Global Business in EDA
Modesto Casas, has 28 years of worldwide market successes. He is multi-lingual and multi-cultural having lived in six countries. Mo has taken several start-ups to international regions and developed them into compelling local enterprises. His company, In Region, takes high technology companies … More »
Develop Which Europe?
July 18th, 2010 by Mo Casas
I had been working with a client on a new product positioning. It was a very valuable product offering and not very complicated to explain to potential customers. We were on the way back from a busy one week trip to Japan. We had been presenting the product for five days of double two hour meetings followed by wonderful working dinners, where each night the great sake threatened to open the locks to our as of yet unannounced product features. We were taking a few notes and talking about what we had learned. Then the client put his pen down on his note pad and asked “How do you think Europe will react to this. With all sensitivity extracted by the previous nights and days, I responded: “Europe? Which Europe?”
If you watched the World Cup of Soccer, you probably noticed the difference in styles, speeds and organization in the different teams. You may have noticed the French team exercising their individualism even against their own coach, the German team fast and well organized with few outbursts of anger, while the Spanish and Italian teams were full of fire and showing their frustration with pouts, grimaces and much hand flailing. You may also notice the nationalism and rivalry amongst their supporters. This should convince you that Europe is not a country, but rather a continent with different cultures, rules of conduct and ways of doing business. Europe isn’t any more uniform in its ways than the soccer fans are in the color of their face paint (see reference reading below).
These differences are important when developing the European Region. It is common for US companies to begin their European adventure with a single office in one of the countries. Often selected based on previous ties by one of the company executives. This is not a regional strategy and while it could temporarily work, it could also damage the company’s image in the Continent. European countries (and people) approach business and relationships in such different ways that, unless your plan takes that into account, you are almost sure to be wrong.
I prefer for my American clients to begin their European development in the United Kingdom with one or two people who can sell and support their customers from a location that is close enough to Europe (The UK is not Europe as you will be reminded there if you mistake Britain for a European Country). The local people don’t have to be employees, who are expensive to have in the Continent. They could be representatives, resellers or distributors on a mostly variable compensation plan.
The rest of Europe expects American companies to do this and no one will be too surprised to get a call from a representative of a US company with an English accent. Doing business in the UK is very similar to the US, the culture and values have many commonalities and language problems are minimal with a few spelling exceptions. In general, UK salespeople are entrepreneurial, direct in their feedback and very responsible. The regulations and paperwork required to register and run a business are not as complex as other countries and the ability to visit or transfer employees is not difficult.
When a product or service is targeted to a specific market or already enjoys business traction in one of the other European regions. There is no better way to do business than locally and if placing a native local representative is not possible while building a region, a good guideline is to keep the language capabilities of your representative as close as possible to the linguistic characteristics of the customer. A representative in Southern Europe (Latin languages) can more easily cover customers in other countries in the region. The same is true for German representatives, who can easily serve Switzerland, Austria and Eastern European countries. English enjoys a prominent position in global business all over Europe, but language, cultures and ways of doing business tend to track each other a lot more closely than the apparent uniformity of the English-for-Business guidelines.
Very few salespeople can be truly Pan-European and succeed in all markets. I know a few and they are a unique breed. It is not the representative’s fault, it is frustrating for a Finn to do business in Italy when everyone apparently talks endlessly and circumvents the important issue; however the Italian customer is trying to get to know the salesperson, thinking out-loud and encouraging a discussion that will lead to a decision. Given the same situation, the Finn may ask three leading questions, look at his shoes and talk among a small group in a more orderly fashion. I am not going to discuss the after hour celebrations when a deal is consummated, because in that department, your quiet Finns outdo almost everyone else.
Finding a Pan European agent in any country is always a challenge. I find it best to target experts who know a specific market or product. I look for multi-lingual people and if they have multi-country residences, they have proven that they can function in multiple cultural environments. I have had success with people who attained higher level positions in larger and successful companies and have experience managing customer relationships in many European regions. These people are expensive, but the most entrepreneurial will work on contract basis or as mainly commissioned representatives. Remember the Peter Principle (See Note 1 below) applies, so check that their approach to customers is adjusted to fit the customer’s way of doing business, rather than imposing their own.
There is no substitute to going local as soon as you have enough business to sustain an employee or representative in each linguistic area. Build regionally and grow locally if you can.
Note 1 “Peter Principle” is an idea first formulated by Canadian author Laurence J. Peter (1919–1990) in his best-selling book The Peter Principle: Why Things Always Go Wrong (1969). The central thesis of Peter’s satirical commentary on business bureaucracies is that “in a hierarchy, every employee tends to rise to his level of incompetence.” According to Peter, work is accomplished only by those employees who have not yet reached their level of incompetence. In this way, organizations and businesses can still function. The result is that stagnant companies are more likely to have incompetent employees at many levels of their organization, whereas growing companies who add new positions and employees can forestall the Peter Principle as long as growth continues.
US History Encyclopedia
Reference Reading: http://en.wikipedia.org/wiki/Regions_of_Europe
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