Domestic impulses usually inform, that is misinform, US principles who are thinking about opening up foreign markets for their products. By inadvertently incorporating domestic biases and assumptions into the long game of international market buildout and expansion, their general tendency will be to look through a distorting, mental prism of what is actually involved in being able to identify, attract, retain and smartly engage with foreign procurement people. Entrenched in a domestic, commercial logic, these US principals are mostly unaware of the warping effect it has on processing international information and thus how out of sync they can be with the foreign customers and the professional, pioneering reps who did the international market development. In short, it skews the principal’s overview of what goes into an international market development plan that actually coheres. Even years into relationships with SME companies, some of them still don’t comprehend the differences between a professional rep and a broker, a risk analyst from a consultant. With the overall importance of the rep and the principal pulling on the same end of the conceptual rope, the principal’s sloppiness in language is indicative of the sloppiness in a principal’s thinking about international market development. It bodes ill for long term rep-principal working relationship and harmony.
Personnel Is Policy
In this national election season we are now in, one can hear political gurus note that a candidates choice of his or her key advisors can be summed up as “personnel is policy”. In other words, it means key advisors views will be the candidate’s new policy going forward. This idea has applications in international market development in this way:If the management of the US principal chooses a purely domestic person to be the company’s Director of International Sales and Marketing, the US principal is essentially signaling to the world that international markets will remain a backwater for them and that their efforts will be perfunctory. To these types of principals, it is the the short-term atmospherics, the glow from a company’s stepping onto the global stage, that counts more than seriousness about what it will actually take. When a company proposes that it really believes domestic skill sets are smoothly transferable to the experience-rich milieu of international market development, it is being both tone-deaf and so unperceptive to the realities of international markets that it distorts the international market development process. It almost guarantees there will be frustration among both foreign importer/distributors and the international, pioneering rep.
Default To Domestic Worldview
With no, or scant, international, commercial sensory experience, without the advantage of the discipline of empiricism to draw on, the purely domestic principal will not only lack the foundation to build on from prior, international knowledge; they will not have the situational awareness to rationally assess and interpret the dynamics of international business development that they are in charge of. They will not be able to detect flaws in their own assumptions, nor spot and recognize nuanced,international patterns of trade. Like fumbling in the dark, they will be able to generally grasp the necessity of course correction, but be lost as to what that correct course correction should actually look like and entail. They will not only default to their domestic, commercial sensory experience about the US marketplace but work to try and superimpose it over the realities of international market development; this recidivism means that they will also remain largely oblivious as to how they arrived at such meager export outcomes. In aggregate, US principals that put such an internationally inexperienced person in such an important, company position are the daft decisions that constitute our country’s chronic trade deficits reflect.
To see if there is hope that the international rep can soon expect to talk international short-hand with the key decision makers within the US principal’s management, the rep must have a robust, international market diagnostics tool in place. This hybrid diagnostics would not only bring a necessary realism to the upfront process and enable the principal to obtain a current, objective view of their export readiness, rep readiness and appetite and capacity for ethical behavior; it would also let them see what they need to fix before they can formally and competently engage in the international process. For the rep, the results of this diagnostics of US SME manufacturers achieves what would otherwise be obscured. It enables international reps to better grasp who are, or could become, rogue versus the ideal, fully conscious, aspirational, micro-multinational companies, outsourced to the hilt but with a mensch-bench management team fully grounded in the type of ethical behavior and disposition towards competency and virtue that professional, independent reps rave about. These results will give both the principal and the rep a much needed, objective assessment of what exactly the principal does not know what he does not currently know.
The Importance Of Enhanced Diagnostics:
- How Export Ready the principal currently is?
- How Rep Ready the principal currently is?
- How central is a Code of Ethics to the principal’s operations?
- Out of international inexperience, and rep unfamiliarity, determine how likely the principal is to conflate, and continue to conflate, domestic ideas and concepts with international ideas and concepts?
- How much task confusion does the US principal have about the importer/distributor?
- How much task confusion does the US principal have about the pioneering rep?
- Who is in charge of paying for the procurement of the financials and reports on potential, foreign distributors?
- Who is in charge of doing, and paying for, the registration of the product in the foreign country?
- Does the principal understand the value of paying into, and for, coop ads of the US client’s brand in foreign markets?
- The principals willingness/eagerness to avail themselves to international, educational courses offered through ExportTech, Export University Inc. and MANA-sponsored events?
The liberalization of former trade barriers does indeed bring about more aggregate wealth worldwide, but it is also clear that it is accompanied by additional social problems. Quoting from “COLLATERAL DAMAGE” in the ECONOMIST magazine’s July 30th, 2016, issue:”Another study found that a one Standard-Deviation (SD) increase in import competition worsened rates of mental illness by 1.2 percentage points”. While this helps account for why so many American people at political rallies since 2015 have been besides themselves with anger calling for import restrictions, what is usually left out of the conversation is what trade wars worldwide would do to the US economy. What really needs to be emphasized is that unless we as a country further engage in the nuts and bolts of export competency, until we make it even more of a national priority to educate, and then reeducate, our collective workforce accordingly, we will not be in a position to take advantage of the new export opportunities that would be afforded to US companies under the The Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP) with Europe. The current United States’ GDP of $17.914 trillion economy will first stall and then shrink because of new, restrictions on US exports that will undoubtedly manifest via foreign regulatory retaliation in kind, The consequences:a shrunken US economy that will contribute to more job losses and even more mental illnesses.
There continues to be an imperfect understanding among US principals of what international market development, manufacturer’s representatives look for in new clients. This includes start-ups, who traditionally are more dependent and focused on raising funds and developing the US market instead of putting in place some of the skill-based infrastructure needed to generate internationally derived revenue on more than a spot basis. If a US company wants to shake its dilettante approach to international market development, if the company sees the strategic value of developing new, international, skill sets to position itself to obtain and retain multiple customers in multiple countries as a commercial hedge against any economic downturns in the US marketplace, then putting a purely domestic person in charge of international market development is most probably only going to further our nation’s already gargantuan trade deficit.
In a mature, US economy, where a great deal of thought goes into the quality control of value-added products, the US principal would be wise to also embody that same level of quality, and apt qualifications and experience, in its choice of Director of International Sales & Marketing. The reason is that international reps not only desire to pioneer sophisticated products with extremely limited, to non-existent, competition; they desire to work with principals with sophisticated, international marketing awareness of what is, and will continue to be, required of them by increasing savvy, foreign procurement people. Since professional, international reps desire both traits, the “personnel is policy” concept is perfectly germane to the overall evaluation process. Both attributes should be seriously considered when a professional, international manufacturer’s rep is choosing between what particular lines to internationally pioneer versus those companies likely to remain superficial in their approach to exporting more of their products.
Plainly speaking, although still heretical to some, the process demands different sets of interlocking skills and foreign, cultural sensitivities not usually found in-house. To choose a purely domestic person to head international market development is in essence the principal acting against their company’s own, long-term self-interest. Having a person in such a key position not only distorts the export process; as the diagnostics will reveal, except on a spot basis, it also renders the company export unready. So going in to conversations with US SME’s, an international manufacturer’s rep must always be on guard against a company culture that promotes the idea that basic export-related information is more than enough, and that the accumulative acquisition of supplemental export knowledge is thus neither intrinsically good or advantageous to the long-term goal of sustained exporting. Since the international market development rep will mostly be interfacing on a weekly basis with the person that embodies this idea, it has implications for the international market development rep as well.
Appeared in Jan., 2017, issue of Agency Sales magazine