In Part One of this two-part series, Daly looked at the requirements of successful business investment in Asia, understanding the target market, and evaluating and selecting a partner or investment.
In Part Two he looks at the need to know about local regulations when doing business in Thailand, developing relationships, if relevant, engaging your staff in the new business venture, avoiding ‘lobbying’, and some concluding reminders.
Familiarise yourself with the local government regulations and requirements for establishing a new business. Most countries are encouraging of investment and development in their local economy. However governments often put restrictions on the way businesses are run, what can and cannot be done, repatriation of profits, partners, etc.
In general the government investment bodies provide solid information on the regulations (the Thai Board of Investment being a good example) and actively support investment. As part of the progression of investing engage a good legal service early on who can guide you through the processes.
These activities come at a cost but it is money well spent either way. Do not be afraid to walk away nor to make the decision to go ahead. Like all good managers make a decision based on your best knowledge and judgement.
The importance of personal relationships in Asia is well recognised. However this does not mean that several visits, meetings, dinners, local tours, more meetings, entertainment, toasts to success, etc, etc, make for a good relationship. It is easy to succumb to the belief in words, promises, attractive targets, projections, etc. while enjoying the ubiquitous hospitality of Asian cultures. The hospitality is genuine while the words only sometimes so.
If you are placing a major investment of time, money or your companies name and reputation in the hands of an Asian partner you need to know that the owner / manager is trustworthy and will do the right thing by you. To have a solid business relationship with an Asian business partner they need to trust you and you them. This must be on a personal basis.
Culturally it goes back to historic times when trust and reliance for security was based on family, village and school colleagues. It is common to hear senior managers in their 50’s and 60’s refer to someone as their school mate and therefore worthy of trust. People need to know they can rely on you and you will not disappear in a puff the first time things do not go smoothly.
Building a personal relationship takes time and effort. You need to prove to a person that you are worthy of their trust and commitment. Go the extra step, help them out and prove that if something goes wrong they can rely on you to do the right thing. A plethora of examples could be given, however the advice is when an opportunity arises – recognise it and act appropriately.
It is useful too to carefully observe the response / reaction of your potential partner in a situation of adversity. The true nature of a person / relationship can often be learnt from how a person acts in an adverse situation. It takes time and effort but once you enter the inner circle you will be rewarded with a friend and a partner who you know will always be reliable.
Make an effort also to become familiar and friendly with as many staff within your partners company as possible. Giving ‘face’ can bring both short and long term rewards (the junior staff will rise in time). A simple compliment like ‘XYZ was very efficient in organising the meeting’ followed by ‘You select very good staff’ in front to both XYZ and the boss can have an intangible but very beneficial effect on your personal relationships and future success.
While I have discussed about your partner the other very important relationship to develop is with your customers. Ultimately your customers will be the line to success or failure. Meet them, meet them regularly and once again, as above, make the effort to develop the relationships that are so important. Support them, provide them with extra or more than you typically would (and be subtle in ensuring their knowing about it).
Domestic Staff Engagement in a New Venture
It is very beneficial to engage your ‘home’ staff where possible in the operation and activities overseas. The transfer of part of your business overseas can demoralise and unsettle your domestic staff. It is important to reassure them, openly communicate the reasons and benefits of venturing into overseas operations and markets. Share the successes and progress with your staff and involve them.
Often establishing a new business overseas will require the transfer of systems, procedures and operations. The opportunity to become involved can invigorate your employees. There is also the prospect to review how things are done during the transfer, resulting in developing better and more efficient methods for both operations.
While it may sound like another cliché, never, ever comprise your integrity or business ethics. The smallest step in this direction is the start of a very slippery slope. It is common knowledge that it is difficult to do business in Asia without some form of ‘‘lobbying’. Absolute rubbish! T
here are any amount of successful international businesses operating in Asia who do so because they follow stringently financial protocols.
For four reasons do not go there. One: it is illegal in most western countries to become involved in ‘lobbying’ overseas. Two: if you are dealing with a company or person who induces this type of activity it will get bigger and bigger and eventually swamp you. Three: it will come back to bite you. Four: it is wrong.
Business in Asia is an exciting and adventurous activity with many pit falls, opportunities, obstructions and benefits. It has the potential to take your business to a completely new level.
Planning for success is important as is the flexibility to adapt, understand and adjust. Do not underestimate the effort, resource and cost required. Embrace the business and social cultures and do not be rigid in your approach or thinking that you know how ‘it’ is done.
Evaluate your partners, do your diligence, build your relationships. Invest with care. Once committed measure and monitor the progress often.
Enjoy your ventures – if you’re not enjoying it you will not commit and success will be that much harder to achieve. And above all go for it – a well-played plan will bring more to you and your company than just financial success.