China’s appetite for pork spurs $4.7 billion Smithfield buy

NEW YORK, Thu May 30, 2013 — Shuanghui International Holdings is buying Smithfield Foods Inc., the world’s biggest hog producer, for $4.7 billion to feed a growing Chinese appetite for U.S. pork, in a deal that has stirred concern among U.S. politicians.
Announced on Wednesday, the takeover would be China’s biggest of a U.S. company, with an enterprise value of $7.1 billion, including debt, and follows a call by Smithfield’s largest shareholder, Continental Grain Co, to break up the company. Continental could not be reached for comment on Shuanghui’s proposal.
The deal highlights China’s growing appetite for protein-rich food, particularly pork, as its middle class expands, making China more reliant on foreign producers.
“I think this is a move by China to make sure their population is going to get fed in a cheaper manner. It’s the right move for them,” said Brian Bradshaw, a pig producer with operations in Illinois and Indiana, who has sold hogs to Smithfield. “Time will tell whether it’s the right move for the rest of the pork industry.”
The deal will face scrutiny by the Committee on Foreign Investment in the United States, a government panel that assesses national security risks. At least one member of Congress said the deal raised alarms about food safety, noting Shuanghui was forced to recall tainted pork in the past.
“I have deep doubts about whether this merger best serves American consumers, and urge federal regulators to put their concerns first,” U.S. Representative Rose DeLauro, a Democrat from Connecticut, said in a statement.

How to expand your business into Asia

Mark Matuscak, President and CEO, Benefitdecisions, Inc.

Mark Matuscak, President and CEO, Benefitdecisions, Inc.

Emerging markets in Asia present significant growth opportunities for businesses, but they also pose many challenges in terms of culture differences and government regulations.

“One reason Hong Kong and Singapore have become popular as a first destination for companies expanding into Asia is because they have very good legal systems with good intellectual property protection,” says Mark Matuscak, President and CEO of Benefitdecisions, Inc. “Other key factors are a strong talent pool of local skilled labor, favorable tax rates and a central location that makes travel within the region easy. Companies may be targeting business in China but set up in Hong Kong first as a gateway. Then geographically and culturally you’re much closer to the Asian markets, and it’s easier to build on that.”

Smart Business spoke with Matuscak about what companies need to know from an HR and benefits perspective before expanding into Asia.

How do HR requirements differ when setting up a business in Asia?

The concepts are the same — payroll and benefits — but statutory requirements are much different than in the U.S. and they vary by country. For example, all employees in Hong Kong have a mandatory provident fund that requires a 5 percent contribution by the employer and a 5 percent contribution by the employee. In Singapore, there is a mandatory central provident fund and the average employer contribution is 15.5 percent; that’s a substantial difference.

There are also differences regarding minimum wages, employee compensation insurance, notice periods, holidays, sick leave and even the manner in which people are paid commissions or bonuses. In some countries, laws regarding maternity leave protect a woman’s job as soon as she declares she’s pregnant. Companies expanding to Asia shouldn’t underestimate the complexities involved with HR.

What are the tax differences?

It’s difficult to generalize, as it varies among countries. Since that affects the design for employee benefit packages, it’s best to get an all-encompassing target for wages and benefits. If you set $60,000 aside for a position, dollars can be shifted between items such as housing allowance, mandatory requirements, core benefits and salary.

Getting the right mix for the market is key to securing the right talent. Start with the existing benefits policy and conduct a benchmarking exercise to see what competitors in the area offer.

Can that be accomplished within a company’s existing HR department?

It’s always a good idea to work with someone with the expertise to understand the unique requirements, taxes, culture and laws of each country. For example, you need someone who can help design a staff handbook that’s congruent not only with the culture and policies of the organization, but is also compliant with local legislation. An HR outsourcing company can create a compliance scorecard that identifies all of the requirements of the various countries.

What issues need to be addressed concerning current employees who will be working in Asia?

There are a number of issues that need to be addressed. For example, the application process can take up to 10 weeks, so make sure an employment visa is obtained in a timely manner. Workplaces are often quite remote, so it’s useful to provide a support structure where employees can go for information about schools, etc. Identifying the issues upfront with an expert and strategizing how to handle them is the best plan to minimize unexpected delays or complications.

Are many companies considering expansion to Asia?

About 10 to 20 percent of middle market businesses primarily domiciled in the U.S. say they are looking to do business in Asia. All the indicators are that China will become the largest economy in the world by 2020, and India the third-largest by 2030. Businesses need to look ahead and develop their plans for growth. Many are entering into Hong Kong and Singapore now as part of their future strategy.

Mark Matuscak is the president and CEO of Benefitdecisions, Inc. Reach him at (312) 376-0431 or [email protected]

Insights Employee Benefits is brought to you by Benefitdecisions, Inc.

 

Apple’s Tim Cook meets with China Mobile chairman in Beijing

CUPERTINO, Calif./SHANGHAI , Thu Jan 10, 2013 — Apple Inc.’s Chief Executive Tim Cook met with China Mobile’s Chairman Xi Guohua on Thursday to discuss “matters of cooperation,” a China Mobile spokesman said, raising hopes that a deal between the two tech giants may move forward.

“In the morning, Apple’s CEO Tim Cook visited China Mobile’s headquarters. China Mobile’s Chairman Xi Guohua and Tim Cook discussed matters of cooperation,” said Li Jun, a China Mobile spokesman, in an emailed statement.

No further details will be given due to a confidentiality agreement signed, the statement said.

Apple, which has deals with China Unicom and China Telecom to sell its iPhones in China, has yet to strike a deal with China Mobile, the world’s largest mobile carrier by subscribers.

Inking a deal with China Mobile will give Apple access to a massive subscriber base and help arrest the Cupertino firm’s sliding market share in the world’s biggest smartphone market.

In an interview with local media on Thursday, Cook told reporters that he is confident that China will become Apple’s largest market in the near future.

“Currently, Apple has 11 stores in the Greater China region, as well as many resellers. We will continue to expand in China and the number of retail stores we’ll have will exceed 25,” Cook was quoted as saying by news portal Sina Technology News.

Wal-Mart to open 100 more stores in China by 2015

BENTONVILLE, Ark., Fri Oct 26, 2012 – Wal-Mart Stores Inc (WMT.N) plans to open 100 more stores in China and create 18,000 jobs there over the next three years, it said on Friday, in a bid to boost its presence in China’s booming but highly competitive hypermarket sector.

Wal-Mart, which has 370 stores and more than 100,000 employees in China, was a pioneer in the market, but now faces much greater competition from Britain’s Tesco Plc, Germany’s Metro AG, France’s Carrefour and domestic firms, as well as a slowing economy.

China’s hypermarket sector, in which retail sales reached 506.9 billion yuan ($81 billion) last year according to Euromonitor, includes the world’s three largest retailers in Wal-Mart, Carrefour and Tesco, and domestic brands led by Sun Art Retail Group.

U.S. firms less optimistic, but will still invest in China: survey

WASHINGTON, Wed Oct 10, 2012 – Many U.S. companies are less optimistic about doing business in China even though sales there are still rising, and most of those firms are planning to increase investment, according to an annual survey of business executives released on Wednesday.

“The China market continues to deliver sales growth and profitability for U.S. companies, but rising costs, increasing competition, and persistent market access and regulatory barriers are tempering the optimism of U.S. companies doing business with China,” the U.S.-China Business Council said.

Forty-five percent of the 111 companies surveyed said they were less optimistic than three years ago about the business environment in China, compared to 26 percent that were more optimistic and 29 percent that were unchanged in their view.

At the same time, 89 percent, the highest ever in the seven-year history of the business group’s member survey, said they made a profit in China in 2011 and two-thirds said their revenues grew by at least 10 percent.

The survey comes amid growing U.S. frustration that many parts of China’s economy remain off-limit to foreign investment 11 years after it joined the World Trade Organization. China also is preparing for a once-in-a-decade leadership change that could keep any new economic openings on hold for a while.

It was taken before the House of Representatives Intelligence Committee urged American companies on Monday to avoid doing business with China’s leading telecoms equipment manufacturers, Huawei Technologies Co. and ZTE Corp. because of security concerns.

The panel’s recommendation has raised fears of possible Chinese retaliation against U.S. firms.

While two-thirds of survey respondents said they planned to increase investment in China in the next 12 months, 17 percent said they had halted or delayed investment plans.

How to go about doing business in — and with — China

Julia Zhu, Senior Counsel, Dykema Gossett LLP

China’s economy is growing at a fast pace and its government has worked to attract foreign companies, which is opening opportunities for them to get involved in the country’s market.

“There is a demand and need by so many Chinese companies that have capital and want to expand their business but don’t have the technology a lot of U.S. companies have,” says Julia Zhu, senior counsel in Dykema Gossett LLP’s corporate finance group.

There are lots of matching opportunities for U.S. companies that have great technology but don’t have a market or the capital to expand their business, which she says creates a good environment for U.S. companies.

Smart Business spoke with Zhu about how to enter the Chinese market.

What do business leaders need to know about doing business in and with China?

First, it’s about the business structure you want to set up. Choosing a physical presence in the country or a procurement strategy depends on whether the company wants to produce goods or services in China for the domestic market. If the foreign company’s focus is on exporting, it might consider using China as a manufacturing base for finished goods or do production outsourcing, which means a straightforward procurement strategy. This can be good for foreign businesses new to Chinese markets while keeping the option open to setting up local production later.

What are some options in regard to business strategy and structure?

If the foreign business wants to set up a physical presence in China, two of the most popular choices are wholly foreign-owned enterprises and joint ventures.

Having a wholly foreign-owned enterprise means you have the sole responsibility for profits and losses. It takes less time to establish because the foreign company doesn’t need to find a local partner or enter into a joint venture contract. Also, this structure gives the foreign owner greater control over company operations, training and recruitment of employees, and better protection of intellectual properties.

With joint ventures, there are two types — an equity joint venture is typically used for long-term projects, and a cooperative joint venture is better suited for short-term projects.

Generally, joint ventures are preferred when a foreign company wants to enter industries for which the Chinese government has restrictions on investment. The government has a list of all the industries in which companies can invest only through joint venture structure.

A joint venture can also be preferred when a company needs a partner to share its capital burden. Chinese companies can have certain technological or distribution advantages, making a joint venture an attractive choice. Successful joint ventures are imbued with clear rules and clear strategy between partners.

There are some disadvantages, such as statutory features where Chinese law requires unanimous approval from a company’s board of directors for major issues, including capital changes and mergers and acquisitions.

How should location factor into a company’s strategy?

Location can be very critical to the success of foreign investors. They need to look at the nature of their business, as well as incentives offered by the local government, their logistical needs, import and export requirements, and government inspections and restrictions.

The theme now is to go west. The Chinese government has implemented tax policies as a strategy to encourage investors to go west. In some cases, qualified foreign investors can have tax holidays.

When people talk about investing in China, they often talk about first-tier cities, such as Beijing, Shanghai and Guangzhou. However, investors should consider second-tier cities such as Nanjing, Dalian, Wuhan and Chong-qing that have cheaper labor costs, greater government support and less competition.

What protections exist for intellectual property?

Intellectual property (IP) is a big concern for foreign investors. The government has taken measures to improve the IP environment. Although China’s IP environment is risky, many foreign businesses have found a way to work in it. The key is to take a proactive, strategic approach rather than a purely legal approach. Businesses should engage the legal system while reducing dependence on it. While traditional legal methods of protecting IP may not always be effective, copyrights, trademarks and patents should still be registered as an important starting point.

Some companies avoid manufacturing innovative, high-margin products in China and instead focus on mature commodity products with lower margins. Others might develop products in countries with better IP protection and bring them to China to guard certain proprietary details. You can also protect yourself with thorough investigation. Watch markets for products like yours, educate suppliers and employees regarding enforcement, and execute agreements to retain key employees.

How else does the Chinese legal system affect business?

Legal compliance in China is different than in the U.S., where one has the narrow task of following existing laws. In China, legal compliance should not be viewed as a standalone legal requirement removed from corporate activities and results, but as a key driver of project completion and investment returns. For business planning, it’s helpful to divide those compliance issues into several categories, such as actions that cause a project not to be approved; internal operating issues, such as those pertaining to labor; external laws, such as bribery and breach of contract; and investment exit issues. By taking a broad view of compliance and conceptualizing compliance issues as a vital part of business performance, it is possible to formulate a compliance strategy that substantially increases the likelihood of success of foreign business.

Julia Zhu is senior counsel in the corporate finance group at Dykema Gossett LLP. Reach her at (213) 457-1830 or [email protected]

Insights Legal Affairs is brought to you by Dykema Gossett LLP

Ford readies Lincoln launch in China by 2014

DETROIT, Tue Aug 28, 2012 – Ford Motor Co. will launch its Lincoln brand in China within two years as it races to catch up with rivals in the world’s largest auto market and home to a growing number of luxury buyers.

The additional investment to launch Lincoln, which Ford did not disclose, comes on top of around $5 billion that the U.S. automaker has spent since 2006 in a market where it lags some way behind General Motors and Volkswagen.

As Ford builds its top-tier nameplate, it is also developing a low-cost car under the mainstream brand to appeal to more price-sensitive consumers in the fast-growing cities in western China. This vehicle will compete with GM’s Sail car.

The U.S. automaker, which joins several other companies looking to expand or launch luxury auto brands in China, is building its dealership network from scratch and will begin selling Lincoln vehicles in the second half of 2014.

“The brand in China could be a bright spot for Lincoln globally,” Ford’s global marketing chief Jim Farley said during a Beijing media event on Tuesday. “We have a chance to be different here.”

To succeed in China, Ford said it will slowly court dealers who can help burnish Lincoln’s image. Ford is also in the early stages of reviving the brand’s stale image in the United States, where sales peaked two decades ago.

Shrinking U.S. crops pose inflation challenge for countries

CHICAGO, Tue Aug 7, 2012 – For nations such as China and India fighting to tamp down inflation while spurring growth, even as the global economy faces headwinds from Europe’s debt crisis, shrinking U.S. crops could be an additional headache as food prices creep higher.

Add to that, dry weather in eastern Europe dimming crop prospects in key grains exporting countries like Russia and Kazakhstan, and a less-than-stellar monsoon in India, the troubles for policy makers could escalate into major challenges.

These nations could get a heads up on the severity of the problems they might face when the U.S. Department of Agriculture on Friday unveils its supply-demand report that will feature crop estimates for the United States, the top grain exporter.

“If the USDA’s corn and soybean estimates are much below trade expectations, there could be negative implications for China and their inflation rate,” said veteran grains analyst Rich Feltes of RJ O’Brien in Chicago.

There are good grounds to be concerned. Chicago Board of Trade corn futures have soared more than 50 percent in the past two months and soybeans by nearly 30 percent as the worst drought in 56 years had devastated the crops.

Wal-Mart bribery review includes Brazil, China

WASHINGTON, Tue Jun 12, 2012 – Lawyers for Wal-Mart Stores Inc. have flagged Brazil, China, India and South Africa in addition to Mexico, as countries that represent the highest corruption risk in a global review, according to a letter from lawmakers investigating the company.

The lawyers said they were retained to review Wal-Mart policies in Mexico, Brazil and China, and later recommended the company also evaluate its operations in India and South Africa. The lawyers referred to those five countries as regions where the risk was the greatest, according to the lawmakers.

The company has acknowledged it is investigating bribery allegations involving its Mexican operations, and that it is conducting a global review of its anti-corruption compliance program, but has not provided details about the review.

The new details came in a letter from two Democratic lawmakers, Representatives Elijah Cummings and Henry Waxman, who are the ranking members, respectively, of the House Oversight and House Energy committees.

The pair wrote to Wal-Mart Chief Executive Michael Duke on Tuesday and asked him to provide additional documents and allow certain witnesses to cooperate with a congressional investigation into the bribery allegations.

Outside lawyers for Wal-Mart briefed the lawmakers on May 21 about the company’s program to comply with the Foreign Corrupt Practices Act, a 1970s-era law that bars bribes to officials of foreign governments.

But the lawyers did not answer any questions about the substance of the bribery allegations, which were brought to light in an April 21 New York Times report that said that management at Wal-Mart de Mexico orchestrated bribes of $24 million to help it grow quickly in the last decade and that Wal-Mart’s top brass tried to cover it up.

The two lawmakers have previously expressed frustration about the information they have received from Wal-Mart.

Wal-Mart representatives did not immediately respond to a request for a comment, but the company has said it is “committed to a full and independent investigation,” and that “it would be inappropriate for us or others to come to conclusions before the investigation is complete.”

How Tim Jenks completed an acquisition to grow NeoPhotonics on a global platform

Timothy Jenks, chairman, president and CEO, NeoPhotonics Corp.

Back in 2003, the telecommunications industry was going through what Timothy Jenks describes as a “downturn and compression,” as large equipment manufacturing companies — his customers — increasingly consolidated and reduced their vendor base to manage costs. The result was that many companies in the telecommunications components industry, which NeoPhotonics Corp. occupied, were being put out of business.

“As a small technology company, clinically a start-up, it was difficult to gain mind share let alone market share at these very large companies as they consolidated their own operations,” says Jenks, the chairman, president and CEO of the San Jose, Calif.-based optical components supplier with approximately 3,000 global employees.

Jenks saw that the company needed to enhance its core value proposition in a way that would resonate with this core customer group and help it win its business. After spending a year looking at M&A opportunities, he and his management team soon found their solution in Photon Technology Co. Limited, China’s largest supplier of active optical components at the time.

“It was complementary technology to our core technology and with an established customer base,” Jenks says. “We had both cash and technology and they had certain products, customer base and manufacturing capability. So together we felt that we would have all of the requisite elements to be an important supplier going forward in the industry.”

By acquiring Photon in 2005, the company now had the opportunity to become a global, one-stop shop for optical components, a value proposition that would click with the needs of its customers. But Jenks now had the task of taking the two companies with different languages and different cultures on different continents and creating one new entity consisting of 1,200 employees and more than 100 customers around the world.

Promote understanding

Before they could align everyone directionally and operationally, Jenks and his leadership knew that they needed to spend time with the employees in China to initiate a comfort level of understanding between both teams.

“In order to do that with very strong differences in language, culture and location, it took an awful lot of personal time and attention to develop mutual understanding,” Jenks says. “With mutual understanding, we could get alignment. With alignment, we could execute on the goals. With the goals being clear, we could make good progress.”

While Jenks had a number of people on his team and several from China who were bilingual, there were still communication differences and cultural differences that needed to be addressed in the new company.

“You need to be compassionate, taking the time and effort to understand our global brethren and what are issues from their point of view?” Jenks says. “Everyone is not the same but everyone is important.”

In-person communication in the preliminary stages of the merger was helpful for both leaders, who needed to establish a plan for integration. For about a year and half, Jenks travelled to China for one week or more every month to meet with direct reports and develop an approach of how to provide a clear direction to the key managers in the combined company.

“The face to face matters not just because it’s face to face, but because it allows people on both sides of the table to jointly see momentum,” he says. “If they see you once a month or once occasionally, there just isn’t much momentum.”

The benefit of being face to face with employees who are being acquired is also being able to see the realities of how people operate and manage the ins and outs of daily business. Jenks says that in retrospect he would have moved to China during this time, now that he’s seen the value of this personal time.

“Living in each other’s shoes by being together causes you to understand the issues that you’re facing not on too high of a level but much more day to day, hour to hour, the real issues that we’re facing and how can we jointly solve them,” Jenks says. “My experience is when people have the opportunity to face challenges together and find solutions together, that is what defines successful integration.”

Build alignment on new goals

This first phase isn’t about getting everyone to agree, but cultivating a comfort level and understanding between your two companies so you make decisions easier.

“We spent a lot of time and effort to understand each other, but we didn’t make it the biggest priority to gain consensus on decisions,” Jenks says. “It was to gain consensus on understanding, not consensus in decisions. Decisions had to get made and we had to move forward.”

The next step was getting the two companies to act as one global company, with one set of goals, one vision and one mission moving forward. Getting this alignment involved eliminating all of the previous goals from the individual businesses and creating one set of goals for everyone.

“The company in China wanted to operate on the global stage and the company in the U.S. wanted to be successful and deploy its technology globally,” Jenks says. “So putting those two nuanced sets of personal goals into one set of company goals was a challenge.”

After a merger, there may be a tendency for employees from either company to hold on to the old way of doing things. Where problems arise is when people become so attached to their previous goals that they don’t focus their efforts on new business growth.

“We had a company in the U.S. that was used having objectives that were local objectives, and we had a company in China that was used to having objectives that were Chinese objectives,” Jenks says.

So part of the strategy to get buy-in was to do away with any past performance goals that distracted people from the new global strategy. All financial incentives for employees in the future would be tied to global instead of local performance.

“It was to eliminate and remove all of those objectives and any references to them and replace them with goals so that people in China have to help the global result,” Jenks says. “People in the U.S. had to help the global result. Then even though they understood it, if they weren’t willing to embrace it, there wasn’t a role for them.”

Jenks and his team collaborated with the leadership in China to develop the new set of objectives.

“We actually spent a lot of personal time to write goals to be one company, not to be two companies, and to express with our managers our values that we would embrace and how we would operate,” Jenks says. “That included people from East and West in the senior most management to share ideas, share understanding, share goals and execution plans.”

Getting input from both teams is important, because it helps everyone embrace the new goals as their own, adding to the synergies in the combined company. Once your topmost leadership is aligned on the new corporate goals, you can proceed to build alignment throughout the organization.

“The key thing is that we did express a group of values to be one company and to focus on those global goals, which implicitly meant that staying on the fence was not an option,” Jenks says.

Again, talking with your people face to face to share the new strategies and goals is critical in getting everyone on the same page.

“It causes integration to happen faster, and people find energy in integration success that allows you to move to the next chapter together instead of moving to the next chapter staying individually who you used to be,” Jenks says.

Get the right people on board

Jenks knew that inevitably there were people in the U.S. operation that didn’t want to spend time working on business in China as well as people in China who preferred working for a Chinese company. There were some people who had the skills to succeed in the new environment but weren’t interested in the new direction.

“It was difficult for some people who are not necessarily comfortable living in a language that they don’t speak,” Jenks says. “Moreover, it may be uncomfortable for people who are linguistically gifted but then may have a larger burden because of their abilities.”

During a merger, you have to accept that there are people who will embrace the change and people who won’t. To an extent, the employees who won’t will self select.

“Ultimately, strong performers and people that were good at execution were strongly encouraged to come over to the one-company side of the fence,” Jenks says. “If they were unwilling to do that, they left. That was perfectly OK. If these are not the objectives that you want to work on then there’s no reason why you should work on them, but then you shouldn’t work here.”

In the course of this kind of transformation process there will likely be turnover. As long as you are very clear about the new goals and direction, then you can be fairly confident that people who aren’t excited about it probably don’t have a role in your new company anyway.

“We had to look beyond the level of turnover and say we’re operating to a larger goal and the goal was to be successful and competitive on a global basis,” Jenks says. “That was embraced by a large majority of the employees in both locations. So having that dedicated and engaged group of employees was a really important part.”

To further engage and motivate people, make it clear that with the new vision comes new opportunities for those who are willing to put in the work. That could be everything from more career opportunities, travel opportunities or selling opportunities. Jenks made sure that the Chinese company recognized it now had access to the U.S. R&D and technology and let U.S. employees know that they could enjoy larger manufacturing and a better cost structure. He also knew the added capabilities of the combined company would particularly appeal to sales people as they sought out new business.

“Sales people are always interested in a higher, broader, deeper value proposition to offer to their customers,” Jenks says. “So there was a natural affinity in terms of our customer facing efforts, meaning sales people, whether they were from East or West, suddenly had a broader group of products because they had the merger partner’s products. They had a better roadmap of what they might be able to offer in the future and they had a bigger story to promote with a customer.”

The employees who embrace change are the ones who will do what it takes to make it successful. “I think it’s been a great experience for all of the people who have stayed with the company over the last five or six years,” Jenks says.

Since the merger, the company has grown from approximately $35 million to $181 million in revenue for 2010. In 2011, it completed another acquisition to purchase San Francisco-based Santur Corp., a privately-held components manufacturer with approximately 150 employees.

“So the principles used back in 2005 and in some subsequent deals are being applied again to develop as one company moving forward and to work jointly on what our goals and objectives are,” Jenks says.

How to reach: NeoPhotonics Corp., (408) 232-9200 www.neophotonics.com

Takeaways

1. Gain understanding by getting face to face.

2. Build alignment around shared goals.

3. Encourage people to buy in or opt out.

The Jenks File

Timothy Jenks
Chairman, president and CEO
NeoPhotonics Corp.

Born: Boston

Education: U.S. Naval Academy, B.S., Mechanical Engineering

Massachusetts Institute of Technology, S.M. Nuclear Engineering

Stanford University, Stanford, Calif., MBA

What is one part of your daily routine that you wouldn’t change?

A quiet morning moment for a cup of coffee alone with my wife

What do you to regroup on a tough day?

I like to have a brisk walk with my dog, but unfortunately most tough days don’t offer the opportunity to regroup. That’s why they are tough.

What do you like most about your job?

I like the global aspect of it. I have friends, colleagues, customers and suppliers all over the world and it really makes me feel like I live in a 21st century existence. My friends and family sometimes are astounded by the regularity in which I find myself dealing with other parts of the world, and it’s a fun thing. At the same time, realizing that what we do really makes a difference. The vast majority of the world does not yet have access to online content. There’s a lot left to do.

What’s the best business advice you’ve ever received?

Hire people you’d be willing to work for, because you may. If you’re picky who you work for and you only hire people that you’d be willing to work for, then you end up with good people.

And, build a business with good people. Good people tend to hire good people.

M&A tips for the next time around: One of the lessons that I learned is that if you’re going to spend an effort to try and merge two companies and you’re in a leadership role, the best thing you can do is move there. For example, doing a transaction with (San Francisco-based) Santur, the first thing that I did is I did take an office there.