When a business wants to expand, the idea of ‘going global’ is often raised. But deciding where to expand, which market and when to go, is critical, and wholly dependent on the company’s strategic growth strategy.
A tried and true ‘going global’ strategy must be aligned to the company’s vision, thoroughly researched, well-timed, well-resourced, and, absolutely, staffed by the right people.
As companies begin to think about growth, ‘going global’ needs to be on the agenda. But the decision about whether, where and when to go needs to be a strategic one, and an extension of the company’s defined growth strategy.
At our recent Alumni Growth Summit, we asked a panel of CEOs to describe their rationale for ‘going global’. Tasked with describing the markets they’d chosen, the profiles of their customers, and what challenges they faced for staffing, regulations, and keeping focus, it became clear that a successful ‘going global’ strategy should include these six considerations.
1. Why do we think ‘going global’ will help achieve our vision for the company?
Going global needs to be integral to the company’s strategy, not a reflex response to an enquiry from someone in another country who wants to sell your product. The purpose or rationale for going global must be explicit and the business case for this should be fully developed. Remember: all customers, countries and markets are not equally attractive or profitable; you need to choose a playing field where you can win.
2. How do we staff this?
Whether you seek a representative to sell your product overseas, hire someone in-country, or relocate one of your own staff to that country, staffing is a key decision. There are pros and cons to each option, but whichever way you go it’s critically important to have someone who fits with your values and culture, understands your company’s mission and vision, is a good communicator, and can perform at a high level with minimal supervision. Take the time to develop a legal document outlining the mutual responsibilities, interdependencies, KPIs and expected outcomes from each party. If you have a shared bank account, make sure you are both signatories. And of course, take the time to manage the relationship.
3. What do we need to do to be successful?
Identifying what systems and policies need to be in place to facilitate success is a good starting point. Clearly, you’ll need to transport products to your chosen export market, but make sure you consider all the options – one of our companies found it easier to get their products manufactured in their export country than it was to ship them from Australia. Remember that the quality standards and timelines that worked for past customers may not meet the needs or expectations of customers in another country, so your staff may be required to increase their performance by a level or two. Plus, customers in different time zones will still expect good customer service, even if your Australian offices are technically closed, so you will need to make provisions for serving customers 24/7/365.
4. Where do we go?
Where to export is also important for success. Some companies rush to the US, thinking that because it’s a big market, people speak English and the customs are nearly the same, they’ll be successful exporting there. Others think China is the place to go. It all depends on what you’re exporting and the market fit. In many instances, bigger is not always better; many companies have proven to be more successful by selling into the UK and Europe, rather than the larger US or Chinese markets.
5. When do we begin and what’s the timeline for the roll-out?
The timing for ‘going global’ depends on your stage of growth, the strength of your team and your financials, as well as your organisational readiness for global expansion. Going global works best when the company has reached ‘continuous growth’ – the business has a team in place, has reserves, and has enough contracts to guarantee recurring revenue, even if ‘going global’ fails. Experience suggests that it may take a few tries to get it right, so you need to be prepared to make an investment and not expect returns before year two, and most likely year three.
6. Who will be responsible for going global?
Someone needs to be responsible for the ‘going global’ strategy. But, not the product team (although changes to the product may be required); not the marketing team (although appropriate branding and positioning in the new country are important). It can’t be the finance team (although financing export, developing banking relationships, and managing foreign exchanges will be critical); and definitely not the sales team (who must be careful not to sell something the company cannot deliver). And while the CEO must be involved, she or he cannot be the ‘lead’. To be most effective, a specific person should be tasked with implementing the strategy, managing the project, tracking progress, and working with all the departments to achieve the synergies required to grow by ‘going global’.