Going/Growing Global

Call it the law of unintended consequences.  You’re a rapid-growth local food company.  You build out your market in concentric circles.  Local…regional…national.  But one day…boom.  You’re selling into the military.  Where are their end-users?  Iraq.  Afghanistan.  You’ve got to drop-ship into Dubai.  Congratulations!  You’re now a global company.

How do you execute on the opportunity?  Hire someone in Dubai to oversee?  Pay a premium to an international broker?  Is there a stateside supply-chain/logistics who does it all from here?  You quickly have to know what questions to ask.  Having an Advisory Board with broad reach and expertise makes a material difference to help you navigate the decision tree — profitably.

We’re living in an interdependent, connected 24/7 world.  And despite the worldwide economic downturn, globalism is not dead, according to Richard Fisher, president of the Federal Reserve Bank of Dallas.  This was discussed at the daylong inaurural conference of the new O’Neil Center for Global Markets and Freedom at SMU Cox, where I spoke on the panel, Accessing Global Talent.

The statistics are not cheery.  We’re experiencing historical drops in global trade.  Sales and shipments of both durable and intermediate goods are down.  A particularly visual datapoint relates to overcapacity and slack in cargo.  Currently, there are 178,000 freight cars sitting unused.  Picture an empty train 2,900 miles long, stretching almost end-to-end across the U.S.

Fisher’s soundbite of the day warned against the danger of protectionism.  ”It is, quite frankly, the crack cocaine of economics.  It may provide politicians with a temporary high, yet it is instantly addictive and inevitably proves debilitive and fatal.”

But Fisher encourages us to take heart. He notes that Americans are inherently capitalistic and thrive on competition.

Thomas Falk, chairman and CEO of Kimberly-Clark, validated the continuing importance of global markets with his lieutenants overseeing China and Russia in tow.  Targeting global customers is critical to growth.  But the key to extend , target and capture worldwide market share is to learn the quirks and minutiae of local customers, which means understanding local culture, which in itself is evolving and changing with globalization.

The competitive roadmap is different for each geography.  China has 150 brands of disposable diapers.  Russia has six.  Distribution channels are even more complex.  There is no one rule/approach for global expansion.  It’s not a mass-market approach, but a custom fit.  It’s all local, local, local.

That means cutting through bureaucratic red tape and finding the most welcoming and efficient locales for new plants.  It means gearing up for rapid growth in China, where the best and brightest employees seek companies that can deliver 40% annual growth and a robust future career path.  10% is measly.  You have to enter the market with a big plan and commitment.

In the early gold rush to put down stakes in China, American and European companies have been competing with each other for local talent there.  Today, the big competition is with Chinese national companies which are raising the ante in compensation packages, promises for growth and patriotic prestige.

Later in the day, Rich Templeton, chairman, president and CEO of Texas Instruments delivered an ”ah hah” moment regarding the global aspect of their corporate DNA.  The company was founded by entrepreneurs in the oil services business — early global road warriors with customers, relationships and a business view that was far more far-reaching than less-traveled domestic counterparts.   When I met my husband, a deepwater subsea engineering expert, he had the most exotic range of passport stamps of anyone I had ever known!

TI was early to expand into postwar Europe in the 1950s,  Japan in the 1960s, Asia in the 1960-70s and India in the 1980s.  Today, 88% of revenue ships outside of U.S.

The company embraces the global marketplace as an opportunity not a threat.  ”We do not know borders,”
he explains.

Talent also has no boundaries, so TI casts a wide global net to target the top engineers/designers in each locale.  Their historical global presence also put them close to global customers, solving unique problems and tapping in to emerging innovations at a very early stage.  Products are developed by multi-country design teams.  Templeton touts that TI stock provides a way to invest in global markets.

So how does Dallas fit into the picture?  As a global business nexus, opines Fisher — with confirming statistics on the Ascension of DFW presented by O’Neil Center director Michael Cox, former chief economist at the Dallas Fed.

With brain power, transportation, favorable cost-of-living, entrepreneurial spirit, DFW is a location to which global talent is easily willing to relocate.  The local area has grown from a scant 3,000 in the 1870 census to a burgeoning population of 6 million — now the fourth largest metropolitan area in the U.S.  Despite an unavoidable impact from the global recession, the North Texas area still has the lowest rate of unemployment anywhere in the country, except the home of the federal government — Washington, D.C.

“But that’s not a real city,” quipped Cox.

Scott Smith, VP of staffing at AT&T;, laid out an incredible, multi-media machine being built for recruitment of the 30,000 people the company targets hiring annually as it expands into new markets and replaces waves of BabyBoomers preparing for retirement.  It is a massive and impressive initiative!

For other companies fighting for the same talent pool, recruiting resources will continue to offer a similar, aggressive, multi-tentacled, high-tech, high-touch reach into the global talent market that the Davids of the hiring world will need to compete with the Goliaths of the Fortune 100.

Like the Marines, we’re ready…we’re prepared.  Bring it on!

October 20, 2009 by Nancy Keene