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Being first to a new market brings huge first mover advantages, in that a company gets a chance to establish market presence before its competitors. However, there is also the downside risk of committing scarce resources to an untested market and essentially taking a 'bet', that hopefully will result in a profitable revenue stream.

BRICS_leaders_in_Brazil

Fifteen years ago it was Eastern Europe, ten years ago it was the BRICs, if you are an organisation planning an international market entry strategy - it can really pay off to know -

Where are the next emerging markets going to be?

The 'bet' taken by companies that pioneered their way into the BRICs over the last decade has, in many cases, paid dividends. These huge markets are now a standard element of many companies' growth strategies. With their large demographic bases and rising incomes, they will continue to be an attractive source of revenue.

However, the BRICs are not without their challenges. For example,   despite the extra revenue generated by the recent World Cup, most economists are predicting GDP growth in Brazil of little more than 1 per cent for 2014, less than the growth rate of many developed countries. In fact some economists are even talking about the possibility of a technical recession.

Despite these challenges, companies will continue to grow their presence in the BRICs and exploit their huge market potential.   So now that most companies have an awareness of the opportunities in the BRICs, what is the next wave of countries that will offer that all elusive first mover advantage?

Respondents to the 2012 EY globalization survey of 800 CEOs from around the world, believe that the most attractive emerging markets outside of the BRICs are Indonesia, Turkey, Mexico and South Africa. The reasons given, include access to nearby markets, political stability, and transport and technology infrastructure.  Many of these markets also show consistently high economic growth close to that of the leading BRICs. For example, Turkey, Mexico and Indonesia closely shadow China and India in terms of GDP growth from 2000 through 2015.

Is it time now to develop a quirky acronym for the next wave or should we wait until it reaches its crest?

As it stands, South Africa is often slipped into the BRICs acronym athe 'S'. In fact the BRICS summit includes South Africa, along with the other four developing nations. So if these emerging countries develop into the next wave, what will they be called? How about the TIMs (Turkey, Indonesia, Mexico, and/or South Africa) or maybe even the MITs (Mexico, Indonesia, Turkey, and/or South Africa)?

Regardless of where this next wave comes from there are key capabilities that you can be building up now in your organisation to take advantage of the emerging new markets. These international business capabilities apply not just in your sales and marketing department but across all the functions of your organisation.

Want to know if you're ready? Ask yourself and your team the five questions below..
  1. Do you have a sales pipeline process that takes account of the optimum approach for market penetration?
  2. Can you critically analyse your potential customer's buying process and do you know how to deploy the appropriate marketing and sales response for market penetration?
  3. Can you apply macro and industry research capabilities to inform strategic decisions?
  4. Do you understand the cultural and communication challenges of international business development enough to enable you to devise an appropriate organisational response, as well as building individual cultural agility?
  5. Do you have the capability to transfer valuable knowledge between organisational entities in different countries?
If you have or can develop the above capabilities - then regardless of where the next wave comes from you and your organisation will be well-placed to take advantage of it. Norma Murphy is Programme Director of the new IMI Diploma in International Business Development an accredited programme which develops the capability of managers and business owners to manage across multiple jurisdictions or to grow their businesses in the dynamic global marketplace.  Her expertise is in Global Strategic Management and Project Management on Masters level and customised executive education programmes and she has over 14 years industry experience in Multinational IT companies. Her work focusses on combining research-based knowledge into practical organisational strategy. For more information on the IMI Diploma in International Business Development click here or contact to one of our programme advisors on programmeadvisors@imi.ie or 1800 22 33 88.     [post_title] => Beyond the BRICs: Is your organisation set to benefit from the next emerging markets? [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => beyond-brics-next-wavethe-tims-mits [to_ping] => [pinged] => [post_modified] => 2019-11-08 10:52:09 [post_modified_gmt] => 2019-11-08 10:52:09 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.imi.ie/?p=7868 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [1] => WP_Post Object ( [ID] => 20814 [post_author] => 103 [post_date] => 2017-10-10 16:30:53 [post_date_gmt] => 2017-10-10 16:30:53 [post_content] => [caption id="attachment_20815" align="alignnone" width="600"]Shipping containers in Antwerp, Belgium. Shipping containers in Antwerp, Belgium.[/caption]   Ireland is an export country; we look outwards. Relentlessly positive in our mindset (and unrelentingly pessimistic in our words) we have a tendency to assume it’ll all work out, that ‘it’ll be grand’. Sometimes though, a force comes that is just a little too big to get our heads around, a little too all-encompassing to simply wave away with a shrug. The solution used to be when these forces came along was to hit the bar and wait for it to pass by; nowadays it requires a bucket of coffee and countless brainstorming sessions in case it rolls over us. Brexit is such a force.

Every Irish exporter is aware of the dangers, and possibilities, of Brexit, and have probably elucidated these views at the end of a board meeting or over the dinner table. They have read the business papers, mentally taking note of those aspects of Brexit that will affect them, and have kept a keen eye on the exchange rates as they’ve fluctuated since June 2016.

Most Irish exporters, however, haven’t written anything down. There is no plan, just a feeling that we may have to be more flexible down the road. Maybe there’s vague notions that the Chinese market is opening up so ‘we must look into it’ or perhaps there’s a feeling Brexit won’t really happen.

It will.

Maybe not in the ‘Hard Brexit’ that was the prevailing political wind until recently, but the UK is leaving the European Union and the relationship won’t be the same for the foreseeable future. It is now incumbent for Irish businesses, and exporters in particular, to develop their international business plans to mitigate against the risks coming down the road.

80% of Irish exports are either sold directly in the UK or transit through the region (1). Does your organisation have alternative market strategies in place? Does your export wing have plans for any transit barriers that may (suddenly) come into place?

Let’s take the tactical question first – are you prepared for a new set of administrative practices associated with transiting your goods through Britain if it’s not part of the Customs Union?

In practical terms, this may mean you have to prepare staff or procure new staff hires to make this trade efficient. Imagine if tomorrow all your exports needed to transit through Norway instead of Britain, what would be the challenges you would face? What would be the costs associated?

[caption id="attachment_20820" align="alignnone" width="600"]People protesting the prospect of a hard border between the North and South of Ireland People protesting the prospect of a hard border between the North and South of Ireland[/caption]  

Many Irish businesses are waiting for answers from the government rather than proactively seeking out alternatives themselves. Almost two-thirds of Irish export companies have said they are unprepared for Brexit, and have not put any counter measures in place over the last six months, according to a survey of 600 Irish businesses by Enterprise Ireland (2).

This is a dangerous strategy. We’ve seen the lack of clarity from all sides of the negotiation table, partly as a negotiation tactic in itself, and it is likely that the rules will come as one big release when negotiations are finalised.

In other words, at the last minute.

Foreign Affairs Minister Simon Coveney has stated that companies using Britain as a transit location to other markets could be badly affected by Brexit, but has been unable to accurately track what goods, and it what volume, actually passes through Britain from Ireland. So, when it comes to negotiations on what goods are subject to custom tariffs, they may end up negotiating blind.

[caption id="attachment_20816" align="alignnone" width="600"]Foreign Affairs Minister, Simon Coveney Foreign Affairs Minister, Simon Coveney[/caption]  

This makes it even more vital for Irish businesses to make their own plans. Of course, as the famous Navy Seal quote goes ‘No plan survives contact with the enemy’ but without a plan, we are doomed to fail.

Now let’s return to the first question: If Brexit makes the UK less profitable to trade with, or at the worst-case scenario, becomes uneconomical to trade with, does your business have a plan to penetrate new markets to cover the gap?

Let’s be clear here, no perfect plan exists. There are too many variables within each sector, too many knowns, and even more unknown unknowns, to accurately sit down today and predict what you’ll need down the road.

And, ironically, when it comes to planning for this, it may be best to ignore the force that is Brexit for now. Instead, now is the time to formulate those international development plans you’ve been knocking around for years now, and begin putting in place a plan of action.

Irish exporters need to begin to evaluate where a new potential customer base, assess what is required to enter that market, create a blueprint for success, and then get down to work. This strategy of international business development will:

1) Begin to grow your business organically

2) Mitigate any potential impact of political shifts in how Brexit will be legally framed

3) Get ahead of your competitors who are planning to do the exact same thing

The organisations who turn Brexit to their advantage will not be the ones who happen to be picked up by the tide and get lucky (although that will inevitably happen too) but the organisations that take a multi-pronged approach to the problem, tackling it from all sides.

They will not be able to share their plans with the rest of the class because, well, everyone is in a different class. This is a huge problem that will be tackled through a million solutions, tens of thousands of face-to-face negotiations across the world, through public and private sector policies and actions, and through lots and lots of planning.

Do you have yours yet?

(1) http://bit.ly/2i0U1hg (2) http://bit.ly/2kDnNJz
Hugh-Torpey-1.jpg Hugh Torpey is the Content Manager at the IMI. Hugh has written the above blog based on the curation of research and insights from associates on the IMI Diploma in International Business Development. The Diploma is designed to give participants a future blueprint for their organisation on completion, and is specifically for professionals from Irish export-focused SMEs, Irish multinationals and affiliates of foreign multinationals based in Ireland, either in the manufacturing or internationally traded services sectors.   [post_title] => Hands up if you have a Brexit plan, and can you share it with the class please? [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => hands-brexit-plan-can-share-class-please [to_ping] => [pinged] => [post_modified] => 2019-11-08 09:41:11 [post_modified_gmt] => 2019-11-08 09:41:11 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.imi.ie/?p=20814 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [2] => WP_Post Object ( [ID] => 20092 [post_author] => 102 [post_date] => 2017-06-29 13:19:17 [post_date_gmt] => 2017-06-29 13:19:17 [post_content] =>

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Fixed or growth mindset?

 Employee engagement is a critical factor to maintaining a productive workforce. Given its importance, organisations continuously try to identify ways to understand and increase engagement. One such mechanism that has gained coverage in recent times is the concept of ‘mindsets’.

‘Mindsets are the implicit theories or assumptions that people hold about the plasticity of their abilities’ (Keating and Heslin, 2015). It is generally argued that people fall into one of two mindsets: fixed or growth, respectively.

Renowned psychologist Carol Dweck describes a fixed mindset as the assumption that ability is a fixed entity and cannot be changed, i.e. ‘you can’t teach an old dog new tricks’. In contrast, a growth mindset assumes that abilities are flexible and can be reshaped and developed through focused effort, i.e. ‘talents are developed, not discovered’ (Dweck, 2006)

What does this mean for organisations?

Research has shown that organisational culture can have an impact on mindsets. More precisely that working in an environment which endorses a fixed view of intelligence (culture of genius) or a malleable view of intelligence (culture of growth) effects employee engagement. A primary difference between the two – in instances of fixed cultures, an employee is normally hired based on a specific skill set they currently possess. In contrast, while still possessing some necessary skills, in growth cultures an employee is generally built rather than bought; through a process of continued learning and development.

What does this mean for employees?

In cases where employees hold a fixed mindset, there is an inclination to avoid challenges that might expose any perceived deficiency in ability. In addition, attempts at positive and constructive feedback are largely ignored. However, employees with a growth mindset embrace and actively seek challenges; seeing setbacks as a chance to learn and develop rather than a shortcoming in ability. Feedback is generally sought and considered.

How can a growth mindset be cultivated?

There are several practical ways to shape a growth mindset in any organisation:

  • When it comes to promotion and selection decisions, give consideration to employees whose performance capability might be most developed by assuming a challenging new role for which they do not yet have all the required competencies (Keating and Heslin, 2015)
  • Focus on the process an employee took to attain a positive outcome rather than the perceived talent that enabled them to achieve it (ibid.)
  • Avoid the use of terms such as ‘star performer’ or ‘gifted’ as doing so may cause an employee to adopt a fixed mindset and avoid challenges in order to preserve this perceived title (Michaels, Handfield-Jones and Axelrod, 2001)

On an individual level, Reid (2017) suggests a simple method of engaging a growth mindset. Use the word ‘yet’, i.e. ‘I have not fully learned how to use the database yet’ rather than ‘I can’t use the database’ and replacing the word ‘failing’ with ‘learning’.

In a world where many people fear failure, it could be argued that not many fear learning!

Sources:
Dweck, C.  (2006) Mindsets. New York: Random House Keating, L. and Heslin, P.A. (2015) ‘The potential role of mindsets in unleashing employee engagement’, Human Resource Management Review, 25, pp. 329-341 Michaels, E., Handfield-Jones, H. and Axelrod, B. (2001) The war for talent. Boston, MA.: Harvard Business School Press Reid, R. (2017) Reeling from a failure? Perhaps an attitude change could help. Available here [bctt tweet="Learn about Fixed versus Growth Mindsets and what it means for your organisation. Find out more" username="IMILibary"] Click here to register for access to the IMI Knowledge Centre.
Ronan CoxRonan has worked in the role of Assistant Librarian with the Irish Management Institute since 2011. During this time, he has completed both the IMI Diploma in Management and IMI Diploma in Marketing and Digital Strategy. Of particular interest are the subjects of motivation, engagement and marketing. [post_title] => A Fixed or Growth Mindset? What it Means for Your Organisation [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => fixed-growth-mindset-means-organisation [to_ping] => [pinged] => [post_modified] => 2019-12-04 16:18:35 [post_modified_gmt] => 2019-12-04 16:18:35 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.imi.ie/?p=20092 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) )
David Cornick

David Cornick

27th Jan 2020

David Cornick is Programme Director for the Leading with Strategic Intent programme, designed in association with IDA Ireland for leadership teams in FDI subsidiaries.

Related Articles

Beyond the BRICs: Is your organisation set to benefit from the next emerging markets?
Hands up if you have a Brexit plan, and can you share it with the class please?
A Fixed or Growth Mindset? What it Means for Your Organisation

Influencing HQ – Leading with Intent in Irish Multinationals

There can be little question that one of the great success stories of the Irish economy is our continuing ability to attract foreign direct investment to these shores. However, recent IMI research suggests that in order to continue this success story local leadership teams will need to enhance their ability to influence strategic decisions on the international stage.

And, when we look at the numbers, there is a lot to influence.

Viewing Foreign Direct Investment (FDI) companies as a percentage of GDP, Ireland is easily considered one of the most globalised countries in the world. Inward economic flows from FDI companies accounted for 66% of Ireland’s GDP in 2015, compared to 1% from our UK neighbours.

FDI companies employ approximately 300,000 people in Ireland, according to the Central Statistics Office, and employment in this sector grew by 7% in 2018, compared to national average of 3%.

These statistics show the outsized influence FDI companies have on the Irish economy, but do not show the influence the leadership teams in these Irish hubs are having on their home headquarters.

 

Critical Challenges for Irish Leaders of FDI companies

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Through focus groups, workshops, interviews and surveys with 25 senior leaders representing the Irish-based subsidiaries of foreign multinationals, IMI (in association with IDA Ireland) identified four critical challenges facing leadership teams in Irish subsidiaries of multinationals.

One the major challenges for leaders was building and sustaining a sphere of influence. Better leveraging their own ecosystem, optimising the strengths associated with Irish leaders, and creating a compelling strategic narrative to ‘sell’ to their international counterparts are seen as key to increasing their influence.

The leadership teams are focused on how they create value for their corporation and how do they get involved in terms of the strategic direction. What we’re looking for them to do now is get their head above the parapet and drive strategies forward and add more value for the corporation.

With disruption hitting almost every business model, developing a transformative mindset was the second challenge identified. It can be easy to slip into the ‘cog in a wheel’ approach, even as a senior leader of a subsidiary, but being an active change agent is vital when delivering on what will be required transformative change.

A more empowered local leadership team will be able to capitalise on opportunities to innovate while excelling in their charter, and in turn this will be crucial from differentiating the Irish subsidiary from other bases around the world, protecting it from global economic forces.

‘’There isn’t a c-level executive I’ve met over my time at IDA who wouldn’t agree that having a more empowered local subsidiary management team that can do more for the corporation and add more value back isn’t a good thing’ said Leo Clancy, Head of Technology, Consumer & Business Services at IDA Ireland. ‘And I think that’s the core aim – that we have a self-determined team of leaders in Irish subsidiaries that can offer more value back to their corporate entity.’’

The third challenge is directly associated with globalisation – the ability to navigate cultural complexities. Working in matrixed organisations, across different geographies, with culturally-diverse colleagues and stakeholder, leaders must develop the abilities to not only manage these cultural differences, but leverage them.

The final challenge identified is attracting and retaining future leaders. Future proofing the organisation through strategic talent management and succession planning is fundamental for success down the road, both at local and international level.

 

Leading with Intent
Leaders in Irish subsidiaries of FDI companies have played an outsized role in global economics over the last two or three decades, and on the Irish economy itself. The vagaries of international economics, however, shows that foreign investment can shift from one country to another, and to remain on top requires adding value beyond tax rates.

By examining their roles as subsidiary players in the overall multinational game plan, building a unique leadership vision and value proposition within that game plan, and developing their ability to manage and strategically influence stakeholders in a matrixed, multi-cultural context, leaders in Irish subsidiaries can continue to be at the heart of their HQ’s thinking.