On Wednesday, November 20, 2013, The CFO RoundTable NYC gathered for “Globalization: A CFO’s Guide,” where a panel of global CFOs discussed why they chose to ‘go global,’ the entry points they used to establish operations in new countries, and the lessons they learned along the way.
Our speakers included:
- Stuart Buglass, Director, Human Capital Consulting, Nair & Company
- Sandra Clarke, Vice President and CFO, Daiichi Sankyo, Inc.
- Michael Cohen, CFO, Birchbox
- Ram Menon, Partner, Transactions and Restructuring Services, KPMG
- Richard Pham, CFO, 1stdibs
For a great synopsis of this program, we also encourage you to read “Companies (Almost) Without Borders” by Alissa Ponchione, Writer, CFO Magazine.
What We Learned
Globalization Is Relative
| Our panelists discussed the differences
in what it means to ‘go global.’
No two global strategies between companies, or even executives, are alike. Before you begin the process, you must first establish what your company’s global vision and strategy is. For example, does ‘going global’ mean setting up sales and field marketing offices in high-interest countries, or does it mean that your customers and suppliers are located across the globe? Further, can you articulate what it is you want from a particular market – whether it be presence, customers, access to local suppliers – and how it supports your overall business strategy?
Only once a common vision and definition of what ‘going global’ means for your business can you move forward in your international efforts.
To Greenfield, or Not To Greenfield
There are multiple ways to set up business in a new country, and whether it be through acquisition of a competitor, hiring your competitor’s talent or sending in your own people (greenfielding), you must understand the pros and cons of each and their intended (and sometimes unintended) affects on your business.
For example, a merger or an acquisition of an international company is certainly the fastest route to take to go global; however, it’s certainly not the easiest or the most cost-effective route. On the other hand, sending your own people to a new market can be more cost-effective, but could take much longer as they’ll need to establish new relationships and trust with local affiliates. One panelist likened this approach to having employees ‘act like missionaries,’ which sometimes they’re just not qualified for.
In essence, how you choose to engage with a new country depends entirely on your global vision and your understanding of the local market.
Act Global, Think Local
| 70+ local CFOs attended our
November 2013 NYC program
A oft-repeated point of advice from our panelists was to ‘act globally, think locally,’ meaning viable global businesses wisely choose specific areas to consolidate, and others to leave to their local market representatives.
For example, the entire panel agreed that all finance and IT functions should be consolidated and acted upon globally, meaning that the CFO and leadership team has complete visibility and control over those specific global operations. However, it’s important for global companies to recognize that every market has different expectations, attitudes, and regulations, and should be approached in an educated and thoughtful manner.
Rethink Your Integration Expectations
As stated by one panelist “If the success of your global effort rests entirely on integration, you’ve done something wrong.” This in no way means that global integration is invaluable, rather, it’s important to clearly define your expectations of what global integration means for your company.
It’s impossible to seamlessly and completely integrate a new business presence in another country. Instead, it’s important to turn back to your global vision and strategy, and communicate that relentlessly to your employees. Make sure that they understand your global vision, and how you plan on making that vision a reality. All the panelists agreed that integration issues are their single biggest challenge, and there’s no easy or right way to get there. Open your lines of communication between all business units and employees, and stay nimble and receptive to new ideas and opportunities.
Photos and More Information
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