Investing in new countries can bring many benefits. But as Frances Davies discovers, there are many challenges involved too.
Expanding into neighbouring geographic markets has become an attractive option for companies keen to broaden their horizons, reduce their costs, increase their customer base and ideally maximise their profits. However, despite the advantages of a pan-European market, there are still many challenges involved, not least the number of different languages and cultures that exist within the EU’s borders. Before walking the walk, all migrating companies must make sure they are talking the talk to ensure that their products meet the local wants and needs of their customers.
More and more, companies are expanding abroad and are expecting employees to relocate and represent them in new markets. Crucially, understanding the local market is an integral part of any expansion project. Products or services often need to be localised so that they meet the requirements and standards of the region. Gary Muddyman, Managing Director and CEO of Conversis, a UK-based specialist in translation, localisation, internationalisation and globalisation describes the key consideration for business: “The core decision with products distributed around more then one country is how far you can standardize that product versus localize them?,” he argues.
“Do you have the kind of product that needs to be localised and adapted to meet local tastes? Before a company considers working across borders it needs to think about this key question. The company needs to consider the dynamics of the market and what are the political, social, economic and technical drivers in that market.”
Localising a website, for instance, would involve translating the information into the region’s language, changing any cultural symbols such as flags, ensuring that the material makes sense to the user and doesn’t include anything that is culturally alien or even offensive to the reader. This is particularly relevant when referring to jokes or anecdotes where word-for-word translations are often unsuitable. Any material must relate specifically to the local audience otherwise the message will fail.
Cultural considerations depend very much on the product a company is considering to sell and distribute in the new market. What is crucial is that a distinction is made between cultural differences and nationalistic stereotypes. “It is important not to descend into nationalistic stereotypes,” warns Muddyman. “Culturally, people from different countries do behave differently, although we should not lose sight of things that are the same or similar. It is inevitable that if people share experience and influences then to an extent, they will be conditioned to behave similarly.”
Muddyman argues that the right balance needs to be found between recognising and embracing the cultural differences without descending into ‘nationalistic stereotypes’ and ‘disenfranchising’ people. And as he points out: “The globalisation of products does mean we are more familiar with foreign products therefore more accepting of them.”
Cultural differences across borders must be appreciated and respected by any staff selected to move to a new office in a new region or country. Therefore fully informing relocating employees of different attitudes, beliefs and norms in the host country is a must. “Businesses need to understand the impact that cultural differences have on the career progression of their employees and on communication and decision-making,” says Stuart Duff, Head of Development at business psychologist firm Pearn Kandola. Duff gives the example of differing attitudes towards career progression in Holland and the UK: “In the Netherlands research suggests that employees are more likely to seek long-term role security while in the UK employees will tend to look for more variety and changes in role through their career.”
Differences in leadership and management style encountered in the new location may well come as a shock to transferred employees, making advance warning valuable. Leadership styles in Europe vary dramatically with some companies incorporating a stereotypical ‘male’ leadership style. “You will undoubtedly find that there are cultural differences in management style and in the decision making process,” warns Colin Meager, European Executive Committee member of Integra International. “Certain EU countries have a more formal and rigid management structure and this can be exasperating to those who are used to more flexible and informal management systems.”
A final challenge for businesses operating across borders is coming to a decision about the power balance, and whether decisions should be made centrally or locally. “Businesses must decide how much power should remain at the centre,” explains Duff. “The issue of centralisation/decentralisation presents a particular challenge for organisations operating globally. For example, how can an organisation influence people and issues and motivate their staff if all decisions are made locally? As in government, some decisions are better made at a local level, the problem is getting the balance right.”
To address these challenges, the globalisation, internationalisation, localisation and translation (GILT) industry has grown up to offer solutions to companies looking to expand in to new markets. “By engaging the right company within the GILT industry you should get the right level of advice and resource in order to fully localise your product,” explains Muddyman. “Another key element is to engage the right partner to advise you properly in terms of brand management, and strategically where your international programme takes you.”
As Muddyman points out, it is relatively simple to manage brands within one national border, but international products bring more challenges. For example “translation isn’t quite as simple as changing one language into another, rather it is about understanding the market that you are aiming at and having the creativity and information to make the right decisions,” he says.
Equally, selecting the right people to represent the company in a new market isn’t always an easy decision. Some thrive in new situations and benefit the company, whereas other find adapting to cultural differences and new practices difficult.
“The GILT industry needs to help organisations develop better practices in selecting suitable expatriate employees and providing effective training,” says Duff. “That means going beyond giving generalised cultural training to expatriates and their families. It should assist expatriate employees to develop flexible styles of working and to identify potentially difficult situations where a flexible style may appear especially difficult – but is especially important. It can also help organisations develop support systems for expatriates and remote workers. There are some great IT remote communications systems already available but organisations need to make sure that their employees know which communication method to use and when to use it.”
Careful consideration of the company’s goals is necessary when choosing a GILT sector company to deal with the intricacies of any expansion or product launch. Preparation, as always, is the key to ensure the company is confident it has made the right decision. “Choose a company that has a genuine understanding of different culture,” suggests Duff. “The best organisations will help individuals explore their personal cultural values and how people are likely to respond to those.”
Choosing the right company for translation is also very important. As content from company to company varies so much any translation company much be apt in ensuring it has translators who are experts in specialised fields of knowledge. So if the client company is very specialised e.g. medical, then finding a company with the relevant knowledge is essential.
“I would be looking for a company that is willing to listen and will make a contribution to the strategic and tactical aspects of product distribution in foreign markets. They will need a world view, to understand your market and to give you the right advice and guidance for that part of the world,” advises Muddyman. “For instance, we would use someone different to draft a legal text than we would to draft marketing collateral. Similarly we would use a different person for the automotive industry than for the medical and pharmaceutical industry. The ability to convert a piece of text in whatever form it is, from one language to another is really the starting point. How efficiently they manage the price, the project, and how they fit the timescale are also important factors.”
Contrary to expectations, choosing a company local to the new market isn’t always a prerequisite to any expansion plan. In fact, other factors should be considered rather than geography when making the all-important decision. “I don’t think it matters at all,” argues Muddyman. “There are the obvious considerations in terms of operational ease and efficiency across time zones. However, by its very nature, the GILT industry is an international industry. I think it is more important to pick the right partner rather than worrying too much about the geography.”
Not everyone totally agrees with this point of view. “With communications these days it is true that your advisor does not have to be on your doorstep – it is their response times and quality of advice that is important,” says Meager. “However, there is no substitute for having a good local advisor who can respond quickly. Always choose a local firm with good local connections and they will ensure that the process of setting up a cross border business is achieved as smoothly and painlessly as possible.”
Emerging markets in countries such as China, India, Russia and Brazil mean that competition is likely to be fierce in the next few years. The consequence of this is that companies need to deliver their products and services quicker and more efficiently to ensure a competitive edge – new technology is likely to be integral to ensure progress. This also applies to the GILT industry. “I think there will be more and more tools to aid the human being in getting the translations and localisation to the client quicker,” predicts Muddyman. “The demand for linguists within these markets will increase and the opportunity for organisations, such as my own, will increase also.”