It used to be that expanding a business globally was reserved for mature public companies looking to take their domestic success to new markets. But nowadays, thanks to exponential growth in technology, many new businesses start out global. Still, for any venture taking their products and services to foreign markets, there are many things to consider. Among other things, business leaders must identify their talent strategy and hire the right people on the local scene to ensure success internationally.
Anna Schlegel, senior director of global engineering at NetApp and author of “Truly Global: The Theory and Practice of Bringing Your Company to International Markets,” is an expert on expanding into new and foreign markets. Talent Economy spoke with Schlegel about what it takes to successfully bring a product to international markets. Edited excerpts follow.
When a CEO is considering expanding to a new market, what are some ways they should prepare?
CEOs typically will work with the executive vice president of sales or the geography or go-to-market leader to look at what are the countries or markets that they want to target. When they do that, it can be done in so many different ways. One way is to go directly, which could be you’re going to open up an office, you’re going to hire a bunch of salespeople, legal people, HR, IT. It can be from small to huge. Another way is to go indirect. What I mean by indirect is you can find partners or a joint venture in a market or in a country that will represent your product. The book, ‘Truly Global,’ talks about big operations, where when you set up shop, you set up a legal entity and you have a variety of different titles to make sure that that expansion is going to stick and is going to be successful.
Many CEOs also try to go to a neighboring country first and start an operation from a different country. For example, maybe you are already in Spain and you want to try getting into Portugal, you can do quite a bit of the work from Spain and maybe set up a smaller company office in Portugal.
It’s complex. There are many different ways. If you go to China, for example, the way you want to prepare is obviously reading a lot of the IDC reports, Gartner reports, market reports; you do an incredible amount of research on the verticals you want to tackle and the segments you think you’re going after. You would prepare getting into a different vertical like in the states; you just need to do it in a different country.
And then, how are you going to sustain that in year one, year two, year three? How many people will you need to see that through? You learn along the way that you do need to hire people inside the market to take your product there. There’s a number of things you need to do with setting up global trade compliance agreements, legalese and, obviously, get the product through borders and customs, the pricing, the return policy, the marketing and all of that. Even if you just did it online you still need to figure out the pricing and return policies, the marketing, your search engine strategy and your competitors. You plan; you strategize. It takes a while to make these decisions.
What are some common mistakes firms make when they expand overseas, particularly around their talent strategy?
A mistake would be not hiring in the country and doing it all from the headquarters. We do see a lot of companies very, very heavy at the headquarters level, whatever that headquarters might be, and trying to be very successful in a market with very small teams in that market without the proper backup from the people at headquarters. It can be very lopsided. Another mistake would be not localizing for the country that you’re about to sell in. So pretending to sell your product in English, let’s say in Japan, is not going to help you.
Other mistakes could be if you’re in IT, the operating system might not work. It might not have been tested to work globally. That is a huge common mistake that many American companies do. We hire engineers that code the product, the product works really well in the states, and then when you’re about to localize that product for Korea or the Philippines or Italy, you can’t do that because the code is hardcoded. So there’s engineering potential issues. There are other mistakes around encryption. China is not going to accept encrypted products from the U.S., for example. There are many pitfalls.
There are also marketing issues that people do, branding issues, advertising issues, where the message will not resonate. Other mistakes are not to research if your offering already exists. Uber, for example, was trying to get in China and they did not succeed because there was already an Uber there and working really well, so why do they need Uber? There’s all kinds of stuff that can go wrong, and they do go wrong.
In your book, you talk about having a globalization team. What is a globalization team and why is it important?
Having a globalization team in a company will pay off in spades. All the issues that we just talked about, this team knows how to fix, knows how to avoid and knows how to prepare and consult with different departments inside of the company to teach them the practice of bringing the company to international markets.
For example, this team will work with engineering to make sure that the code can go global, that encryption will not be an issue; that the brand campaigns will resonate. These globalization teams inside a company are the teams that localize a message, localize the product, consult with, for example, the support teams to make sure that their offerings are in the local language. Maybe there’s a chat, maybe there’s a knowledge base, maybe there’s a website. This globalization team is going to make sure that these things are in the language of the customer, in the right code. The globalization team is a team that transforms the product experience locally.
What types of people are on that globalization team?
The globalization team does a lot of strategy. They map what needs to get done at the enterprise level. They’re at the strategic level, they put in roadmaps, and then when it’s time to get the work done, then the localizers kick in.
The types of people on a globalization team can vary. I’ll give you some of the titles that you really need to have:
- A localization lead, so a head of localization. This person would run all the translation for the company, all the localization exercises for the company.
- The other person you’d need to hire is a systems globalization expert. This person will set up the content management systems where all this information that needs to go global will reside. They push the content out. The systems allow for the localization team to review the content, edit the content, then publish the content.
- One of my favorite titles inside a globalization team is a globalization strategist. For example, a strategist will understand how to get into China. What sort of partnerships do we need to be putting in place for China? A strategist will also identify which departments inside of the company need to be globalized.
- Globalization teams can have translators, can have editors, can have reviewers, but you can outsource a lot of that through agencies.
- A globalization team will also have product globalization engineers. They are the ones that will grab your product and re-engineer it to work in Japan, to work in France, to work in Russia. So they will change the user interface, they will test it, they will make sure the operating system works seamlessly, etc.
- You can have vendor managers inside a globalization team. Globalization teams usually use a lot of agencies and a lot of consulting partners.
How should executives hire for those team members?
Usually, what I like to say is hire a very expert senior director of globalization who methodically will put the team in place. My advice is to do a centralized operation for the company that will look at what departments need to be globalized, what languages are important to the CEO, and what are the products that are going to go into each country.
How can a company know if expanding to their new market is successful?
They need to give themselves realistic revenue goals. They can give themselves SMART [specific, measurable, attainable, realistic, timely] goals like any other project. You give yourself a goal or a SMART goal that’s measurable and attainable. Say that we’re entering this product into this country; we want to see this many units sold or this many downloads or this many books, whatever it is that you’re selling. You watch that quarterly, and you address as you go, and you watch it very, very carefully, and you don’t drop it.
Again, you need people in the field, and you need systems to give you the metrics back. You want to see the data and the analytics of how it’s behaving. And if things are starting to go down, you need to step up marketing. Probably the product has pricing issues or customer issues. So you need to have a very good look, also with the support team and call centers, to make sure you get a first-hand readout of really what’s happening there.
Lauren Dixon is an associate editor at Talent Economy.