Exactly a week before the UK voted on Britain’s future in Europe, the venerable British adman and part-time behavioural economist Rory Sutherland wrote in The Spectator:
“Europe is more of a cultural hodgepodge than any other continent. The Brits and the Scandies are similar in our tolerance of uncertainty, but they are much less individualistic and competitive than we are. The Germans are very different from the Dutch, let alone southern Europeans. Frankly, if I were trying to create a superstate, I’d start somewhere else.”
Whatever your politics, this must strike a familiar chord with many founders who have sought to grow their business in other markets—to Europe or beyond.
Expanding overseas has many challenges, depending on where you decide to set up. Language barriers, availability of senior talent, connectivity, corporation tax and salaries are all important considerations. Crucial too are decisions over whether it’s best to acquire a business, found a completely new venture, or work with a partner.
What has become clear from recent conversations with members is that, while these are all important matters, none is more vital or tricky than managing culture.
Olly Swanton, founder of global communications agency Way to Blue, opened offices across Europe, the US and Asia to serve his increasingly global client base. He told us that the ubiquity of the English language can often work against you when venturing overseas.
“We're divided by a common language and it can lull you into a false sense of security very quickly. You think you know what they're saying because you understand the language. But what you must remind yourself is: they do operate differently, and they say things in a different way."
And then there's the challenge of managing your international offices. “The biggest single challenge we have with our structure – so many people in different countries, in different offices that are disconnected – is the management bandwidth it takes to operate that," Olly adds. “It takes a particular senior skillset and attitude—a very international attitude to succeed.”
What’s more, as Patrick Eve, CEO of Zigzag Global points out, work cultures are rarely homogenous within markets—especially the United States, which members describe as 50 entirely different countries. TranslateMedia, the company he founded in 2004, had already established a presence in New York and later acquired Texas-based business McElroy Translation.
“I think what came as a surprise was that some of the cultural challenges weren’t just between the New York business and our UK office but across our offices in the US as well. We had built a very specific culture in New York but trying to integrate that into the newly-acquired Austin business proved a lot harder than we thought.”
Dan Scarfe, CEO of New Signature had built his business organically for 14 years before deciding to venture into the world of global buy and build, via an acquisition by Columbia Capital. He also cites the integration of culture as his biggest challenge.
“We had several businesses that we were bringing together across the world, each with different values, different visions, different missions. How can you coalesce all those companies around one common north star?”
It seems that, when going international, maintaining culture is as crucial as it is challenging. So how do you achieve it?
Many members recommend a staged transition period, where the founder or CEO runs the overseas business for one or two years. Even someone in your senior management team who’s been with within your company a while, knows how it works, understands the culture inside out to bed it in personally.
Dave Emerson, VP sales and marketing at SEKO Logistics took this approach when the company launched into Hong Kong and China, although he admitted it did have a noticeable impact on the team back home.
“The big benefit of having one of your team there in the beginning is that you put your cultural stamp on the office early days—that really helped. We’re quite a social business, we like to spend time with the staff or going out and socialising and we got that into the team, very early doors. Which, to this day, is exactly how we run the company.”
The takeaway? Thanks to better technology and connectivity, most elements of international business can be tackled remotely. Culture isn’t one of them: you need to be there to stitch up the patchwork yourself.