Looking for Success in the International Space? - Retain An IE

Foreign operations are an unnecessarily expensive business. I have been doing this for years. The road map is invariable and predictable. First there is a flurry of optimism and excitement. Passports and Visas in order, off we go to El Dorado. It’s an exciting affair… international departure lounges and exotic destinations. The initial trip always yields a favorable report. Of course it does. In the information age there is an abundance of data available to facilitate the identification of new markets. An hour of smart searching on the web and one can access all there is to know about the widget market in Ghana.

Very few companies possess the internal human resources to exploit operations in foreign markets. And even if they do, can they afford to dedicate this staff to a still-to-be-proved viable venture? Hiring a full time professional to start up the venture from day one or sending out a valuable member of management is very high risk indeed. When I am approached in such circumstances, I insist on an Interim Management arrangement. Give it a name. Initiating commercial activity in a foreign market is a start up. It is irrelevant how big and bad you are in your domestic market...you are a novice in foreign lands. You will find very few Fortune 500 CEOs who will disagree with this assessment. You will find even more CFOs who quite simply do not want to talk about the subject.

Just because one is in a new environment, does not mean that the old rules no longer apply. In fact, it is in such circumstances that one needs to adhere even more rigidly to solid professional standards and practices. If it is unwise to task an inexperienced executive with an important venture in a domestic market, then the same holds true for foreign operations. A significant addition to this maxim is that it is not only the executive that is inexperienced in the foreign market, but the company itself.

Before I get carried away, go 18 months forward from the buzz of the JFK International Departure Lounge. The exciting new venture that everyone wanted to be associated with has now become the corporate black hole. There have been many casualties. Not wanting to mix metaphors – it is now a rudderless ship floating aimlessly (and expensively) towards some foreign shore.

There is no great mystery to being successful in new markets. It is rather straight forward. I could draw a magnificently exciting profile of what makes a successful International Interim Executive, but the reality is that I do what you do…I just do it somewhere else.

Like everything in life, there is a learning curve. Unfortunately the promise of foreign gold and the adrenaline rush of jetting off all over the place dim the sensibility of even the most seasoned campaigners. Experience counts and can be acquired through the intelligent use of Interim Executives in international markets. It is that simple.

The International Interim Executive has done it before. All you are requesting is that he now does it for you.

DF
CEO 24/7

Rebuilding Confidence

Shortly after a private equity firm got involved, I was called in to analyze their company's stake in a transportation company. The target company was being directed by the second generation of the founder, but had stumbled badly and required a capital infusion.

The foreign manufacturer had recently opened a new manufacturing facility in the U.S., but had lost one of its major customers to a competitor. Revenues had dropped to less than 50 percent of their peak. Several key sales people had also left the company for greener pastures, leaving a void that was being filled by employees from other departments. The hole seemed to be getting deeper.

After visiting both the U.S. location and the headquarters, and meeting with the executive management and the employees, it appeared that the fifty year-old company had failed to address changing market conditions. Additionally, it was still operating with paper, pencil and typewriters for internal and external communications and record-keeping. Their new facility required a few changes to streamline their assembly line, and the installation of a mid-range computer system with enterprise software eliminated the previously mentioned problems and helped to increase productivity. Extensive training on the new system, along with workflow changes, took months to complete, but the ROI was quick. Experienced sales reps were recruited and trained, and equipped with state-of-the-art technology, allowing them to access real-time information and quickly respond to RFPs and customer inquiries.

I personally visited with their major customers, and took several key executives along. We also invited the customers to the new manufacturing facility, and impressed them with the ISO application process. After one year, we recaptured the major customer that had been lost, while simultaneously expanding the customer base. Revenues soared above the previous high. As the interim COO, I was retained for a total of 24 months. Eventually, the private equity firm sold their stake to another group, and at a very nice return.

DE

IE Provides Quick Response to Global Competition

The North American subsidiary of a European company had to respond swiftly to very aggressive global competitors. Rising feedstock costs were seriously impacting the financial performance of the subsidiary.

A seasoned interim executive with detailed knowledge of the U.S. and international business environment was brought in, assessing the state of the subsidiary and developing options for the shareholders. The management of the subsidiary was too occupied with day-to-day business decisions and lacked international experience.

After a detailed analysis of the product portfolio and the distribution channel of the business, the sales team was realigned, focusing on technically driven value-added products. Regional Distribution Centers were established in order to expand the distribution of the company's products. The company's product range of high volume, low margin commodities was transferred into a JV with a Mexican competitor, providing a significantly better cost position. Its North American asset base was utilized for growth in high margin products.

The interim executive led the change process in the subsidiary, coaching the Management Team in adapting to an increasingly global business environment.

TM

Writing A New Prescription

It happens in thousands of companies every day. Metaphorically speaking, what begins as a sneeze turns into a cold. Before long, the entire company is sick, and in need of a cure. Something that appears to have happened overnight, in reality took quite some time to develop. When the problem surfaces in the boardroom, my telephone starts to ring, and travel plans begin. Such is the life of the consultant and turnaround specialist.

I usually get called in after a company has missed its numbers for three or four quarters in a row. Investors and financial institutions may have become uncomfortable with the loss of a major customer, the rise in inventory levels and fewer turns, or perhaps the financial ratios are headed in the wrong direction.

Determining a point in time at which the shift occurred requires an initial assessment by the consulting team. Talking with the employees, vendors, and customers usually uncovers some problems, as these are all stakeholders with a desire to see positive results. Major challenges present themselves when technology advances are not adopted in a timely fashion, or logistical considerations are ignored, or time to market increases. Personnel issues are easily resolved; replacing capital equipment requires planning. All of these areas, however, needed to be scrutinized.

Organizations are going to make missteps during their lifecycle. Having the right consultant in place who can not only provide a quick but thorough assessment, followed by a plan of action, and who can assist in its implementation, is key to minimizing those missteps.

RS
CEO 24/7

Working Behind the Scene

You may be one of the millions of people who visit a theme park at some location around the world each year. I enjoy them for the sense of escape from reality, the entertainment, and the enjoyment of watching so many others having a good time. But a few steps from the attractions and rides, still within range of the lively music and the visible light shows, you are exposed to another part of the park...the operations portion. Not glamorous or glitzy, it is where the real work gets done.

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There you will find the the electrical transformers and panels that control the rides and lighting; the hydraulic and pneumatic pumps and hoses; the water pumps and pipes that are essential in creating the water rides, waterfalls, and rain forests. There are offices where employment interviews are being conducted, where training is performed, bills are paid, vendors meet with buyers, and there are loading docks for deliveries of food and souvenirs. It is not unlike what happens at other organizations around the world, every day of the year.

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Interim Executives complete their assignments in a similar manner. They work behind the scene when a client company loses a top level executive, or perhaps, in a turnaround situation or a restructuring. They may be called upon when a new company division requires an experienced executive to step into a lead role, at any location on the planet. The opportunity requires someone with senior-level experience, someone in the same industry, and someone who knows how to develop and execute a strategy. They provide leadership without the learning curve, and they operate at the highest levels within an organization.

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Working behind the scene, away from the bright lights and the applause, is where Interim Executives really shine. These anonymous 'stars' appear when needed, and when the objective is reached and their assignment concludes, they move forward to the next challenge. Many clients retain the same executives for a minimum number of hours each month, thereby being assured of their availability. And just like the operations at those theme parks, these executives help their client companies put forward the highest quality product and service that their customers have come to expect.

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JC