International
Turtles and the Moon
01 July, 2012 18:05
Or is it “Chalk and Cheese?”
Overseas markets can be as different as Night and Day. Or as the Japanese say, “Turtles and the Moon.” And Brits sometimes say “Chalk and Cheese.”
Then again, some things are pretty universal.
Some months ago I was involved in a five-day coaching program in Singapore for global major account executives. We had participants from Japan, China, Korea, Germany, France, Denmark and Australia. Among the expert facilitators with whom I worked on the project, Germany, UK, Canada and the U.S. were represented. Considering there were 19 students in attendance, that’s a pretty internationally diverse crowd.
You might think that it would be difficult to account for cultural, political, economic and financial variations represented within such a global group. A real “Turtles and the Moon” situation. And as I personally deal with a clientele from literally every continent, I do often hear:
- We don't DO it that way in (insert name of country here)
- Our accounting practices in (my home country) just don’t work that way
- (the territory in question) has a totally different business environment because of government and banking regulation.
- Comparing (our system) to that in the U.S. is like comparing “turtles and the moon.” Or “chalk and cheese.”
- Executives are busy and don't like to have their time wasted.
- Executives always care more about their own company than yours.
- All top executives have gatekeepers and there is always a way past them if the message is sufficiently compelling.
- Executives can always pull 15 minutes to hear a summary of such a proposal-- if they can be convinced that it represents an opportunity to measurably improve their businesses in ways that are consistent with their strategic and financial objectives.
- Executives’ primary goals and objectives are financial-- revenue, profit, growth and shareholder value.
- Every company has assets and liabilities (both current and long-term) and equity of some kind. Every company as some source of income, and expenses, both fixed and variable. Every C-Level executive knows this and thinks about each of these components daily.
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When in Rome...
31 March, 2012 12:00
...or Tokyo, Johannesburg, Sao Paulo....
Nowadays it is fairly typical, even among relatively small companies, to have a significant amount of their business coming from outside the US. In fact, 418 of the Fortune 500 get less than half of their revenue from US domestic markets-- including such American corporate icons as General Electric, Proctor & Gamble, and Coca Cola.
Companies with significant operations outside of the US have a number of issues you may need to consider to really understand their financial statements as well as how they manage their business both strategically and operationally. A few key areas are--
- Legal Structure- What is the legal structure of their international operations? Wholly owned subsidiaries, joint ventures, sales offices, distribution partners, licensees? Each of these international expansion strategies not only affect the business strategy of a company, they are reflected in financial reports and results in vastly different ways.
- Tax Base- Above and beyond basic legal structures, where is the tax base for their international operations? Are profits repatriated to the HQ country (US or otherwise)? How is cash flow managed between home and foreign entities?
- Costs/ Expenses- How (if at all) are corporate overhead expenses allocated to foreign operations? How about costs for localization and development of market/country-specific products? Local marketing expenses vs. Global branding programs? Transportation costs and import duties? Knowing a" margin" number for an international business unit can be misleading unless you know what does and doesn't go into that number.
- Currency- What is the base corporate reporting currency? How and when are exchange rates calculated for foreign currency revenues, costs, expenses, capital investments and cash flows? Does the company "hedge" for currency fluctuations? If so, how much, in which directions and what impact does it have at the end of the day? The difference between missing, meeting and exceeding analyst expectations can often be found in currency reconciliation.
- "Non-Standard" Accounting Practices- Until even relatively recently, you could group international accounting practices into two general camps-- (U.S) GAAP (Generally Accepted Accounting Principles), and "other." Many countries-- and for that matter, many multinational corporations-- have had their own distinct flavor of accounting and reporting practices. While International Accounting Standards (IAS) including the International Financial Reporting Standards (IFRS) are becoming more of a "common denominator" for analyzing and comparing financial results among different countries/regions (as well as among competitors), there are still many major world markets where "homegrown" metrics and procedures still prevail.
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'Tis the Season... but not for YOUR reason...
22 December, 2011 08:53
Seasonality is a very real issue when it comes to executive sales. And end-of-year issues affect everyone. I’m not talking about your internal end-of-year sales targets and end-of-quarter quotas. No one (at least none of your customers) cares about that. Unless you’re in the sorry habit of trying to cut low-margin deals just to hit your numbers because you haven’t been able to take care of business properly until it’s almost too late.
And those “last minute specials” really aren’t doing anyone a favor anyway. You trade away your credibility and standing as a true business advisor interested in the customer’s success for a little low-margin volume on product your clients probably don’t really want-- “empty” sales that will make your next target that much harder to achieve. And the customer is stuck with stuff they didn’t really need. More importantly, feeling that once again, someone who should have been looking out for their interests (YOU) was willing to sell them down the river just so you could get your personal bonus.
So forget about yourself. You should really be thinking about seasonality from your client’s perspective. And while the seasonality that affects the clients sales is important, there are cycles and calendar items that are likely even more important when you’re selling at the executive level:
And those “last minute specials” really aren’t doing anyone a favor anyway. You trade away your credibility and standing as a true business advisor interested in the customer’s success for a little low-margin volume on product your clients probably don’t really want-- “empty” sales that will make your next target that much harder to achieve. And the customer is stuck with stuff they didn’t really need. More importantly, feeling that once again, someone who should have been looking out for their interests (YOU) was willing to sell them down the river just so you could get your personal bonus.
So forget about yourself. You should really be thinking about seasonality from your client’s perspective. And while the seasonality that affects the clients sales is important, there are cycles and calendar items that are likely even more important when you’re selling at the executive level:
- Budget cycles-- when you pitch at the wrong time relative to budgeting and forecasting exercises, you will not only miss the window of opportunity, but you’ll have difficulty getting and keeping their attention at all.
- Earnings announcements—for at least a week before and after 10Ks and Qs (or international equivalents) are released, it is not only futile but shows a lack of insight to be putting YOUR stuff on a C Exec’s plate uninvited. Annual meetings, analyst meetings, fundraising roadshows and annual report prep time are all key deadlines that you should be aware of if you want to impress your customer that you understand their pressures and priorities.
- Marketing initiatives—major industry tradeshows, significant new product line launches, massive press junkets and new advertising campaigns can also make it difficult to command the mindshare you need to get the necessary audience for your proposals.
- Regional calendars—pity the sales executive that tries to schedule meetings in Japan between April 29 and May 5 (Golden Week) or in Australia the first Tuesday in November (Melbourne Cup). If you don’t know the local calendar, you don’t deserve their business.
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