There Are Smart People Outside the United States
Working in an advertising agency with offices across Asia and Australia, we work with a number of multinational companies (MNCs). These multinationals have really strong office networks across the regions and believe ‘Asia’ will bring their future growth.
‘The pivot to … Asia’, in Obama’s words, is a real conversation being had in MNC Board rooms.
Most of these companies have billions of dollars in revenue, although a majority of the revenue is still derived from the United States. Often, they are listed entities where the share price and profit growth are a core part of a CEO’s KPIs. More often than not, this growth continues to be delivered from US, or a handful of markets outside the US.
However, when we come across Heads of Marketing or Business Unit heads for these countries, almost always, we are asked to localise an International strategy that has worked – usually in the US or a developed market. Sometimes the tactics make sense, but very often these lack local insights. As a result it is really difficult to craft an effective growth strategy and campaign that delivers a return on the investment.
Fundamentally the trouble here is that of trust. Very often, the regional heads of the respective brands are based out of Europe, Dubai, Singapore or the US. The control over the country or the market’s P&L in a fully matured form does not sit in the local entity. A majority of the strategy calls are being made remotely, looking at numbers.
The trust in the local leadership is missing. At some point these multinationals need to trust the smart people they are hiring in the local markets. These smart people exist.
A giant global software product business we work with has this problem. They are ambitious, have the cash to invest and are really smart in the way they look at growth in the US. However, in India, their strategy is controlled by leaders based out of the US. They haven’t seen any serious growth for the last four years they have been trying to build a base in this market and are about to retreat completely.
Here is the other side though. Recently, Jeff Bezos announced that his India head will join the “S-Team”. Unfortunately this person had to prove himself to grow the business to a level before he was allowed “in” for looking after the fastest growing e-commerce market in the world. But hey – at least there is recognition of the importance of a senior leader in a glocal (global-local) context. A large part of the success for Amazon in India is coming through true localisation of their global values and strengths. This is being facilitated through strong local leadership.
If MNCs want to succeed in growing markets across Asia, they need to not only appoint a strong leadership but also need to back them. Simply transferring a square peg to fit a round hole is not going to cut it.