When growing your business overseas, it’s probably pretty easy to realize that you need a long-term growth plan, a strategy on how to approach the markets you are targeting and any number of other wide-ranging, strategic items that make good business sense.
But, says Charles “Chip” McClure, don’t forget the little things as you look to plant your company’s flag in Europe, Asia or Latin America. They’re the seemingly obvious, all-too-easy to overlook checklist items that tend to disappear when you get caught up in your high-altitude vision planning.
McClure, the chairman, president and CEO of ArvinMeritor Inc., a $6.4 billion manufacturer of automotive systems and components, has firsthand experience with building a worldwide company. He lived in Germany as a business expatriate in the early 1990s, and has helped spur a worldwide growth plan that has seen ArvinMeritor significantly increase its presence in Asia, Eastern Europe and South America.
When it comes to generating business and relating to international customers, sometimes the biggest steps you can take are the smallest in scale.
“Remember that there is a 12- or 13-hour time difference between the U.S. and places like Japan and China,” he says. “If it’s early morning here, it’s evening over there. So it doesn’t hurt if you have meetings late at night so that it’s morning in other parts of the world. It really helps to be sensitive in that way.”
Growing your business overseas is a large-scale, costly and time-consuming endeavor. It can allow you to reap large rewards, but getting to that point takes planning on both a big and small scale and a willingness to sweat the details.
Here’s how McClure has conquered some of those challenges.
The human touch
When McClure is interviewing for an overseas management position, he has two questions he asks every candidate: “Do you know a second language?” and “Have you had a chance to live and work internationally?”
The first and most important component of successful overseas expansion is the people you put in place to run the show. McClure says the best candidates won’t just have a working knowledge of your company and industry, they’ll also have an extensive knowledge of the culture, business climate and customer base of the country or region you are trying to broach.
“The person who heads up our Asian unit has been with ArvinMeritor for about eight years,” he says. “He is originally from India, was educated in the U.S. and is now based in Shanghai, China. So you have to have people who know how to do business in the area, from the leadership on down.
“The bottom line is that you need to have people on board who have had international experience. I encourage people to take (expatriate) assignments because it really does teach you a lot about the globalization of business.”
As part of ArvinMeritor’s expansion plan, McClure places an emphasis on educating his employees on cultures and customs from around the world. It’s something McClure says should be reinforced at regular intervals, and it can be done in a format as basic as a lunch meeting.
“We’ll have our people bring their lunch for doing a lunchtime training session,” he says. “As part of our diversity exercise, around Cinco de Mayo, we had a lot of programs about what goes on in the Latino culture. We’ve had people come in and talk about how to do business in Asia, about business opportunities in Eastern Europe.”
But it doesn’t just stop at learning about cultures and customs. McClure says that learning to communicate in other languages is important for any business leader who is exploring growth opportunities overseas but especially for American businesspeople. Traditionally, English has been the language of business, and even though many businesspeople from other countries learn English as a second language, it still aids communication in a big way if the native English-speakers learn how to conduct business in the local language, mainly because important points can get lost in translation.
It’s something McClure learned firsthand during his time in Germany.
“If I go back a long time ago, I did not speak German,” he says. “After six months living in Germany, however, I had learned to speak German to the point that I would conduct my meetings in German. That’s when I learned that we would get all these documents from the U.S. in English, but when we’d go down to Spain, the operators on the factory floor wouldn’t understand it.
“When things were translated, you might get about 80 percent of the meaning. The other 20 percent might get lost due to differences in grammar, sentence structure or idioms that don’t translate well from one language to the other. Sometimes that 20 percent is nuances, but sometimes those items can be very important.”
The solution is another detail that can sometimes get overlooked: Write in the native language; try not to translate.
“That’s where our communications wing comes in because we want to make sure that worldwide we are communicating the same thing,” McClure says. “You want to make sure that you are not just translating from English to Mandarin in China. You want to make sure you have it written in the local language and written at a level that various people at levels throughout the organization can understand.”
Driving the same standards
Beyond the obvious language and cultural difference and the time gap, McClure says there really isn’t much of a difference between communicating domestically and communicating internationally. You need to hammer away at the same messages, every day, and keep your communication philosophy as simple as possible.
McClure says dodging tough questions with vague answers and lacking clarity when it comes to your core values are among the things that can damage your ability to grow close to home. When you’re trying to build a business in a far-off nation, the problems can be magnified.
At ArvinMeritor, McClure values a culture of openness and transparency and wants employees who feel the same way.
“We spend a lot of time talking about ethics, integrity and looking to attract people who are the same way,” he says. “That’s where it helps to have been in the country for a while. We understand the culture, and people know and understand us, so it’s a little easier for a company with more experience, as in our situation, than a company that is new to the area.”
To stay current on what is happening, McClure travels often to ArvinMeritor’s facilities around the world. When he’s not traveling, he and his senior managers are frequently conducting video-conferences.
When McClure does travel, he makes it a point to get down to ground level, both figuratively and literally.
“I think that part of my role as a CEO is to provide the vision, drive the strategy, communicate, provide the resources and get out of the way,” he says. “I have to have the ability to view things from 35,000 feet, and then come down to sea level when needed, then go back up to 35,000 feet and let our people get the job done.
“With that in mind, when I go to a plant, I don’t tend to spend much time in a conference room listening to a nice PowerPoint presentation. I’d rather spend more time out on the floor with the operators so we can kind of track what is taking place, what areas of improvement are needed. It’s all about communicate, communicate, communicate, and then hold people accountable.”
Face-to-face interaction is the most effective way to communicate and drive the same standards across the board, but any way you can bring two groups of people together is worthwhile. Employee interaction not only gives you a chance to communicate, but it also gives people in different departments a chance to communicate with each other.
“We’ve been in India for a long period of time; we have had an engineering center there,” McClure says. “I took the entire officer group over to India a couple of years ago, and we spent a week traveling through the country. What has come out of that besides the face-to-face contact was that there were a lot of meetings spawned on the engineering side, on the manufacturing side, and things like that.
“So at the end of the day, there has to be a personal interface, and there also has to be good communications technology in place because you won’t always be able to be there in real time.”
Communicating with your key players in international markets is vital, not only so you can keep tabs on what is going on within your plants and factories, but, McClure says, it also gives you an early warning system for approaching change or potential trouble.
He says that knowing what is going on in both the business and political climate of a given country is crucial to maintaining your presence there. With that in mind, he’s involved ArvinMeritor leaders in both the U.S. and abroad in forming an enterprise risk-management system. The risk-management system helps McClure identify trends in various countries, allowing senior management to formulate response strategies.
“For example, there is a definite migration westward from the east coast of China,” he says. “It becomes much more difficult to move materials to the interior of China as it is moving materials to eastern Europe. So as you move further in-country, you need a good enterprise risk-management system in place.”
Risk management also comes into play when considering natural disasters or geopolitical issues that could affect your ability to move materials both in and out of various countries.
“If ports on the west coast of the United States close down for whatever, how are you going to get material in from Asia?” McClure says. “If ports are closed due to political instability in some countries, how are you going to get material in and out? There are a lot of those different dynamics that vary from country to country.”
In the end, it all comes back to communication. McClure says an organization with a transparent communication culture and employees who are enabled and encouraged to work with their coworkers all around the globe is an organization that will be able to adapt more readily to unexpected circumstances.
“You have to make sure you have the people and systems in place,” he says. “It’s all about the integrity of your people; that the organization understands what you are trying to do. If you don’t have the people, it won’t work. That’s why we spend a lot of time communicating with our people and investing in them.”
HOW TO REACH: ArvinMeritor Inc., www.arvinmeritor.com