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The world isn’t getting tamer, but rather more complex. Be wary of the business and cultural traps when moving to global markets.
Many businesses leaders say it’s becoming harder to operate globally, according to PwC’s recent global CEO survey.
That report, which interviewed over 1000 CEOs from 85 countries, says CEOs are increasingly nervous about the fractured systems and differences in the way business is done across the world.
“Most CEOs see the world moving in the opposite direction [from a seamless marketplace], towards multiple belief systems and rules of law, regional trading blocs and increased tax competition, and rising nationalism and diverse economic models,” PwC said.
Managing the workforce, understanding the key market and ensuring consistent growth is getting harder.
Global leaders are being asked to work across differing belief systems, cultural structures and nationalities. It’s counterintuitive to their global mindset, and is making CEOs feel like they’re working against the grain when it comes to globalisation.
The business leaders of today need to equip themselves for a changing workforce, one that puts these disparate systems at the centrepiece of the global framework.
Find a common purpose
When pitching yourself in an overseas market, or expanding your business overseas it is crucial to keep a clear vision. As your workforce is fragmentated by borders or cultures, try to find the underlying values that bind the team — what is the common purpose of your business, and how do you apply a local lens to that?
Having a strong purpose is important but by overlaying a local lens you are showcasing your understanding of the domestic market. One way in which leaders are seeking to strengthen the workforce across culture is through a cohesive framework of cultural understanding. Like with any team, big or small, local or global, you need to understand what drives your staff and having a thorough understanding of cultural differences is a great way to start.
How are people going react to humour? What do people value at their core? What is going to give you a competitive advantage?
Understanding what drives locals is going to help you successfully manage your workforce, market your product or long-term business strategy.
Ask for feedback
To judge your mastery of local knowledge you need to open yourself up to criticism. Have an open mindset and be willing to learn from locals so you can keep your business thriving.
At a recent panel, Amber Johnson HR Manager from Australian digital marketplace startup Envato said that it is in the everyday conversations you have with your staff that real feedback occurs. Not in the once-a-year 360 review.
Make sure you’re creating touch points with your team and that the feedback is two-way. Deep introspection and analysis of your team will make you be a stand out leader, ready to take on a global challenge.
While it is important to have a clear vision and strategy, you need to have the flexibility to accommodate local market needs.
Learn from others
Running a global business comes with unexpected pitfalls. It pays to be aware of others’ mistakes.
One example is Wesfarmers’ recent struggles with Bunnings taking over the UK’s hardware store, Homebase.
One of the first things that Wesfarmers did was to remove the majority of local senior management in the company. They now lacked the institutional knowledge of years of running a hardware store locally.
The Wesfarmers team had assured investors of the due diligence and research done before moving into the market. The company made major shifts in price points, and key offerings, including the removal of the soft furnishing lines, such as Laura Ashley. Lines that had been securing strong revenue streams for the business.
In February this year, the Australian company wrote off $1.3 billion in value.
The lack of sound local knowledge and the loss of key personnel in the business contributed to the failure of the brand in that overseas market.