Monday, May 8, 2017

Multinational Subsidiaries - The Four Bridges

When you are running a multinational subsidiary, you start it, staff it and scale it. Day-to-day activities occupy the bulk of your attention. It is absolutely correct that you should concentrate on this – it is what you were tasked to do.

You can enhance this single-minded focus by addressing the other aspects that are crucial to the long-term sustainable success of your enterprise. I call them “The Four Bridges”.

The Four Bridges

No man is an island entire of itself. Every man is a piece of the continent, a part of the main
John Donne (1572-1631)

No entity operates in isolation. Its ultimate success relies on a broad network – actually several networks. The links to those networks do not develop on their own. They require active nurturing. If a firm is an island, it needs to build bridges to the other areas that will sustain it.

I will describe 4 primary bridges.

The Parent Bridge

Recent research into romantic relationships confirms that “absence makes the heart grow fonder.” However, in business the reality is more a case of “out of sight, out of mind.” Despite the best intentions, when a firm is located thousands of miles away from the parent and separated by many time zones, it is easy to become isolated and even a little bit forgotten. Parent company attention will give priority to the people who are nearest and whose voices are heard loudest.

The responsibility falls to you as a leader in the satellite to reach out to colleagues in the parent company to keep them informed about what is happening on the ground. The message needs to be reinforced continuously about how the Irish operation is relevant and how it contributes to the overall success of the global organisation. This can be achieved by clear formal reporting, regular updates, exchange of personnel and joint projects.

Multiple benefits will accrue from this:

·         Higher priority being allocated to your requests
·         A better understanding in the broader group about the relevance of the Irish operation
·         Less interference from the parent company after they become comfortable that the local operation is being run well.

The Local Ecosystem Bridge

Let’s face it, when your firm decided to invest in the Irish operation, the intention was to be around for a long time. It makes sense to become more connected with the local community and increase the “Irishness” of your operation. It is also a way to overcome the isolation you can experience when you are working so hard to make a success of your venture.

Depending on your country of origin, there are business associations and chambers of commerce such as the American Chamber of Commerce, Ireland Japan Association, Ireland China Business Association and the German-Irish Chamber of Commerce. There are local organisations such as the Dublin Chamber of Commerce. You may find an industry-specific organisation. All of these provide a way to meet like-minded people and advance common views.

There are Irish governmental organisations such as IDA Ireland (promoting inward foreign direct investment) and Enterprise Ireland (supporting indigenous Irish firms but also building linkages between Irish firms and foreign firms located in Ireland).

Something you will find in Ireland is that people like to help each other. Building connections in the community gives greater potential for collaboration and support. All of the universities are open to connection with potential partners for research, as sources of potential employees and they welcome guest lecturers from industry.

Another attraction of Ireland is the ease of access to policy makers.  All TDs (members of parliament) publish their email addresses. Enda Kenny, the Taoiseach (Prime Minister), famously offered his mobile phone number to USA CEOs to say that he is open to their call when investing in Ireland. He even vowed to keep the phone line open after receiving several prank calls in connection with the promise.

Some of the dividends of connections with the local ecosystem:
·         Higher brand awareness among the talent pool
·         Access to local supply base for goods and services
·         Linkages with universities
·         Influence on national policy making
·         Closer connection with other firms operating in Ireland.

The Broader Ecosystem Bridge

As a member of the EU, Ireland is also influenced by EU law. According to Article 288 TFEU, a Regulation “shall be binding in its entirety and directly applicable in all Member States” The consequence of this is that a lot of laws influencing activity in Ireland are made by EU policy makers. It may be important to keep abreast of changes that are happening at European level and even have a voice in the formulation of appropriate policy.

The good news is that European policy makers are keen to be informed by people with direct expertise. If your perspective is relevant, you can get access to members of the European Commission, European Parliament and permanent representatives to share your views.

Tending the wider ecosystem can provide the following benefits:
·         Advance intelligence on EU-level initiatives that could have an impact on your business
·         Ability to provide input on the direction of future EU policy
·         Building broader coalitions and alliances

The Bridge to the Customer

The success of your activity in Ireland hinges around how you satisfy the customer. Startups are always frantic and chaotic under the surface. However the customer expects continuity. When the parent company’s name is above the door, customers expect at least the same level of quality, service and delivery.

As the local leader, you cannot delegate responsibility for the customer experience. As a leader, you have to maintain open channels of communication with the customer. You also have to make sure your team always has to keep the goal of customer satisfaction to the front while they are rolling out capabilities from the Irish base.

Closer connection with the market can bring the following advantages:
·         Keeping the customer in the picture of the evolution of the Irish operation
·         Improved local responsiveness to potential customer issues
·         Strengthening the sense of ownership on both sides.

The Upshot

The temptation for leaders is to focus on the organisation they have built. Locating in Ireland can be a very rewarding experience but it comes at the risk of isolation. Well-connected links will enhance the robustness of the operation but these links do not grow passively. They need to be nurtured actively.

Apart from the four bridges outlined above, your business can have other bridges too. These can connect you to supply chains, regulatory authorities, outsourced capabilities, etc. Please feel free to add your experiences in the comments below or message me directly.

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