Monday, December 8, 2014

The Association Guide to Going Global: An Introduction

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


You know when you are global when:

  • Your organization feels as “at-home” in any one culture or in any one part of the globe as in another;
  • Your customers and stakeholders view your organization as “a local organization” wherever they and you may be in the world;
  • Your organization is able to sift through local trends and ways of doing things to identify what has potential on a global scale, and is able to apply global trends and strategies effectively at the local level everywhere in the world;
  • As markets rise and fall, you are able to shift resources fluently from one to another so that your overall organization continues to thrive and produce intellectual property that is wanted and needed throughout the world.

In other words, being global assures you act as and are perceived to be a citizen in every community of the world, that you are able to bring resources to bear when and where there are opportunities, and that you are adept at recognizing and addressing trends in customer needs and wants on a local as well as a global scale. Isn’t this the formula for any successful organization?

These qualities most certainly characterize successful organizations at the local or national level; so in one regard, globalization is mostly just a matter of scope--but what scope it is! When the world’s cultural, ethnic, linguistic, legal, and political differences are all thrown together on one playing board we have a game with moving parts that is more complex than playing three dimensional chess. Then, just to make it interesting, throw into the mix the differences in financial, educational, and technological means from one country to another—not to mention the challenges of distance and sheer geographical differences—and you have a very intimidating picture indeed!

Is anyone able to win at such a complex game? Yes, every day. In fact these are the organizations that touch every aspect of our lives, from the products we use and consume to the healthcare treatment we receive, the global flow of products and services and the ideas they contain are all the result of organizations that have been conceived to satisfy our wants and needs. If they are not global themselves they are linked in to organizations that are.

The global sharing of ideas and competition among people and organizations on a global scale can and do result in discoveries—including new cures for old diseases, and better products at less cost. Few energy sources are greater than those that can successfully harness the minds and creativity of the six billion human souls that inhabit our planet—or a portion thereof! But of course, globalization is not all sunshine and roses. If your particular product or service is not among the best then globalization can be a painful experience—as news about plant closings and business failures tell us every day. So the trek toward becoming a global organization can be seen to be as much defensive as it is progressive. If your organization does not find and fill its global niche then the chances are good that someone else, somewhere else will!

Textbooks typically point out that there are three types of transnational organizations: “International” organizations that operate across national boundaries because they buy or sell internationally, have international meetings or alliances, and/or serve stakeholders/members from other countries. In international organizations, there is little customization of goods and services for global customers, and the organization’s business and governance structures are highly concentrated on the domestic market. Customers, whether local or global are treated the same.

“Multinational” organizations that have a sustainable and on-going presence in more than one national market simultaneously. Goods and services may often be customized for a country by country market., and the operational and governance structures may be distributed among and within these targeted countries. Local customers, regardless of location, are the priority, but global customers outside of these markets may only be supported with difficulty. And “Global” organizations that fulfill all four of the characteristics noted above. Goods and services allow for major customization. The business and governance structures are highly networked and distributed. Customers are supported both locally and globally. Unless you have merged your organization into another to become global instantaneously, for most, becoming global is a gradual, stepby-step process in which a domestic organization becomes international, then multinational then global. It is a time-consuming, difficult process, but it is a challenge that this generation cannot refuse. Globalization is something this generation and every generation after us will have to incorporate into their education, mindset and day-to-day living. It is the trend that most defines our times. Those people and organizations that adapt to it best are the ones that will reap the most rewards.

Organizations based in smaller countries with advanced economies have a special advantage in that they are used to dealing with foreign languages and cultures. Cross border transactions are a daily occurrence for them. It is no wonder then that managers from the Netherlands who seem to be multilingual at birth are in much demand as managers in global organizations.

The old joke, told mostly by Europeans, that a person who speaks three languages is called trilingual, a person who speaks two languages is called bilingual and a person who speaks one language is called, you guessed it--an American—contains a sharp bit of truth. When one is born on a continent where well over 300 million people speak the same language and which constitutes the largest economic market in the world, it is easy to be parochial without seeming to be undereducated! Nevertheless for this reason Americans are at a disadvantage when it comes to understanding and operating successfully in a global environment. It is for this reason that this book focuses particularly on the challenges faced by US managers as they grapple with globalization.

This book of course also focuses on associations. While the management tactics and strategies that are discussed here could be and are applied to all sorts of organizations, associations have a particularly important role in globalization, for two reasons. First, associations—and that includes trade associations and professional societies (and other individual membership organizations) as well as chambers of commerce—have played a particularly important role by providing the networking contacts and market intelligence small and medium size enterprises (SMEs) have needed in order to expand as rapidly as they have into global markets. As is discussed in the first chapter SMEs have been the surprise winners in globalization, snatching the prize out from under the noses of the giant but lumbering multinational companies that have not been as nimble in taking advantage of new opportunities in new markets, and associations have a lot to do with this. The second reason why associations deserve special attention is because of the critical role they can and do play in addressing issues of social responsibility that all too often fall in the cracks between the secular interests of national governments and for profit undertakings. To a large extent associations are just now coming into their own; and their effectiveness in this current and future role will be largely defined by how well they have learned to navigate in a global environment.

This book is divided into eight chapters that correspond to those issues or problem areas that naturally crop up whenever a conversation turns to globalization. While sticking to the facts, I also attempt to use personal anecdotes and stories to liven up what some textbooks have turned into a dry topic. Globalization deserves better. It is about flesh and blood, dreams that have been dashed as well as dreams that have resulted in fabulous success. More importantly, it is about a topic that affects all of us. It defines our time, and how we cope with it will determine the quality of our future.

Here is how we will take this journey:

Chapter One: Why Go Global?
This chapter addresses the trends, opportunities and threats of globalization for associations and how successful associations have responded. It also addresses the emerging opportunities that are unique to the association community and what associations need to do to ready themselves for these roles.

Chapter Two: Common Problems that are Encountered
There is enough of a track record now to be able to learn from the successes and failures of others. This chapter attempts to catalogue the lessons that have bee learned so that others may build on them.

Chapter Three: The Structure of the Globalized Association
This chapter addresses the different stages in cross border transactions from international to multinational to global. It also addresses the different structures that have found to be suitable for organizations of varying means and missions. There are as many variations in globalization as there are organizations, but there are some broad models and lessons that have been learned that might serve to structure and inspire others that have faced or are facing similar challenges.

Chapter Four: Funding and Financing
Even the most altruistic associations need funding to fuel global operations. This chapter focuses on those considerations and how successful associations have addressed them.

Chapter Five: Language and Culture
These are the most obvious differences among international markets, yet language and cultural differences continue to be stumbling blocks for individuals and organizations operating across national borders. This chapter discusses some of the gaffs that can happen and how successful managers avoid making them!

Chapter Six: Endeavors in Specific Countries
This chapter discusses the differences between lesser developed, developing and developed economies and how each pose a different set of challenges and opportunities. It also discusses BEMS (Big Emerging Markets) and the BRIC countries (Brazil, Russia, India and China) and the dos and don’ts of entering those markets.

Chapter Seven: Successes and Failures—Other Case Studies
This chapter discusses successful strategies and models that have been used by associations that have expanded globally.

Chapter Eight: Some Final Thoughts on Truly Becoming “Global”
This chapter discusses the nature of the globalization challenge for association managers and why it is a challenge that no manager can ignore.

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