PR TECHNIQUE: Global expansion requires local familiarity

Whether you open your own office, team with a local affiliate, or buy an existing firm, research and a solid, realistic plan are global-expansion keys.

Whether you open your own office, team with a local affiliate, or buy an existing firm, research and a solid, realistic plan are global-expansion keys.

It was Fluke - not a stroke of luck, but an instrumentation and network-management company - that, seven years ago, led Lou Hoffman to realize the importance of a truly global strategy. His young, small, but successful tech PR firm had just missed winning Fluke's business to what was then Shandwick in what Hoffman now calls "a demolition derby" for the account. To Hoffman's mind, the reason that his firm lost out on the business was that it hadn't established a global perspective, especially compared to his massive competitor on the pitch. He'd had a similar feeling two years before, when The Hoffman Agency worked with partners on a global account that, by his own admission, didn't go well. "I wasn't looking to expand globally, but I thought we could do it with affiliates and partners," he says. "But what the Fluke experience taught me is that while with the affiliate model, if you do it right, you can deliver a good product, the problem is in the selling and marketing. The ante to play the game for blue-chip accounts is having your dots on the map. That's when we decided, if we're going to do this, we're going to do it right." And so, in late 1996, The Hoffman Agency opened its Singapore office. By 2001, it had outposts in Beijing, Tokyo, Seoul, Hong Kong, and it had already turned its sights on Europe. By spreading itself across the globe, Hoffman had found the differentiator he had been looking for. The agency's president had made overseas expansion an integral part of his company's business plan, which PR executives familiar with this kind of move agree is the crucial first step in taking your industry abroad. After all, putting up a shingle in Paris, or Hong Kong, or Sao Paulo requires a significant investment in financial and human resources. Consequently, the success or failure can speak volumes to clients and competitors about where an agency is heading - or where it isn't. But the importance of an international approach being a strategic fit for an agency is pretty much where the agreement ends. Expansion can take on a few different forms, from co-branded partners or affiliates to wholly-owned subsidiaries. Both models have proven to work, and there are more than a few agencies that use both to great effect. There is certainly no formula for things like a threshold of existing or potential business activity necessary in a market before plunging in. On this point, Hoffman admits, "We didn't have a thick business plan. We didn't crunch the numbers thoroughly. We just said, 'You know what, we're going to do it.' I found one of our vice presidents here was willing to parachute into Singapore for 12 months. I told him, 'Your mission in life is not to drive revenue and profit; I just want you to learn and figure out the lay of the land so that as we get into our second year there, then we can start to drive our success and have an idea of what we want to do.'" In contrast, Alasdair Sutherland, EVP at MS&L, puts this in starker terms. He says, "That threshold [of whether the office will be viable] is the ability to predict the business of the first two years." Whether choosing an affiliate or buying an agency, one of the most important actions is spending time getting to know that partner. Brodeur Worldwide's way of entering a market is through exclusive affiliates. "We find a firm that is a tech leader in that particular market, one that can service the clients we have around the rest of the world as we go into that market," says Terresa Christenson, Brodeur's Asia-Pacific MD. "We make sure that the chemistry is right, that the corporate culture and values match ours, and then join up in marketing affiliations, working our way to owned businesses. "In tying up with affiliates," adds Christenson, "you have to do a certain amount of knowledge transfer if they are going to be representing you. You need to be on the ground with them for whatever period of time it takes for you to bring them into the family, so to speak." Sutherland recommends the same information-sharing procedure before buying a firm. "Do not make the mistake of not working with the agency or pitching with them," Sutherland says. While bringing a smaller foreign agency into the fold offers some advantages that working with affiliates doesn't - namely, having the brand name on the door, having control over the agency, and having that coveted global authority - managing a newly purchased company offers its own challenges, he adds. Not only do financial policies and planning need to be changed, but also that agency's brand needs to be respected. When MS&L buys an agency, it co-brands for a period of time that's determined by each agency's brand value in the market. "When you buy an agency, you buy it because of its strengths," Sutherland explains. "Let them tell you when it's right to change." In finding a new office's leadership, Waggener Edstrom CEO and president Melissa Waggener Zorkin recommends beginning with a communications expert and then finding people who can help build business. "Find the strongest person in the market," she says, "Start out with someone you know understands the communications business and knows what value we're adding." Fleshing out the rest of the office staff is, to a degree, a matter of finding a balance between local and imported talent that depends on the market in question. Before entering China, Hoffman brought a Chinese PR executive back to the US for a stay in his firm's Silicon Valley office in order to ground her in Western business practices. Overall, Hoffman was wary of creating a situation where the office's management was heavy with Americans. A few years later, he's finding that he wants more American staffers in the mix. "We're trying to sprinkle Western talent into the rank-and-file," he says. One of watchwords in discussing international offices is balance, and not just in reference to staffing issues. "There is a delicate balance," Waggener Zorkin says. "There has to be a common vision and a common set of values, but you have to localize all this very quickly." ----- Technique tips Do scout out in detail an affiliate before you begin working with it Do look for a combination of communication experts and business-building talent to comprise the office's leadership Do use a mix of local and international talent Don't open an office in a foreign market unless it's part of the firm's long-term business strategy Don't rebrand a successful foreign agency without its leadership's input Don't expect to research a market without word of your interest getting to competitors

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