Platt Perspective on Business and Technology

Moving past early stage and the challenge of scalability 31: business scalability from the global business perspective 2

Posted in startups by Timothy Platt on April 23, 2013

This is my thirty first installment in a series on building a business for scalability and long-term success (see Startups and Early Stage Businesses, postings 96 and scattered following for Parts 1-30.) This is also a direct continuation of Part 30, where I first began explicitly exploring the issues of expanding a business and its operations internationally and even globally, from the perspective of improving expandability and scalability per se.

I focused on two areas of potential difference that can become critically important when expanding a business and its operations into a new country: legal systems, and cultural norms and systems. And I noted in those contexts that differences might only become readily apparent when significantly problematical violation of expected norms have already developed, and certainly where cultural differences come into play. And to reiterate a briefly noted set of working examples as to how cultural factors and assumptions can shape business practice, and accepted and expected workplace behavior, I note that:

• For businesses and business settings, cultural differences can and often do express themselves as differences in communications practices and expectations, and on how good or bad news is or is not stated or even acknowledged.
• Cultural differences can and commonly do affect how mangers lead, and how people on those managers’ teams respond to suggestions, directions or advice and from whom and on what time schedules.
• Business expansion and scalability has to be carried out with an awareness of these and other issues and certainly when this means expanding in directions where differences and conflicts of understanding and acceptability can arise – which as stated above might only be apparent after a problem has developed.

And significant issues do not just arise when moving into a new country to do business, where cultural details in dress and other day to day matters are overtly novel and different from those of the home office setting. The most significant business practice and employee problems that can arise from cultural differences often in practice, manifest themselves from seemingly little differences: the differences that can sneak up on you because this new business setting seems more uniformly similar and familiar that it perhaps really is – at least for some issues of importance to employees, customers and others.

I stated at the end of Part 30 that I would turn in this posting to consider approaches for identifying potential problem areas proactively, and for more effectively course correcting where problems do arise. And for that, I follow through on both halves of that series installment: legal and cultural issues and challenges, at least as a starting point. And I begin that from the fundamentals:

• Never simply move into a new country to expand your business as if arriving like a conquering army. This means moving in with eyes and ears open to both similarities and differences, and it means bringing in managers and advisors, at least as short-term consultants for the latter, who really know this country and how things are done there.
• In practice this is probably going to mean finding the right people there, in a target country for business expansion, bringing them onboard as new employees, and training them to business practices and systems, and to be aware of the business’ ongoing corporate culture and ways – at the home office.
• And while they are there and before starting to build in the new country, learn from them as they are learning from you. Talk with them about similarities and differences of approach, process, understand and expectations, and about differences in communications and follow-through that they face. These are the people who can tell you in advance where problems might arise as they will see where they themselves find differences between what they see while working at the home office or headquarters, and how they would do things and see them done back home.
• If expansion into a new country is through foreign acquisition and involves bringing in preexisting business operations and systems as a whole, bring in at least select managers in place and certainly from those who would definitely be kept on – or where a decision would have to be made on that and they are in an organizationally critical position. Train these mangers for working as managers of the now parent company and bring them up to speed in the home office or headquarters, and probably in strategically and operationally grouped batches so as to maintain business effectiveness in the acquisition during this process. And once again, while they are learning about your now expanding business and its systems and ways, pick their brains for understanding and insight too.
• And this type of two directional sharing of knowledge and insight can and should really go both ways. As a foreign acquisition goes online, send one or more home office or headquarters trained managers, who might be junior level or mid-level to learn and work at this acquisition – not to run things but to serve as advisors and facilitators and to learn. Pick people who have language skills, or at least ability to pick up a new language and who would be comfortable finding their way in another culture – and who know that they have a lot to learn and who can do that. Pick people who really know the business and how things are done in its core home country offices so they can help their new colleagues avoid problems or complications stemming from misunderstandings.
• And together, these two sets of managers can serve as the bi-country experienced backbone of your increasingly multinational enterprise for making connections and bridging gaps.

The goal here is to find ways to maintain the overall identity and systems and values of the parent company while respecting and effectively working in the perhaps strange waters of a new culture and setting – and with people in those foreign offices feeling connected while still knowing they can be themselves and of their own cultures while doing so. And there will always be tradeoffs and complications in anything like this when this type of program is moved from principle to practice, and hope to realized business results. But this will go more smoothly than simply moving into a new country to do business ad hoc and without systematic planning or follow-through.

I am essentially certain to continue writing about the types of issues I have been raising here, and I add throughout this series. But for now at least I am ending this specific series here at 31 installments. You can find this and related postings at Startups and Early Stage Businesses. You can also find related material at Business Strategy and Operations and at its continuation page: Business Strategy and Operations – 2.

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