By William R. Dodson
At a recent conference on trade with China, a manufacturing
vice president presented the stages his company went through in order
to source products from Chinese factories for sale and distribution in
the U.S. market. He universalized these steps for use by any company (at
least, in America) interested in foreign direct investment in China. I’ve
chosen to take his evolutionary model and apply it to managers who don’t
know a thing about a particular foreign market, but who are sensing market
pressures to investigate the possibilities.
The stages are:
1. Ignorance/Denial. Doesn’t know anything about
business in a foreign country; doesn’t want to know anything.
2. Acceptance/Desire. Cursory interest in the potential of the
foreign market.
3. Understanding/Action. Actively researching the opportunities
for doing business in the foreign country provides.
4. Expertise. The company invests increasing levels of staff and
resources in the foreign country.
I would expand the model slightly and add a step between steps 3 and 4:
Have a representative from an established office make a landfall in the
new country. Such a transition is tantamount to the first step Neil Armstrong
took when the Apollo touched down on the moon back in 1969. The new world
is huge! It’s alien! It’s awful! It’s this step 3a that
scares managers who are snug in their domestic offices.
So how can managers who want to see their companies invest in other countries
change some very set ways among their colleagues and supervisors?
First of all, Manager X (whom we will invest with supernatural powers
of persuasion) must have a very deep and abiding belief that FDI is truly
good for his company. Nothing convinces better than one’s own conviction.
Still, that doesn’t mean Manager X should be an evangelist. Evangelism
is a cultural thing: some cultures are more open than others to people
papering their bodies with extracts of articles about foreign lands and
strange habits, and running half-naked down corporate corridors. Nor is
it advisable to constantly talk about the foreign country and how it’s
good for the company. Colleagues might begin taking a jaundiced view of
Manager X and of the target market, drawing an inextricable link between
the kookiness of both.
Instead, Manager X must be more subtle in taking the company from stage
1 to stage 2. The key here for Manager X is to Listen (with a capital
L). He must learn on an individual basis what each of the key decision
makers determines "what’s in it for him or her." How is
foreign investment going to directly benefit the individuals who will
be responsible for taking the risk in the new market? Is it fame? Fortune?
Doing what’s right for shareholders?
One manager I know understood that the president of his company was concerned
about investing in China, because the president did not want to "get
caught up in yet another business fad." The manager was sensitive,
then, to tilt proposals for further market research into China away from
anything that smacked of blind advertising for the China Market.
Manager X must also create some sense of urgency in the matter. This brings
issues onto an individual’s radar screen for consideration. It’s useful
here to pass along articles or internet links to stories about how competitors
are investing in a particular country, what their thinking is and, perhaps,
how Manager X’s own company may lose market share in the long run.
The first two action items practiced with consistency over a span of half
a year will raise the issue of FDI in a specific country to managerial
consciousness. It’s up to Manager X to begin synthesizing trends in the
foreign market with his company’s core competencies. By consistently and
respectfully passing along to decision-makers the possibilities of what
the company could do in the foreign market, backed up by what other companies
have achieved through such investment, Manager X begins developing synapses
of recognition in the minds of supervisors of what could be achieved.
It’s very seldom that managers explore new countries on their own; however,
if Manager X truly has the conviction that investment in a particular
foreign market is right for his company, he should take a trip to the
country on his own, on his own time, if need be. The trip is tantamount
to indicating to other managers that "the water is fine for a swim!
Come on in!" The trip will also be an opportunity for Manager X to
make local contacts and do some initial market research to determine the
best way to position his company’s products or services or capabilities.
Finally, at stage 3 and even 4, the company should send delegations of
managers to the foreign country to "see with their own eyes"
the possibilities for profit in the new land. At this point, Manager X
can become a guide for the group, and may even find himself installed
as the head of the foreign office.
Eventually, more and more staff from the office will stake their claims
in the new market, and business with the foreign country will become self-perpetuating.
At which point, Manager X will know it is time to discover a new world
to explore...and to share with his peers.
Author Bio: William R. Dodson is Managing
Director of Silk Road Communications, L.L.C., which advises businesses
on how to adapt people and products for success in international markets.
He writes the weekly column "The Cultured Business," found at
www.silkrc.com and is a contributing editor to AMA’s MWorld Journal
of Management. He can be reached at wdodson@silkrc.com
or +1 (847)722-7817.
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