Buried near the end of the article is this little nugget about Intel’s China strategy:

Early this year Intel’s top brass started talking about upgrading leadership in China. Intel is doing fine in China, but the three parts of the business — R&D, manufacturing, and sales and marketing — never got properly aligned. The stakes are higher than ever because next year China is expected to become the world’s largest computer market.

This reflects a common challenge among companies operating in the big emerging markets – they may have started there for global production arbitrage, expanded the kind of work they do in the country, and then began to see the huge potential market.  In Intel’s case in China, perhaps their biggest market.  Yet the organizational structure and strategy is still rooted in the original arbitrage model, so the different parts of the country’s operations are not “properly aligned.”  Simply moving to the traditional MNC country-by-country model would lose the benefits of global arbitrage and perhaps aggregation for the rest of the company.  What’s a company to do?

There are no easy answers here.  To quote Pankaj Ghemawat in Redefining Global Strategy “Nobody has yet figured out the optimal way to organize a complex global economy, but much can be learned from looking at leading-edge companies.” (p. 218)

And that is precisely what keeps coming back to me: that in the business world, huge amounts of self-confidence and even arrogance, a hard-hearted, “take no prisoners” style, are usually seen as positive, even essential elements to becoming a successful executive.  Yet in this situation, what the business really needed was an exec at the helm with excellent “soft” skills – humility, empathy, cross-cultural communication skills.

Are these skills only needed in crisis situations?  I don’t think so.  In fact, I think these soft skills are an essential requirement for any businessperson who operates in a multi-national environment (which, increasingly, is all of us).  Check out these notes from and about two very successful global business executives:

An article in Businessweek about Dominique Senequier who leads AXA, one of Europe’s largest private equity firms, noted that:

Senequier…spends 240 days a year in Asia and North America raising money. She says that in her business, being French is more of a handicap than being a woman, because her country is not known for its private equity industry. “Our investors don’t understand that we can be French and succeed,” she says. “I tell them being a minority forces us to be more open to other cultures and forces us to be modest.”

Her mission now, she says, is to persuade people to invest in Europe…That will open the door for private investors and sovereign wealth funds from developing nations with budget surpluses, particularly China. “We’ll have to try to capture this flow, and this will be possible only if we show our willingness to invest” in those countries, too, she says. “It has to be a win-win game.”

And from an article in the WSJ about Craig Naylor, an American heading a Japanese company, Nippon Sheet Glass Co., a big glass manufacturer:

I decided …that if I was ever running a global business, I would create a multicultural, multiregional team that would have input into the strategy —not just for implementing the strategy, but for creating the strategy…

Some people believe that the onus is on the Japanese to learn English, but in the meantime the responsibility is on the English-speaking people to make yourself understood. You need to meet them more than halfway. When I first came to Japan I tried the idioms and spent 15 minutes explaining why this idea doesn’t have a snowball’s chance in hell.

Modesty? Creating a win-win strategy? Soliciting input into the strategy? Meeting people more than halfway? These are not buzzwords you often find promoted in the American business press, but I think they are sage advice for businesspeople seeking to build success across cultures.  And it’s too bad Svanberg didn’t take note of Craig Naylor’s advice about idioms before he talked to the press…

• The pharmaceuticals industry is tracking five big deals in emerging markets…
• Universities in Asian emerging markets are recruiting US professors…
• The majority of Tupperware’s sales are now in emerging markets (30% annual growth in India since 1996!)…
• Africa’s consumer markets are growing at two to three times the rate of developed markets…
• And the big news everywhere is that China is now the world’s 2nd largest economy.

It seems more and more likely that emerging markets are going to be  the engine for economic growth in this century, and one of the big disadvantages the United States faces going into the 21st century economy is simply our lack of experience and knowledge about these regions.  If American citizens (read: employees) don’t have first-hand knowledge of living in these countries, how will we be able to sell effectively into these markets, and support our own country’s economic growth?

I am heartened by occasional news pieces that show younger Americans increasing their exposure to other parts of the world, and not just by taking short trips, but by living and working in them.  The newsletter from my MBA alma mater, Northeastern University, for example, highlighted a new co-op program:

The program is starting as a pilot, with six students working in three IBM locations in the Philippines, Argentina and Costa Rica…[The program is] spearheaded by Peter Lynt, a 1983 graduate of the College of Business Administration and IBM’s general manager of global business process delivery…[Lynt said] that students who are immersed in an international culture will have a leg up in a competitive job market that continues to become more globally focused.

“Cultural diversity is becoming a major component of the business world,” Lynt said. “How you deal with different cultures and get different tasks completed is a very different element of one’s education now.”

Hear hear!

India is protesting a bill in the U.S. Congress that would increase visa fees for foreign workers in the U.S. as discriminating against Indian companies.

“It is inexplicable to our companies to bear the cost of such a highly discriminatory law,” the Commerce Ministry said in a statement Tuesday that included excerpts of a letter to U.S. Trade Representative Ron Kirk. (from the Boston Globe)

and from immigration experts (in the WSJ):

“It’s adding to the negativity about America,” said Vivek Wadhwa, a visiting scholar at the University of California and research associate at Duke University who studies immigration issues. “The money raised is insignificant and the damage is huge.”

“I am saddened and disheartened,” Infosys chief executive S. Gopalakrishnan told India’s Economic Times on Tuesday. “When emerging economies are opening up, it’s unfortunate that countries like the U.S. are moving in the other direction.”

And it’s going to help us reach the goal that I set in my State of the Union address, which is we are going to double America’s exports of goods and services over the next five years.  We’re tired of just buying from everybody else — we want to start selling to other people, because we know we can compete.

That’s how we’re going to grow our economy.  That’s how we’re going to support millions of good jobs for American workers to do what they’ve always done:  build great products and sell them around the world.  Our workers can compete with anybody — and America is going to compete aggressively for every job out there and every industry out there and every market out there.

I read the full quote with mixed feelings.  It is great to see Obama specifically encouraging selling to international markets, but the quality of the American workforce or American-made products is only part of what will lead to an increase in international sales. I wish that Obama had not positioned it this way, as if buying an American car is a direct reflection on the value of the Americans involved in building that car.  If that were true, wouldn’t the corollary be that the citizens of countries with low exports have little value?  Yet one of America’s founding principles is that all people are created equal – and high or low job output does not make it otherwise.  This may make for rousing speech material, but I think it strikes an overly nationalistic tone won’t help international marketing at all.

So how I would have liked to see him say it?  How about:

We know our products and services can compete in world markets on the basis of quality, so now it’s up to us to focus on leveling out the playing field in tariffs and trade regulations, and learning how to sell more effectively into foreign markets.  It may be difficult for us to accept that we have to keep our markets open to foreign products and services in order to grow our sales in foreign markets, but that is part of the deal.  And as much as we value our own citizens, we need to appreciate the cultures and environments in other countries in order to sell effectively into their markets.  As our auto industry’s comeback demonstrates, part of the path to improved economy for the US lies in greater economic development and trade throughout the world. We must become a leader in global economic development.

In any case, perhaps we should remember the famous words of an earlier president, “Ask not what your country can do for you, but what you can do for your country.”  So, go out and sell to the rest of the world…

Since this is a blog primarily about marketing and selling, let me take a minute to talk about the PMC’s marketing.  The PMC is an extraordinary event in all kinds of ways, and if it hasn’t been written up as a business case already, it should be.  With over 5,000 riders and 3,000 volunteers, the logistics alone are astonishing.  It’s also an amazing market success: raising over $30 million in donations every year, in addition to financial and in-kind contributions for the organization and event costs.  How do they do it?  They have a consistent, powerful message, and they get it out in across more channels and distribution points than any other marketing campaign I can think of.

In the weeks and days leading up to the actual bike ride, you can hardly turn around in eastern Massachusetts without running into a mention of the PMC.  You see it in the usual PR channels: stories in the newspapers, TV, and online.  You see it in corporate branding campaigns on and offline (this year, every cup of Dunkin Donuts coffee advertised the PMC!).  You see it on bike riders’ shirts out on the roads, as they train for the ride.  And you see it in your email, tweets, Facebook updates, blogs and RSS reader…

One thing the PMC does very effectively is to provide a set of tools to its riders/fundraisers.  These include typical marketing assets (downloadable logos, printed notecards, photos, sample fundraising letters), technical tools (an application where each rider can create a profile and accept online donations, a text messaging donation app), and training and support (orientations for new riders, fundraising tips and help online and in printed materials, a help desk).  Perhaps most importantly, they don’t just create the tools one-time, they “feed the beast,” providing a steady stream of material to feed fundraisers’ individual campaigns, and updates and tips on how to use all of these tools.

The PMC’s methods and materials are designed to support the army of volunteers, not a traditional business’s marketing organization.  Yet as businesses find themselves increasingly operating in a world without borders – between channels, between work and personal lives, and between countries – I think there is much to be learned from the PMC’s approach and success.

Does your organization provide its employees with the marketing materials, tools, training and support needed to get your message out?  Do they all have a consistent message and brand?  Do they work for all of the channels in today’s environment?  Do you steadily feed new information and ideas into all of your channels? Do you have the results to show for it?

A little research on the web turned up more information about the small software industry in Ramallah, and another participant that I wasn’t expecting: US AID.  Here’s a press release about a B2B roundtable they set up to introduce Palestinian IT entrepreneurs to global tech players.  While the title of the conference, “Enhancing U.S. ICT Companies’ Competitiveness through Partnerships with Palestinian Companies,” is aimed at typical business objectives, the press release also calls out regional economic goals “Additionally, this encourages private sector growth and economic prosperity in the Palestinian Territories.” The announcement also cites the support of a number of governmental agencies and NGOs who work on economic development to support social and political goals in the region.

Offshore IT outsourcing has always offered the promise of this dual benefit – supporting lower costs and increased competitiveness for businesses in developed economies, and supporting business and economic development in developing economies.  But it’s much more common for Americans to argue against that job growth, and see it as taking jobs away from Americans.  (See, for example, the recent debate on Shumer’s proposed offshore call center tax at Horses for Sources, and my response about Fair Trade in services outsourcing here.)  This is one of the few times I’ve seen services outsourcing identified explicitly as a way for businesses to support peaceful economic development in developing countries or regions.   I hope that we will see more support for this viewpoint among American companies, government agencies and the public in general.

Stepping back from the specifics of Israeli style, though, I think this is a smart way to address concerns about customer service in an international context.  If your business trains customer service reps from another culture or location, why not advertise that they’ve been trained by people from your target customers’ country/culture?  With this one line in their email, IsraelPhones made it clear that they understand both cultures – American and Israeli – and addressed a typical concern of their target American customer, as well as differentiating themselves from other Israeli mobile phone service providers.

Ford Motor Co has named Jim Farley its first head of global marketing, sales and services and appointed the head of Volvo to run its European operations when it completes the sale of the unit to China’s Geely, the automaker said on Thursday.

Farley, 48, had already been head of global marketing for Ford, and the automaker has expanded that role to include sales and service for the first time as it adds to a focus on worldwide product development and manufacturing.

JPMC announced a similar new global marketing and sales role a few weeks back, and I wonder if this is part of a growing trend among large US businesses.

For Ford, this will be a key role in their success going forward.  Recently, Fortune speculated that GM may be worth significantly more than Ford, noting that “the numbers were helped … by an increase in global sales, including important emerging markets like China.”

One comment in particular caught my attention, because it seemed to call on the principles of Fair Trade in support of the tax, and for not working with call centers in developing countries.  I’ve copied in my comment below, and would be very interested in hearing your thoughts on this.

Phil,

I don’t want to beat a dead horse, but I notice that no one has yet responded to the flawed argument that Schumer’s proposed call center tax supports Fair Trade (in [...] comment).

Fundamentally, a U.S. tax on calls directed to India will work against the Fair Trade movement’s purpose, which is to support market access and fair prices for small producers in developing economies. (See http://transfairusa.org/content/about/overview.php or http://www.fairtrade.net/what_is_fairtrade.html.) Schumer’s tax would likely reduce market access and payments to small businesses in India, while increasing payments to the U.S. government – hardly a small producer in a developing economy.

Fair Trade organizations in developed economies typically guarantee a price to their suppliers based on what is needed to ensure a decent standard of living for their workers (rather than the lowest available current market price), and provide technical and economic support, such as business planning and access to loans. The Fair Trade response to [...] concerns about poor conditions and low pay in the services business in India should be support for the creation of call centers in India (and other developing economies) that are governed by the same principles applied to Fair Trade farmers and goods producers. The U.S. side of a Fair Trade supporting business would focus on marketing services to American businesses who believe their customers will value their certification of Fair Trade practices sufficiently to pay a small premium. For a great example of an organization innovating in this area, look to Samasource (www.samasource.org ), which pays individuals and small worker co-ops for service work in some of the world’s poorest areas, including refugee camps.

[...] is correct that Fair Trade principles include a commitment to ensuring fair labor practices from suppliers, and further, to requiring suppliers to run their businesses democratically and responsibly, for the good of all in their community, including the environment. However, Schumer’s tax will not have any impact on Indian labor laws or practices. Indeed, by impeding trade and probably taking away American business, the tax will likely reduce the ability of the US to influence labor practices. Schumer’s tax will work against the ability of employees to improve their own working situations as employment and business grows in India. Witness the steady increase in salaries in IT/ITES businesses as the number of jobs began to outpace the availability of skilled employees. The reality is that this industry has enabled many Indian families to move up from poverty and buy homes and cars for the first time ever. I don’t mean to suggest that today’s India-based call centers are adhering to Fair Trade principles, but it is a gross misrepresentation to claim Fair Trade in support of trade restrictions and taxes on business in emerging economies.

Cindy Carpenter