One of the most exciting megatrends in business today is the rise of emerging markets. We are now witnessing a profound shift, as countries that were once the source of low-cost manufacturing are now becoming attractive consumer markets in their own right. With so much growth projected in the future, companies are placing big bets on their emerging market strategies. This opportunity makes the need for effective local leadership more critical than ever.
Seventeen years ago, I immersed myself into the Latin American culture as a brand manager for Black & Decker. Living with a family in Costa Rica – where I slept on a straw mattress and went without hot showers – helped shape my view of what it would take to be successful in business there. First hand, I experienced how people lived and worked. I embraced the culture and came to understand the value Central Americans placed on personal relationships. These insights continue to guide the way I conduct business globally.
At Newell Rubbermaid, we have developed an approach for advancing leadership in new markets that has helped guide us. Our brands like Paper Mate and Parker pens, Rubbermaid Commercial Products, Irwin Tools and Lenox saw blades realized double-digit growth in emerging markets in 2011. No matter what products or services you sell, and regardless of your business model, as you look to take your brand globally there are some universal steps that can help lay the foundation for a strong business strategy.
Find Your Leader
When entering a new market, the choice comes down to a local leadership or an expat leadership model. Both choices represent challenges. A local already knows the market and the nuances of doing business in the region, but doesn’t yet have the passion or knowledge of the company’s purpose, culture and business. An expat from headquarters presents the opposite challenge. Either way, success depends on a strong onboarding program and ongoing training, along with a trusted advisor on the ground to provide advice. What doesn’t work, in my experience, is a new hire from outside who has neither the right market nor company knowledge.
Hire Supporting Talent
Once you’ve identified your local leader, you need to build out your organization. That used to mean simply forecasting average sales per employee to estimate how big the team should be and how much it would cost. Today, the concept of workforce planning is much more sophisticated. The key is to ensure that the current positions you are filling are also the ones needed to achieve your future goals. For example, if you want to build a billion-dollar business, are you bringing in people capable of managing at that scale? Too often, companies build the team they need for the short term, rather than think ahead to create the talent pool of their future.
Why does your company exist and what would the world be like without it? These questions sound esoteric, but they are critical to bringing to life a company’s purpose and culture and inspiring passion. Training programs must give the team a reason to believe and that goes a lot deeper than financial goals.
Leaders should think of training emerging market teams in two phases – at home (brand culture) and in-market (cultural connection).
A home training program helps emerging market teams feel a closer connection to the company. For example, in some of our businesses Newell Rubbermaid brings teams to the U.S. to learn on the production floor, in the marketing department and with the sales teams. This also builds relationships that help them navigate the business broadly.
A second phase calls for creating a training and development center within the local market, as we have recently done in Shanghai with our Lenox Institute of Technology to educate both salespeople and customers on the benefits of our products. As teams reach a large scale, sending all employees “home” for training may become cumbersome and expensive. In-country training centers are set up to operate seamlessly to support broad networks.
When you have strong local leadership and a thriving local organization in place, that’s when the magic happens. Rather than information always flowing in one direction from headquarters outward, valuable insights begin to flow back from new markets that can be shared across the entire enterprise.
All too often, marketers go to an outside agency to purchase research, but the best way is to take the time to see for yourself. For instance, our team in Latin America watched how local women cleaned a floor with a squirt bottle and a pole with a rag attached. That resulted in a new product that is now sold globally: a mop with the cleaning liquid built into the stick.
It Starts from the Top
The last critical ingredient to leadership in emerging markets is setting a bold ambition. Every market is like a canvas—there may be many ways to paint it, but the first brushstroke starts with a compelling vision for what is possible. I believe a bold ambition, ideally set directly by the CEO of the company, is critical to providing the passion and inspiration needed for local leadership to go out and color in the lines and make the canvas come alive.
Bold ambitions, by definition, are hard. They require people to stretch out of their comfort zone and embrace not what is probable, but what is possible. Hockey great Wayne Gretzky famously said, “Skate where the puck’s going to be, not where it is.” Bold ambitions define where the puck is going to be, maybe as far as 20 years from now. The companies that bet big on emerging markets 20 years ago are the ones who are riding the next wave of growth today. That’s what true leadership is about: you first have to believe, in order to achieve.