The following is a guest post by Mona Pearl and is part of our Collaborating Internationally – Going Global series. It Includes excerpts from Grow Globally: Opportunities for Your Middle-Market Company Around the World. Copyright ©2011 by Mona Pearl. Reprinted with permission of John Wiley & Sons, Inc.
As trade borders become seamless and the world becomes more dependent on technology, businesses must scramble to acquire the tools and skills necessary to survive and thrive in the increasingly competitive global market. Attaining success and leadership globally demands a mindset overhaul, a well-conceived execution plan, and the ability to view, understand and execute well formulated plans in a constantly changing and borderless economy.
Frank Sinatra sang “…I’ll make a brand new start of it, In old New York, If I can make it there, I’ll make it anywhere…” An unproportionate large number of companies that have made it in the US failed when venturing across borders. You may want to be part of it, but what got you here, won’t get your there. Guaranteed.
The question we need to ask ourselves is: “What must be done differently to accelerate future success and leading in the global marketplace? “
Focus on Success and Avoid the Top Three Costly Mistakes
Global growth and expansion is the antidote for shrinking domestic markets. It offers unparalleled opportunity for growth, increased sales, diversified markets, and improved profit. US companies must pay attention to international markets for their products and services and take advantage of amazing growth opportunities. Unfortunately, many US businesses gaze with trepidation at the process and surrender to fear before making an earnest effort.
Tapping into this large pool of opportunities requires executives to refine their skills, adjust their mindset, reaffirm their focus, and retest the strategy while modifying the direction as needed, in a global context.
In order to create a framework that enables you to see, identify, respond, think, plan and operate strategically, beware of the top 3 mistakes companies make when going global:
Mistake 1: Lacking Clear Objectives
Make a commitment. Entering the global marketplace requires a tremendous dedication of resources, capital, time, and leadership. It has to become a priority, starting with the present and looking into the future. Knowing where in the world you should go, researching opportunities and assessing target markets are the basics behind growing globally. Don’t skip this critical step.
Perform a thorough market readiness assessment. Perform the necessary research to identify your potential customers and learn to think locally. You can significantly increase your likelihood of success by researching the market and the competition and setting clear objectives, timelines, milestones, and metrics and using this research to create a roadmap to success. And of course, all this information has to be analyzed and interpreted in context, and aligned with the local culture, politics, financial system, and more. Data alone will not suffice.
Mistake 2: Forgetting the Fundamental Importance of Cultural Differences
Be sensitive to cultural nuances and deploy the right team. In some markets it is crucial to have a local trusted person. A successful vice president of sales in the United States may not employ the skills necessary to negotiate the global market. Get expert help and advice.
I’ve witnessed many business transactions that come to a screeching halt and fall apart due to cultural misunderstandings and cultural ignorance. Don’t assume anything, and do your homework. Business people in an international business environment must not only be sensitive to differences in culture and language, but they must also learn to adopt the appropriate policies and strategies for coping with these differences. This will affect the outcomes of the negotiations, agreements and business structure.
Mistake 3: Underestimating the Time to Market for Your Product/Services
Don’t put expansion plans at risk by budgeting too short a timeline. When this happens, inevitably, the business depletes available capital and the upfront investment of time and money is wasted while your international reputation is blemished. Resist the temptation to be overly optimistic. Look at the Ease of Doing Business (EODB) index for planning purposes, and focus on interpreting that information correctly and analyzing how it will affect your specific business plans, using your resources, vision and long-term plan. You cannot put a time frame or price tag on building relationships and trust.
Focus on Opportunities, Not Obstacles
Ultimately, a successful global expansion is dependent on a company’s ability to view the world in a new way. In this increasingly complex and competitive global environment exceptional skill is then needed to evaluate the options, manage the risks and execute a winning growth strategy. Instead of gazing with fear at the process, focus with excitement and starry eyes at the opportunities and, most importantly, plan for success. Winners will reap the benefits, while expanding and executing growth strategies more quickly and more effectively than their competitors. Be fast, flexible, innovative, motivated and enjoy the adventure! It’s a big world out there with lots of potential for businesses with a keen entrepreneurial spirit.
You may also like:
- Collaborating Internationally: What Businesses Need to Know About Going Global (blog and audio interview with Becky DeStigter, The International Entrepreneur)
- Mona Pearl’s Global Business Development Website
- International Conference Calling Evaluation Guide (A free ebook on the critical capabilities needed for high-quality international calling)