Leading Globally: Four International Business Leaders Share Their Insights

The opportunities for exporting or going global are obvious, such as entering new markets, better positioning, spreading risk, and achieving growth and scale.  There are any number of challenges that a bank adviser will tell you such as exchange rates and fluctuations, payment terms, logistics time frames, legal requirements, customs and tariffs.  But what about the leadership challenge as a key piece to understand?  So I took the opportunity to interview four NZ international business leaders that I work closely with, to understand the leadership challenges and to share some of their insights.  You will notice some key themes.

Link Logo 1Communication builds trust.  Leading a geographical and cultural diverse team is very challenging and relies heavily on developing trust within the global team. There can be a constant feeling of isolation, especially when there is a significant time difference, which makes easy and constant communication difficult. As Andy Millard CEO, Link Engine Management says, “You cannot just pick up a phone and have a chat. Regular communications become more structured and formal, usually with one person meeting outside of business hours (usually me, so I don’t want to inconvenience our employees)”.

“In the same way, it is easy to have many conversations in a day with team members in your office that progresses ideas and develops strategy or tactical decisions. The ‘back story’ is all relevant when you are discussing the topic informally in an office environment however, to an (isolated) remote team member the decision or conversation seems to jump ahead and leave them behind.”  With this in mind, some simple leadership themes Andy maintains are:

Get Face-to-Face.  Travel – get face-to-face with the remote teams at least twice a year and make it more than a fleeting visit – 3-4 days minimum. Also spend some quality time with them on the road seeing customers. What it can do for the relationship, not to mention the value of meeting and listening to customers shouldn’t be underestimated.

Over Communicate.  Make sure you over communicate. Regardless of whether it is a meeting, phone call or email – communicate daily or once every two days keeping them abreast of development that may impact them. Make sure other staff i.e. sales, marketing, etc are over communicating what they are doing.  Ensure regular meetings –  Put them in the diary and stick to it! – via Skype or Hang outs. Ensure others do the same.

Share.  Use Facebook for Business, Sharepoint or a staff newsletter, etc. to share pictures, stories, etc. with the wider team. Tell stories! Easy to say, very hard to maintain the discipline to do … but worth it.  Constantly ask for remote leaders’ input into ideas or decision – regardless whether it is required or not. Keep them included.

Agree Boundaries.  Delegate the decision making – Trust! Clearly articulate boundaries and let the remote manager make the decisions. Don’t get caught up in the daily decision making for each remote site. Set the strategy, agree of the execution and the KPIs (or milestones) and let them get on with it. Being involved in what colour the new t-shits are or the amount of photocopy paper you buy in Birmingham is just stupid.  Additionally, agree on times and days – make sure you and the team members are afforded that appropriate rest time.  Keep weekends for the family.

Lastly, Be Hungry to Understand.  Watch, listen and observe. Like a good recon soldier – observe to learn, learn to understand before acting. Understand cultural values and practices, how business is done in their region, what the customs are and how the customers transact. Religious and public holidays. Trying to measure and manage by our (NZ) business and employment values and practices could cause much frustration and damage.  Engage with your team members – ask their advice. Ask them to be your teacher, Ask Ask Ask. It is always a great conversation to ask the ‘how’ and ‘why’ questions and let them tell you – and resist comparing their country to NZ or worse, telling them why NZ is better.

Seequent-logo

Scaling Culture.  When companies choose to go global, many struggle to stay profitable. With new offices to lease, staff to fill them and new infrastructure needs, scaling can turn into an expensive exercise. Seequent (formerly ARANZ Geo) Managing Director, Shaun Maloney  said “We’ve been able to stay profitable through our whole expansion and transition, which is quite rare,” Shaun says. “We’ve gone from a company of 19 people, doing $2.5 million in revenue, to one that does $30 million with 184 people in 13 offices around the world.”  Maintaining a healthy company culture across different countries and continents isn’t easy, but Seequent has found a way.   “We’ve also set up an intranet, chat and we use notice boards to publish core value stories across the company,” Shaun says. “We also move a lot of staff around for a few months at a time to get that cross-pollination of culture and ethos, and develop face-to-face relationships, which are important.” “There’s obviously a big cost in doing this, but it’s well worthwhile. It helps us make sure we foster one global culture.”

Shaun adds that before launching, go and find those who have done it before you and seek advice,  get on the ground and be there, and seek to understand the market first hand, find trusted advisers in the new market outside of your business relationships within the region to get a different view.  He says “Too often kiwis rush into a new market, get off the plane, meet someone, form a relationship and put all of their faith in them – they need to go broader and seek wider insights and question what they are told.  Ultimately, take your time, prepare and don’t rush it“.

EPLMark Field, CEO at EPL leads a business based in Christchurch and Thailand, exporting across the globe.  He has identified several key focus areas: Firstly, research, research, research.  Mark said, “If I look back at our move into Thailand our greatest failure was fully understanding how business was conducted, how to set up banking systems, what were the rates of pay, hours of work etc, etc, etc. We asked the questions but often only got part of the answer or got the answer the best served the person providing the answer. In hind sight I would spend considerably more time gathering information from multiple sources and testing that information”.

Understanding the Culture.  It is very important to understand the customs and beliefs of the country or countries you are going to operate in. For example, freedom of speech in NZ is considered a right and you can openly criticise the government. In Thailand questioning or criticising the King is considered highly offensive and may get you arrested.  Also, a successful leader may have to adapt their style in a leadership role overseas. New Zealanders are encouraged, from an early age to speak their mind, challenge, and to stand out. In Thailand this is actively discouraged and speaking out or suggesting better ways to do something is considered disrespectful. A good leader encourages initiative from their staff however this proves very challenging in Thailand.

Customer Relationships.  Customer relationship management may be very different to NZ. Face to face meeting over numerous occasions may be required to gain trust. Emails and phone calls alone are rarely successful. A game of golf with a client is an acceptable way to do business in Asia, where as in NZ this is considered a perk. Gaining a relationship with a customer at a high level is also challenging but needed to win business.  There may also be moral challenges, in some countries unofficial payments or gifts is considered or even expected, as an acceptable way do business – and not making a payment or giving a gift may result in roadblocks. The dilemma for a leader is not only personal but what practices their managers and staff might allow versus what is acceptable by the company values.

The Right People.  If the business is relocating a person overseas the impact on the persons spouse and children needs to factored in. Whilst an overseas posting is considered an adventure the reality is that is very difficult and in some cases several marriages have ended because of relocation.  It maybe a balance or combination of the right local and expat existing staff.  Leadership in the new location will significantly determine the success of the new office.  Be very specific as to who is taking the lead and what qualities you are really after.

Monitor your business very closely.  A business setting up overseas needs to have very robust systems in place to monitor business activities, both financially and holistically. Ensure active visit schedules, good authority schedules, robust KPI’s and strong financial management. Bad news or results are often hidden. Remember that setting up a business overseas puts strain local resources.

FootscienceAs the leader of an international export business producing Formthotics, Greg Thompson, General Manager of Foot Science International, identifies that for New Zealand businesses it is often necessary to have a real niche, and as such going international early is a necessity.  When doing so you need to be export and marketing lead.  Often businesses start as a technical or product lead businesses but soon need to adapt as they go international.  He identifies that when going into a new market the power of focus is key, and not a shot gun style approach.  pick a new market, eg the US, then pick 5 key entry states, then pick the key cities in each state, then the key retailers in those cities, then pitch to those five.

If entering multiple international markets over time, you also need to understand that one operating model doesn’t fit all, and you may need to adapt your approach and model to each market.  Greg also identified if a business was on the cusp of becoming and export or global business, it was key to have market knowledge, and also knowledge and experience of international sales and marketing – ie someone who has been there and done it, as a key capability enabler.  He also said if you can, don’t underestimate the effect of boots on the ground to create momentum in key market entry strategies.

Background.  For many New Zealand businesses, especially those in manufacturing, primary goods, or IT sectors, at some point early in their business life cycle, consideration for becoming a global enterprise is a serious option, and I predict that this probably before businesses of a comparative size in other countries need to face this challenge.  Part of this is that New Zealand only has a domestic market of about 4 million people, the equivalent size of some small cities around the world, and so to grow and scale they need to enter foreign markets and lead global businesses.  As such nearly a third of all NZ small to medium business (ie 25% employing 6-19 and 28% of those with 20+ employees) are exporters.  And they export to Australia, China, US, Japan and UK, and many many others.

Greg Allnutt is a Strategic Adviser at Advisory.Works

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