Global Expansion: Embrace the Differences
I have had the good fortune to travel all over the world for both business and pleasure. Whenever possible, I love to travel by train. Handing over the travel responsibilities to someone else so I can spread out and work or relax is wonderful. It gives me the opportunity to experience the places I am traveling through and the people who live and work there in a way that’s impossible in an airplane at 30,000 feet.
When I think about the things I have observed while working in organizations that delivered global products, I think there are a lot of things that we can learn from train travel.
Plan your route before you lay track.
Several organizations I worked for started as domestic companies before they expanded internationally. They were pulled into global markets by the needs of their large enterprise-customer base or the allure of “being global.” But these expansions weren’t always successful, even when augmented by international acquisitions. I also worked for at least one company that was designed and built from the ground up to be a global organization. Not surprisingly, its global expansion efforts were much more successful.
Planning for globalization from the ground up requires consideration of things like global currencies, multiple time zones and language support, as well as the different legal and taxation systems found around the world. You have to think about things like international trademarks and website URLs. At a minimum, these things affect product support infrastructure, marketing, sales channels and finance.
If you plan for these concerns as early as possible in the company’s formation, you will create a foundation you can build upon as you expand. It’s much easier to think globally and deliver locally than to think locally and deliver globally.
Trains aren’t always on time everywhere, and that’s okay.
Trains run on time—to the minute—in some countries. In other countries, not so much.
This is only one example of the differences that are present in different countries and cultures. Conducting business may occur at a different pace than you are accustomed to. Decisions may take longer than you expect, or response time for additional information may be much shorter than you anticipate. In addition, labor relations, holiday frequency and work hours may vary.
When I first became responsible for products offered in a global market, I solicited input from my sales channel and interacted with people in the local markets to understand their wants and needs. Next, I calculated market sizings, revenue projections and investment requirements. When I reviewed everything, I concluded that 80 percent of what we needed for any of the various international markets was exactly what we needed for our domestic market. Only 20 percent was unique in any given market.
Based on this understanding, I adjusted my market size and revenue estimates down by 20 percent, rationalizing that we should be able to close 80 percent of our opportunities with our existing capabilities. It took me a while to realize that the additional 20 percent was required to win any business in those markets.
The reality was that until we addressed the differences, we were not a viable player. This concept is simple and easy enough to understand. Still, I had to learn the hard way.
Providing international offerings is not just about the language extensions and features and functions that must be added to your product. You also have to understand the buying processes, personas and terminology used in each country and culture you wish to pursue. It’s important to respect these differences and realize that inherently they are a good thing.
"You have to understand the buying processes, personas and terminology used in each country and culture you wish to pursue."tweet
Trains will change tracks.
I was once traveling through the heart of Germany and I only had the basic ability to read and speak German. I had to change trains at a large train station with lots of arrivals and departures, all running precisely on time. I departed my original train, found the connecting train track and waited for the next train to arrive. About five minutes before its scheduled arrival, an announcement was made over the public address system. I assumed it was some sort of change and didn’t think much of it until my train failed to arrive on time and another one left on the track behind me exactly when mine was scheduled to depart. I eventually worked out that my train had changed tracks and I had missed it. It was time to replan.
Similarly, markets change all the time. If you aren’t in the station, you won’t hear the announcements. Even if you are, you probably need a local to translate for you.
We often recognize those changes in our home markets because we live and work in those markets and interact with them every day. We must also be engaged in our global markets if we are to be aware of, understand and adjust to changes.
Trains often change crews when they cross borders.
I am often asked how to interact and gain insights in international markets, especially with differences in time zones, language, culture and distance. I generally answer that if you can’t be there yourself, you must have some sort of proxy. It could be your sales channel or—even better—a local product team member. These people are responsible not only for representing you in those markets, but also for collecting information and identifying changes in their markets. You must trust those representatives and believe the information they provide so you can make the appropriate adjustments to your products to support those markets.
The differences may be subtle but they are important to identify and address. Although markets are always changing, they rarely change at the same time or in the same way. Ideally, you will have someone who can anticipate those changes and identify when those changes are occurring. You also have to trust the input you receive from your advisors and adjust products and approaches as necessary.
Trains are similar, but their differences are important to understand.
Generally speaking, humans are all motivated by the same things in the same ways. At a basic level we need food, shelter and safety. Beyond that, most of us desire love, a sense of belonging and purpose in our lives.
What varies from country to country, and culture to culture, is the way we pursue these desires. If we want to be successful in a global environment, we must recognize that true success comes only when we understand our differences and work to embrace them—in our companies and our products.
The answer to global-market success isn’t to just lower your expectations by 20 percent. It requires understanding that those markets may look and feel much like your own but will have some fundamental differences. Think globally during your planning phases and you will have a much better chance of accommodating those differences, even if you don’t expand right away.
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