Working across borders – international corporate communications professional Toomas Kull shares the challenges of international expansion in chapter 24.
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WORKING ACROSS INTERNATIONAL BORDERS Toomas Kull
• What to consider when planning an international expansion strategy
• The challenges that come with cross-border working
• Ways to reduce risk when entering new markets
If you’re trying to grow your business, one of the first steps on the road to success is developing and maintaining a local client base. Once this has been achieved, some business owners may feel they are ready to expand operations internationally to increase their competitiveness, generate additional revenue, and capture the advantages of a globalised marketplace.
To successfully convert a communications business from domestic to international, a number of issues should be considered when formulating the international expansion strategy.
Some ‘inward-facing’ services can be delivered from anywhere in the world (e.g. communications audits, development of plans, processes, strategies and programmes) much more easily to more ‘externally’ facing ones (e.g. media engagement, profile raising, crisis management).
However, there are limitations to running longer-term projects over the phone and the use of digital channels can be disrupted by different time zones and cultural attitudes. Over time, even the cost of flying may be considered too high.
Therefore, having people on the ground can be an economic as well as practical consideration and help to underpin the business offering.
Opening a new office in a foreign market is resource intensive and needs to be financially viable.
It is likely that a business will need to be on location for a while before new business leads convert into revenue. It can easily take three or more years before an office becomes profitable.
If there is an economic downturn, then it is important to remain in the market. In many non-Western countries and cultures, contacts will be appreciative when they see that a firm has stuck around through the hard times. If a temporary retreat is made, the relationships are unlikely to survive.
Consider whether there is an established market for communications services or one which is beginning to emerge. Take time to plot the competitor landscape, consider the scope and scale of operations, and whether the business will have a distinct offering.
While company size does not always matter, expansion can be trickier for specialist or boutique consultancies that lack the brand name and perceived trustworthiness of the bigger players.
Relocating staff from headquarters can be a straightforward way to get the new office up and running. However, this reduces the numbers available to service existing clients in the domestic market, making it more difficult to sustain growth.
One of the biggest challenges for communications companies is finding and recruiting the right talent in new markets, particularly in specialist areas of communications that go beyond consumer PR and marcomms. On the other hand, senior local professionals are likely to have connections which are invaluable for demonstrating local market knowledge and securing new business.
The challenges of working internationally
• Cultural differences and language
The ‘Western approach’ to business does not work everywhere, and variations in cultural norms can impact international expansion and project delivery.
Business conversations in the US can be upfront and direct, but in Asia, the Middle East, and Africa, initial engagements take more time, with greater emphasis on developing trust.
Even in France and other Southern European countries, it is important to establish a basic level of familiarity first.
"Building trust is a critical first step to doing business in Asia," said Jacqueline Ratcliffe, international communications specialist.
"As a newcomer, ensure that you invest the time upfront in getting to know your existing and potential business partners, both professionally and socially. This is also their chance to get to know you and assess your credentials before making any commitment. Strong relationships and word-of-mouth will open the door to opportunity".
While the international business language is considered to be English, operating exclusively in English does not ensure common understanding of the issues at hand.
Being able to communicate in the local language allows for more meaningful relationships and trust to develop and even a limited proficiency can help with understanding client needs. However, when entering negotiations and detailed discussions, insufficient fluency can become a blocker.
“Cultural sensory perception is critical,” said Dr Barbara Gibson, global communications consultant, referring to the ability to spot when culture is in play.
“This requires a broad knowledge of cultural differences and the generic ways in which they differ, particularly from your own. This is especially critical in high risk situations such as conflict and negotiation, because once you’ve spotted that something is wrong the deal may already be lost.”
For many communications consultancies, translation is key to the work that they do and produce. It is important to be able to deliver high quality translations that can bridge any gaps between regional variations in the language.
• Approach to media relations and communication
The geography, economy, and history of a country are likely to dictate the practice of public relations and the approach to media reporting.
“Those companies which have international operations or a global perspective will often consider themselves to be standard bearers for their industry or their country in overseas markets. They see the benefit in sound communications and will invest in advancing and protecting their reputation, and thereby their licence to operate,” said Claire Maloney, partner at CNC Communications.
In many emerging markets, clients can have different expectations of what is achievable in PR. For example, it is not uncommon for clients to demand media coverage which is favourable to them (and unfortunately, The Economist will not publish a story just because the client wants them to).
Across geographies and company sizes, social media is becoming a great equaliser. Even in Far Eastern markets where the media is considered to be tightly controlled, issues and crises play out on regional (and international) social media channels. As a result, social media is changing the pace at which local companies recognise the need to communicate proactively and manage reputations.
Advice and tips
• Put together a great team
Hiring people already immersed in the local environment can help bridge the cultural differences and language barriers and provide access to new business leads.
However, the business also needs someone who can embody and communicate the company’s brand and values. Local hires can be supported by relocated staff who know the market and can establish the company standard.
In the longer term, international talent can be fostered by offering young professionals from the home market the possibility of spending time in another country office.
• Expand with a client
Where possible, expand into markets where the company has strong links or a long-term engagement with a client.
"Opening an office in a new market is often driven either by your existing client portfolio, or by the search for new opportunities. In either case, entering a new market with a secured ‘anchor client’ will allow you to hit the ground running, generate essential initial cash flow and gain local exposure while you search for new business opportunities,” said Jacqueline Ratcliffe.
• Find other ways to enter the market
Although a strategic partnership might not offer the full set of advantages to having your own office, it can create other types of new business opportunities. For example, it allows you to advertise a presence in that country, and clients wanting to enter the market can rely on your insights and contacts.
Furthermore, there are shortcuts to finding and setting up an office, which can be time consuming and costly.
“[Over the last ten years] It has become more socially acceptable to work out of co-working spaces, business hubs and even cafés. You can do this on a global basis at a fraction of the cost of a full office,” said Michael Ambjorn, founder of Align Your Org.
• Adapt to the requirements of each market
Despite clients seeking international communications knowledge and expertise, communication services that appear to have been copy-pasted from the domestic market will be rejected.
There is a greater demand for local content and locally originated ideas which are delivered in a culturally relevant way with greater impact. Communications services and the way in which clients are engaged with may require adjustment according to the varying cultural norms and market needs.
Nowadays, companies and government agencies increasingly encourage the development of know-how in their countries. Clients want to see the transfer of knowledge and building of skills in their markets.
There is a tendency to combine markets into a homogenous group, such as ‘emerging’. However, within each country there are differences in the media landscape, communication practices, social media use, culture, and laws.
What works in the Middle East, in terms of setting up a new office, building a team, and developing a client base, would not necessarily work in a place like Hong Kong.
There is real benefit and strength in considering each market separately and on its own merit.
Toomas Kull is an international corporate communications professional, and provides reputation and issues management advice to clients across sectors. He is a board member and president-elect of the UK chapter of IABC (the International Association of Business Communicators), a non-profit global network of over 14,000 communication practitioners from more than 70 countries.