Think Globally, Play Locally

Whether you work in a large multinational corporation, lead a rising regional enterprise or run a small-town business, these days all leaders must share a common goal: to be global managers.

Even if you never leave home, you must manage on a worldwide playing field.

Globalisation has extended the geographic scope of business. Mobility and access provide more choices: where to buy, where to sell, whom to hire, where to locate, what to emulate. The ability to source globally, for example, provides a wider choice of parts or products. Like it or not, local suppliers compete in national and international markets for local business.

How can you make smart decisions on the global playing field? These strategies will help you manage globally, at home or abroad.

Companies must be world-ready, whether or not they are world-active. Help yours develop a cosmopolitan mind-set from the start.

Genzyme, a growing pharmaceutical company, was active internationally almost from its first year. It formed alliances with European, Japanese and US companies; satisfied both US and European regulatory standards; and sourced its material internationally, obtaining serum from New Zealand, enzyme from Thailand and tissue from France.

The founder of a medical company that wanted to operate in a similarly international way was especially concerned about protecting the quality of his medical instruments, which meant working with people who share his values – something that is more difficult to determine when working outside of one’s own country. Even if international markets are a small part of a small business, relationship management looms large. Trust is essential.

For the entrepreneur who founded the medical company, the first relationship-management accomplishment was finding a knowledgeable international representative. He hired an American expatriate living in Switzerland who had appropriate industry experience. He established relationships for distribution in 27 countries. His ability to find and form the right relationships was artistry: a subjective process of seeing through language barriers, national regulatory differences and differing business practices.

“Quite often an individual might make a favourable impression when he has traveled to a trade show or exhibition,” the representative said, “but once you get back to his country and meet the people he has hired and see how he treats his people, it can be quite a different story.”

The medical company recognized the importance of demonstrating its own trustworthiness, as well. It went out of its way to provide benefits for distributors in order to compete with local products.

Cohen & Wilks International managed its own changes – and embraced world quality standards in the process. Originally family owned and run in the provincial city of Leeds, England, CWI transformed itself through a joint venture with Mitsui, one of Japan’s oldest, most distinguished business groups. Once Britain’s largest manufacturer of raincoats, CWI could have collapsed when British garment manufacturing lost to Asian competition.

Instead, the chief executive officer, Bryan Spink, began to travel widely in Asia, forming a partnership with Mitsui, which opened doors and enabled CWI to add goods purchased through Mitsui and manufactured in Asia. Giant Mitsui needed small companies like CWI to contribute local knowhow to Mitsui’s global aspirations, like establishing a base in Europe. Small CWI extended its reach globally through its large well-connected partner, first in Korea, later in Indonesia.

Apparel manufacturers have been criticized for sweatshop conditions in Asian factories – low wages, poor working conditions and environmental abuses. Large companies, like Nike and Starbucks, have responded to pressures to ensure that their foreign suppliers meet minimum standards on workplace and environmental issues.

Small Cohen & Wilks faced similar pressures. It responded with a code of socially responsible conduct. CWI knew that British consumers were watching, and it sought the most environmentally correct, highest-wage facilities to fit British and American sensibilities.

Globalisation helps raise awareness of conditions in other parts of the world, and thus it can help raise standards – if there is sufficient will on the part of company leaders and sufficient pressure from consumers.

Some companies that try to meet high standards can find themselves in the middle of a global controversy when values, politics and differences of opinion create new challenges seemingly overnight. Keep in mind that information spreads rapidly online, and Web-based protests are common. Rumours and protests can wreak havoc as they ripple through an industry.

Organisations don’t have to be large to think globally, and they don’t even need offices or operations in many countries. Some might effectively conduct international business out of a single office. An aircraft-leasing firm that was among Ireland’s largest companies operated worldwide from Shannon Airport. It closed its offices around the world because they added costs and interfered with teamwork; it was better to send people temporarily to countries where deals were being negotiated.

But managers must think internationally even if they are operating a local department in a local company – not because their company has locations elsewhere but because their partners do. They may work with international suppliers, attract capital from foreign investments or sell to international markets. Or they may choose allies in other countries as a way to gain clout or new ideas.

Companies whose business scope is purely local can often benefit from international allies. The European Retail Alliance was the brainchild of Pierre Everaert, then-chief executive of the Dutch food retail holding company Ahold (Albert Heijn supermarkets).

By forming the ERA with Argyll (Safeway stores) in the United Kingdom and Casino in France, and then a larger marketing alliance with eight other European companies, Ahold gained sufficient clout to encourage manufacturers to design standard products that all three companies could buy at lower cost. When Everaert retired from Ahold to take the helm at Philips, and there were similar turnovers at the top in partner companies, the alliance deteriorated.

Global management comes in many varieties. It’s not only for the multinational firm with subsidiaries in many countries.

Distributed by The New York Times Syndicate