Why do some companies succeed and some fail in emerging markets - what are the common success factors?
Businesses grow at such a fast rate they outpace the growth of available talent
As companies scramble after the same people in an ever escalating spiral of higher salary packages, coupled with a lack of talent available, there is a risk of company growth slowing down.
Recognise that your local remuneration requirements won't fit into global policies, you will have to break the mould: unless you attract and retain talent they will hop to the next opportunity.
Losing good talent in developing markets is different to developed markets. Employees will more readily jump from one industry to another, because employers are all hunting from such a small pool.
An investment in training and development seems the obvious solution, however many company programs are mediocre when compared to developed countries, even though the need is much greater. Recognise also, that employees are hungry to learn, and use it as part of your retention strategy.
Expats are short-term solutions, but so often local replacement programs are not developed therefore perpetuating high cost expatriate options. Choose your expats carefully; some love developing markets, some hate it and an unhappy expat is usually an unproductive one.
No longer a place for mavericks, emerging markets used to be a place expats ended up in if they couldn't find anywhere else to go. To succeed today companies need to choose their best expatriate talent as emerging markets are more complex and more challenging than developed markets, yet offer better returns.
Not for the fainthearted
Companies need to have an appetite for risk, an early-in attitude and be prepared to make bold decisions that aren't wrapped up in bureaucratic decision-making processes. In emerging markets if you hesitate the opportunity is gone and you need to empower your local general managers and their teams.
The road is full of ups and downs
Short-term views don't hack it. Success takes time, and ups and downs are inevitable; all too often companies run at the first few potholes they encounter. Yes, emerging markets will dilute your bottom line margin, because they are less profitable, but if that's your beef then double-digit growth markets are not for you.
Try a lot of stuff, keep what works
You can't over-analyse decisions because there's little data to analyse anyway, so make intuitive decisions. Try lots of stuff, and keep what works. Think, decide then act, move on if it doesn't work.
Success for savvy companies in developing markets is not a formula they stumble upon but a strategy developed, adapted and repeated across emerging market after emerging market. Don't be afraid to beg, borrow and steal ideas! Or at least share across your organisations.
It's all in the attitude
Companies and people that succeed in these complex, difficult but rewarding emerging markets all have attitude, passion and optimism about these places; they make success the only option and have fun doing it!
Michael Wood is co-founder and Director of Aperio, a business consulting company focused on the FMCG space in South and Sub Saharan Africa. Michael has many years international experience where he held the positions of Marketing Director, Sales Director & Managing Director with the Gillette company and Procter & Gamble.
Aperio is a business consulting company focused on accelerating growth of FMCG brands in South Africa and sub-Saharan Africa. We understand the challenges FMCG businesses have on a day-to-day basis and guide multi-national companies to achieve greater results in the region.
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