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Going Global: Has Your Association Got the Mindset?
No doubt you have noticed. Suddenly the world has gone Global. What this oxymoron tells us is that associations, just like business, have to understand how they can operate in this new and totally strange environment, the Global Economy. The ones who have not extended or are preparing to extend, their Global reach in the next five years could be in danger of natural extinction.
How are Trade and Professional Associations affected? The crunch is coming from three directions. First. Association members are going global at breakneck speed and they need help with this, it’s the biggest change dynamic of our time. Second. People living outside the United States (95% of the world’s population) want in on the knowledge, learning, experience and know-how of America, and they see that Trade and Professional Associations are one of the major conduits to achieve that. Third. The rapid growth of international convention sites will attract your member’s attention and could lead you into the uncertain realm of Cross-Culture negotiation.
By the year 2007, according to the Financial Times, sixty-five percent of all American corporations will have to be skilled in the techniques of International business. In other words Managers, at a minimum, will have to understand how to negotiate, how to purchase and sell products, how to deliver world-class customer service, how to recruit and how to manage multi-culture teams on a Global basis. We all thought technology was the biggest learning curve of our time. For business it’s not. It’s Globalization.
Going Global is not like expanding to another State. Even starting business in Canada requires many more skills and knowledge of the people, their culture and their background, than starting business on the other coast. It is not only a major investment in time and money but it is a 180° change in corporate attitude and culture, the whole business has to develop a Global Mindset. It has to develop and learn skills which enable it to be a success in cultures other than its culture of origin.
Your Members are already over there
Between 1989 and 1996, cross border trade in goods and services grew at an annual rate of 6.2 per cent. The current rate is approximately 7.5, over twice the average annual growth rate of the world’s Gross Domestic Product. Simply put globalization is picking up speed at a startling rate. As Jack Welch, Chief Executive of General Electric puts it, “It will be a Hurricane!” As the US economy slows companies will increasingly turn their attention overseas to Europe, for example, where the high economic growth rate this year is forecast by some experts to outstrip the US for the first time in a decade.
One of the other major reasons is that the affordable infrastructure is in place. Between 1930 and 1990 for example, the average air transport revenue fell from 68 cents to 11 cents per mile. Between 1960 and 1990 the cost of a three-minute telephone call from New York to London has dropped 60 per cent and the unit cost of computing power fell by over 99 per cent.
The business environment is also there in the form of Liberalization. Between 1970 and 1997 for example the number of countries that eliminated exchange controls relating to trade rose from 35 to 137, and this increases constantly. That other political catchword of the 1980’s “privatization” has caught fire around the world allowing the entrepreneurial spirit to reign in countries where previously government and bureaucracy kept a cage around overseas opportunity.
Over the last 30 years or so therefore invention and infrastructure were preparing for a revolution. It took the destruction of the Berlin Wall in 1989 to open the floodgate.
We have slowly realized that very little is 100 percent Made in America any more. The plane may have a Boeing brand name but the equipment parts were made in as many as 15 different countries. The toys our children play with were inevitably made in Asia, the clothes we wear were not made in the USA, much of the food we eat was not raised by American farmers and the cars we drive may be built of parts from over 20 nations. In our search for price competitive product we have encouraged our suppliers to go global shopping and negotiate deals the world over which will constantly give us our cheaper, better and faster goods. As customers we asked for it, and our markets supplied it, through the phenomena of the Global Economy. As businessmen scour the earth to find the best deals in the face of hyper-competition we the customers now rarely turn the plate over to see where it was made, we already know the answer.
As buyers look into every nook and cranny of the planet to find the best deals, salespeople are following behind selling American product and services to a hungry and can’t-wait-world. Brand America is top of the list. This year alone it is forecast that the United States will achieve a staggering growth in exports of over $3 billion to an increasingly prosperous world that is quickly getting wired to the new economy. As emerging markets take their place at the table they look to small and medium sized companies to work with them in specialty and niche areas. Strategic alliances and partnerships are formed daily throughout the world to promote long-term customer care, training and integrated management. The US Department of Commerce believe that over 60% of companies exporting and working in some fashion overseas have no more than two years experience in the process. For all of them it’s a time of trial and error as they tread into unknown risk-laden wilderness of differing cultures, attitudes, beliefs and systems. Associations are the perfect vehicle for training these Global explorers in Global management skills and perhaps for assisting with overseas contacts and trade missions.
Who knows how
The World Bank suggest that something like two-thirds of the world population (4 billion) want in on the life style and opportunities of the other one third now that they have little difficulty in finding out how they live. The village public TV or the neighborhood communal cell-phone communicates a glimpse of the way of life on the other side of the poverty ditch and once seen it remains a dream. An often forgotten statistic in the horrifying numbers we are often served about India is the remarkable one that there are over 300 million people in the country with university degrees. The educated classes in Russia, eastern Europe and Asia are hungry for knowledge and instruction and they are looking to America to provide it. The great resources of Trade and Professional Associations are perfect vehicles for feeding them.
Coca Cola, according to a recent Reuters report, has substantially boosted the economic growth in China. Over 400.000 people do work connected with the manufacture, distribution and sale of the product. 14,000 people work directly for the company. Coke’s bottling business contributed $1 billion to the Chinese economy and paid over $48.3 million in taxes in 1997.
According to Professor Douglas Woodward of the University of South Carolina, Coca Cola’s greatest impact on the Chinese economy is much more substantial. He reports that the influence of tried and tested business and management methods installed by Coke through its enormous chain of suppliers and distributors has created a network of entrepreneurs who are recruiting, training, and running their businesses using methods which have proved to be successful throughout the world.
The training, the mentoring, the business advise generated every day and shared in this organization can only be imagined. It must be changing attitudes, beliefs, lifestyles and lives. It must be bringing challenges, difficulties and happiness. It is creating prosperity to those who wish to receive it. But most of all it is producing new entrepreneurs who in time will move on and start their own businesses based on what they have learned with Coca Cola. They too will teach others their best business practices.
If the best Global companies are helping to train a generation of managers in best business practices then perhaps there is also a place for the best American Associations to welcome overseas members and provide the platform of global best standards in the trade or profession they represent, along with endless opportunities for training, exhibiting, networking and government negotiating to create and set global standards for entire industries.
Professional institutes have often been the leaders in developing global standards. In the first fifty years of the last century the London based institutes of Accountants and Insurance professionals for example were called upon from the corners of the British Empire to establish generic professional standards. The Chartered Insurance Institute created best practice qualifications that soon spread throughout the world that ultimately made the system of modern insurance a truly global procedure and the Institute of Chartered Accountants established accounting principals, which are used every day throughout the world.
The Global economy is often referred to as the most brutal the world has known in the sense that its competitive disciplines do not permit sloppy or unprofessional management. It has raised the cost of bad government by demonstrating repeatedly that investment can be withdrawn at a ‘click’ and that open markets don’t discriminate for vested interest. For hundreds of thousands of business and professional people throughout the world, the only road they can see forward is along the highway of the global economy. Where can they look for driving instruction, directions, and repair and maintenance facilities? Perhaps it is to the great resources of the American Trade and Professional Associations.
Join the Country Club
ICCA, the international meetings association based in The Netherlands, outlines some interesting meetings statistics on their website www.icca.nl. Their meeting criteria is that a meeting must be organized on a regular basis, it must attract more than 50 people then it must rotate between 3 different countries. The statistics shows information from 25 countries numbering 2626 meetings in all fitting the criteria of which the USA had 200, Spain 156, Australia 103, Israel had 42 and Thailand 38. Clearly the rest of the Meetings world outside the USA is getting substantial international experience as a percentage of population.
In the lodging section of the website is a list of 51 impressive hotels located in 28 countries. Many highly suitable facilities that I am familiar with are missing but the support information of those listed is comprehensive and easy to follow
The recent opening of the Hilton London Metropole has added convention space amounting to 44,000 square feet of meeting rooms and 373 guest rooms bringing the total number of rooms to 1,073 in one of the most popular convention venues in the world. According to Meeting News numerous Mexican locations have enhanced their facilities particularly the 1,017 room Acapulco Princess which has completed a massive renovation of he meetings area and the Melia Cancun Convention Center & Resort which has enhanced the facility with a 16,137 square foot ballroom. Similar reports come in from Asia, Australia and throughout Europe.
All this action and investment is in response to the growth of Global business of which Association members are taking part. Their need to fast-track their Global knowledge and understanding, just to keep up with the competition, is paramount and their association’s need to support them is imperative. Now is the time to get a Global Mindset. It’s survival time.
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