Going International

Jan 17, 2005

Years ago in The Zweig Letter, I wrote an article entitled, “Go local” as a rebuttal to all of the pundits who were advocating A/E firms “go global.” It just made sense to me that fully penetrating a firm’s local markets would be cheaper, easier, and faster than “going global” for the vast majority of design and environmental firms. I still feel that way— and see lots of evidence that there are typically huge gaps in the client/potential client lists of A/E firms that they are marketing to (many local or regional potential clients aren’t included!). That said, the international market is becoming a bigger and bigger part of some of the best firms in our business. We have some clients claiming to have as much as 70% of their work coming from outside of the United States, whereas they had less than 10% international work a decade ago. While I certainly don’t know ALL about how they do what they do, here’s some of the lessons learned that are worth passing on: Look at markets where you have an existing employee who is from there. This certainly seems to be a key ingredient in the success equation for U.S.-based firms that are thriving in the international market. They have an employee who is originally from that country. This employee is the critical bridge between the firm and the foreign country and is typically invaluable in helping the firm do business there. Get a local agent. You need someone on the ground who understands the laws, the culture, and the way business is done. If you don’t have an employee who is from the country, the next best thing is to hire someone who is there now and who will be willing to do whatever is necessary to represent your interests there. This is a MUST for anyone considering doing anything in a foreign country. Talk to other U.S. firms that are there now and find out what you can from them. That’s one of the great aspects about the A/E and environmental business. It’s not so competitive that most firms won’t share lessons learned with potential teaming partners or friendly competitors. Do some secondary research to find out what firms are in an area that you are interested in and start sending out some e-mails and making some phone calls to them. Pick the hottest markets. I would rather be working in China or Dubai than I would Belgium or Kuwait at this moment in time. Why? Because China and Dubai are both overloaded with work and may be more willing to give a U.S. firm that doesn’t have quite all the required experience doing what they want done a chance to perform. The fact that both countries like Americans and don’t see us a threat doesn’t hurt either! Read the industry press and general news media to help identify where these hot markets are. It’s not hard to do if you make an effort to stay well-informed. Security is everything if you want anyone working there. Though I know there are Americans working there right now, Iraq has to be a tough place to ask people to go. Dubai, on the other hand, is known to be a safe place, and the government there is going to do anything necessary to keep it that way as they position themselves as the “Switzerland of the Middle East.” If you need employees to physically go to the country where the project is, then you better be conscious of how critical safety is. Know the local labor laws. We once had a firm shut down what they thought was a project office in Spain only to find out they had to pay all their laid-off workers for three years! I have heard similar stories involving different firms in other countries. This never should happen unless you’re completely ignorant of the country’s labor laws. Team up. Find a local firm to do a job in the foreign country with. If things really look promising, set up an association or JV of some sort to pursue work there on a standing basis. One client of ours did this and then eventually bought down the interest of their local business partner over time. It has been a very successful entrance to the market for them. Doing work in foreign countries may be fraught with peril, but firms that want to educate themselves have plenty of resources available to them to do so. Do your homework first, and you may be sowing the seeds of your firm’s long-term success. Don’t do your homework, and you could risk the entire firm! Originally published 01/17/2005

About Zweig Group

Zweig Group, a four-time Inc. 500/5000 honoree, is the premiere authority in AEC management consulting, the go-to source for industry research, and the leading provider of customized learning and training. Zweig Group specializes in four core consulting areas: Talent, Performance, Growth, and Transition, including innovative solutions in mergers and acquisitions, strategic planning, financial management, ownership transition, executive search, business development, valuation, and more. Zweig Group exists to help AEC firms succeed in a competitive marketplace. The firm has offices in Dallas and Fayetteville, Arkansas.