Labcast: Are You Ready to Go Global?

April 18, 2013

In this week’s Labcast, sales and business strategist Dave Brock of Partners in EXCELLENCE sheds light on how to properly incorporate international expansion into your business growth strategy.

Going Global: Incorporating International Expansion into Your Business Growth Strategy

In today’s business world geographical barriers aren’t what they used to be, but that doesn’t mean that international expansion is a business growth strategy to take lightly. Going global presents a myriad of potential pitfalls in addition to opportunities, and only those who plan accordingly will meet with success.
Listen in to this week’s Labcast to learn the tips and tactics that will ensure you’re fully prepared to take advantage when the right international opportunity arrives.
Labcast 104_ Dave Brock Helps SMBs Determine If They’re Ready to Go Global

Podcast transcript:

Kevin: Hello. Welcome to this edition of Labcast. I’m Kevin Cain. Today, I’m joined once again by Dave Brock, the president of Partners in EXCELLENCE, a boutique consulting and services company that helps their clients sharpen their strategies and execution around a variety of areas, including business strategy, sales strategy, and performance, as well as globalization. Today, Dave joins me to talk about how SMB’s can determine whether or not they’re ready to go global. Hey, Dave. Welcome to LabCast. Thanks for joining me today. How’s it going?
Dave: It’s great, Kevin. Thanks for inviting me. I’m looking forward to our conversation today. It’s an exciting topic.
Kevin: As I mentioned in the introduction, we’re talking about the whole idea of how small and expansion-stage companies can go global, and what that really entails and the process around it. What I wanted to talk about first today, just sort of how you come to the decision of when is the right time to go global. If you’re an SMB, it is automatic that in today’s global world, you need to be in Europe and Asia? Or is there certain metrics or benchmarks, or I don’t know what, that needs to happen to indicate that it’s the right time?
Dave: That’s a really great question. I wish I had a really insightful answer to it. I think you kind of know when you know. I think, maybe I’ll turn this question around. In a sense, I think a lot of SMB’s don’t think of the opportunity to go global. It’s less one of knowing when the right time is, but they just omit that from their thought processes. They think of themselves as kind of a regional or super-regional player. They define their business as whether it’s in the local community, whether it’s in, say, from a US perspective, in a state or whether we’re national. We don’t naturally think about, “There’s something beyond our country’s borders. There are customers that might be interested in our products and services that are beyond our borders.”
I think one of the great things about the web, about mobile communications, and all, is it’s made distance irrelevant. It’s compressed distance and allowed us to reach out across our country’s borders, around the world and find customers. It’s also created the reverse, where customers in regions where we’ve never served can find us and reach out and ask to do business with us.
Kevin: I was just going to interject that I can imagine, though, that the prospect of going global is a little bit of a daunting one. I imagine the regulation that comes into question, the cultural issues, the myriad of different aspects that you need to consider is perhaps what keeps people from making the jump.
Dave: It is daunting. You clearly have to approach it correctly and sync in ways that you perhaps haven’t thought of before. One of the mistakes I see too many people make is they just think of a global expansion, whether it’s say a US company looking to go to Europe, Asia, Africa, or Latin South America, is they just think of it as an expansion into a new market. They extend the same business practices, the same business processes, even the same products, and the same old methods into these new regions where to be successful; it probably requires some very, very different thinking.
Kevin: What do you typically recommend is the best way to go global? Is it through acquisition or partnerships? Or is it just getting some boots on the ground and growing organically from there?
Dave: I think first of all, one; is knowing the right time to go global. One is; I see too many, in particular, I see this in early stage startups, is they immediately want to go global. From the very first day of inception, they want to launch globally. Very, very seldom have I seen anybody be really successful at that.
Usually, you have to have things very stable in your home markets. You have to know the formula for success and be executing that very, very well, because the time and resource it takes to be successful in moving beyond your home markets into global markets is overwhelming. As you start thinking about going global, first is invest time in understanding the markets. Go out and . . . and perhaps even physically, go out and get to know the markets, get to know the customers, get to know the business practices and processes that are required for being successful.
Even if we look at maybe the simplest thing of western markets dealing with each other, so we have, say, a European company that wants to globalize by coming to the US. The practices and processes, and the way we present ourselves to customers are very different. Too often, I see people going global and failing to invest in that and understand it. That will limit their success, or in fact, cause them to make some real failures. Too often, I see people, for instance, just signing up a partner and abdicating their brand, abdicating the strategy, and just giving it to them and saying, “Solve the problem. Sell my product.” Usually, that’s a sure road to failure.
Kevin: Assuming that you are going to go down the path that you suggested; doing the appropriate research and due diligence. I know this is kind of a tough question to answer and it’s going to vary wildly, based on industry, company, and where you’re trying to relocate or go to globally. Can you give our listeners some sort of sense of what type of resources and how much time a global expansion project is going to take? Or strategy?
Dave: In some sense, if you think of the time and resource it took to establish yourselves in your home market, if you look at it, say, from a startup point of view, we invested time in trying to understand who are customers are in our home markets, trying to figure out what’s the best way to attract them and to serve them, and to start doing business and support them? In essence, you’re talking about doing the very same thing all over again. You presumably learned a lot, so you aren’t going to be starting from ground zero, so you can compress that cycle. You do have to say . . . you do have to go in and understand the markets. You do have to invest some in physical presence and research. Then you have to say, “What is the right way for me to enter that market? Is the right way for me to establish an office and establish my employees? Can I find a partner, a reseller, or say master distributor, that can allow me to achieve my objectives and open those markets?” You do that. It takes time; it takes resource.
I’m working with a number of companies right now, and some of the biggest problems I see, one is an unrealistic view of time. Then you take them back to, “Look how long it took you to ramp in your home markets. It probably won’t take you that long, but it will take you some time.” You look at money. People under- invest, in particular if they’re going for a partner strategy, they say, “Let’s just find a master distributor, turn the problem over to them. They’ll solve it and we’ll collect the orders.” You have to invest money in this, you have to. Whether it’s money to develop training programs, whether it’s money to localize your manuals, your website, your product offerings, and it’s money invested in marketing or co-marketing within those marketplaces.
Kevin: You’ve already touched on in our conversation a couple of the mistakes that big companies make when they go global: Not getting the timing right, not having done their due diligence, partnering with someone, and sort of abdicating when they do, and really not understanding their market. Are there other challenges or mistakes that you see companies making on a consistent basis, that you could help our listeners avoid?
Dave: I think just because it works and sells in our country, doesn’t mean it works and sells in another country. We have to respect cultural differences. We have to expect behavioral and attitudinal differences, and we have to understand those and adjust our strategies to do that. There’s a simple example: A number of years ago, I invested in a software company in Paris. As I was recruiting to build the management team, I was using all the things that I had done successfully in the US, in starting a number of very, very successful startups, and growing them. Then all of a sudden, I found I was having difficulty doing that in Paris because all our employees at the time were French. The way they wanted to be led, the way we implemented and executed our strategy, the way we attracted the right talent was very different from the process that I had used in the US. Not that one was better than the other, but they were different, and I was failing to recognize those important differences.
As we look at going global, we have to look at the cultural differences. We have to look at the market differences. Certainly, as you enter, say, the Chinese market, being very attentive to the governmental, the regulatory, and the overall structure of that marketplace is very critical to your success. I think we do have to really understand cultural attitudinal, behavioral, and to some extent, governmental and regulatory differences to be successful.
Kevin: Do you think that that need for cultural sensitivity might lessen in the future, as globalization takes more effect, and we become less culturally distinct as a world?
Dave: Absolutely not. In fact, I think that the recognition of cultural differences probably comes more intense. Certainly, as we look at social media today and the ability to communicate, whether it’s through Twitter or blogs in building communities around the world, we see important cultural differences. I think we become enriched and better people by recognizing and understanding different points of view. I would tend to say that the path to success is almost exactly the opposite; heightened awareness of the cultural differences, heightened sensitivity to it, using it to enter the region that you want much more successfully, and also using it to make your company a better company and global player.
Kevin: Dave, this has been really great. Thank you so much for joining us today. Before I let you go, can you let our listeners know where they can find you online?
Dave: Thanks so much for asking, Kevin. This has been fun. I’m Dave Brock. I’m president of a boutique consulting company called Partners in EXCELLENCE. Probably, the best places to find me online are either through Twitter, @Davidabrock, or through my blog site, which has all my contact information, which is PartnersInExcellenceBlog.com.
Kevin: Great, Dave. Thanks again for joining me today. Really appreciate it.
Dave: Thank you. I really appreciate the invitation, Kevin. Take care.
Kevin: You too.

President

<strong>Dave Brock</strong> helps sales and business professionals achieve extraordinary goals through his consulting and services company <a href="http://partnersinexcellenceblog.com/">Partners In EXCELLENCE</a>. Dave is also an Advisory Board Member for <a href="http://www.decisionlink.com/">DecisionLink</a>.