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

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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 13: Going "Glocal"

The Advisory Partnership reports on how to get the balance right when your global strategy meets local reality. http://bit.ly/TAP-APAC13

Glocalisation is the ugliest of buzzwords. It’s neither easy to say nor easy to implement but it’s an important concept to be aware of for any business that is planning geographic expansion. 

We understand globalization as a modern reality and we have affection for localisation as something personal, more intimate and somehow just a little more right.

Not surprisingly, the process of glocalisation is a hybrid of the two where a global product or service is transformed to meet the needs of local consumers. In simple terms, it’s where that international supermarket chain comfortably becomes our corner shop.

The trick in a successful implementation of a glocal strategy is the transformation process and how much attention is really paid to the 'local' part.

The glocal approach is often criticized for its long-term ineffectiveness. Bloomberg Business Week highlighted the weakness of a system that allows for the flow of innovation in only one direction; from the headquarters of multinational corporations out into the world. They said that whilst glocalisation suggests an understanding of local conditions, in reality, glocalised goods often have little local relevance and overlook the specialized behaviours and cultural specifics of local markets.  

They are right.

Research shows that whilst there may be an initial surge in sales for newly adapted products, in time, local markets lose interest due to poor adaptation and come to see it as just a cynical gesture towards the local market.

Glocalisation will always fail if it forgets the concept of local when rolling out a service that has worked well in a different region for a unique population. 

Glocalisation is however an economic reality and a necessary part of today's global expansion strategies. So, for us, it will only be successful when we take the best of both worlds: trading on our international success whilst truly understanding and respecting the uniqueness of local markets.

Rather than take a top down approach from multinational to local, we’re best to use our international skills and experience to fully understand the needs and requirements of the local markets first.

So be careful to focus on the end-user customer first and then restructure your product or service back till it meets the core. 

As a key part of your strategic plan, be sure to get out of your office headquarters and experience the local markets as fully as you can. This way you will achieve the best of both worlds: a global product enhanced with regional input and a local product reinforced with international experience.

Aligning our strategy this way, creates both sustainable reach for international products and services without the need for insensitive commercial colonisation.

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

Post by James Douglas
www.theadvisorypartnership.com

Related Posts by The Advisory Partnership 

International Growth CheatsheetOver Promise, Under DeliverPartner Smarter, Grow FasterInternational Strategy - How to Get an A in GeographyThe Traditional Office is an Endangered Species

Advisory No 12 - The Traditional Office is an Endangered Species

You’ll notice a common theme if you stroll the central business districts of many of the world’s larger cities.  There are increasing numbers of premium office spaces being turned into luxury apartments.  

Of course there are practical considerations here, both technological change and the cultural change that favours renovated warehouses as workplaces can mean that many of our eighties-style office blocks are now redundant and are preferred for housing over business.

This change may however be the development of a major shift in business culture to us working remotely or "teleworking".  Indeed it’s entirely possible that the office of the future is not an office at all and is likely, for many of us, to be a place where we meet, exchange ideas and tasks, and then complete our working day at home.  

The end of the traditional office could well occur during the course of our careers and we have to be ready to adapt our operational systems and processes accordingly.

In the USA in 2012, 2.6% (3.3 Million people) considered "home" their primary place of work. (Source: Global Analytics.com).  This figure had grown by 80% from 2005 and continued growing even when the workforce declined in 2011-2012.

In 2013 the Australian Bureau of Statistics concluded that 24% of Australian workers spent at least part of their time working from home.

In that same year the Australian Public Service Commission Employee Survey found that 80% said working from home ‘increased work and life balance’ with 69% saying they were ‘more productive’.  

Interestingly, these Australian teleworkers had higher employee engagement, worked longer hours and had fewer sick leaves.  This is not at all surprising considering they get to give up the daily commute and put some extra quality hours back into their working day.  The Australian Government now has a target to double the formal teleworking workforce by 2020. (telework.gov.au)

So, teleworking should be embraced because what any manager wants is a fully engaged productive workforce who are happy and committed in their roles.

Technology has enabled this flexible work practice and the widespread availability of mobile and cloud technologies now has most of us connected to our workplace 24/7.  It's practical then that only way to make the 24/7 work culture sustainable for us personally and professionally is to have the tools to take some time back for ourselves while still operating in the reality of modern business.  Teleworking is part of the solution for this.

Teleworking is both empowering for the individual and productive for our businesses.  

As managers and business owners we have to be ready for this inevitable change in our operations and ensure that we have adapted our processes accordingly.  

We need a management structure that recognises our increasingly fluid teams and, at the same time, we need to ensure that there is increased formality and accountability around roles and responsibilities.  We need to keep our project management tight and our meetings formal, structured and action orientated. 

By recognising this change and working with it,  we win all of the benefits of an engaged motivated team and less of the risk around lack of accountability with a mobile workforce. 

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

Post by James Douglas
www.theadvisorypartnership.com