The secrets to the best solutions are found where the greatest challenges of the world exist.
When our U.S. based company first contemplated global expansion strategy in the early 1990s, there stemmed an appropriate internal challenge from the senior management team as to why. The U.S. market was very large and profitable. At the time, we held a >5% overall market share of our water sector and the market was growing. Globalization seemed, to some, a difficult diversion to a proven domestic approach. The management challenges of differing currencies, cultures, contract styles and languages, in addition to the issue of management time required, seemed like a tall order. There was no indication that a non-U.S. market had any advantages in profitability, but certainly would add disproportionately to corporate overhead. We were inexperienced in transcontinental travel—we knew it and were not kidding ourselves—and we were unsure of the time dedication it would require of a few of us. So why?
The major reason for globalization was rooted in the conviction that the best technologies in the world are found at the location of most severe challenge. These challenges were often not located in the U.S. If we were a technology company, how could we detect and learn the best technologies without an international presence? For instance, the best dredging and pumping technology in the world resided in the Netherlands. The best desalinization technology existed in Arab countries and other places of severe drought. The best dam and reservoir technology was found in emerging countries harnessing large rivers for energy.
At that time, computer science was elementary and email was just evolving. Software compatibility was problematic and equipment costs were very high. There was no satellite or high-speed cable lines available to a small consulting firm. So, a real challenge was when we found the best technologies, the feasibility of moving that technology freely across geography. This concern spurred the company to focus special attention on electronic knowledge management, and we got good at it. Just like a country overcomes technical challenges when they are critical to its survival, so does a company become good at overcoming internal impediments when they are critical to their success.
We established a global platform over ten years through trial and error. Every country was entered by acquiring established enterprises rather than a ‘green field organic’ entry. By accomplishing a global presence, we certainly found advanced technology to share throughout the world. What we underestimated from the beginning was the richness of thought and ideas a diverse community brings. This was both true for the company and the individuals. We could recruit better people because we offered a global experience others could not. We also underestimated the extreme qualities of thought, unrelated to technology, some countries brought due to their histories. For instance, the United Kingdom brought system and process discipline. The Italians brought flair and creativity. The Australians and Kiwis brought an innovation and competitive spirit, etc. The ability to capture these attributes on project teams and create more valuable solutions was not originally contemplated, but turned out to be enormous. Had we not taken the chance to go global, we never would have guessed the magnitude of competitive advantage cross-national teams offer in the eyes of the clients. Accents do sell!
With the speed of digital revolution, the synergies of a stable and long-term global firm are just now blossoming. Mobility, miniaturization, bandwidth, transmission speed, and the “cloud” are all facilitating a total collapse of geography and magnifying the advantages we started to realize 20 years ago.
In retrospect, the company could have grown faster and made more money by focusing on better penetrating its partially served North American market in the ’90s and early 2000s. It was an investment to go global. The cost of the global expansion was paid for by the stockholders of that era in lower bonuses and stock appreciation. However, the benefit now is a global company that is comfortable with the international integration of talent and its mandatory requirement to perfect knowledge-sharing, making it very well positioned for the future. The digital revolution has caught up with our strategy.
Now, once again, the company faces other transformational strategies in starting new service groups and focusing on automation and digital harvesting of data. The same question of 1990 will be asked again: why are we diverting to endeavors before we capitalize on our existing geographical footprints? The answer is the same—to begin building a new future on the back of current operations. That is how corporations evolve and position in differentiating ways.
© 2015 Robert Uhler and THE UHLER GROUP. All rights reserved.