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Feb
16
2009

Inability to Scale Biggest Mistake in Trying to Grow Globally

As this recent story in Fast Company illustrates, globalization creates some fascinating challenges and opportunities for associations. Saw this first hand in 2006 while meeting software executives in Bangalore.

I’ll be presenting a session at the upcoming ASAE & The Center Great Ideas Conference on Sunday at 315pm entitled “Act Locally, Think Globally: Leveraging Opportunities.”

The biggest lesson I’ll share from our “in field” client research and case studies is that most associations fail to grow their regional business because they try to operate locally using underdeveloped operational models.  In other words, they cant scale to meet local demands that require better marketing, adapting product to market, or selling.

It isn’t hard to see if you think about this problem from a different point of view.

Often clients need to make a critical attitudinal adjustment as they adapt themselves to new markets.  This new mindset requires one to think like you are starting your association from scratch as any “start-up” business might. It requires running your operation with revenue in and expenses out so as to prove it can stand on its own over a realistic time table.

Thinking like a start-up means you need:

  • An active and visible local presence – that provides a platform to project in a region (especially underserved areas) and demonstrate your commitment to regional stakeholders that you are there not to “take out” value but to “invest” value that returns for everyone.
  • Management on the ground that is matrixed (or fully integrated) into international HQ – to drive local efforts in defining market opportunities, create strategy, implementing programs and relationship building.
  • Lower communication and cultural barriers – so your local people with the functional business and technical expertise can ensure that “Europeans talking to Europeans” can better fulfill the mission.
  • To integrate local volunteer leaders into your management process – not providing opportunities for “real” self-determination” or the ability for them to have a stake in building “locally relevant” products and services will create perceptions that you have no intention of truly serving the needs of the local community. Associations must create collaborative governance and product development models that will significantly benefit future international Board and staff decisions.
  • To treat the market as an investment with a tangible, measurable, locally relevant strategy and implementation plan - growth requires investment and measured effort to expect yields.  Focused and mandated personnel concentrating only on core market sizing, strategy, business development and relationship building without being cannibalized by other HQ projects or by other lines of businesses is critical.
  • Calculated risk management – you do that by keeping the costs to enter/exit a market manageable.  Scaling work load based on strategic priorities and local needs; revenues collected and expenses paid in local currency of that country to mitigate currency exposure.  Getting shielded from local personnel laws concerning hiring, discipline, or HR benefit costs by leveraging an existing WOFE status.
  • To accelerate time to market – Having scalability in serving a market will permit you to act on strategy and opportunity more quickly so that operational planning and implementation is faster.
  • Scalable operations – Having the ability to adapt resource needs quickly any where in the world by project or for other purposes with the proper expertise when needed.

As association executives we need to lead our volunteer leaders through a risk management exercise to help them appreciate the need for operations investment that can scale.  This requires good field research, a business plan with a financial and operations model that defines success using KPI’s over a three year period.

Here are the slides.

About the author

Peter Turner

As MCI's Senior Advisor, Global Development Strategy, I help associations build and execute global growth strategies. Over the past 30 years I have served three associations (ASAE, MPI and IEEE Computer Society) as a leader of business, product and partnership development.

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