One of the best things about the world we live in is that it is relatively easy to move into a new market. With the advent of the internet and the greater access to information it is a lot easier to sell a product or set up a new office in a brand new area.
However greater access to information does not automatically equate to greater competence when it comes to working at an international level. Cultural differences can have a HUGE impact on a company’s bottom line if they aren’t properly anticipated and planned for.
Which raises an interesting question, if a company wants to open up an office in a new location, especially a flagship office in an international location they are faced with a very difficult decision to make.
Option 1 would be to pick one of the strongest and best performers in the home office to send abroad. This is the option I have seen most companies choose, and the results are not often pretty.
First it is important to remember that a strong performer in your home market will not necessarily be a strong performer in an international setting. Being successful at an international level takes a skill set that is not often present in a lot of very successful people.
Another drawback from sending the strongest person to a new international location is that their expertise is now being denied to your home office. So if they are not prepped properly before leaving with the cultural knowledge, and they haven’t been able to properly hand off all their responsibilities to their replacement the home organization will take a huge hit in their productivity.
So then Option 2 would be to send the not so quite effective person so that the home office does not hurt too much from the lack of output. The problem with this idea is that not only are the same concerns around an ability to perform at the international level, but there is a lack of certainty that a person will be able to do the job period. If the office fails there will always be the question of if the company had sent a better performer, would the office have been successful.
A third option would be to build a local team. This would avoid the problem of being able to operate in the new culture, since ideally the local would have the expertise needed to build a successful office. However the downside is that since they are new hires without any oversight it would be difficult to confirm that they are working as hard as you might like.
The fourth, and my favorite option, would be to hire someone in your local market that has experience in the region that you want to expand into. They are more likely to have a cultural understanding of the prospective host culture. You will also be able to run the appropriate background checks and verify competence around the skills you need, but they local experience will allow a company to put someone in place that will have training and knowledge of the home office and company culture, but also the skill set to be able to perform in the home market.
Additionally, once you send the person in charge of your international market, you’ll want to give him a lot of autonomy. Allow that person to determine hiring decisions, pricing structure, marketing approaches. Have regular and steady check ins to check progress, but give the team enough autonomy to make decisions based on local market conditions.
The reality of the issue is that despite success in your home market, market conditions and business models can vary drastically. And the activities that made you successful in your home market can spell out failure in your new market.
If you approach each new market with a willingness to learn you will ultimately be more successful.