In a recent conversation of Sabit Tapan with Emin Birsel, a seasoned Senior Executive and Board Member with a wealth of experience in International Markets, Emin unravels straightforward insights that can inspire and guide aspiring entrepreneurs to embark on their business journey.
Let's begin by examining the role of the company board, the role of the executive leadership, and the critical skills and capabilities needed to lead a successful international expansion initiative.
Building a Strategic Foundation
According to Emin; Company boards are crucial and play a pivotal role in the decision-making and oversight of a company's international expansion efforts. The composition and responsibilities of the board can vary depending on company size, industry, and specific expansion goals, contributing greatly to its success.
It can be beneficial to have board members with experience in international business operations. They can offer valuable guidance and insights. The responsibilities of the board can be explicitly directed towards the setting of the particular strategy and providing oversight for the implementation of international expansion.
This includes evaluating potential markets, assessing risks, and approving major decisions related to this expansion. Boards should also assess and manage the risks associated with the expansion, such as political, economic, legal, and cultural factors.
Networks, Relationships, and Vision:
The board monitors the financial performance of international expansion and ensures that appropriate financial controls are in place. The board also ensures that the company complies with all relevant laws and regulations of the home country as well as the target market. It is crucial to have a board that understands these levers and variables.
Hence, a board often serves as a source of expertise and advice for the company's management team and the CEO. They can provide insights, contacts, and guidance based on their collective experience. Board members often bring valuable networks and relationships, and they should be chosen according to that into the board as well. This can include industry contacts, government connections, business partners, and connections in the target and international markets.
Sabit Asked: How does the board support the organisation during the strains often associated with going international?
Emin: The board is built with people who are open to that vision, and who can put that vision in front of them. So, if a company has done that due diligence work, they will be coming to the table with a board that prepares the CEO of the organisation to that end which may or may not include increasing the number of board members. The board would be a very strong force behind the CEO and management team to stay the course.
Executive Leadership Skills: Steering Your Startup Ship
What is the role of the executive leadership, and the critical skills and capabilities needed to lead a successful international expansion initiative?
Emin: The vision and the push for strategic expansion can come from the board, but also from the CEO and management team who see opportunities in the foreign markets, who see how to leverage them. Hence it would be their role to bring those topics to the board’s attention to continue the growth and prosperity of the company.
There are additional sets of skills and a different playbook to win in this journey.
Managing a diverse and international team is a new and exciting challenge for many leaders. Leaders must understand and adapt to the cultural nuances and practices of the new market.
This includes communication styles, decision-making, and work norms while ensuring that the company's values and mission are effectively communicated and embraced by all the international locations.
A very important topic is about building trust. Building trust is crucial for effective leadership, and this will require extra effort in an international context.
Naturally, managing teams across different time zones, and different geographical locations requires effective remote communication, coordination, and trust-building.
Another critical point is deciding on how much decision-making authority should be centralised at the headquarters and how much the CEO gives away.
Those roles, responsibilities, and performance expectations must be clearly defined. This is a lot more important in an international setting, especially when working across different languages, cultural barriers, etc. To address these challenges, companies should consider appointing leaders with international experience and cultural sensitivity. And should invest in leadership development programs that specifically address those global leadership skills.
Agile Organisational Adaptation
Sabit: Indeed, effective leadership is essential. Shifting to organizational aspects, how should companies handle mindset changes and structural adjustments during international expansion?
Emin: Adapting the organisational structure to international demands presents challenges but also growth opportunities. Establishing systems for knowledge sharing, effective communication, and adherence to company values across diverse locations is crucial.
Remaining flexible, responsive, and regularly evaluating and adjusting organisational strategies are key to success. The organisation can also be significantly impacted, and with the right decisions, it can create a hugely positive momentum for success in the market.
The company's technological infrastructure should help the organisation to make that transition along the journey. For the organisation, ensuring effective communication becomes critical between the international offices, subsidiaries, and the central office.
Regular evaluation and adjustment to the organisational strategies will also be crucial for success. Those decisions can certainly be made along with the new talent and new organisations that have joined the now-expanded organisation.
Talent Development: Investing in Your Startup's Lifeline
Sabit: Yes. You've mentioned that going international can create immense opportunities for some internal talent who can flourish with that opportunity. Yet, companies can also acquire new talent from the market. So, what is the balance? How can companies create and utilize these opportunities to develop talent and hire new talent during an international expansion journey?
Emin: Retaining top talent is crucial while identifying and developing local leaders is equally important. Companies should invest in recruitment, retention, talent development and cross-cultural training programs. Recognizing the potential tension areas within the organisation and ensuring a supportive and inclusive work environment is key.
Mergers, acquisitions, or international expansions can create anxiety within the organisation. However, it is the lifeblood of the company to make sure that the right talent, and critical employees, stay with the company, and they see a future within the organisation. So, this is the critical way for organisations to survive and prosper in the medium and long term.
Retaining top talent in competitive markets is critical. But also identifying and attracting skilled local talent can be a challenge, yet a hugely rewarding experience. If the company is new in a market, that can be a higher challenge.
It is desirable to identify and develop local leaders who can effectively manage teams and navigate the local business environment. So, while many companies will find a balance between transferring employees from their home market, organisations must also develop talent from outside the organisation. Hence, future leadership roles should be open for new and existing talent in a newly acquired environment.
Transitioning to Local Talent: A Startup's Practical Approach
Transitioning from expatriates to local talent requires readiness assessment, preparation and transition management. Companies must assess if there's sufficient talent with the required competencies internally to fill positions and plan for growth opportunities. It's a phased approach that requires careful consideration. This model is very commonly used, and there are very positive sides to it. But I want to address several issues there:
Usually, the model is to expatriate some employees, usually leaders, to the new organisation.
And this can be not only for top management but also some critical functions such as finance and marketing.
Now who is expatriated is an important issue.
This requires readiness on behalf of the company because the moment that international expansion is done and expatriation must be done, you start asking yourself
Benefits of Transitioning to Local Talent
This brings numerous benefits.
First, those people know the mother company. They bring the vision and the values of that company.
On the other hand, they also know the business.
The third one, they would be huge assets for effective communication between the new market and the home market.
Sabit said: Our discussions provide valuable insights into the multifaceted aspects of international expansion, from the go-no-go route to market to the people and organisational issues.
Emin's roadmap provides a comprehensive guide for entrepreneurs embarking on the journey toward global success, offering invaluable insights into the nuanced intricacies of the international business terrain.
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