Whether a company should bring an expat to lead its expansion into a new market or hire a local has been an ongoing discussion within the industry. Each approach has its defendants. For instance, Doug DeVos, the President of Amway and the Chairman of the World Federation of Direct Selling Associations (WFDSA) takes side on this issue, saying, “Local leadership always works better since they know the market, work better with governments and understand the culture.”
I asked the following question to some of the noteworthy people from the global industry:
“If you were the sole decision maker, would you prefer an expat or a local Country Manager for your direct selling company’s next international market and for what reason?”
Below are their responses:
Pam Anthony, Managing Director of Pam Anthony Recruitment, Partner of Pan European Solutions:
“This is a really interesting question and there are pros and cons on both sides. My preference would always be that wherever possible a company recruits a local manager, as they understand the culture and the vagaries of the market. Another consideration that is often missed is that it gives more confidence and credibility to a company, when the domestic population can see that the business is investing in their country and believe in developing local talent. However, dependent upon the company’s structure and business model it is not always possible to source local talent, so when recruiting an expat there is a lot of goodwill to be gained by ensuring that there are obvious plans in place to train and develop local people to progress within the company.”
Jeff Babener, Legal Counsel at Babener and Associates:
“And so they say: Think Global, Act Local. One astute observer of direct selling has noted: ‘a perception may be right or wrong, but it is always right in the mind of the person who holds the perception.’ Translated for direct sellers, this means: Know your market and know the minds of your customers, distributors and employees. Understand what drives them, what are their passions, what are their strengths and weaknesses, what are their biases. Above all, understand their culture and be able to walk in their shoes. Or to mix metaphors, if you are going to operate under the sea, send a fish and not a mammal. Of course, a company needs an “ambassador” to its foreign operation and one who is able to understand the parent company and its goals; but, for the local operation, a company should look for a talented native executive who clearly understands direct selling, but more importantly understands his or her local market.”
Sean Eggert, President at Hanna Shea Consulting:
“It is truly a case-by-case basis. Depending on the market, you may be faced with a situation where you are working with limited resources, especially if the direct sales industry is not well represented within the expansion country. In this case it makes sense to hire an expat industry veteran. Of course each country is going to have its own caveats and nuances, and to enter a market without the insights of a local leadership team can cause costly mistakes in marketing and sales strategies. Ideally, the best approach is to hire the best candidate (local or expat) that can show they have worked in a situation similar to the one you are about to face, and successfully navigated the unique challenges that come with opening up a new country.”
Miroslaw Lubon, Executive Director of Poland Direct Selling Association:
“Definitely a local Country Manager! Never in the history of my relationship with the industry did it happen that an imported GM performed well enough to make a new business grow at a satisfactory rate. Why? The much acclaimed globalization processes, while obviously being helpful in starting businesses abroad, are still unable to eliminate completely, or even reduce substantially, the significant role played by what you can call “local color”. And by this I mean local habits, customs and first and foremost the mentality of the locals. Add to that a sea of differences in tax, labor or logistic regulations. And then there’s the problem of the language. By its very nature direct selling is all about building lasting and profound relations between not only the seller and the consumer, but to the same degree between the distributors and the company’s management, including the Country Manager. The ability to efficiently communicate in a local language is a must, a rather rare skill among expats.”
Alan Luce, Senior Managing Principal at Strategic Choice Partners:
“When opening a new country market, local talent is always a plus if that person also has a deep knowledge of your company, your culture, your products and your compensation plan. If the choice is between an experienced direct selling local but one who has no or little knowledge of your company, you are usually better off bringing in an expat with deep experience with your company as the general manager and hiring the local as the head of sales. This advice comes out of 40 years of experience that has involved opening or helping to open dozens of new country markets both as a company executive and as a consultant retained for the purpose of opening the market.”
Ed Ludbrook, Leadership Expert:
“Having worked with so many country managers, they should be selected for leadership qualities not where they are from. Unfortunately, all too often the person is recruited locally or brought in as an expat, due to company/industry experience, rather than leadership qualities. My advice is always to hire great quality local people, preferably with no industry knowledge, and then investing heavily in their training and development. Our business is based on leadership and in a stand-alone role like Country Manager, people either have the potential or not. So hire quality, invest in development. “
Ian Morgan, Senior Partner at Meridian / MMi:
“Direct selling normally requires duplication of a business model with no deviation within countries. The philosophy, ethics and product offering are set in stone or should be as far as legally possible. The one way to guarantee that head office strategy and objectives will be given the best possible start is to have an ambassador who knows the business backwards. He or she will set the pattern for the future and duplicate the business as owners would prefer. I have seen local management attempt to improve on the business model with not so perfect results some of which have set markets back years. I spent 14 years as an expat, in some cases trying to raise markets from oblivion. Every time had the start been a duplication of the home office, catastrophe could have been averted. There are no exceptions I can find to cultural differences. The basics of the business and the needs of the independent sales force are the same worldwide.”
Bobbie Wasserman, Managing Director of Wave2 Alliances:
“From my in-house and consulting experience, my first preference would be a local executive with industry experience. That individual will know the regulatory requirements of the country, how local business is conducted, and will build strong relationships with local Distributors. While strategic directives would originate from HQ, the Country Manager’s understanding of the local business landscape and culture would allow them to report back to HQ on specific needs to help them achieve that country’s business objectives. ”
Bob Woodard, Founder of BW International:
“In general, I would always prefer a local Country Manager if my company was opening a new international market. A local Country Manager arguably would know the market, have local resources, and speak the language. The fact that I would select him or her would mean that they have already been vetted as the ideal candidate with the right qualifications (including values, vision, management style, and experience) to meet or exceed expectations. The exception to this ‘rule’ could be based on what role or roles expected to be played by this individual. For example, if someone were being groomed for a Regional position, they may not be a local national. Or if the country were in need of a turnaround, then the qualifications might call for different skill sets / experience levels and I might choose someone from another country.”
Dirc Zahlmann, CEO of Zahlmann Consulting:
“After guiding our clients in several hundred projects in expanding to international markets, we have experienced a lot of options regarding this matter. After all this experience, we can state that hiring a local country manager is the best solution. As long as this local country manager is experienced and has a regular ongoing communication with a good team from the headquarters, the results are better than sending an expat to an international market. The expat can be very experienced and talented, but always has to adapt to the cultural differences and working methods first, before he/she can concentrate on the market and people development. A local country manager is experienced in his market and when he loves the story and products of the company that he represents he will be faster and more sustainable in achieving success for the company.”
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