Going global: C-level executives share their best tips on how you succeed
We all like to learn from the best. The CEO of FotoWare, Co-Founder of LendMe and a Danish Entrepreneur share the most valuable lessons learned from their global expansion.
Besides being world-famous brands, do you know what Walmart, Starbucks and Tesco have in common?
They have all failed in their global expansion.
The US big box retailer Walmart failed to consider cultural differences when the company opened its shop in Germany in 1997. In 2006, Walmart said “Auf Wiedersehen” and left Germany at the cost of USD 1 billion.
The US coffee chain Starbuck's expansion to Australia in 2000 turned out to be a coffee nightmare rather than a fairytale – mainly because the Australians found the coffee too expensive. In 2008, Starbucks closed its 61 stores and reported a loss of USD 143 million.
In 2007, the UK-based grocery chain Tesco went for the American dream. But convincing American consumers to buy fresh supermarket meals was too hard. In 2012, Tesco closed its 200 stores on the west coast. The cost of the failure? Nearly USD 1.8 million.
“In an analysis of 20,000 companies in 30 countries, researchers found that companies selling abroad had an average Return on Assets (ROA) of minus 1% as long as five years after their move. It takes 10 years to reach a modest +1% and only 40% of companies turn in more than 3%”
Going global is challenging. The facts speak for themselves. That's why my goal is to prepare you for your expansion.
I have asked:
- Anne Gretland, CEO of Fotoware and Chairman at Smartminds
- Frederik Murmann, Co-Founder of LendMe
- Bo Møller, Danish Entrepreneur & Founder of companies like Twentyfour, ResOS and EasyPractice
to share the most valuable lessons learned during their international expansion by answering these questions:
- How did you prepare your company for international expansion?
- What are your top 3 tips for other companies expanding to international markets concerning digitalisation and business processes?
- What do you see as the biggest challenges of international expansion?
- How do you create an overview of your company's resources and finances cross-border?
"Including your employees in your internationalisation process is vital"
Anne Gretland, CEO of FotoWare and Chairman at Smartminds
FotoWare employs 115 people and 16 partners in countries like Australia, Thailand, the United States, and Isreal. The company provides Digital Asset Management Software.
Under Anne’s leadership, FotoWare has been named number 1 as 'Best Workplaces in Norway' three times and ranked top 10 for 'Best Workplaces in Europe' given by Great Place to Work®. In that time, FotoWare has grown in number of employees from 20 to more than 100, and increased revenue year over year. In 2021, Anne was named Diversity Leader of the Year awarded by Nordic Women in Tech, and has twice been named on the list of Norway’s 50 women in IT.
How did you prepare your company for international expansion?
We have been selling FotoWare licenses and services through a partner channel for more than 25 years and have customers in 40 countries in every part of the world, so we are used to working internationally, across borders, companies and structures.
Our experience is that many customers want to have local language support and customer relations directly with the producer.
We wanted to expand by specifically acquiring companies which could add new knowledge and skills to our team while at the same time adding valuable technical expertise to our product portfolio.
We started to identify companies located in areas where we had many customers already, and companies with product features complimentary to our own.
We involved the whole company to give input to this process based on their interactions with potential candidates. That way, this process was as inclusive as possible for all employees.
Also read: Customer case: How Symetri benefits from using TimeLog across countries
What are your top 3 tips for other companies expanding to international markets concerning digitalisation and business processes?
1. Be compliant with customer data and GDPR
Get the right internal tools for customer data and customer support/account management flow as soon as possible.
It is also essential to ensure you are compliant in terms of customer data and GDPR - this needs to be consistent across the entire company/companies to make sure all local laws and regulations are being followed, and that customers can be sure you are compliant in every way.
2. Prioritise security in every aspect of the company
Security is essential. You need to make sure that everyone gets the proper training and understanding of security on every level, and in every aspect of the business.
In FotoWare, we are ISO certified, and we follow a structure related to internal and external processes, which also includes technical, business, and workflow security.
3. Communication is key
Use common internal business tools and internal communication platforms. Being located in different countries and having employees from many different cultures requires frequent and consistent communication and information sharing. Everybody must get the same overall information no matter what part of the business they work in.
We use Confluence and Slack to keep everyone on the same page. We also do New Employee Onboarding with every new employee on their first day, with information about FotoWare’s vision, mission, culture, business tools and expectations. That way, everyone gets the exact same information no matter what team they are on.
What do you see as the biggest challenges of international expansion?
Despite many companies working across borders these days, and even though most of us as consumers buy goods and services from across the world, most countries still have a strong local culture for their country, and their own ways of doing things. Even a local sense of humour, for instance!
It is important to understand and be open to other cultures, and to be inclusive of things like humour and way of work “this is the way we do it here”.
Respect, inclusion, and two-way communication are key for everyone who works and does business internationally.
How do you create an overview of your company's resources and finances cross-border?
We have always had employees in different countries and are used to doing digital all-hands every quarter, and having our overall goals, vision, and KPIs visible for all to see on the company-shared spaces in Confluence.
So, with employees in 10 different countries, we are mindful of the need to communicate broadly and to keep the information updated. We use Slack to post information about new customer wins, status on financial numbers, and releases.
You might also like: 5 tips: How to prevent your IT system from slowing your global expansion
We also send welcome emails about every new employee, with information about the employee and the role so everyone can feel that they get to know them, even if it’s digitally at first.
"You need to have your business case in place first"
Frederik Murmann, Co-Founder of LendMe
Fredrik co-founded LendMe which was bought by Norske Axo Finance in the summer of 2021. Today, Frederik is COO for the entire Axo Finance group, which operates in Denmark, Sweden, Norway and Finland. He has worked for more than 10 years in the financial industry, and has, among other things, worked as a legal consultant at Saxo Bank and as chief legal officer for EnterCard. Frederik is among the leading experts on the Danish loan market and also sits on the board of Copenhagen Fintech.
How did you prepare your company for international expansion?
For me, every action you make in a company should be based on reasonable assumptions and business cases that make sense. It might sound a little boring and not like a true entrepreneur, but I believe it is the recipe for success.
We spent – what others would probably describe as an unproportionate amount of time - on making a thorough business case before even launching LendMe. It took time but it also allowed us to plan to make plans two-three steps down the line that made sure we focused on the most important things when we got going.
The same principle still applies to me today, no matter if it is launching a new product or it is about expanding to other countries – so the short answer is that we made a business case we believed in and that showed it was worth the while and then we executed on it.
What are your top 3 tips for other companies expanding to international markets concerning digitalisation and business processes?
Rule number 1,2 and 3 is “Never assume that what works in one country automatically works the same way or just as well in another country.”
Always look at international expansions as starting something new and revisit all assumptions as even the most subtle differences can make your product or service unsellable, even though we think that our neighbours must think and act just like us.
The devil is in the details, and I have seen the mistake made so many times in my career.
What do you see as the biggest challenges of international expansion?
People do not use enough time on bullets 1 and 2 above but just start running. Secondly, never underestimate how much time you spend on expansion and that it takes time away from your existing markets that may/will suffer as a consequence.
How do you create an overview of your company's resources and finances cross-border?
The initial overview is made by creating a well-worked business case/plan. Once you have expanded it is about making sure you have the same reporting and KPI structure and that your accountant and bookkeeper help you build a system that is similar in all countries.
"A marketing-led analysis will give you the best start to your global expansion"
Bo Møller, Danish software entrepreneur & Founder of companies like Twentyfour, ResOS and EasyPractice
Bo Møller is a Danish software entrepreneur who has built several Danish businesses. Among them are the Danish software consulting company, Twentyfour, the international practice management system, EasyPractice (Recently sold in a DKK +100 mio exit) and the international restaurant operating system, ResOS.com.
How did you prepare your company for international expansion?
I have been involved in working with global expansion for multiple companies. The strategy for internationalising that I am most fond of is simply doing a "marketing-led analysis" of the potential international markets.
Instead of spending a lot of time analysing various markets, I am often in favour of selecting f.ex. 10 or 20 markets and simply start marketing to these markets without having an actual presence there.
When we launched EasyPractice outside of Denmark we followed this strategy. When we launched resOS.com outside of Denmark we also followed this strategy. It's highly effective to simply launch international marketing and then look at the results after a few months.
What are your top 3 tips for other companies expanding to international markets concerning digitalisation and business processes?
1) Keep it simple in the beginning. There is no reason to open an office abroad before knowing if the market can be penetrated.
2) If you're selling something digital then you can open several international markets at once and then close down the least effective ones. Do this.
3) Try to come up with a "minimum viable internationalisation strategy" as execution is king. Doing a lot of analysing can be expensive and inefficient. Let your marketing or sales strategy be the analysis.
What do you see as the biggest challenges of international expansion?
I believe companies set up too many boundaries for themselves by seeing a lot of potential challenges that might not be there. The biggest challenge of internationalisation is within oneself.
How do you create an overview of your company's resources and finances cross-border?
It's important to have a great financial advisor who can help set up the correct chart of accounts for the financial reporting so the monthly P&L shows the numbers that are relevant for decision-makers.
In my opinion, this is hugely underrated. I've used my wife's company, Ekstern CFO for this in all my companies.
And if you can keep your product offering simple then reporting also becomes simple. I'm mostly involved with SaaS companies, which means the products are all digital. This means it's somewhat straightforward to use tools such as Chart Mogul or Profitwell for reporting, which is what I recommend.
For a more complex service, it's important to have similar tools and I'd recommend TimeLog to any auditor, architect or similar service business that is looking for a system that can help give meaningful data insights.
