Five Basics You Need to Know to Play in Today’s Global Market

by Principal’s Report, adapted from Thomas Travis

How do you . . . maximize your business opportunities when working abroad?

Summary: As the design and construction business becomes increasingly global, A/E firm principals must think, plan, and operate in new ways.

Sometimes, the complexities of doing business on a global scale can feel overwhelming. To work globally, one must understand business opportunities and avoid costly mistakes. To that end, here are five “Tenets of Global Trade” any successful entrepreneur must know. They apply to doing business around the globe, regardless of country, commodity, or culture.

Tenet one: Take advantage of trade agreements
Think outside the border. You must understand trade agreements and preference programs and how they can impact your business. Decisions about where to set up a business venture, how to locate the best sourcing opportunities, and how to develop a strategic plan for the future are all dependent on a thorough knowledge of the trade opportunities these programs provide. After the agreements have been implemented, take advantage of new opportunities. Companies that participate in trade negotiations and scrutinize the details usually end up winning. Those that don’t frequently lose their competitive edge.

Tenet two: Protect your brand
Protecting your brand means singling out and promoting what is unique about your firm—and benefits you offer that competitors don’t. It means protecting your firm’s image and its intellectual property. The proliferation of piracy, to which computer-generated and computer-transmitted project files are especially vulnerable, requires vigilance when it comes to worldwide copyright, trademark, and patent protection. Pay attention to the human rights and environmental practices of offshore facilities with which you do business. If you don’t take care of your brand and its reputation, not much else matters.

Tenet three: Maintain high ethical standards
Maintaining the highest ethical standards and requiring that your offshore partners do the same have become business necessities in today’s international climate. Your firm must establish its own standards of acceptable conduct, communicate those standards both internally and to all offshore partners, and enforce them through internal monitoring systems. We’re operating in a world where watchdog groups and governments are constantly looking for unscrupulous business practices. If your company is doing something it shouldn’t be, it will be uncovered eventually.

Tenet four: Expect the unexpected
When managing a global business, be prepared to deal with situations that aren’t covered in traditional business plans. Whether the event creates opportunity or peril, how you prepare and plan to react to the unexpected must become an essential part of your global thinking. Whether the issue is a natural disaster that disrupts communications channels, an outbreak of influenza that can shut down commerce, worker strikes that close down ports, currency crises that turn a region’s economy on its head, or a surprise coup d’état in the country where you just opened an office, the longer you are involved in international business the more likely an issue will arise that was both unanticipated and unplanned.

The smart global entrepreneur always expects the unexpected and has a flexible enough project delivery system to change course when circumstances dictate.

Tenet five: All global business is personal
Resolving disputes in business is always a challenge. When the person or group with whom you have a dispute is halfway around the world, finding a resolution can be next to impossible if you don’t already have established personal relationships. Forming personal, face-to-face links is key in global trade. A good rule of thumb is: The farther apart you are geographically and culturally from your offshore counterpart, the more important it is to meet face to face. That means a lot of traveling by you, your partners, or your project managers to maintain these personal relationships. You may have to make yourself available at places and times that are inconvenient, even perilous.

Creating these on-on-one relationships with your overseas business partners will have a huge payoff. International business is not a nine-to-five job, and the extra time you spend building personal relationships with your foreign counterparts will pay for itself.

These tenets of global trade should serve as the backbone of your efforts to build successful global operations or expand them. If you follow them, you can better handle the realities of today’s global trade environment. You will have systems in place to avoid public relations disasters that can result from scandals, security breaches, or ethical breakdowns. With proper planning, unexpected natural disasters, financial market drops, or government breakdowns will not harm your business.

Copyright Institute of Management & Administration 2007. Reprinted with permission from Principal’s Report