International growth: learn from those who have gone before

In New Zealand, we have been studying and discussing the challenges of international markets, and the rewarding experiences that they can bring.

But all to often, our conclusions are based on a tentative rather than an affirmative understanding of these markets.

When we become aware of what we do not know, we have to apply some critical thinking. There's no prior experience to fall back on.

Given this, many New Zealand organisations are crying out for more information on how others have coped with the challenges.

Who can I talk to? Will conferences and seminars provide more information?

What are the credible sources, and how fast will their information become outdated are just some of the lingering questions that New Zealand leaders have.

It goes without saying that overseas expansion is a totally different proposition from expansion within New Zealand and there are many factors to consider when attempting to enter a foreign market.

Various differences in regulation, cultural and business practices and confounded elements generate high levels of uncertainty.

There is always plenty of collective wisdom to draw on

The good news is that our organisations do not have to take the plunge into the unknown. The experiences of entities like Fonterra and Zespri help us in forming a basic impression of foreign markets.

We tend to feel more positive about a particular market if one of our New Zealand organisations is doing well there.

Similarly, we may feel sceptical about another market in which a New Zealand organisation is facing all sorts of challenges. But learning from the behaviour of larger organisations can be limiting as the same conditions may not hold for small or medium-sized organisations.

But all's not lost: New Zealand and indeed all countries across the globe are dominated by small and medium-sized organisations.

It is good practice to identify these potential role models and see what can be learned from them.

In the ideal scenarios, it would be great to follow similar organisations or successful organisations of a similar size and industry.

But given New Zealand's limited presence abroad, learning from observing is far from straightforward.

Access is key

In this, there's a lot that mediating institutions can offer, be these public relations organisations or public sector institutions.

Beyond this mode, we can also rely on our knowledge of what other foreign players do in the host market of interest.

Observing surviving or well-to-do foreign players can help assess what works and what doesn't.

This can be useful when it comes to fairly restrictive host markets, with lots of regulations and implicit cultural barriers.

When observing through this mode, always try to study those foreign players who have been in the host market for a while.

Another mode of observation is to learn through observing what host country players do.

At first glance, this does not make any sense. Local players are by nature different from foreign ones.

So what can we learn from them?

Local players have lots of vested interest so they will do everything to stay alive in the game. Wouldn't a foreign player have the same aspirations?

My study on the international expansion of Asian organisations has revealed a strong theme. Namely, that these international players tend to follow what local players are doing in the host markets that they enter.

New Zealand organisations would do well to take this approach too, but bear in mind that there's a lot more to understand in terms of regulatory, cultural and business practice differences when dealing with foreign markets.

All in all, the main lesson to be learned is that observing and learning from others can contribute to success and help to mitigate risk.

Nonetheless, every organisation should seek to have a process for drawing upon the various forms of learning above. In particular, this process should ensure that the experience gained through learning from individuals within the organisation is shared across the entire organisation.

Unless good learning is documented as widely as possible for organisational learning, we will experience deja vu in the big unknown of international markets.

Published on stuff.co.nz