrassment point.

The good news is that when you spend time to cultivate strong bonds, many smaller conflicts and misunderstandings can be cleared up based on built-up goodwill. Likewise, some misunderstandings never come to pass because communication lines are more open. In the long run, building rapport saves time and money with faster deal making and more effective conflict resolution.

Here are ideas for building rapport that are proven to work:

  1. Consistent Contacts

When I say consistent, I’m talking about both periodic visits to meet with the contacts face to face AND keeping the same people connected to the relationship. I see many tech companies missing both components. Video conferencing, phone calls and emails can never take the place of building rapport in country. And when there is a major problem, it helps greatly to travel to the source of the issue to help resolve it. It shows great commitment to the partners, clients and suppliers involved.

The second critical piece is keeping the same company staff connected to key accounts or suppliers. Even when Joe gets a promotion from sales manager to VP Sales, he should take an active role with accounts he cultivated. Otherwise, the rapport building starts over. In most of the world, relationships are between individuals, not companies.

  1. Learn the Cultural Rules

This may seem like a given, but you’d be surprised how much today’s execs don’t necessarily know about their international counterparts. Last year I spoke with an American CEO who was baffled by the English. He had been spending time south of London with a company they were acquiring and stumbling through simple cultural differences. For example, don’t ask an Englishman about his life outside of business. It’s considered none of your business.

  1. Never Underestimate Shared Experiences

Share experiences can take on many different forms depending on the cultures involved. Some prefer to build rapport outside of work. For instance, the Chinese like to take their special guests on tourist trips to get to know the area. The Japanese like to go out drinking (the Russians as well). Businesswomen all over Latin America often watch Mexican Telenovelas. Others focus on joint business activities. German counterparts may like to do some sales calls together. Regardless of the activity, getting to know your contacts will serve you well during any challenging times!

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 – A Twist on Offshoring: Interview with Patrick Linton

 

The International Entrepreneur Interviews Patrick Linton

Patrick Linton, Co-Founder of Bolton Remote

This week I caught up with international entrepreneur, Patrick Linton. Two years ago Patrick co-founded Bolton Remote, an interesting off-shoring service for small and medium sized companies. The rules of international business keep evolving. Read on to find out more…

Patrick, would you explain for our readers the business model behind Bolton Remote? How is it different from traditional international offshoring?

Bolton Remote helps businesses reliably tap into large, dynamic and cost-competitive international talent markets. We’re part HR & recruitment firm, part professional employer organization (PEO), and part co-working space… but everything centers around bringing together the right companies and people, regardless of nationality or geographical differences.

“Traditional” offshoring is usually associated with outsourcing. The two are typically (and incorrectly) used interchangeably. Bolton Remote is purely offshoring in the sense that we help companies leverage international, non-local talent, and not outsourcing in the fact that we allow businesses to keep control over all of their competencies.

We tell companies that they should keep as much as they can in-house, but they can still get the benefits of leveraging global talent (cost savings + access to good people). Previously, small and medium-sized companies were limited to their local talent pool – we just give them more options.

An example would be a software company who thought their only way to access offshore talent was to outsource software development. The problem with that – if you give it to someone else to build and maintain, you’re missing valuable insights, and it’s very risky because this is what you do. Instead we say: don’t outsource, just use our service and platform to build out your own team that you select and you manage. We focus on attracting and retaining your talent – integrating our knowledge of the local culture to help supplement your management – but at the end of the day, these are “in-house employees”.

What has changed in your industry since you founded your company?

Since starting Bolton Remote in early 2013, I continue to see a massive shift of small businesses, start-ups, and medium-sized companies looking to remain competitive by tapping into new overseas talent markets. The “big guys” like IBM have been doing this for decades by going into these markets (China, India, the Philippines, etc.) and setting up their own operations, hiring thousands of people, and building products and services based on large scale labor arbitrage. This has typically been off limits to smaller firms because of the high barriers to entry setting up overseas operations. So, moving jobs to competitive locations is nothing new – but our model is to help SMEs have access to the same advantages.

In Western countries there is always a fear of losing domestically-based jobs to those who will work for less elsewhere. What would you say to those who fear jobs moving overseas?

Interestingly, many of our customers are more successful because of their ability to bring on remote staff in cost-competitive locations. We enable them to do this easily, quickly and safely. So in that sense, I see what we do as job creation. I think as long as we focus on providing a service that helps companies be more and more successful, and at the same time are creating badly needed jobs in countries like the Philippines, we are doing a lot of good both in the developed countries we serve, and, in the developing markets where we hire talent.

What’s an example of a best practice you’ve seen in managing global talent?

Do not to assume that people value or are motivated by the same things in another culture. In western countries there is an obsession with working from home. That may drive someone to perform in many US organizations. This is far from the case in other places around the globe. I had a conversation recently with a new hire in Manila. He has been working from home for a while now. When I asked him why he is looking for a new job, he said “at home, my only friend is Google.” He explained that working from home was lonely. He often feels left out of the company culture and misses building relationships with other Filipinos. Try to understand what motivates people to perform, and build systems, incentives and processes around that.

From your operations in Manila and Singapore, what do you see as major trends in global HR?

I think we will see new tools and technologies that help companies manage their remote global workforces. There are already some great technologies that have started to revolutionize the way companies manage talent. These include improved video conferencing tools, project management, document storage, workflow management and performance management.

Another trend is that companies of all sizes should expect and plan for multi-cultural, cross-geographical work forces. In global cities like Singapore, it is not uncommon to have people from across the globe all in one conference room. The advent of remote staff is already starting to happen. Only instead of everyone working face-to-face, they are “sitting” remotely side-by-side with global counterparts.

 

About Patrick Linton

Patrick is the Co-Founder of Bolton Remote and splits his time between Manila, Philippines, Singapore and Australia. A graduate of Belmont University, Patrick has had an extensive academic and professional career in Southeast Asia. Before striking out as an international entrepreneur, Patrick was a consultant for Accenture.

For more articles written for growing companies doing business internationally, please read more from The International Entrepreneur Blog.

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.

The International Entrepreneur – Maximizing Potential in Your Multicultural Team

ConfidenceEntering the room, you can feel the tension. Your multicultural team, representing different company interests, is sitting around the table. One confident young man boldly answers your first question and others look blankly ahead. How can you possibly get this team to accomplish anything if they can’t work effectively together?

One of the greatest challenges in international business expansion is bridging the cultural gap. Team members have to understand how their approach to group dynamics affects others in order to avoid alienation and everyone counting down minutes until the meeting ends.

The multicultural team is one of the most underutilized aspects of international expansions, mergers, and partnerships. In fact, on more than one occasion I have heard frustrated managers refer to their team as “performing” and their role as one of “babysitting”. The challenge for both the team leader and members is to leave behind assumptions and find the unlocked potential of the team’s productivity and usefulness. Here is my advice:

 

Know the Likely Points of Contention Between Team Members

When various cultures mix, there is likely to be friction. One important issue is how to deal with conflict. A German team member may want to articulate the issue and how it occurred, including assigning fault. Those from indirect communication cultures find this rude and disrespectful. A key ingredient to high-functioning teams is trust, and for most from Asia, Africa, Latin America and the Mediterranean area, this directness just lost the trust.

The important thing is to know who is on the team and what can be learned about their native work culture ahead of time to anticipate some of the obvious flash points.

 

Create a Common Goal

This is especially critical for multicultural teams. The goal helps to create a common set of terms around what needs to be done and what the outcome will be if successful. The clearer the goal, the more likely it will be that the team will perform to reach it.

 

Establish a Framework for Team Norms

Team leaders often default to the social norming for teams in their home culture. And often little thought it given to how this style is received by team members. A leader from Chile may use storytelling to emotionally connect with team members. But the Canadian may be annoyed by how long it is. The direct communicators in the team will likely tune out many anecdotes. There is middle ground, but it must be defined in order for both direct and indirect communicators to speak and interpret for the same situational understanding. Perhaps this means limiting the amount of anecdotes or explaining that this is a useful tool to understand perspective.

It is also important to establish a way to make decisions as a team. Must decisions be unanimous? Is there a point where discussion will be stopped and the team votes? Or does the team leader take the input and make the decision? Never assume that other cultures make decisions in a similar way.

 

Head Off Issues Early

If the team is underperforming, then it is better to investigate the root causes sooner rather than later. Issues may have an easy fix such as clearing up a misunderstanding. A common problem is a team member that stays quiet. It may be helpful to forewarn this person that you will be calling on them and to be prepared to share their perspective. It is also helpful to give this person permission to give an answer contrary to others in the team.

A word of caution: if there are indirect communicators in the team, DO NOT bring up team communication issues in an open team meeting. Indirects do not like discussing issues in a group setting (again, it’s considered rude). Ask questions of individuals in private instead.

 

Take Advantage of Diverse Perspectives and Strengths

This is why a multicultural team can be so powerful! Instead of seeing an issue or opportunity from a limited set of assumptions, those from a diverse background can bring ideas and solutions from more varied experiences. There may be a best practice from Brazil that no one in Italy has ever heard of before. In confronting similar issues, there are infinite ways to approach solving them. When an unexpected solution is presented, be sure to ask questions to understand the underlying assumptions that led to that conclusion.

 

Stay Positive & Focus on Progress (Patience)

Multicultural teams may be more challenging to manage. But as the team leader, it helps greatly to encourage participation and stay positive with the team about any progress. That doesn’t mean sacrificing results or progress towards results. Building the team’s effectiveness may take a little more time.

Overall, building an effective multicultural team is much better than languishing in frustration. Instead of underestimating the contributions from collaboration, focus on maximizing team’s performance. This means balancing the interests, communication styles and cultural assumptions. If you need help getting more from your multicultural team or staff, please contact me.

Onward & upward!
Becky Park

The International Entrepreneur – How International Expansion Affects the Rest of the Company

How International Expansion Affects the Rest of the Company

Expanding your company internationally represents both great rewards and risks. Going global can exponentially grow well past the limitations of your domestic market. But one of the greatest challenges to success can lie within the company’s structure and staff. This article is focused on how an international expansion affects the rest of the company and where to focus your planning beyond business development in foreign markets.

Always Start With Strategy

The key to international expansion is ensuring that your plans align with the company’s overall strategy. Here are some questions to ask your leadership team:

1. Does this expansion fit into the VISION we have for where we want the company to be in 5 years? 10 years?

2. Does the expansion into global markets match the company’s IDENTITY to our customers, our industry stakeholders and our employees?

3. Does this expansion fit with our FINANCIAL GOALS and the ultimate EXIT STRATEGY?

4. Is our company’s STRUCTURE organized in a way where domestic customers and new foreign customers can both be served?

Many companies start expanding internationally while continually chafing against a clash with existing strategy or unspoken assumptions about direction. It’s better to halt expansion plans without this strategic alignment. This holds true for organic international growth as well as foreign company acquisition.

 

Incorporating International Into Existing Functions

It is critical to integrate international activity into the rest of the company. One of the biggest mistakes I repeatedly see in companies is to establish”International” into its own separate department. The problem with this structure is that the rest of the company begins to disassociate from international and decisions are made elsewhere in the company that do not optimize for all world markets and customers. Eventually leadership tends to shut down the International Department for any number of reasons. Shutting down even a successful operation is easier than working through issues with this “foreign entity”.

Here are some ways that international expansion can affect some core business functions:

  • Accounting– Different required accounting reports for government, different norms for handling accounts receivable, need for bribery/corruption strategy
  • Business Development/Sales – Different customer buying patterns, different negotiating styles & techniques, different compensation structures
  • Customer Support– Local dialects and languages, different expected modes to access service information, different ways of expressing emotion
  • Finance – Exchange rate fluctuations, repatriating profits, access to financial capital and banking services
  • Human Resources– Staffing for language coverage and other international business skills, updating company employee policies to ensure that they apply to international situations, training needs
  • Information Technology– Planning information systems to reach new geographic locations (extension of existing systems), evaluate the need for greater integration for efficiencies in serving more markets
  • Legal – Understand legal implications of doing business in new countries/locations including intellectual property rights, employment law, commercial registrations & other regulations governing foreign companies
  • Logistics/Shipping – International shipping forms & regulations, hiring a good freight forwarder, managing shipping costs & ensuring that those costs are built into pricing
  • Marketing– Country laws governing marketing activities, different customer preferences, different communication preferences, different style preferences, translation/localization of materials
  • Product Design/R&D– Manufacturing input requirements (materials AND country of origin), metric vs. English measurement, different packaging requirements
  • Production– Increased unit production for additional demand, any alterations to products that stop production before product batch can run, inventory storage
  • Supply Chain Management – Sourcing any newly required materials, and hopefully discovering better quality or less expensive supplies/materials available in the new geographic markets!

 

Managing Company Culture and Expectations

Cr0ss-cultural leadership is the area most overlooked and also most likely to derail an international expansion from within the company. All it takes is for one key employee to view serving international customers as a burden and product orders are delayed, shipping costs are inefficient, or marketing copy is left unchecked for localization. Just like any big change in the company, the change must be managed internally with staff. This means communication from leadership about international markets’ role in the company’s plans. It means training for any staff interacting with the new foreign customers. And it means incorporating international success into employees’ performance objectives and expectations.

When I am working with a company client that has this as a risk, I normally recommend inspiring employees with their expanded international role in the company’s success. Change is uncomfortable for most of us, but when we understand the reasons for international expansion and its importance most employees normally play a positive part. Cross-cultural training can be a wise company investment. It also doesn’t hurt to highlight fun parts of the new country’s culture: celebrate holidays like Cinco de Mayo, display country travel posters in common areas, etc.

 

For more information or ideas about international expansion planning, please contact Becky Park, The International Entrepreneur. Becky works with B2B technology and professional services companies to help them become more competitive in global markets.

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