Srinivasa Ramanujan was born in 1887 in Kumbakonam, India. His father was a shop assistant, his mother a housewife. Although clearly scholarly-like in his early math work, he had no formal math training. At one point, he failed at school. When he sent a book of theorems to Cambridge, G. H. Hardy responded and began a five-year collaboration.
Ramanujan graduated BS and was eventually named a member of the Royal Society. Although he died at the age of 32, mathematicians are still decoding his work, including aspects related to string theory and the creation of the universe.
The point is this: there is human genius and potential, much of it still unknown, even now, because of political, geographical, and economic boundaries. With over 7 billion people on the planet, there should be a better way to harness the talents of the world.
Building partnerships beyond your borders – which many large multi-faceted companies and online marketplaces are already doing – is becoming a low-friction way for less developed countries to add value to the world economy.
While the economy and maturity of business are certainly factors to consider when deciding to expand beyond your borders, so are the opportunities. For marketplaces, it is possible that a certain country may provide unique and diversified goods or services. For media companies, it may be a matter of acquiring a local perspective or accessing specific audiences. In the B2B sector, the promise of a 24-hour, cost-effective workforce may seem attractive.
In the end, the use of a global supplier base can help your company innovate, differentiate its services, improve its competitiveness and increase its growth. For these reasons, it is too important for business leaders to simply ignore.
So, what's stopping companies from getting contributions from emerging markets and how to overcome those hurdles?
Efficiency as a weapon against failure
Any partnership effort in emerging markets requires light and efficient operations. Why? Two reasons.
Companies that are not lean can not scale effectively. Growth without a lean operation in place is spreading, resulting in gaps and failures. It's basically scaled up without benefit – or worse, adding costs and complexity.
The other reason is more emotional and rooted in the morale of the company. Working in multiple countries while maintaining the mental health of all involved requires a realized process. Rules vary with respect to communications, relationships, transactions, taxes, contracts, fraud and expectations. Waiting for staff members to properly tailor the thousands of differences related to working with international partners is unrealistic and sets up your global initiatives in case of failure.
With over 7 billion people on the planet, there should be a better way to harness the talents of the world.
Codifying (and ideally automating) many of these rules into digestible frameworks and processes early in the maturity of your business allows a New York team to work seamlessly with partners in Frankfurt, Sri Lanka or Hong Kong. It's less stressful and allows teams to focus on what's important – relationships and results – rather than impulsively addressing the value-reduction tasks of each jurisdiction.
Effective processes are also essential to reduce the internal and regulatory risks associated with working with remote partners. The propensity for errors, fraud and exposure to tax risk is increasing across borders. For example, do you know if a partner is on a terrorist watch list (FOCA, etc.)? What does the IRS require in terms of reporting to meet FATCA? These are not interactions that should be left to chance, and they should not slow down the process. The elimination of friction around these controls enhances the overall performance of the company.
Structuring remote operations and visibility
Suppose your company knows that it needs an imprint in a particular country. It may be as simple as hiring development teams or establishing a supply chain that is meaningful to the business model. Companies must then decide: do they install a local office or do they operate remotely?
Developing countries are also struggling to cope with the scarcity of local resources or talent, sometimes unstable political and infrastructural environments and, of course, a lack of of banks and digital commerce. In most cases, your business will do better if you can do without the physical presence, especially if the idea is to move quickly to scale across multiple regions.
Ensuring the visibility of overseas operations is the key to managing a successful remote presence. What is important when there are different structures of regional entities involved, is that you have a way to group this information and manage it centrally. For example, if there are affiliates, try to get each on the same platform to standardize processes. There should certainly be an integrated location element, but having a common approach will make the reports and controls easier to maintain.
Preventing the best churning partners
A number of partners will arrive. It's a numbers game. In emerging markets, these partners often face complex situations and their status may change abruptly. That said, the turnover should not be because of your operations. Otherwise, you develop the reputation of being a difficult partner to work.
The use of a global supplier base can help your company innovate, differentiate its services, improve its competitiveness and increase its growth.
Some partners will become major suppliers, reliably providing quality service or attractive products. It is imperative that they be satisfied both in terms of feeling valued for their efforts and in the frictionless way that they work with your company. You will probably find superstars who are so hungry to make a difference, that they are outperforming. That's your mathematician in the rough.
Unsubscribing partners also means you have to recruit perpetually. The strength of the network of partners is in number, so you must be able to integrate them quickly and positively. This increases the ability to find these superstars. This is also the reason why Uber, Lyft and Airbnb have remained reliable destinations for consumers. Suppliers are always there and ready, including internationally. And some can leave, which is normal – as long as new partners join more.
Innovation for the greater good
Integrating global talent into your own supplier ecosystem allows your company to differentiate itself from its competitors and set up your business for long-term success. And that is precisely why most of the world's most innovative companies have major ongoing initiatives to associate with the global workforce.
This also leads the world towards a more optimistic journey. Giving people in developing countries access to the global economy can help ease everything from disease to political instability. With technology and the will to open up to greater human contributions and promote shared prosperity, the business world has a great opportunity to make a difference.
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