More than half of Google’s revenue (57%) now comes from outside the United States. Apple has a similar split, with 60% of its 2014 fourth-quarter revenue accounted for by international markets. Why is it that some companies experience tremendous success abroad, while others struggle to go global? In my work as a global business advisor to Fortune 500 companies and high-tech start-ups, I’ve observed seven traits that distinguish companies with accelerated global growth.
They have an innate global bias. American companies with strong performance in international markets frequently have a founder or a prominent executive on their team who is either from a foreign country or is a first-generation American. Having global diversity in the C-Suite makes a business more likely to optimize for global growth. Consider Google’s Sergey Brin (Russia), Facebook’s Eduardo Saverin (Brazil), and Microsoft’s Satya Nadella (India). Even Steve Jobs was the son of a Syrian immigrant.
A study published by the National Venture Capital Association reveals that 40% of publicly traded venture-backed companies operating in high-tech manufacturing were founded by immigrants. Similarly, more than 40% of the 2010 Fortune 500 companies were founded by foreign-born immigrants or first-generation Americans, according to a study by The Partnership for a New American Economy.
On the flip side, businesses lacking an international perspective among their leaders are often timid about moving into new markets. A fear of the unknown is normal, and because they do not have first-hand experience, they sometimes fail to recognize the importance of the rising middle class around the world. They struggle to prioritize global expansion, because they are not convinced they need to diversify geographically in order to scale.
They favor the web. Companies that deliver web-based products and services, such as e-commerce, SaaS, PaaS, and consumer web and mobile, tend to experience turbo-charged global growth, simply because they can take their software or website international without making a large investment.
Even companies in industries that pre-dated the web, such as manufacturing and pharmaceuticals, tend to have faster rates of global growth if they invest heavily in online and software-based models for strategic areas of the business. Moving to the web makes a company more nimble and capable of responding to opportunity in international markets.
They work with the right partners. High-performing global businesses have an ecosystem of channel relationships, resellers, and partners to help them expand internationally. Carefully choosing international partners is important at the onset of entering markets overseas, and especially when trying to push out competitors to become the market leader. Apple’s partnership with China Mobile, the largest wireless network in the world, helped the company become the no. 1 smartphone maker in China. One year after the deal was announced, the company moved past five local competitors that previously dominated. Likewise, Uber recently announced a relationship with Starwood Hotels that will help it strengthen its presence in 100 countries.
They know their metrics. All of the companies I’ve worked with that have seen their global revenues soar are diligent about analyzing international and domestic sales and marketing data.
Companies that struggle with international growth tend to have a hard time answering these basic questions: What are your top 10 countries by revenue share? By customer base? What percentage of your marketing budget is allocated toward international? What percentage of your sales team? Often, just the exercise of obtaining this data helps a company get a better understanding of their true international picture.
They value the opportunity. When advising executives, I watch closely to see how they talk about international business. Does the company think about international markets as a strategic advantage, a hassle, or something in between? High-growth companies view global markets as an area of largely untapped opportunity that simply must be explored. They talk about global business as an investment in the future, a way to diversify and achieve scale.
Companies that aren’t as destined for global success will interpret the same data negatively, viewing global markets as more of an annoyance than an opportunity. They tend to underestimate the revenue they currently obtain from international markets, and they view any spending on global markets as a cost to be reduced.
They put the customer first. The businesses I’ve seen with the strongest track record of global success all have this important mission in common. If the customer lives outside of their home markets, customer-centric organizations make an even greater effort to go the extra mile (or kilometer). They view global marketing and localization not as a burden, but as an advantage against competitors, which enables them to attract customers in other markets, better serve them, and convert them into advocates for their brands.
They take international strategy seriously. Companies must value the people and processes that are critical to global endeavors. Driving international revenue, at most modern businesses, hinges on two key functions within the company: global marketing and localization. Fast-growing companies prioritize these areas, usually by assigning an executive who helps drive strategy for international markets.
Businesses with unimpressive global trajectories make the common mistake of diluting the importance of international growth, either by placing ownership at lower levels of the organization that cannot influence strategy or within multiple silos across the organization. When globalization becomes decentralized and has no clear owner, the business struggles to coordinate all the moving parts and drive international strategy forward.
When proper support for globalization is in place, the end result is a “global first” culture. Employees throughout the company begin to display a globally-minded attitude, which spills over into business processes. The engineering team builds software with international users in mind. Content creators think about their audiences in different countries before translation ever happens. Executives frequently discuss the importance of international customers. Global becomes a strong driver of the company’s growth and future.Go to Source