Unlike large multinationals, many US mid-size enterprises often lack employees with international experience. This talent gap has become a major obstacle in the way of a full economic recovery in the U.S.
Surveys consistently show that US executives agree they need more talent with global competency. A McKinsey survey showed that 76% of senior executives believe their organizations need to develop global-leadership capabilities, but only 7% think they are currently doing so very effectively (1). These executives go on to say that as a result of this gap in skills, significant business opportunities are lost.
It is astounding that 30% of US companies admit that they have failed to exploit fully their international business opportunities because they didn’t have personnel with international competency (1). This can manifest in ways that are not even visible, such as missed opportunities where nobody in the company even knows or realizes that an opportunity exists. But it could also be a failure to anticipate local customer needs. Or it could mean mistakes when a company selling abroad fails to recognize the distinctive laws, regulations or policies that apply.
In particular with regard to emerging markets, North American companies are behind their peers from other parts of the world in trying to address the huge opportunities presented by the ballooning middle class. This is especially true for mid-size companies.
From lost opportunities all the way to delays and mistakes that end up costing a fortune, the lack of understanding of how to conduct business globally is hurting America -- more and more each day. And the majority of American executives agree that developing leaders who are culturally and functionally proficient across regions is a key to more effective multi-regional operations (2).
So what can you do? If you are a CEO or company owner, hop on a plane and visit other markets, and encourage your top employees to do the same. Of course do some research before your trip and get some guidance from seasoned advisers. As soon as you have ascertained there is a potential market for your product or service, assign a top employee full time to exploring that potential and developing a plan to expand. Don’t make it a part time job or add it to someone’s plate; that never works as today’s business will always trump long term potential. Choose someone who is open minded, curious and agile. Give them some training that will help them understand business practices and the culture of the countries, so you avoid costly mistakes. Before you know it, your company could be growing in leaps in bounds!
For lots of articles and discussions on this and related topics, global expansion, trends in exports and foreign direct investment, join our LinkedIn group
McKinsey Quarterly: Developing Global Leaders. Pankaj Ghemawat June 2012
McKinsey Quarterly: Managing at Global Scale. A survey of 4666 executives of global companies across regions, functions, industries, sizes