CEOs succeed in connecting the dots, around the world
Tuesday, 1 May 2012 17:35
From CEO Update
By Mark Tarallo
“Going global” has become one of the most discussed concepts in associations these days, but some groups – and the executives who lead them – have been actively engaged for decades, and their lessons learned during years of international business have become valuable signposts to associations newer to the world stage.
One of these veteran groups is the International Association of Refrigerated Warehouses, a core member of the Global Cold Chain Alliance. Nearly 40 years ago, IARW decided it wanted to become a better representative of its industry outside North America. Europe seemed like the easiest first step, so it set up an overseas convention in London in 1974.
“We were one of the pioneers,” said William Hudson, who has led the group for 26 years.
It was first of many such ventures. Later, the group started opening international offices. In 2007, IARW teamed up with a few other related industry associations to form an umbrella group, the Global Cold Chain Alliance, which, as its name indicates, has a clear international focus. With members in 67 countries and roughly 40 percent of members outside North America, it currently operates offices in China, Latin America, India, Russia and Europe.
After four decades of international activity, it’s no surprise that Hudson (now also CEO of GCCA) sees a world of opportunity when he travels the globe. But he also cautions that, for associations first looking to explore these opportunities, a one-size-fits-all approach will not work.
“My message is – within every country, the opportunity looks different,” he said. “You have to understand the landscape.”
A global authority and thought leader
“Understanding the landscape” is also a key concept for Dick Blatt, who for 17 years was chief executive of POPAI – The Global Association for Marketing at Retail. Blatt, now president of Planar World Consulting, started international work around the time he assumed leadership of POPAI, back in 1992.
“That was before many people were doing it,” he said, “because I sure looked for the blueprints and guidebooks.”
(Blatt, who left POPAI in 2009, emphasized that his comments for this article were his own, and did not reflect the group’s approach to global expansion.)
Besides understanding the local landscape, Blatt also said it is important for an association to understand itself – namely, take a long look at mission and strategic objectives and ask: “Do they translate globally?”
If they do, an association should articulate its strategic endpoint in expanding globally, Blatt said. This may differ from group to group – some associations venture abroad in search of new members, others seek to develop new markets for member products and services. Still others want to form alliances and partnerships with similar associations around the world.
And some groups seek opportunities to lead their industry – in Blatt’s words, to be an international “thought leader” for the profession, and to maintain and expand the group’s relevance as the industry’s leading source of information.
A group like IARW, for example, has sought to establish a global brand based on its authority as a thought leader in the field of refrigerated storage of perishable commodities, with expertise valid throughout the world. “The food science doesn’t change if you’re in Kenya or if you’re in India. Food science is food science,” Hudson said.
IARW’s work in setting up an industry association in the Philippines in 1998 has become a model for the group, Hudson said. Typically, IARW starts with educational programs that bring the target country’s firms together. Compiling a directory of these companies also helps industry cohesion. In focus groups, IARW can communicate the benefits of joining an association, such as better advocacy in government affairs.
In this and other global ventures, one of IARW’s most effective selling points is that the group has been developing best practice research since 1891, when it was founded.
“Now in the Philippines, they don’t have to do research on how to store and export mangoes. We’ve already done all that,” Hudson said.
Doing deep homework
Global experts agree that the process of properly determining goals and objectives for international ventures requires significant research and planning, something that some associations skimp on, according to Alfons Westgeest, a group vice president at the Kellen Company who leads his firm’s global development and operations.
“The ‘depth of homework’ is sometimes a concern. You cannot do it quickly,” said Westgeest, who has worked in the international sector since 1981, when he joined Ernst & Young’s association management and European affairs division.
Thorough research and preparation, experts say, often includes designing a workable business and governance model for the global venture, as well as ensuring that there is “buy-in” from not only the board, but all levels of the organization.
“Make sure your strategic plan incorporates input from all the different ranks of your association,” Westgeest said.
When making presentations about global plans to the board and others in the association, honest assessments are key. Be clear on the financials, and don’t over-promise return on investment. Indeed, ROI often takes three to five years with most global ventures, he said.
“Say, ‘these are the risks; these are the opportunities.’ It shouldn’t be just, ‘this is great – let’s go,’” Westgeest said.
As it happens, Westgeest, Hudson and Blatt will all be attending (with Hudson and Blatt presenting) the 2012 Association International Conference, to be held May 1-3 in Washington, D.C. ASAE is sponsoring the conference. Blatt’s presentation is entitled “Do’s, Don’ts, and Do-overs: Your Global Commitment in 5, 10, 15 Years.” Hudson’s is “How Three Associations Achieved International Success.”
ASAE also launched a Key Global Associations Committee this year; U.S.-based groups with $10 million-plus annual revenue who receive at least 10 percent of their revenue from international activities are eligible to join. The group now has 22 members, and its next meeting is scheduled for June 28-29 in Toronto, according to Jakub Konysz, senior manager of international development at ASAE.
Right people, right attitude
As part of preparation, in-country visits are crucial, experts say. As Westgeest put it, “You have to get on a plane and understand.” He also recommended that CEOs take along a board member or another leader from the association on such trips, to facilitate the buy-in process.
When doing advance work in the target country, find out which companies in local industry are successful, Hudson said. Pay attention to any local industry figure who reaches out to you, and if the host government sponsors training or other business-related sessions, find out who attends them. They could be future leaders of a new association, he said.
Experts agree that working with local partners can be a key to success, but it can take some time to find an effective partner. Due diligence is necessary to make sure the local partners are credible; insufficient work in this area can lead to a costly “reboot” later, Blatt said.
Once an effective local partner is found, the working arrangement can later be modified to suit both parties. For example, The Sulfur Institute had employed a full-time China-based staffer for many years. As the group’s international program evolved, it has found a continuing need for the staffer’s expertise, but not on a full-time basis, according to President and CEO Catherine Randazzo.
So the association recently entered in an agreement with another group doing work in China, the International Zinc Association. Randazzo arranged for both groups to share the China-based specialist. “It’s worked out extremely well,” she said.
Attitude is also important in international ventures; even the most well-regarded American associations should not assume they are the industry’s ultimate authority, experts say. “You certainly have to respect the country and what they have developed. You need to go in and say, ‘How we can we develop what you have established?’” Hudson said.
Moving beyond entry level
Finally, experts offered some guidance for associations that have begun a global venture that is still in the preliminary stages.
“The first thing you should be doing is registering intellectual trademarks,” Blatt said. This also applies to IT tools such as domain names for websites, he added.
When it comes time to enter into written agreements, such as a memorandum of understanding, association leaders should do their best to clarify and articulate expectations on both sides. “It’s harder to back up and recoup,” Blatt said.
Frequent communication with the board on progress made toward stated goals is highly recommended, as well as analysis on needed adjustments and roadblocks. Be realistic, but at the same time do not forget to assess intangibles like an enhanced international reputation, a potential place at the table in global trade issues, and the like.
Indeed, CEOs or other association leaders new to the international arena may find that their careers can be the biggest beneficiaries of these intangible positives.
“It’s extremely rewarding – both organizationally and personally,” Blatt said.