Read the full script of Module 3, Episode 7 of the Global Growth Master Class below. Want to get certified on global expansion? Simply click here to access the complete course today.

Companies tend to air on either side of the spectrum, favoring company knowledge, giving HQ too much power over local markets, or favoring local knowledge, setting local teams up for difficulty because they understand the local market but don’t have a path to leading the company to make the changes required to change the business to actually succeed in the market.

The intersection of local and company knowledge plays a crucial role in driving international growth initiatives. Local teams need to possess deep knowledge of the local market to determine how the business should be localized, as well as establish the necessary relationships and build trust with HQ to facilitate support for the new market.

In an IDEAL situation, the team leading the global growth hiring efforts would be able to find a rare "unicorn" candidate who possesses all the desired qualities. This individual would have experience in a leadership role within the company, a proven track record, established trust, strong cross-functional relationships, effective people management skills, a broad understanding of various functions, and a successful history of launching similar products in the targeted markets while sharing the company's core values.

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Additionally, they would be a native speaker with a deep understanding of local business culture, established local contacts, and prior experience working in the targeted market. Lastly, they would have the flexibility to travel as needed. However, it's exceedingly difficult to find someone within the current ranks who meets all of these requirements.

The level of local knowledge required increases as the cultural differences between the company's initial and target markets grow. Moreover, when the company has established more momentum-building structures and processes, it becomes easier to address gaps in company knowledge and internal relationships. When making a decision, most executives we interviewed believed that local experience was more valuable than company experience. Understanding the local business culture and the target customer was deemed more important than having expertise in fixing internal process problems. It was generally agreed that company knowledge could be learned through exposure and experience.

How do you ensure local hires have Company Knowledge?

It's important to note that candidates from the local market without international expertise may lack the essential entrepreneurial skills needed to establish a strong partnership between the local team and HQ. In situations where a Global Class Company lacks overlap between local and company knowledge, strategies can be implemented to bridge the gap, such as bringing a local team member to HQ for a few months. This not only enhances the relationship between the local team and HQ but also increases the company's knowledge.

BlaBlaCar effectively implemented this strategy prior to launching in new markets by hiring locals to manage the market pre-launch and having them work out of HQ. This strategy served two important purposes. Firstly, it allowed the company to leverage the local knowledge of these employees to influence the product and operating model so that they would more easily work in the new market.

Secondly, it helped these employees to develop a strong understanding of the company and its values, which complemented their local market knowledge. When they returned to their native market, this combination of company and market knowledge led to success as they were able to effectively localize the product for the market and work effectively with HQ from afar.

Involving key local team members from the beginning is important for expansion readiness. This means incorporating local market team members into the planning stages of a launch, not just the execution, to facilitate the overlap between local and company knowledge. It may be beneficial to start the hiring process during localization discovery, as good candidates with a deep understanding of the local market can provide valuable perspectives in creating the Global Growth Playbook, going through the Business Model Localization Canvas exercise, and creating tools and processes to support the local market. This is not only to lock in candidates before they find other job opportunities but also to improve the chances of success by leveraging their expertise early on in the process.

Another strategy that has proved effective at Plaid is the "Send One, Hire One" approach. This involves having a local lead role shared by two leaders: one coming from HQ and another being hired locally. While this approach does address the need for overlap between local and company knowledge and provides an extra senior resource, it should be noted that it may lead to challenges in decision-making and dividing responsibilities.

Uber, known for quickly entering new markets had local launch teams that came from HQ (so they had strong Company Knowledge) and would enter a new market with two key tasks - (1) to hire a new local team (with Local Knowledge) who they could impart Company Knowledge on, and (2) so that anyone from the city center could request a ride and a car would arrive within 5 minutes. The company built this launching muscle to quickly grow into new markets and bridge the gap between local knowledge and company knowledge.

Software consulting firm Thoughtworks implemented a Co-GM Model where a leader from HQ was sent to an international market and a local market leader was hired, to share responsibilities for running the local team. This is the most straightforward way to ensure both company and local knowledge, however, using this model may confuse roles and responsibilities since there are two people in charge.

One final shortcut for bringing in local knowledge early on in market entry is to hire a customer or user of your product. Having someone who already understands the value of your solution to the local market, these customers are more likely passionate about solving the problem, and not only understand the local culture but take pride in the local market and want to bring this solution to the country. The existing connection to the company also more likely ensures alignment of company core values. Passionate users can make for good employees. 

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 3, Episode 8 of the Global Growth Master Class.