Taking Tech Companies Global

If you’re a tech company expanding outside of the US, you’re going to need more than a slick logo and a ping-pong table to make an impact. From not anticipating cultural differences to failing to research the market before expanding, hyper-growth organizations can’t always predict the challenges presented by taking the business multinational. If your company is considering global expansion, considering the tips below will go a long way to making your growth across borders both pleasant and profitable.

Don’t Rely Solely on Virtual Communication

It’s no secret that good social and cross-cultural communication skills are vital to successful virtual relationships. Unfortunately, many tech companies (and start-ups especially) are comprised of engineers, developers and other employees used to working autonomously and independently, often working out of their homes or remote offices.

Email is the default method of communication. And sometimes various chat functions are used.  But studies in managing virtual teams show that face-to-face communication is 10 times more effective than phone, and phone is 10 times more effective than email. This means that you must encourage phone, video conference and even face-to-face conversations when at all possible. Making it clear to your employees that you expect them to know each other as people, not just as email thumbnails, fosters a personal connection between your global workforce. Personal relationships don’t just make project work more effective – it also increases employee retention rates and promotes a global mindset for staff.

Product Development: One Size Does Not Fit All

Expanding your products or services globally is a lot trickier than many international tech companies anticipate. Standards and viewpoints we accept in the US may not be viewed so positively abroad. For instance, Facebook has run into privacy issues in other countries, from the amount of user data they collect to claims that the ‘Like’ button violates certain German laws.

China is a notoriously difficult country for US firms to expand into. LinkedIn is poised to become one of the few US tech companies allowed in this restrictive market, in part because it offers a service not well established in China: Business networking.

The solution: Care and attention to the local culture, customs and laws. Take the time to create relationships with local economic development agencies, chambers of commerce and other local tech companies. Talk through your business proposition with leaders to discover what cultural challenges you may run into, then create a global game plan. Having a trusted business leader on the ground during your global expansion will prevent easily-preventable conflicts through innovative solutions only available from a leader with intimate knowledge of the country into which you are expanding.

Internal Culture is As Important as External

Consider the business culture of the new market you’re entering and make sure your internal communications reflect it. In the US, business mixes personal and professional. Tech startups especially build their teams around passionate people who love what they do, love the company they work for and are happy to rally around and even celebrate a set of common values. Many Asian companies also embrace a close company culture and in some cases look at a firm as an extension of family.

In some European countries, however, you’ll be hard-pressed to drum up this type of workplace enthusiasm. Employees see it as a job, they’re happy to come work, happy to have success, but the concept of colleagues as family is foreign.

Management style and decision-making methods need to be considered as well. Tech companies place an emphasis on consensus building and crowdsourcing ideas from among their disparate experts. Managers must find the right balance between leading the team toward a goal while still allowing the experts to feel their contribution matters.

Work-Life Balance is a Myth (But we can try!)

Let’s admit it – there are workaholics in the tech industry. It’s the norm to work long days and sometimes all night to get things done. When you’re based in the US, with only US times zones to deal with, it’s not as much of an issue. But if you expand into Europe, where work-life balance is taken very seriously, all-nighters are anything but typical and a different approach is necessary.

An even more delicate balance exists in India, where a heavy US business presence means Indian employees often work crazy hours to keep up with the demand of US-based customers. Does this make work-life balance difficult? Yes – while workers complain about working long hours and being stressed because of it, the hours also make workers in India feel needed and valued. There is an international trend towards making work-life balance attainable, and that’s important for business leaders to consider when planning global expansion. Make sure you are prepared to manage expectations across your culturally diverse workforce as part of your global business plans. It’ll improve relationships and increase employee engagement.

Now that you know the trends I see with expanding tech companies, I’m curious to know what unique challenges you’ve faced with global expansion. Drop me a line at melissa.lamson@lamsonconsulting.com and let me know. With your permission, your story might be one of the ones featured in a future blog post.

Want to approach your workplace with more Global Savviness? Ask these 3 Essential Questions

When you take a vacation to a different country, you spend a lot of time researching the culture -everything from the food to cultural customs such as tipping in restaurants or conducting yourself at historic sites. So why shouldn’t you do the same when looking to expand your business?

As you look into market potential, labor costs and building codes, don’t ignore the cultural implications of doing business in that country. Research what cultural, ethical and legal differences exist, and come up with a strategy to navigate them. Building respectful, culturally appropriate relationships is crucial to the success of your new venture.

One idea: to help develop global savviness, find locals to be your guide. When searching for consultants, accountants or law firms in the new country, for example, look for firms that have previous experience helping foreign companies make a successful transition. Make contacts in expat business communities or look for government or economic agencies that specialize in international relations.

As you make these connections, there are three vital questions you should ask to ensure your business doesn’t run afoul of hidden traditions, considerations or business practices.

1.     How are contracts negotiated, structured and agreed upon?

Business laws and contract requirements vary wildly across the globe. Besides the differences in ethical, legal and structural requirements, there are often specific cultural conventions in play. For example, in some Latin American regions, a verbal commitment and a handshake is more important than the paper. In fact, too much emphasis on a paper contract could turn off potential business contacts because they view a verbal commitment as being more trustworthy. Finding the right legal representation in the country is key to handling this process correctly.

2.     What expectations do employees have about office culture?

In the US, cube farms are so plentiful, they have become a part of our culture (and our pop culture). However, cubes are not necessarily an accepted office setup in other countries. As I discussed in No Such Thing As Small Talk, 7 Keys to Understanding German Business Culture, in Germany, legally, employees must be able to look out a window. It’s also more common for Germans to work quietly at their tables so they don’t need the noise buffer of cubical walls. When they do have conversations, they’ll move to a meeting room or take a break in the coffee corner. (They don’t spend as much time speaking with others while working as we do here in America.) Ignoring these cultural differences can result in confusion and even foster aversion to cooperation.

3.     What are the unique HR considerations we need to consider?

So many cultural aspects affect your HR policies and procedures in a new country, from hiring practices and acceptable interview questions to the employee holiday calendar. In the US, we have guidelines about what you can and can’t ask during the application or interview process. But these restrictions don’t exist in other places. In India and some European countries, it’s common for applicants to submit photos and include things like age and marital status.

With some countries, radical cultural differences and cultural sensitivity plays an even bigger role in HR. In South Africa, healthcare plays a large factor. For instance, it’s common to have mandatory HIV testing for employees on the shop floor. And therefore, sadly, funerals are important affairs in South Africa. When an employee requests time off for a death, they can expect to have up to two weeks of leave.

Opening your organization to a global mindset unlocks endless possibilities for professional—and personal—enrichment. But global savviness does not happen overnight; it requires patience, an open mind and above all, respect for those around you.

Contact us for more answers to your questions about global expansion: info@lamsonconsulting.com

Setting Global Management Priorities in a Shifting Business World

Working globally in business today means more than travelling to an executive meeting in another country. It’s a broad-ranging pursuit that requires a deeper understanding of the contexts in which we work. International business trips not only foster exposure to other cultures and perspectives in your own dealings, but also assist in creating a more worldly approach to every level of a company. For leaders seeking a more global perspective, and wanting to develop global mindset in their teams, here are three ways to set global management priorities:

Look for quality over cost:

In my work with management teams of large international brands, I’m seeing a trend away from seeking labor that is most notable for its low cost. Companies now are more interested in the quality of the work. They’re looking for a more sophisticated ROI, which means skill level, language aptitude and time zone accessibility all rank higher on the list now, too. Cost, which was once the only question asked when looking to outsource or expand, has been pushed farther down. This trend has caused an increase in near-shoring, or companies looking to countries in their same (or closer to their same) time zone, for labor. It has also allowed high-skill workforce areas such as China and India to remain in the conversation, even as the cost of labor in those countries increases. Work ethic, cultural values and timeliness are now of greater importance to global managers than simply selecting the cheapest possible option.

Think beyond the BRIC countries:

In countries with a strong reputation for skilled labor and an ascending economy it’s now more competitive to recruit than it was when these countries were less developed. It’s also the case that BRIC countries come with their own set of challenges that foreign investors have a difficult time overcoming. Brazil’s government stronghold makes business dealings complex, China and the Chinese culture is still a mystery for many American and European firms, India’s infrastructure is difficult to navigate and the political relationship Russia has with other countries is mucking up potentially successful joint venture negotiations.

This isn’t to say BRIC countries aren’t still important markets for foreign business development, there is lots of opportunity.  But it does mean that BRIC countries are no longer as easy to penetrate as we once thought they were. Managers and companies who are looking for the next frontier of a strong labor market might look a bit farther off the traditional map: Indonesia, Chile and Ghana are all labor markets poised to take very well to outside investment. Just this week, a Chinese business group announced it is investing $2B into building an industrial park in the town of Shama on Ghana’s coast. In a few years, business investors will be looking at a whole new acronym for key international investment. Smart managers can take advantage of the upcoming shift by investing now in South East Asia, West Africa, South America and other burgeoning economies.

Renew your investment in management training:

With the rise of virtual workplaces, there was a shift away from formal management training. But company leaders have found that there has been a management and leadership deficit. In John Kotter’s recent blog, Management is (Still) Not Leadership, he points out that managers are less skilled today and individuals don’t necessarily know how and when to lead.  Today, companies are reprioritizing training teams to work more effectively, especially in virtual environments. Companies are now investing more time, money and importance in training global teams and managers are seeing the need to invest in programs so employees are well equipped to lead in global context.

The productivity and retention of employees, especially in a global team that doesn’t work in the same office, can be greatly increased by investing in training on how to effectively manage global projects and dispersed teams. Along with management training, performance management is becoming a critical issue as companies have more employees in more places. How companies assess and develop managers is becoming a critical point of investment and attention, as there is a focus on business growth and demonstrating ROI. This rapid growth makes training vital, both for internal employees moving up in the business and new employees coming in. Formal learning programs in both team and personal management skills will deliver a huge return on investment, especially in global company that is growing rapidly.

By focusing on these three management priorities, companies will set a globally-minded intention at the top and business will see efficient, more productive work from existing employees. In a growing business it’s better to make one smart, considered decision than to make two quick, wrong choices. That’s why I encourage managers to look beyond bottom line in outsourcing labor, to think beyond the common and increasingly popular BRIC countries, and to maintain a commitment to training employees in a continued, deliberate way.

How Managers Can Cultivate a Global Mindset

No manager in a growing business would say he or she isn’t willing to do what is necessary to help the company succeed. Yet many of them consider investment in global mindset training to be an add-on rather than a necessity. Global mindset training isn’t an optional area of casual interest for employees. It fills a strategic tactical need of operating in today’s business setting. By implementing the following changes regarding what it means to have a global mindset, leaders will grow their bottom line, improve communication and open new markets to their companies.

Prioritize personal exposure to differing perspectives. In an ideal world, every manager would do a six-month “study abroad” in a country other than his or her home nation. As much as we might like to believe that the Internet makes these kinds of experiences unnecessary, this kind of enriching experience is invaluable in understanding how cultural differences shapes business and purchasing decisions. Anyone who thinks the Internet has made the world completely homogenous has probably not spent six months in a country other than the one he or she was born in. Opening your own mind to the differences in cultures will help you understand what kind of perspectives you might encounter in global expansion, international sales negotiations or hiring discussions for a new regional vice president.

Employ anthropology tactics inside the company. While a six-month “study abroad” may be too much of a commitment in today’s world, employers should encourage managers to travel and visit with employees in their local office(s) on a regular basis. There is no substitute for meeting in person and seeing where employees spend their working days. If leaders approach their business meetings with the perspective of an anthropologist, they will more quickly get to the root of global business challenges. When observing staff in their home office, or even listening to how they interact over the phone, consider how their concerns might differ from your own. By learning to ask the right questions and listen with more precision, an anthropological approach will help you meet business colleagues with an understanding of their own unique perspective and motivations.

Pursue global mindset at every level of the business. While making global mindset a priority starts with upper management, executive staff aren’t the only people involved in implementing it across a company. Personnel in human resources, public relations, and corporate communications support those executive leaders. It’s just as important that staff in those areas have a global mindset as well, because they’ll be doing much of the practical work involved. Messaging for the company’s internal and external copy, meeting and training scheduling, presentation layout and tone are all tasks that need to be handled in a way that is culturally and globally sensitive. Making global mindset a priority for the entire staff, not just those who often travel internationally, will ensure that both everyday and long-term actions of the business are sensitive to the needs of other cultures.

Make face-to-face meetings a priority.  It’s true that technology has allowed businesses to complete entire large-scale projects without ever meeting in person. Sometimes they are completed without ever talking on the phone. But while this kind of work is now possible, that doesn’t mean it’s the most effective way to get things done. Research shows that if a project team meets in person even once during the course of a project, their productivity increases by nearly 50 percent. It might seem cheaper to complete a project in a completely virtual environment. But in reality, investing in travel budgets for the people on a team with members in different areas means better work done faster.

Devote serious resources to global mindset training. Competing in a global world is only one reason to devote resources to continuing training in how to communicate and interact with different types of people. A company with a continuing and well-designed program in these areas will raise retention rates for employees, be able to compete for talent, and be better equipped to access new markets and expand. A globally-minded business is also in a better position to develop products that meet the needs of more groups of people than a company with a narrow idea of its consumer. Learning how to communicate across cultures and perspectives should not be a half-hour slideshow during employee orientation. It needs to be a continuing partnership between managers and outside trainers with the same priority as training on customer management, product changes or selling techniques. By offering a program around skills in global mindset, behaviors and perspectives can be trained and changed to be more understanding and respectful of different types of people.

Global mindset is not just about understanding cross-cultural communication, it’s about understanding not only who, but also what and how to do businesses successfully across borders, regions and perspectives. By taking the topic of global mindset seriously for their teams, managers can leverage their resources more successfully and support company growth worldwide.