Continental divide Featured

9:57am EDT July 22, 2002

In the 1970s, Albert Bersticker spent eight years in Spain, running one of Ferro Corp.’s overseas operations. The job required complete immersion in the Spanish culture and an understanding of how local firms did business. Bersticker later became Ferro’s CEO, blending his foreign experience with the Cleveland specialty chemical maker’s history over nearly 80 years of international business.

“You’re not thinking globally if you still see a substantial difference between Singapore and Cincinnati,” Bersticker maintains. “Unique problems arise when you are dealing with a global economy — problems that spring from the obvious fact that you are doing business in foreign lands.”

To that end, Ferro has developed seven rules for handling its global business dealings. According to Bersticker, the size of your company doesn’t matter; the rules still apply:

1. Rely on experienced international executives.

“Truly international executives have a very specific mindset,” Bersticker explains. “They accept different ways of accomplishing the same goal. They have to, because they encounter different methods and approaches wherever they travel. They also possess genuine interest in, and respect for, other peoples and cultures.”

2. Implement locally, but always remember the big picture.

Local or native-born managers are better attuned to local customs and methods than someone from the corporate office. “However,” Bersticker warns, “those managers should always be guided and supervised by company personnel from home. Over the years, we learned it was a mistake to expand into a new market by turning over all operations and control to local personnel.”

3. Be ready to deal with new and often extreme conditions.

Train your employees about foreign culture, including languages and local customs. “In Japan, for example, when someone hands you his business card, it is considered extremely bad manners to simply take the card and stick it in your pocket,” Bersticker says. “You must accept the card with a brief bow and then scrutinize it intently for a second or two, as a sign of respect.”

Also, have contingency plans in place to deal with crisis situations, such as political unrest.

4. Measure results in U.S currency.

Results in any other denomination can be misleading. For example, prior to Brazil’s economic reforms of the 1990s, Ferro’s Brazilian operations reported exponential growth in sales and earnings. Unfortunately, that growth was measured in the local currency, which went into a free-fall when the Brazilian economy collapsed.

5. Offer the same high level of quality in all markets.

“One of the surest ways to ruin your chances for success in a new or emerging market is to think of it as little more than a dumping ground for old products and technologies,” says Bersticker. “Few customers will accept anything less than the best your company can offer.”

6. Focus on the customer.

“No matter what the product or service you offer, your customers ultimately want you to provide them with four specific benefits,” he says. “Added convenience, greater efficiency, high reliability, and finally, an improvement in the quality of their lives.”

7. Look to the future.

Keep your company’s foreign goals subordinate to the long-term future prospects of the parent company. “Individual markets come and go,” Bersticker says. “But the truly global company constantly weighs the value of each of its foreign operations. Maintaining an international focus does not mean the company can indefinitely support underperforming operations, simply because they are in foreign territory.”