A Maine-based medical device manufacturer was recently presented with an opportunity to partner with an unknown distributor in the South American country of Columbia to sell and service its products. The small manufacturer didn’t have a presence in Columbia or knowledge of the market and customers and had to make a quick decision on whether to commit to the cost and time required in marketing a medical device in a new country. Would the decision to invest in this relationship justify the expense? What was the business climate in Columbia and would this distributor be able to sell and service complex regulated devices?
In a 2010 IBM survey of more than 1,500 business leaders, CEOs identified a new primary business challenge – complexity. CEOs reported that they operate in a world that is substantially more volatile, uncertain, and complex. Six out of ten CEOs reported that the new economic environment is significantly more complex than the past and eight of ten leaders expect the level of complexity to increase. They say they have never faced a learning curve so steep.
The increase in global complexity should be viewed as both a challenge and an opportunity for businesses. We identify three primary areas for business leaders to focus on in this new “flat” world.
Extend trust: Extending trust can remove many of the complexities involved in making decisions and allow companies to move faster to capitalize on opportunities. Trust in any relationship is based upon credibility, consistent behavior, reputation, and results that earn continued trust. The key in extending trust in business is to maximize dividends and minimize risks. Businesses that can establish, extend, enhance, and restore trust can greatly benefit in the new economy.
Smart trust should be extended in relationships with employees, partners, consultants, customers, and even competitors. Businesses extend trust to employees by communicating a vision and values system and then allowing their workers to take action within these guidelines. Not extending trust to employees leads to bureaucracy, disengagement, and turnover. Maine companies can navigate through complex situations by seeking help from “outside experts” and trusting that they will provide knowledge and input to grow the company. Extending trust to customers will allow for a freer flow of feedback, and honest feedback is critical to innovation. Even competitors should look at ways they can work together and share common knowledge and resources to compete globally.
Streamline processes: Organizations must simplify internal processes and develop an organization that can make strategic decisions quickly. Leaders need to focus on continuous learning and innovation to develop lean systems that allow rapid decisions. Markets, customers, and competitors evolve quickly and successful companies must vary tactics and adapt to rapidly changing business conditions.
Utilize new marketing tools: Companies can establish a product, brand, or world-wide market much quicker now than in the past. Business leaders must take advantage of the internet, social media, and E-commerce opportunities now available for global market development. Used effectively, these tools can enhance the organization’s ability to forge business relationships and establish a national and international link to customers around the globe – even from a small, rural location.
The medical device manufacturer met internally and elected to extend trust to the Columbian-based distributor. Staff worked with the Columbian government to clear the medical device for human use and introduced a new continent to their products. After a satisfactory introductory period that enhanced the trust, the distributor setup a wholly-owned Latin America subsidiary with product distribution and tech support channels from Mexico to Argentina. The relationship continues to grow today and provide benefits to both parties.
1group was founded in 2010 to bring out the best in organizations through bringing out the best in people. Our facilitating, coaching, and training services can help you extend smart trust, improve processes, and capitalize on market opportunities to increase profitability.
