TAP Case Notes 1 – APAC Centre of Excellence

Client      Global Advertising Technology Business 

Service    International Strategic Development

Result     Creation of APAC Centre of Excellence  

Date          2014

Background

Our client was a technology business that supports the advertising industry with TV distribution and asset management services.  Following our strategic and operational review of their existing operations in APAC, the client accepted our recommendation to create a joint venture with an existing Asian partner to service the region. This business already had a long standing relationship with our client; it serviced their print advertising distribution and had an operational footprint in Malaysia, Singapore and Hong Kong. 

The project was firstly to relocate the client’s APAC operations from Hong Kong and secondly to form a regional ‘centre of excellence’ in Malaysia to allow for expansion throughout the region.

Challenge

Once the regional office was established, we were appointed to provide the framework for the client to roll out their service to 17 Asian markets generating USD $23M at 48% EBITDA within 3 years.  Our role was to ensure that the Asian operation was fit for purpose both as a regional head office and as a ‘centre of excellence’, able to lead the direction of the business in the region.  We were required to implement the best of the client’s international experience while ensuring each Asian market's unique processes were fully understood.  

At the same time each of the 17 markets were transitioning from analogue to digital TV services so, with an industry in flux, we were required to include strategies for change across a number of markets with diverse, cultures, languages and processes.

Approach

We had already proposed the client’s global and regional models and had completed the transition of the Hong Kong office from a regional to a satellite sales office so we understood the task. 

To build the centre of excellence, and to meet the growth challenge, we appointed a ‘SWAT Team’ sourced from the client’s most successful operators worldwide.  This team was important to help with the digital change required within the region and to quickly instill values consistent with the rest of the the client's business.  We then focused on hiring an experienced local leadership team to build credibility and deliver the skills to quickly deliver transactional revenue.  We ensured that the model we prepared was scaleable and easy to replicate on a market-by-market basis throughout Asia.

Results

The relocation of the regional office from Hong Kong to Malaysia created a strong regional centre through which the client could direct its regional growth.  Despite obvious disruption, no customer was lost in the transition of the operation from Hong Kong and within 6 months, the Pan-Asian operation was servicing markets in Vietnam, China, Singapore, Thailand and Hong Kong.  

Asian business sourced from the client’s global client network could now be managed through Malaysia, and each of the client’s country operations can now sell Asian broadcast services to their local clients.  This was a significant win for the client who could add Asia to their many international proposals and tender requests a potential revenue lift of 20%.

Initial revenue was not however as budgeted. This was due to the TV product having limitations in dealing with local business issues specific to Asian markets.  However, we prepared a product review and business case for interface changes that is scheduled for completion in 2015.   Revenue is forecast to meet expectations by June 2015.

The Advisory Partnership assists its clients with operational strategy and structural change, delivering outputs that are scalable to meet the challenges of technological change and international growth.

Post by James Douglas

www.theadvisorypartnership.com

Other Posts by The Advisory Partnership

Upscale your International Growth
Over Promise, Under Deliver
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International Strategy - How to Get an A in Geography

Advisory #14 - International Growth Cheatsheet

As every business matures it seeks to extend its reach, seeking new territories for its products and services. 

You may be interested in opening your business in another state or you may be interested in expanding internationally or to emerging markets.  However, if 86% of businesses fail to achieve their strategic plans (Harvard Business Review), what are the skills that you are missing or need to be aware of to ensure that you can grow your business successfully into new and emerging markets. Just as importantly, what are the dangers you need to avoid?

Based on our experience in LATAM, Asia and the US, The Advisory Partnership has prepared a list of skills, essential to your interstate or international expansion.

Project Management

You need to be efficient.  You need to have a tight project team with clear roles so that you can make decisions quickly and change course if operational realities reveal that you need to head in a direction other than you anticipated.  

Your project needs clear leadership and a decision-making hierarchy but be careful not to over-manage; too many layers of management will stifle decision-making. Your start-up needs to be able to act dynamically and respond nimbly to situations as they develop.

Research Skills

Find out everything you can about your target market. Make no assumptions.  There are no short cuts here.  Working in isolation from your desk at head office will not be enough to get the feel of an international market and to understand how it works on the ground.  You have to get on a plane and spend some time there. Don’t spend a day; spend a week or a month if you can.  It will pay you back with speed to market; delivering faster revenues and fewer expensive mistakes.

Networking Skills

You need to find businesses and individuals that have entered similar markets and learn about their experiences.  You need friends who’ll tell you how it really is.  What worked for them and what didn’t? 

How a market presents itself externally will be very different to how it operates internally.  You need to know the difference.   Find a local consultant who can partner with your own project manager to help you understand the market intimately and be sure that your consultant has the credentials and contacts to deliver the connections that you don’t have on your own.

People Skills

Your business will rise or fall on the success of your people so you need to have the right team before launch. A key appointment to your new market should be an HR manager or agent and they need to be a key part of your start-up leadership team.

Hire people who have done what you do before; people who are already credible and trusted in your area of operation and who’ll be able to hit the ground running with your product and service. Hire the best people you can within the available budget and don't make any false economies.  Low cost labour with limited experience will slow you down, they will require induction and training.  Start-up is not the time to be moving slowly.  


When you start to make appointments, hire a mix of local employees and trusted experts from your business.  This way you’ll have the best combination of skills to deliver not only your company’s expertise but you’ll also have local credibility and a built-in understanding of cultural sensitivities.  

Structure your operation in this way to help you successfully navigate sales and operational issues in the local markets. 

Multi-Tasking.  

As you expand, it's very likely that you’ll be performing a local and international role at the same time.  This means you’ll be working on your new markets at the same time as your home operation, probably across different time zones. This is exhausting so you need to be highly organised for it to be sustainable.  Structure your meetings formally to a tight, action-based agenda and allow for separate informal catch ups to understand any day-to-day personal challenges. 

Culture

There’s no such thing as a unilateral 'global' approach because you need to adjust your behaviour for different types of interaction with different locations and work to overcome language and cultural barriers.  Employment expectations, language capability, education and culture may all be markedly different to how you normally operate and you will have to make some allowances in your process to ensure that you get the best from your team.  

There is your way of operating and the local way, the right way for each new market will be somewhere in the middle and you need to find that sweet spot. Your success is dependent on working out which is the right approach and managing accordingly. 

Operational Excellence 

Once you’ve hired your local talent, you must now surround them with everything that is great about your organisation.  Send in an "SWAT Team" from your own business and surround your new team with all the skill, passion and enthusiasm that has made your business great at home.  Avoid a fly-in-fly-out approach.  Give them some time to bond and to really share the essence of what your business is all about. The time and energy you put into helping your new team out now will save you in the long run. 

Product Management

You may have a product or service that has been hugely successful in your own market but you still need to be sure that there aren’t regional variations that may completely negate the effectiveness of that product in a new environment. Be prepared that your product or service may need to be adapted to cater for the requirements of the new market.  Do your research and test the market in advance before committing to a costly launch of an inappropriate product. 

Technology 

Make no assumptions about technology; particularly if your product is within the digital or online sector.  Public internet and business connectivity are not a level playing field worldwide. If you are entering emerging markets particularly with a new technology product, be mindful that traditional processes can still dominate due to poor Internet performance in some countries.

Growing your business into new markets can be one of the most rewarding things you can do in your career but keep in mind that whatever new market you enter, it’s is not your home territory. You need to continually compare your strategy against operational reality to ensure you have the best set up for success.

The Advisory Partnership assists its clients with operational strategy and structural change, delivering outputs that are scalable to meet the challenges of technological change and International growth.

Post by James Douglas

www.theadvisorypartnership.com

Other Posts by The Advisory Partnership

Over Promise, Under Deliver
Partner Smarter, Grow Faster
International Strategy - How to Get an A in Geography

Advisory No 11 - Over Promise... Under Deliver

The Advisory Partnership reports on the dangers of over-promising our operational commitments when we're caught in the middle of a sales pitch 'high'.

We’ve all been there. It’s a good meeting. The rapport is strong. The client has the problem and we have the solution. We’re already mentally registering the sale and toasting our success.

Then comes the question:

Is it possible for you to include an additional feature, product or service?

And we say, "Sure! No problem".

It’s all too easy to be drunk on a sales pitch high and say yes to things we’ll regret the next day. 

We do this for two reasons; one is our eagerness to please our new client and the other, darker reason is the fear that we’ll lose the sale or the client’s respect if we don’t agree to everything immediately.

But all too often when we answer ‘no problem’ we’re really just taking an indirect route to a disappointed client and we simply reveal our own failure to adequately convert an opportunity into a profitable sale that is easily implemented.

Keep in mind that it is often a closing negotiation tactic of the client to get more of our product and service for either the same price or a faster turnaround. It is not at all accidental that the question comes towards the end of the negotiation when we may have begun to let down our guard.

Everyone wants a project that is well managed, cost effective and operationally efficient. So, here's how we deal with the situation.

We need to see the client's last minute question as a new brief and to be confident that, in the end, we’ll be respected for taking the time to consider the answer and to revise our offer if necessary.

This is where we must stop and think. We may have arrived at our meeting with a beautifully balanced business case for the project that we are about to sell but in one single word, we can turn that profit into pain.

The end result of making unrealistic promises is a place nobody wants to be.

So, before saying yes to what is an extended brief, we have to take the time to think through the effects on our team’s existing commitments. If we take on work than can’t be delivered effectively, then it's directly connected to our operational efficiency and therefore our business' bottom line.  It's impossible to do a profitability analysis on the spot so it's smart to leave the matter and respond promptly after the meeting.

Failure to do this, inevitably leads to project failure which can impact our reputation in the market and undermine the revenue growth we thought we had already achieved when we said ‘yes’ in the first place!

So in this situation, if you truly know the answer then of course you say it but if you’re at all unsure, agree to respond later.  When you respond with a new, carefully crafted proposal, you will ensure not only your profitability but also your own ability to deliver effectively.  Hopefully you'll also be building a long and trusted relationship with your client in the process.

The Advisory Partnership assists its clients with effectiveness reviews that remove barriers to growth and international business development.

www.theadvisorypartnership.com
Post by James Douglas

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Advisory No 10 - Business Development - Partner Smarter Grow Faster

A growing international business needs new staff and lots of them.  

It needs to have tried-and-tested suppliers to provide the products and services that it can’t deliver itself and it needs them fast.  

And it needs strategic partners to help extend its geographic reach and to build a network of customers that will deliver on the business plan.

What these three categories have in common is that every growing business is reliant on people and partners to deliver its growth plans.  

For start-ups and developing businesses, having the right team around us is critical to our growth success and it’s definitely not the time to cut corners.

As managers it is likely that we are busier than our peers of 10 or 20 years ago and the speed at which we are required to make important business decisions is accelerating. When we are working in start-ups, this pressure can be ten-fold.

However busy we are, it is essential is that we appoint any new relationships with care whether they are our staff, suppliers or strategic partners.  This is because our own success is ultimately reliant on the partners that we choose to represent us. 

Our partners success is our success and their failure is ours to own.

It’s tempting, but we should never make our decisions based solely on the candidate that we know well or is closest to hand.  In the rush to start-up and grow our businesses we often quickly grab our former colleagues and partners as a short cut to establishing a new team. 

Remember that we don't achieve something different for our business simply by replicating an old model so it’s important that our new partnership appointments are still given due-diligence and tested against alternatives in the market.

No decision is a valid decision until it can be compared against alternatives. A choice of one is not a choice at all.

It's always wise to properly review alternatives as the sanity test to your preferred partnership choice and it's is time worth investing as it provides clarity, validates your final decision and supports your position for any future conflict.  Most importantly, you develop a balanced approach as you are forced to consider the negatives as well as the positives of your preferred partnership choice.

The pressures of establishing and growing your business are tremendous but be careful not to blindly choose old partners for your new business development.

Be open minded to change. 

When we take the time to fully review and make informed decisions on our business partners there’s every chance that growth will come stronger and faster than if we select solely from our inner circle.

The Advisory Partnership supports broadcast media and advertising businesses with their strategic and operational expansion into new markets. 

Post by James Douglas

www.theadvisorypartnership.com