5 Steps to Strong Global Partnerships
Bringing your product or service overseas takes a lot of preparation and prudence. The last thing you want is to be seen as the stereotypical “ugly American” touristjust when you're embarking on your global market expansion. One of the best ways to avoid this is to put some time into building a relationship with a trusted partner. If you’ve never tried to do this in a foreign market, it can be a bit daunting. Here are some things I’ve learned in striking up cross-border partnerships.
In some cultures, the “right” introductions are mandatory. Find a trusted reference--someone who can vouch for your track record, your integrity, and your genuine desire and commitment to forge a cross-border relationship. That person might be someone you worked with in a previous job that had a great experience with you, a former classmate, or a customer that depends on you - and likes it. Your reference doesn’t necessarily need to be in-country, but they do need to be very connected and respected there.
Build Over Time
Don’t expect international business deals to run on the same frenetic clock as American deals. Prepare to spend time getting to know your would-be partner through multiple visits and regular dialog. Talking about important industry trends, potential strategic benefits of a partnership, and common business challenges.
Get to know the people not only in the office, but also over meals. Understand what drives them. Let them know what drives you. You need to establish trust, preferably with as many stakeholders as possible.
Understand Common Values, Different Cultures
Respect for the culture of your potential partner is crucial. Even seemingly small things, like understanding the holiday calendar of your foreign partner, shows cultural sensitivity and a practical orientation towards doing business together.
This is yet another reason that a trusted advisor is invaluable. An advisor I had in Japan was kind enough to provide me with a Japanese calendar. The holidays were marked, but so were special days that were supposed to be auspicious for business deals. My advisor recognized that my key champion within a larger company was from an older generation that would pay attention to such things--something I never would have realized on my own. I did my best to schedule my visits to him on the auspicious days.
Identify Mutual Wins
When it’s time to piece a deal together, start with a bulleted list showing what you need and what your potential partner needs. Keep the language simple, and make sure you both agree on the list.
It’s important that the list shows a good balance between your concerns and that of your potential partner, especially when a relationship is new and everyone is a bit nervous. A sense of balance conveys your interest in doing a fair deal. The process of revising this list, and making sure all the stakeholders get ample time to weigh in, will help things go more smoothly once the attorneys show up and the clock is on.
Keep Things Simple
Keeping things simple, and thinking ahead, reduces the risk of misunderstandings. You want to work through as many ‘what if’s’ as possible with your potential partner before bringing in the attorneys. If you’re going to be shipping goods across borders, think about who pays the costs to ship them and whether there will be export/import restrictions. Even if you don’t know all the details up front, agree on how, generally, you will address import/export issues.
Write Everything Down
You may come out of a meeting thinking you have common agreement on a whole list of points, only to find out later that you and your partner left with a different understanding of what transpired. Or perhaps you met with only some of the stakeholders from your potential partner, and the list got modified afterwards when other folks weighed in. All of this is normal, even when there are no language challenges. And it makes it doubly important to write everything down, and to verify that you are working from a common understanding, after every meeting.
Make Plans Together. Establish Lines of Communication
Regular communication with your partner is crucial to keeping an international business relationship healthy and flexible enough to adjust for changes in the business climates in both countries. One of the great advantages of having an in-country partner is that they will spot opportunities you would otherwise never hear about. Regular communication (at least quarterly, if not more frequently) ensures that you can react quickly when opportunities arise.
Your relationship with your new partner may have many facets, so establish appropriate points of contact for each one. Your day-to-day operations will be smoother, and it’ll be easier to build a broader base of trust and support between the companies.
The right cross-border relationships can provide your small business with a competitive advantage and growth strategy that will be hard for your competitors to match. You shouldn’t wait until you’re big to be global.
LAURA SMOLIAR | CEO, Peppertree Engineering
Armed with over 17 years in Silicon Valley’s technology sector and a Ph.D. in Physical Chemistry, Laura co-founded Global Innovation Foundry, LLC in 2014 to bridge innovation and market opportunity between the U.S. and Asia. Her own start-up experience building strategic partnerships and raising funds from Asia inform her approach to solving complex problems across different cultures and economies, harnessing the best assets of large corporations and small companies.