I have been fortunate, actually blessed, over my career to see the world up close and personal. My career has taken me to 40+ countries across Asia-Pacific, Europe, and Latin America, 4+ million flight miles, and lots of learning the hard way! It all started in 1996 immediately after graduating from Northwestern, Kellogg School of Management. My executive sponsor at The Coca-Cola Company called and said it was time to repay the Company for that pricey MBA! Then he said we were moving to Hong Kong… I about fell out of my chair! But my wife was up for the adventure, and our three kids were too young to know any better, so off we went.

Fast forward to my years in the direct selling industry… building and leading multi-national and multi-cultural teams, opening new markets, repairing old markets, and guiding global strategy has been an absolute adrenaline blast! Whenever a young employee asks me for career advice, I always say try at least one international assignment. We live and work in a global economy, and the related learning is not taught in text books.

 

The First Rule of International Expansion in Direct Selling

Assuming you have done your homework, have the required funding and organizational bandwidth, and you are convinced your business model and products will do well in the targeted country, do nothing more until you hire a strong GM… even before drafting your new launch plans. Trust me, I have seen several premature launch plans shredded by a new GM with better information and market-specific experience.

So, what’s The Golden Rule? To put it simply… Hire a local and industry-proven GM! The GM role is the public face, corporate leader, and hub of all activity in the respective market. They need to be grounded in the local culture, business environment, and the local direct selling industry. I detailed in a previous article about the complexity of our industry and the difficulty explaining it to outsiders. Good luck trying to teach an outsider about our industry from the other side of the globe. Your new GM needs to hit the ground running!

Local industry knowledge and proven mastery of all the operational and cultural nuances in the respective market is critical to a smooth and successful launch, and then leading the general business forward. And it goes without saying that language fluency is critical in effectively communicating with the local team, field distributors, and local vendors, as well as managing the occasional conflict between all of them.

Expats, please don’t be offended. I have seen several expat GMs succeed over my career, but I have seen many more fail. Sure, expats can be effective in functional roles, but in my experience, the market leader needs to be local. If you want to develop a family member or someone from your corporate team, don’t first thrust them into an international GM role. Start them in a market support role, or a functional regional role that interacts with multiple markets and/or liaisons with headquarters.

Just a side note on expats: I played an expat role too, and survived. Back in the day, 1 in 3 never made it past their first year. Living conditions, schools, separation anxiety, environmental, language challenges, and political unrest unsettled many families. For example, the biggest issue I observed in Hong Kong and China was expat kids picking up asthma from the smog. We all love our kids, and this led to an early exit for several families. On a positive note, I will mention that my expat assignment was the cornerstone experience for our family. The kids returned to the US academically advanced, grounded in cultural diversity, and “worldly wise.” So, I’m in no way knocking expats; I’m simply highlighting the facts I’ve experienced in my own situations.

 

I Found One Exception …

The only exception to The Golden Rule, in my personal experience, was in Japan where I hired an American GM already living in Japan. A missionary kid raised in Japan, he was fluent in Japanese, culturally grounded, and had a proven track record and established reputation in the local direct selling industry. It was a smooth and successful launch.

Before switching topics, I want to reinforce the importance of engaging your new GM on the front end of planning. Bring your new GM to headquarters so they can help your team bake out launch plan details and educate your team on local topics like competition, industry trends, and culture. Additionally, bringing your new GM to headquarters will help build important relationships with the corporate team (a team that they will be routinely calling, outside of your normal working hours, for support). Trust me: that relationship is helpful when your phone rings at 3am!

Jeff Dahl, international expansion expert with Strategic Choice Partners (and part of our fractional services), lays out 2 more critical points when it comes to international expansion in his guest article on The World of Direct Selling News titled, “The Golden Rule of International Expansion” Be sure to read the full article. The first one is “Flexible Income Opportunity” …