In prior postings, we have explored the issues faced by businesses struggling to identify their place in an increasingly global economy and the kinds of myths that often cloud their decision-making. We have focused on factors like contract provisions, language choice, risk assessment, and risk mitigation, that companies and their lawyers are usually comfortable discussing.
What about the more intangible factors? Corporate leadership requires decision makers to balance opportunities — usually triggered by external drivers, such as funding, governmental programs, or economic conditions — against the cost of pursuing, capturing and developing those opportunities. When opportunities require new methods or new markets, the stakes are higher. Leadership usually will have to focus on and manage the change. When is a company “ready” to make a shift and enter new markets?
Company leaders are acutely aware that the best time for change is often understood only in retrospect. So, too, is the relative cost and benefit of making a change. For that reason, no one wants to skip recognized opportunities that could have been handled with appropriate planning. On the other hand, no one wants to push his company into new territory before it is ready.
Whether the shift means going into new states, new geographic regions, new product/service lines, or new countries, the answer is, in general, pretty much the same.
A company can (and should) shift once it has in place a management team that has a proven track record as a team of gathering information, assessing that information, and making decisions.
All members of the management team should be able to articulate the negative and positive “drivers” that define the opportunities. In the case of infrastructure development work, for example, a “negative” driver might be the ongoing decline in municipal and federal infrastructure opportunities in the United States and the need to either reduce long-term operations or expand abroad. A “positive” driver might be the recognition by management that in-house expertise is transferable to similar projects in the Caribbean, Latin America or Africa, where long-term projected needs promise multiple projects and declining “learning curve costs” over time.
The management team must be prepared to allocate responsibility for existing operations as well as operations related to the new venture, and accord sufficient resources to handle all activities. The new venture will undoubtedly take significant time, effort and attention from those handling it. Those in charge of the launch and follow-through must be assured that they will not be pulled in multiple directions that do not benefit the new operations. On the other hand, concerns raised by those who maintain the existing operations should never be ignored or dismissed.
All members of the management team should be able to clearly articulate the parameters within which the company will operate as it pursues the new venture. The exercise of defining the parameters will result in a focused, disciplined approach that will allow the management team to respond, on theme and in a cohesive manner, when it assesses the value of opportunities or addresses obstacles that arise along the new path.