THE RULES OF GOING GLOBAL

By John Quirk

The first is the ‘321’ rule. You may be familiar with this rule if you’ve ever managed a building project, but from experience it applies very aptly to ‘go global’ initiatives.

The rule is everything will take you three times as long as planned. It will be twice as expensive as budgeted and you will only want to do it once. That said, it can be an exciting journey with significant financial gains.

The second rule I call ‘the ghost of Ned Kelly’. This rule is for expanding into Australia.

New Zealanders often see themselves as Australian cousins and assume the business environment is the same. The reality is that it is 2% to 4% different. This difference is enough to have dealt to a number of New Zealand companies.

For a New Zealand business contemplating doing business in Australia, the best advice I can give is to imagine the ghost of Ned Kelly on the shoulder of every Australian businessperson you are dealing with. If you do that your subconscious response will protect your business interests and you’ll be very successful in Australia.

Another is the ‘act local’ rule– you need to employ good locals and you need to lead and manage them well. Nothing beats spending time in market, and you need to do it much more often than you think you do.

Succeeding in the US

The US is a fantastic market for New Zealand companies – it is big, it is progressive and it is very pro- business. But it is not as easy as it looks and the following rules should help:

The ‘50 different countries’rule: treat the USA as 50 different countries; don’t underestimate the cultural and business differences between the states and understand the vast geographies involved.

The ‘they are really speaking Chinese’ rule: the US language and culture feels very familiar to New Zealanders and they become quickly very comfortable, but this is often at their peril. It is in fact very different on multiple levels. To ensure success, approach all business dialogue and documentation as if it is being communicated in Chinese. Be extremely deliberate in translating everything into your own language and terms.

The ‘no one can walk on water’ rule: when employing people in the US, particularly sales and marketing people, you’ll need to be extremely careful. They have fantastic CVs, coupled with exemplary interview techniques. They seem like they will be able to walk on water. Just remember that no one can walk on water and many New Zealand companies take one, two, three or more attempts to get the right people who can perform to an acceptable level for them.

The ‘double agent’ trap: sales agents in market are extremely attractive to those companies who have little capital; however the benefits they deliver can be somewhat dubious. My advice is take extreme care and do your research, as they can often have multiple and sometimes conflicting interests. It is very hard to secure long term, high performing sales agents.

The ‘multinational myth’:selling your products and services to a multinational that will get compelling strategic advantage from a relationship with your company and open up a global distribution channel to you is nirvana. However, unless you are lucky it can be a long, hard road. Often with these companies the brand is very strong, the people often aren’t as good as the brand and they often have a complex hierarchy and are embroiled in politics you can’t see. Start at the top of the company and work down – working up from the New Zealand or Australian subsidiary is a long frustrating road. Figure out how the multinational can make significant money from being involved with you. Be able to articulate these numbers in their terms and take/give their salespeople easy deals.

The ‘cheese on the mousetrap’ rule: many New Zealand companies focus efforts on building the perfect mouse trap. In fact many spend 90% of their funding and time on the mouse trap and 10% on sales & marketing. US companies are the other way around. New Zealand companies should spend 90% of their time understanding what type of cheese is required to attract the mice, know where the hungry mice are, go where the really  hungry mice are, know why they like your cheese and attack the markets that don’t have a pet cat.

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