The rein of one-size fits-all and the inherent risks

Many companies approach international countries developments with a very centralised way to decide and see their expansion. Often with management teams based in HQ, but who never even lived abroad or did business internationally. Ignoring, as a consequence, that international business require some key skills and experiences in order to avoid mistakes.

Indeed, leaders in HQ who lack international experience may make several common mistakes when expanding into international markets. Here are the major ones I found they make.

Ignoring cultural nuances: I remember this article I wrote some years ago about this subject: You can never replace a local experience ! Failing to understand and adapt to cultural differences can lead to ineffective marketing campaigns, miscommunication, and a lack of resonance with the local audience. This can result in low customer engagement, reduced market share, and a negative brand perception.

Underestimating regulatory and legal complexities: Such mistakes can harm the company's reputation and hinder its ability to operate smoothly in the market.

International markets often have unique legal and regulatory frameworks. Leaders without international experience may overlook these complexities, leading to compliance issues, legal disputes, and potential financial penalties. And using externalised third parties to deal with some of the company activities without the minimum basic knowledge of the local context can lead to disasters.

Lack of market research: Frequently I heard leaders from HQ saying that their view was the one applying. Big Red flag !! Insufficient market research can lead to a lack of understanding of the competitive landscape, consumer behavior, and market trends in the target market. Without this knowledge, leaders may make misinformed decisions regarding product positioning, pricing, or distribution channels, resulting in failed market entry or suboptimal performance.

Centralised decision-making: Just imagine pure sales decisions being taken without taking in account the local context, market situation or local competition and differentiators ... Leaders accustomed to a centralised decision-making approach may try to apply the same model to international expansion, disregarding the expertise and insights of local teams. This can lead to a lack of adaptability, missed opportunities, and a failure to leverage the local market knowledge and talent.

The consequences of these mistakes can be significant for both the company and its employees.

Financial losses: Poor decision-making and market missteps can result in financial losses, including failed market entry, low sales, and wasted investments. This can impact the company's profitability, shareholder value, and long-term growth prospects. Strangely, while being known this consequence is not that often taken in account when appointing to the leaders... and very often even not expressed as one of the reasons why the company failed.

Damage to brand reputation: Ineffective strategies, cultural misalignment, and poor customer experiences can harm the company's brand reputation. Negative perceptions and poor word-of-mouth can lead to a loss of customer trust, reduced customer loyalty, and difficulty in gaining market acceptance.

Employee dissatisfaction and disengagement: If international expansion efforts fail due to leadership mistakes, it can negatively impact employee morale and motivation. Employees may become disillusioned and disengaged, resulting in decreased productivity, higher turnover rates, and challenges in attracting and retaining talent.

Missed market opportunities: Mistakes made by leaders without international experience can cause the company to miss out on significant market opportunities. Inefficient market entry, lack of market penetration, and inability to effectively compete can limit the company's growth potential and market share.

To scale international subsidiaries effectively, leaders should possess a combination of skills that enable them to navigate the complexities of different markets and manage diverse teams.

Here are some key skills that are important for leaders in international expansion:

Global mindset: Leaders need to have a broad perspective and a deep understanding of global business dynamics. They should be able to recognize and appreciate cultural differences, adapt their strategies to local contexts, and anticipate market trends and challenges on a global scale.

Cross-cultural communication: Effective communication across cultures is crucial for building relationships, managing teams, and understanding customer needs. Leaders should be skilled in cross-cultural communication, including active listening, empathy, and the ability to convey ideas clearly and respectfully across language and cultural barriers. The first skill being, to my point of view, international experience. This is not something you can improvise.

Strategic thinking and adaptability: Leaders must possess strong strategic thinking skills to develop market entry strategies, adapt to evolving market conditions, and make informed decisions in complex and uncertain environments. They should be flexible and open to adapting their approaches based on market feedback and changing circumstances. I have seen no many times leaders in HQ applying without any discernment the same rules, recipes, etc, all having the same damaging consequences, without being conscious of the tough consequences of their lack of capacity of listening on the business, the acceleration and moral of the teams in the fields who are struggling to bring business in, but face the walls of lack of experience and fear of the unknown.

Emotional intelligence: Leading diverse teams in different cultural contexts requires emotional intelligence. Leaders should be able to understand and manage their own emotions and those of others, demonstrate empathy, and effectively navigate cultural nuances and interpersonal dynamics.

Talent management: Building and managing high-performing teams across international subsidiaries is essential for success. Leaders should have skills in talent acquisition, development, and retention, as well as the ability to foster a collaborative and inclusive culture that motivates and engages employees. I have seen in my career so many different cultures operating in the same departments, sharing the same language to understand each other, but with so many different interpretations, that I can say with confidence, that if you don't have the capacity to anticipate these interpretations, you have the certainty that the execution will be different in each country. Nuances and interpersonal dynamics or education are filtering key messages.

Global networking and relationship building: Developing and maintaining strong relationships with stakeholders, partners, and key players in international markets is critical. Leaders should possess strong networking skills and the ability to build trust, negotiate effectively, and navigate diverse business ecosystems. Only leaders with a real international experience have these capacities and can articulate them properly in order to scale the business.

Risk management and problem-solving: International expansion entails various risks and challenges. Leaders must have the ability to assess risks, develop risk mitigation strategies, and solve complex problems that arise in different markets. They should be resilient, resourceful, and capable of making informed decisions in dynamic environments. Unfortunately, many of them are hiding themselves behind "company" decisions to justify the impacts of one-size fits-all approaches that are devastating.

Continuous learning and adaptability: Successful leaders in international expansion are lifelong learners. They should be curious, open to new ideas, and willing to continuously update their knowledge and skills to keep pace with changing market dynamics and emerging trends. How often I have seen leaders, leading international teams, traveling in countries and totally ignoring basic habits or common behaviour in order to have the minimum required impact.

These skills, combined with experience and a willingness to seek advice from local experts, can help leaders navigate the complexities of scaling international subsidiaries and drive successful expansion efforts.

To avoid the challenges of having leaders without international experience leading international expansion efforts, companies can consider developing themselves by implementing the following solutions:

1. Hire leaders with international experience: Actively seek leaders who have a track record of successfully navigating international markets. These individuals bring valuable insights, cultural understanding, and regional expertise that can contribute to effective expansion strategies.
2. Develop a global talent pipeline: Implement programs to identify, develop, and nurture talent within the organization for international leadership roles. Provide opportunities for employees to gain international experience through assignments, secondments, or rotational programs, allowing them to build the necessary skills and knowledge for global leadership.
3. Collaborate with local experts: Engage and collaborate with local experts, consultants, or advisors who have deep knowledge of specific international markets. They can provide guidance on market entry strategies, cultural nuances, and regulatory considerations, helping to mitigate risks and optimize decision-making.
4. Establish cross-functional and diverse teams: Form cross-functional teams that bring together individuals with diverse backgrounds, skills, and perspectives. This diversity can foster creativity, innovation, and a better understanding of international markets. Encourage collaboration and knowledge sharing between teams to leverage collective expertise.
5. Invest in cultural competency and language training: Provide training programs that enhance cultural competency and language skills for leaders and employees involved in international expansion. This training can help bridge cultural gaps, improve communication, and foster effective relationships with local stakeholders.
6. Encourage a learning culture: Foster a culture of continuous learning and knowledge sharing within the organization. Encourage leaders and employees to share insights, best practices, and lessons learned from international expansion efforts. This collective learning can inform future strategies and enhance organizational capabilities.
7. Conduct thorough market research: Invest in comprehensive market research to understand the target market's dynamics, customer preferences, competition, and regulatory environment. This research can inform strategic decision-making and help leaders tailor their approaches to specific markets.
8. Establish strong communication channels: Create robust communication channels between headquarters and international subsidiaries. Regularly share information, goals, and strategic updates to ensure alignment and facilitate the exchange of knowledge and best practices.

With this, companies can better equip their leaders and teams for international expansion, reduce the risk of mistakes, and increase the likelihood of successful market entry and growth in international markets.