Plus Consulting was no stranger to international work, but it didn’t add a foreign office until a 2014 acquisition.
The Microsoft National Solution Provider has offered technology consulting services for 18 years. Plus also customizes Microsoft, Salesforce, Infor and SugarCRM customer relationship management products, and has a security and strategy consulting practice.
Many of the 125 employees are in Pittsburgh, but its North American customers often work around the globe.
CEO Steve Smith says Plus even consulted for the Macau gaming industry — setting up a legal entity there — before changing Chinese government policies choked off that business line.
“In an international situation, there are things that are beyond Plus Consulting’s control. It’s difficult for us to even stay on top of what’s happening and why it’s happening,” Smith says.
Today, the technology consultant has about 50 customers in Australia and New Zealand through its Melbourne office. Smith says one-fifth of the revenue is tied to Australia. Even more impressively, its profits are on par with the North American profits.
Culture is king
From the start, Smith expected time zones to be a challenge.
“You need to have great leadership built into your business plan cost model from day one, in order to be able to have a life,” he says.
For the first two years, Smith or another leader would be on the phone every night. Now, strong Australian leadership requires less U.S. management.
Another lesson learned was the challenges of currency fluctuation. An international acquisition might be worth 80 cents in local currency to one U.S. dollar at the time of sale, but when it’s time to repatriate profits, that disparity could have increased.
“Everybody in the banking industry can do banking within a country; not all banks are equal when it comes to doing international banking,” Smith says.
He thought all banks could electronically convert currency in a millisecond. Instead, Plus had to change banks in Australia twice.
What Smith truly underestimated, however, were the cultural differences, even in an English-speaking country. Australians are consummate professionals who work hard and dress much better than Americans, but some differences require planning.
In the U.S., 40 hours is typical. Smith says the typical Australian’s workweek is in the low or mid 30s and company hours must include room for things like filling out timesheets.
Americans rarely take more than two weeks off, but with Australia’s history of the “walkabout,” workers may take large chunks of vacation.
“They have no professional qualms with taking every drop of vacation all at once and leave for a month at a time,” he says.
Smith says it’s also strangely common for long-term employees to quit for six months or a year to attend to another aspect of their life.
“So, we need to plan for the possibility of someone coming back, maybe, in a year,” he says.
Smith would take more time to understand cultural differences before another international acquisition. For example, a handful of Plus’ customers operate in Australia, so Smith admits he should have leveraged those relationships to learn what it’s like to do business there.
“I’d have a more intelligent set of questions to ask people now in hindsight,” he says.
That’s what happened with a Brazilian company.
“We listened to my own preaching on doing the research, so we did extensive research of what the culture of business was like in South America,” Smith says. “As a result of that, we decided for our business model at Plus, we could not make it worthwhile in a financially viable way and so we passed on the acquisition. Not because the acquisition on paper didn’t make sense, it’s because the long-term impact of the business culture would have made it difficult for our business model to work within South America.”
Investing in relationships
Within the U.S., Plus’ geographically dispersed team comes together annually in the spring. Smith considers it money well spent. Internationally, he tries to bring the leadership together and U.S.-based leaders go to Australia four or five times a year.
“Those are investments you have to make in order to make it all work,” Smith says. “It’s expensive. Flights are expensive. Travel is expensive. The time to get there is expensive. Those are all things you need to plan for.”
Plus has been growing about 20 percent year over year. The growth has come from business development, a handful of acquisitions and investing in partnerships. The company has people dedicated to solely managing certain relationships.
“Every company you partner with, they have their own way of doing things and we need to adapt and blend with it as best as we can,” Smith says.
Plus focuses on the long term, what Smith calls the “get rich slow” method. With regards to sales, he wants people to either call Plus first or already be familiar with the company.
“It’s investing in our community and working hard to be viewed as thought leaders,” he says.
Plus creates networks like the Greater Pittsburgh CIO Group, which consists of CIOs and IT professionals, both customers and noncustomers. Plus doesn’t use this to sell; instead it builds trusted relationships, a good reputation and learns about industry trends and challenges.
It takes decades to build networks and is difficult to do internationally or in areas where a company has fewer people.
“In Australia, our partnerships get a lot more of our focus and attention,” Smith says.
Employees focus on the Microsoft and Infor relationships, not being community thought leaders.
“You need to have a certain breadth and depth in terms of human capital in a geographic location in order to have a legitimate impact of being viewed as thought leaders,” Smith says.