As he steps down from his role as chairman of the board of directors, Nord Anglia Education, Alan Kelsey discusses the journey towards internationalizing a business and how the challenges you face can pave the way to business success
photo: By Alan Kelsey
Developing your business internationally can seem like a particularly daunting prospect. How will you be able to manage your company when you are not based in that country? How do you operate within the boundaries of local regulations that you have very limited experience of? How do you manage stakeholder expectations? These are all questions I asked myself when we made the decision to take Nord Anglia overseas.
While internationalizing the business allowed us to grow globally, it was our response to the challenges we faced along the way that helped us achieve success. Nowhere was this truer than in our experience of leading our expansion into China.
If you are a leader looking to internationalize your business, here are some of my key learnings from our move into this market, which may serve as guidance before you make the leap overseas.
1 - Harnessing local market expertise
Moving into a new market requires local knowledge. When we expanded our business operations in China, we worked closely with a local specialist who guided us on the idiosyncrasies of the Chinese market, providing valuable insights which helped firm up the foundations upon which to enter.
Something as simple as flying the Chinese flag to observe national ceremonies in our new schools, which others might have overlooked, helped us solidify our reputation in this market and demonstrated our commitment to the community and respect for local culture.
While we were fortunate enough to have a local specialist on the ground, there are other options available for those businesses which are unable to source a local contact in the market they are expanding into. Indeed, the China-Britain Business Council (CBBC) has a number of China Business Advisers (CBAs) around the UK who have extensive knowledge and practical experience of conducting business in China across a range of industries.
2 - Cultivating partnerships in the region
Local partnerships are a good way to help build your business and develop your international reputation.
In China, we found that local property developers were sometimes keen to have a prestigious international school anchor a new residential development. These developers were able to advise us on the best areas to build our schools, ensuring each site was located within a prosperous and competitive catchment area, where families would want to live and require a good school for their children. This was invaluable in helping the growth of the business.
I would recommend that any leader looking to internationalize takes the time to research into the organization they are looking to partner with. Ultimately, you need to ensure that you are both working towards achieving the same goal. Discussing desired outcomes from the outset will make a big difference in helping your business succeed.
3 - Navigating new legislation
It is no secret that global markets, including China, have a number of different legislations and jurisdictions in place, which all provide a complex backdrop for conducting business.
Understanding these laws and regulations and how they applied in practice was invaluable in developing our success in the Chinese market.
By using local lawyers who had an intricate understanding of the region’s legislation, we knew we were receiving the best possible guidance. When new legislation arose which could impact Nord Anglia’s operations, we were reassured by having a strong local team in place, which was able to react quickly to ensure our business remained compliant.
I would encourage any business to look to regional legal advisers when internationalizing. It is all too easy to fall back on your usual routes for legal counsel, but this could be one of the biggest mistakes.
4 - Managing expectations
One of the most important aspects of internationalizing is how you communicate with and manage the expectations of the people that it will inevitably impact, not least shareholders if your company is quoted.
In China, we took the decision to open new schools rather than buying existing ones. We teamed up with property developers to build the new schools while we worked to equip and furnish them, driving down the need for capital expenditure. However, this meant that it took time to fill the new schools with students and as a result, each one was loss-making for an initial period when opening. This undoubtedly constrained our rate of growth for a short period of time, which was the unpopular decision with shareholders.
Leaders should work hard to manage shareholder expectations carefully. You must also be willing to make bold decisions that you believe will fundamentally deliver for the business and shareholders in the long-term.
5 - Cross-border knowledge sharing
Knowledge sharing is vital for any business to succeed. Implementing regional structures across markets is just one way that will allow for cross-border knowledge sharing to flourish.
Naturally, we had a regional management structure in place but from these, we built competencies, such as our health and safety specialists. These experts would regularly provide feedback on how processes and procedures could be improved. By sharing processes and protocols across borders, we were able to ensure everyone was handling health and safety issues effectively.
By asking teams to share insights and best practice tips, you will help to increase productivity and efficiency while also ensuring your business provides the best possible service.