Tuesday, December 30, 2014

Board Guidelines for Creating an Effective Global Strategy

By Steven M. Worth, President at Plexus Consulting Group, LLC

It is common to find that boards of directors and their staff are out of step with each other on the topic of globalization. Here are two ways in which this happens.

Should a board’s responsibility stop at the national border? While the staff is usually the first to see market growth opportunities, boards rightfully see themselves as custodians of their association’s resources and representative of the interests of current members. As such it is sometimes difficult for boards of directors to allow association resources to be spent on developing markets outside the home base of most of their members. How can they justify to themselves, much less their members, a decision to spend time and money developing markets in other countries that may be their own rivals? In these times of chronic high unemployment this concern has to weigh heavy on everyone’s mind.

When a board makes globalization a priority, as many do, resources can be stretched to the breaking point! How does an organization with limited resources expand to meet the needs of a market that could literally encompass the globe? Some organizations have consciously made the decision to embrace globalization by creating a board of directors from different parts of the world who then feel obliged to include global expansion opportunities in everything that they do. And if this is not done in a business-like manner, the organizational stresses that this can create can lead to a whole host of problems, including high staff turnover, strained budgets, and weakened brands.

These complex issues can be rendered manageable if volunteer and professional leadership remember to focus first and foremost on meeting the needs and understanding the trends of the market(s) they serve. Here are some guidelines based on the hard-won experience of others!

  • Meeting the current needs of your members is absolutely a prerequisite—but don’t jump to conclusions, you might be surprised at how globally-attuned your “domestic” membership might actually be. Time and again associations with “national” or “American” in their name make the mistake of assuming that their base of operations should be confined to the home soil only to find their membership drifting away in favor of organizations that are more attuned to their growing global market needs. People, organizations and nations as a rule do best when they are free to interact with others like themselves. Confinement is not a natural state. So do your homework, study the interests of your members on a regular basis, track their trends, and be sure to be there where and when they need you.
  • There are over 190 countries in the world today and the number is growing. So where are the opportunities? Where should you be, if you can’t be everywhere at once? It is amazing how haphazardly some organizations make their decisions as to which markets they choose to expand into—their globalization “plan” is purely opportunistic, and as such is a recipe for failure! Here are seven measurements you should be making of each and every international market opportunity:
  1. The absolute size of the market
  2. Presence of competitors who are fulfilling the market needs as well or better than you could
  3. Presence of potential strategic partners who might be interested in collaboration
  4. Affinity with your home market in terms of culture, language, and trade relations
  5. Growth trends in your sector of their market
  6. Success of similar organizations in entering the market
  7. Expected ROI within a three-year time frame
Rank each of these seven criteria for each market on a scale of one to four and then average the whole (weighting those points that you deem are more important than others) and see how various national markets compare with each other. From this exercise you can prioritize markets and thereby ensure you are focusing your organization’s resources effectively.

  • Finally, think like a businessperson. Demand hard market data and make your decisions accordingly. Give your investments time to pay off but ensure that they do. If your organization is providing valuable resources to meet market need you will find buyers willing to pay fair market prices—a rule that is as true anywhere else in the world as it is in your home market.

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