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European-American
Topics - Business
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Stephen D. McLaughlin |
Interview with Stephen D. McLaughlin,
CEO of
Global Market Insights and author of several articles
focused on helping U.S. businesses expand successfully
into Europe. The interview was conducted at a conference
about GMI’s success with expansion of client businesses
abroad.
Posted July 31, 2007 |
Stephen
D. McLaughlin
Let's start off by you telling us a little bit about GMI and
what the company is all about.
Steve McLaughlin:
GMI stands for Global Market Insights, a
Luxembourg
consultingcompany, which helps
U.S.
clients who are already in the European market or who are
considering the great possibilities over here.
How do you
help U.S. companies expand into Europe?
Steve McLaughlin: We do this through two
unique characteristics: our skill set of both internal and
external staff helps us restructure and refocus our clients to
better serve the European marketplace. In addition I have also
ensured that all of our people have solid understandings of both
European and American business practices.
Let’s say I have a midsized company that I want to
expand into
Europe. How do I get the process started?
Steve McLaughlin: The
first thing we would do is take a good look at the product you
are selling from a market research/intelligence point of view.
To do this we would have a combination of in-house talent on
the financial side, while reaching out to our European network
of researchers for the specifics of the product. We would then
be in a good position to tell you which products are the best
positioned to do well here. This seems like a standard approach
but it is not; the field is always moving with the latest
example being the big swings in the dollar/euro exchange rate.
This would be the first step.
So once GMI has done that, what sort of challenges
can I expect to come up during my expansion?
Steve McLaughlin:
Boy does that depend! Each case is obviously very different
but let me hit on some common challenges we have seen. The big
one is the differences between all of the different countries.
This is a common market, yet at the same time it is not. The
biggest issues to face will be languages and regulations. For
example: if you are in the IT field with a product that involves
customer interface via a computer the different languages can
cause programming issues — German is a language that can test
some software limits. As for regulations, this is a big issue in
the financial industry where regulations can vary widely across
borders. GMI's advantage is that we know how to find the answers
to the product’s specific problems through the contacts we have
built up.
You mentioned earlier something about the
differences between U.S. and European business practices. Is
this really a sticky issue? And if so, what are some of the
things to look out for?
Steve McLaughlin:
Believe it or not, one of the biggest issues we have seen is
the stereotypes that exist on each side of the
Atlantic.
France, for example, can frequently get an undeservedly bad
reputation in the U.S. because of the news we see about strikes,
etc. It paints an untrue image of a country that U.S. companies
should avoid when in fact the French have an amazing creativity
that they apply to business. On the other side, Europeans can
think we are pushy in the way we push proposals and in so doing
misunderstand the value of speed and priorities which U.S.
business learned in the past twenty years. To answer your
original question this does NOT have to be a sticky issue if you
focus on fundamentals — delivering a good product is the key
here.
I read in an article you wrote recently that one
of the major challenges some U.S. companies face in their
expansions is staffing their overseas offices. Can you elaborate
on that?
Steve McLaughlin:
This has been a big issue for some of our clients and, to be
frank, was something I devoted a great deal of time to when
growing my own business — more than you might imagine. The key
issue here is finding the right mix of skill sets and
nationalities, with two issues key on the latter. First, if you
are a small to medium sized company many of your employees will
interact with your
U.S.
offices and clients — make sure you get Europeans who understand
the U.S. as it will be a lot harder to find Americans with
European experience in some parts of thecountry. The second
issue faces larger companies. If you hire a multinational
workforce then you need to understand that there will be a
tremendous tendency for the workers to segregate themselves
along national lines from day one — this is not the ideal way to
approach team building! This can be dealt with but you need to
be aware of the issue.
I know that another issue with staffing overseas —
just like in the U.S. — is hiring the right, qualified people
for the job. I hear that this is not always an easy task in
Europe due to privacy laws. Can you give us an idea of how these
laws work, and how GMI can help?
Steve McLaughlin: This
is a good point. Privacy laws in Europe are very strict in some
areas while lax (by our standards) in others. For example,
European universities are very strict on the information they
divulge on their students, to the point that we would think the
students don't care whether or not they find jobs. The laws are
historically based and Europeans take them very seriously and
for good reasons when you understand the history. GMI, through
our experiences in the European marketplace, has learned how to
find the talent that U.S. companies need across a wide variety
of skill sets, to include which nationalities are best suited
for certain companies — this is a big generalization that we
obviously don't always stick to, but it has helped us move
quicker on servicing some client needs. This is in many ways an
executive search type function, which is an industry where we
have a strong background — this is an easy fit for us. For
example, one of our manufacturing clients needed a senior
executive to run their international sales. In this case we
moved forward with two key underlying facts we knew from our
knowledge of the European market: the client’s product was the
key selling point and the new executive would need to mesh with
the unique corporate culture of the client. We therefore
searched for someone who both understood the industry and who
had a broad exposure to the U.S. In this case we recommended an
American. This took some convincing of the client (who wanted a
European) but we found the right person through our U.S.
resources. The point for those who are interested in the
European market is that we knew the product was the key to the
sale — there was no need to restrict the search to just
Europeans.
There is a tendency to think of the European Union as
essentially the only "safe" place for
U.S. companies
to expand to. Is this true? And if not, can you give us an
example of an expansion you have helped outside of the EU?
Steve McLaughlin:
This is by no means true and I can think of possibilities in
each region of the world. Let's use
Latin America
for this example. Latin America has several advantages, led by
geography and the various free trade agreements, which exist
throughout the region. In
Latin America,
U.S. products have a reputation for being the gold standard
across a wide variety of industries; there are many reasons
which we can discuss another time. In one case we helped a
client in the manufacturing industry team up with a local Latin
American company for a joint venture. We found the local company
and knew that the mixture of local distribution networks and
U.S. state of the art technology would work.
I know that GMI is involved with helping U.S.
based investors find the right companies to put their money in.
Can you tell our readers some of the ways you do this?
Steve McLaughlin:
We have a client in the venture capital industry that is
always looking for both investors and companies in which to
invest. In our case the focus is on the latter although we do
some work in the former. When looking for companies needing
early stage investment we have a variety of ways to help, but
focus on two key areas. The first is our knowledge of which
industry fairs are the best to frequent and the second is
knowing which universities produce the talent that, once you
know the ins and outs of the market, will lead you to the right
companies. Lastly we have a network of consultants who spot
trends for us. As an example, we
know that certain Belgian and German universities are field
leaders in certain IT sectors. To state the obvious, the
Internet allows many academics in the same field to regularly
communicate with their peers around the world. We then used our
European contacts to get ground truth on what was happening
around the world in this specific sector, and found a company
needing early stage investment that was not even in
Europe. Knowing
the needs of our Venture Capital client we put the two together
for a mutually satisfactory arrangement.
Can you give our readers an idea of some of the
currents trends that bear watching?
Steve McLaughlin:
The European venture capital industry is, to be blunt, trying
to catch up with the
U.S. in some
areas. Sweden and the Scandinavia area in general are the
leaders in this industry, and you can tell by that region's
focus on technology — look at Nokia for example. The biggest
trends in Europe are efforts to modernize the financing side of
the industry, which has been dominated by banks. The money is
here; we just have to build up the culture of creating the right
structures for investors like those existing in the U.S.
Can you tell us a bit about what you do in the
Precision Manufacturing industry and what the opportunities are
there?
Steve McLaughlin:
We have excellent and long-standing relationships with
several
U.S.
companies in this industry. In this area we bring three things
to the table: knowledge of the local market for direct sales,
consulting help to restructure some of our clients functions to
actually increase sales; I am especially proud of this because
we took an industry (consulting) that has traditionally involved
cost saving and instead increased the sales. The third skill set
we bring is our market research/intelligence capability — we
know how to spot trends in an industry where products can change
almost daily. If we can do it for our existing clients we can do
it for new ones. The best example
of this skill set in action was GMI helping a client restructure
their internal organization to bring the engineering and
manufacturing people closer to the clients. The reason for this
simple — we knew our client’s product was well-built and would
appeal to European quality requirements that were important for
this particular product. This had the intended result and the
client has increased sales.
And is there a major need in the European market
place for Precision products?
Steve McLaughlin:
Absolutely. The quality, which is traditionally associated
with the precision manufacturing industry, goes a long way in
Europe
which has always placed a premium on good quality products. In
addition, this is a dynamic marketplace that is evolving as new
countries join the EU. Don't forget about the exchange rate
movements constantly changing the definition of what is
profitable.
If you needed to pick just one main way that GMI
could help me and my company get a foothold in Europe, what
would it be?
Steve McLaughlin:
The best thing we can do is give you a unique insight into
how your product can sell in places you had not previously
thought of. Think of us as Europeans who speak your language.
If you want to learn more about Steve McLaughlin click
here
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2006 All content property of European Weekly unless where otherwise
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