Read the full script of Module 10, Episode 4 of the Global Growth Master Class below. Want to get certified on global expansion? Simply click here to access the complete course today.

Culture cables

In line with the suspension bridge analogy, the core component of our management model is the company culture, which acts as the main horizontal cable holding up the bridge. The towers, roadway, Momentum Builders, and local teams, all support the cable, while the cable itself supports the roadway. In the same way that a bridge cable supports the weight of the bridge, company culture serves as a common thread, holding everything together and bears the weight of all other elements of the management model. 

Without a strong and consistent company culture, the entire structure is at risk of falling apart, much like years ago when the Tacoma Narrows Bridge famously collapsed, only a few months after construction was completed. Challenges, such as strong winds, can cause weak cables to snap and result in catastrophe. Additionally, suspension bridges like the Golden Gate Bridge have a system of smaller vertical cables that connect the main cable to the roadway. In the context of international management, these smaller cables represent trust points.

Trust is a crucial component of a strong company culture, and it is also one of the Four Commitments for Successful Global Growth (Trust and Autonomy)

Trust acts as a connector that supports each part of the roadway, visualized as the smaller vertical cables that connect the main cable to the roadway on a suspension bridge. 

Unlike the singular main culture cable, which runs through all parts of the model, trust cables are numerous and span the entire length of the bridge, representing the various trust points in the international management process.

The trust extends throughout the entire model, connecting to the main “culture” cable. Each local market leader must trust their team to perform, and the local team must trust the leadership to support their launch efforts, and so on. The failure of any one trust point can destabilize the entire bridge, leading to other breaks and eventually leading to a collapse. In order to establish trust, relationship-building rituals and strong feedback loops are essential to promote the adoption of core values and align the local market team with the company's culture.

At the same time, it is important to recognize that there may be differences in both global and local values, and it is crucial for Global Class Companies to proactively manage these differences

One way to do this is by universalizing core values, which legacy companies may fail to do at their own peril. In fact, failure to universalize core values is one of the top ten reasons why global businesses fail, as outlined at the beginning if the course. - and is something we will discuss in more detail in the upcoming module on culture.

Recall the situation Apple faced in China, where the local team acted according to what was considered right by Chinese local business culture (which valued protecting the boss and saving face), and how that directly conflicted with Apple’s company culture closely aligned to Western business culture (which prioritizes honesty and integrity). Differences like these can easily lead to misunderstandings and a lack of trust.

The Flexport case study we shared in a previous module shows that the strong trust between COO Sanne Mander and Head of Europe Jan van Casteren played a crucial role in the company's success in entering European markets, finding initial product-market fit, and scaling to reach company-market fit.

It’s also crucial to recognize that trust levels may vary in different local markets of the company due to factors such as preexisting relationships or performance. This can have an impact on the power dynamic, as those with stronger connections to HQ or better performance may have more influence. It is important to keep track of this to prevent it from impeding decision-making and biasing allocation of resources.

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Just like the small cables connecting the roadway to the main cable on a suspension bridge represent trust, trust must exist throughout an organization, both between HQ and the local office and within the local office itself. The trust points between the local market lead and the rest of the local staff are particularly crucial, and the level of comfort with transparency and trust may vary depending on the office location and local business culture. 

The strength of the bridge lies in the agreements made by both HQ and local market stakeholders. This involves agreeing to transparent communication that goes both ways, leveraging structures and procedures set forth by HQ, preserving company culture, developing trust (represented by the bridge cables), and adapting to the local market.

It is essential to hire the right local market leader who can properly translate these operating principles and values to the local market. High levels of trust facilitate collaboration and the sharing of challenges, which enables problems to be addressed proactively. 

The Flexport case study we shared in a previous module shows that the strong trust between COO Sanne Mander and Head of Europe Jan van Casteren played a crucial role in the company's success in entering European markets, finding initial product-market fit, and scaling to reach company-market fit.

It’s also crucial to recognize that trust levels may vary in different local markets of the company due to factors such as preexisting relationships or performance. This can have an impact on the power dynamic, as those with stronger connections to HQ or better performance may have more influence. It is important to keep track of this to prevent it from impeding decision-making and biasing allocation of resources. 

The strength of the bridge lies in the agreements made by both HQ and local market stakeholders. This involves agreeing to transparent communication that goes both ways, leveraging structures and procedures set forth by HQ, preserving company culture, developing trust (represented by the bridge cables), and adapting to the local market.

NOTE: Don't miss out on the next episode! If you want to continue learning about global expansion strategies and dive deeper into the course material, simply click here to access Module 10, Episode 5 of the Global Growth Master Class.