Archive for March, 2009

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why I do this crazy international stuff

Monday 30 March, 2009

My dad gave me a subscription to National Geographic Traveler magazine last year. In a recent issue, editor/VP Keith Bellows interviewed online “Trip Lit’ editor Don George. Keith asked Don, “You’ve visited 75 countries. Why do you travel?” Don responded, “Because I’m still trying to understand the world. The world is this incredibly huge picture puzzle, and I’m trying to figure out what the picture on the box is so that I know what the puzzle looks like. And I’m trying to figure out how many pieces of the puzzle I can absorb inside myself. It’s been fascinating to go out & find all the differences in the world. It’s just endlessly fascinating, the differences in people, language, cultures, customs, beliefs. And I feel like we are put on this planet to understand as much of that as we can in a nonjudgmental way. With that as a goal, every trip is passionate because there’s always new things to discover, new people, new adventures.”

This is very much the way I feel about international business, as a global business explorer.  I find it endlessly fascinating to discover how differently business is conducted in different parts of the world.  I prefer to learn these things in a non-superficial way by really digging in & getting to know different people, cultures, & languages.  Having lived & worked for a few years abroad, I learned how different a demographically similar place, Germany, can be.  Despite all the economic & financial similarities, my 1st few months there were some of the most difficult months of my life.  Having lived through that, spending extended periods of time in Poland & Sweden & traveling to 30+ countries were much more enjoyable.  Despite the fact that many American business people try to minimize the differences between foreign businesspeople & themselves, they miss many subtle but important differences which make & break deals.  Different decision-making processes driven by different business values all over the world mean you have to be somewhat of a chameleon to be able to learn & adapt in different places.  To be nonjudgmental is really difficult because it goes against a lot of what we’ve been taught our whole lives.  Experiencing new cultures breaks that down.  Domestic business mostly revolves around expertise in industry& function, i.e success is determined by being the best software salesman, etc.  Place doesn’t matter that much because it’s all the same across most of America.  Expanding that internationally exposes business to lots more variables which make it infinitely more interesting to me.  To be a successful software salesman outside of America, you have to learn other languages, what other buying points are, how decisions are made in other places, etc.  In some ways, business stays the same, but in other ways, everything changes.  I find that to be unbelievably intellectually stimulating.

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violence vs. nudity in American media

Wednesday 25 March, 2009

This article by Michael Phillips in the Arts & Entertainment section of the Sunday Chicago Tribune Why you shouldn’t take kids to see ‘Watchmen’ really touched a nerve with me so I have to comment on it.  It highlights how accepting America is of violence & moralistic in depictions of the (naked) human body.  Movie ratings are the most obvious example of this  cultural bias which I think reflects worse than just about anything on how America depicts itself to the world, & conversely, how the world sees America.  What’s scarier is that there are those who contend that this glorification of violence has no effect on our real lives, a point on which I disagree.  You’re fooling yourself if you think watching your hero splatter the bad guy who gets what he deserves in the end doesn’t lead to the same kind of behavior in children.  They follow their role models & our role models shoot ’em up.  I have a friend who hasn’t allowed her 2 boys to see the Disney film Sleeping Beauty because of the violent end to which the witch falls in that story.  I’m with her.

On the other hand, a naked breast revealed on national television is a natural catastrophe & worth squandering millions of dollars to protect the sanctity of America.  What a waste of resources.  The rest of the world just laughs at us, & for good reason.  Naked bodies among consenting adults should be allowed to those who want to see them.  I lived & worked in Germany for a couple of years.   The house where I lived abutted a babbling brook on the back of the English Gardens, where 100’s if not 1000’s of Germans, young & old,  literally hung out naked when it was warm enough each summer.  You’ll see the occasional naked body on television in Europe, which you rarely see in the states, except on pay television.  I see no harm in these & even came to enjoy them.  We preach morality, yet have a tremendous poverty problem & don’t even provide health insurance for all children.  What hypocrisy.

In a business sense, it undermines our credibility with European customers & partners.  Violence fuels our aggressive approach where we lack any subtlety in dealing with others on their own terms.  We are known as swashbuckling urban cowboys who are great at the art of the deal, but weak in recognizing the cultural differences required to make these deals work.  We preach 1 thing, openness & transparency in business, yet contradict ourselves with another, when confronted with an open or transparent blouse.  Freaking out at the sight of some nakedness just highlights the skewed moralistic values with which we are imbued from an early age.  Some may claim nudity is inherently sexist, but today it’s equal-opportunity.  Just as many men are being shown nude onscreen as women these days.

Getting naked creates lives.  Violence ends lives.  Why do we OK the viewing of the latter while decrying the depiction of the former?  Make love, not war.

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getting china & india right

Monday 23 March, 2009

I attended this Chicago Council on Global Affairs event Getting China and India Right which actually focused on international business…imagine that.  It featured Anil Gupta, coauthor of the book Getting China and India Right: Strategies for Leveraging the World’s Fastest Growing Economies for Global Advantage.

Gupta extrapolates the current pace of change to bring out that the GDP of China will exceed that of the US by 2025 & will double US GDP by 2050.  India’s GDP growth trails China’s by 12-14 years.  In this era, China & India together will equal the US, Europe, & Japan combined.   The financial crisis is impacting China & India, but has only slowed their growth rates to 5-8%, which closes the gap at a faster pace.  This is a structural non-linear shift which we simply need to accept like gravity.

There are 4 main stories-

  • offshoring-cost reduction arbitrage opportunities
  • market size-the GDP/population growth creates 25% of growth in the world
  • innovations hubs-the number of engineers, patents, etc. being created there blows away everyplace else
  • rise of competitors-like Lenovo & Tata, etc., Chinese & Indian firms are buying US brands here

Examples-

  • Black & Decker power tools leverages cost arbitrage because there’s no market for do-it-yourselfers & their tools are too expensive even for professionals
  • Motorola created a touch phone for China in China even before the iPhone debuted.  The US is no longer the center of gravity in the world.
  • AT&T sold out of India in 1997 for $205M & may now have to buy back in @ $2B.

Q&A

  • Small firms can get involved in China & India by focusing & choosing 1 & not the other & finding a local partner as a co-owner.  To pick which 1 depends on the goal & the industry.  For consumer products, China has superior distribution.  India has better technology.
  • Managed trade could be the answer for the US.  The world might not allow China to take over most of the manufacturing for the world.
  • Chinese & Indian firms are buying foreign brands like Jaguar & LandRover rather than building their own here.
  • State-owned companies have huge shares but are badly mangaged & very inefficient.  Some industries are highly fragmented & must consolidate.  Corruption is on the wane.
  • Intellectual property protection has improved vastly over the last 5 years although the regulatory framework is still highly protective of local companies.  M&A is not easy, but positioning yourself as a partner help.  B2B companies are wary of being sued in other countries.

My only beef is this was very skewed to the big company perspective.  Gupta freely admitted it takes deep pockets to endure upfront & fixed costs required to start up in these countries.  The most difficult thing is to take advantage of these opportunities on scarce resources & nobody seems to be able to shed light in this way.

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Chicago Tribune columnist on tour through SE Asia

Friday 20 March, 2009

Apparently Chicago Tribune business columnist David Greising was sent on a tour to SouthEast Asia sponsored by the East West Center of Hawaii.  He contributed these stories:

1st of all, all hail when the Chicago Tribune devotes an article to international business.  They seem to be few & far between these days.  2ndly hail sending David Greising to write about these issues, because he seems to be the only writer there who has a grasp for much of anything going on outside of Chicago.  He even quoted a local executive of a Chicag0-based firm, which is exactly the tack he should be taking with these kinds of things.  But I guess that’s the reason I’m writing this article.  He didn’t do enough of this.

He visited 3 countries, Indonesia, Singapore, & Thailand, & as a columnist for the Chicago Tribune only spoke with 1 representative from a Chicago-based company, & didn’t even make that the focus of the article.  We got decent summaries of what’s happening in those countries, but we can get those many other places.  He interspersed a couple of human-interest vignettes, which are always interesting & enlighten the picture, but again available elsewhere.  I didn’t read anything new.  He added nothing that I couldn’t get somewhere else.

Maybe he’s syndicated elsewhere & thus shouldn’t focus just on Chicago.  Maybe his handlers wouldn’t allow him  to contact employees of Chicago-based companies.  Maybe he was just to damn tired or didn’t have the time to get this together.

Regardless, if he’s going to fly all that way, I would have expected more.  Chicago has a number of very global companies that are doing significant volumes of international business.  We hear very little about the world-wide aspects of their businesses.  David had a chance to learn & report on what Midwest-based companies are doing in a very interesting part of the world.  It appears as if he or his editors dropped the ball.  This trips seems to have been an opportunity foregone.

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Münchner Olympiapark…uncovered

Wednesday 18 March, 2009

I checked out this presentation at the architecture school @ IIT Munich ’72: Olympic Architecture and Rhetoric The question to be answered was did the rhetoric @ the time support the architecture?  Pardon me for the indulgence, but I lived in München for a couple of years & spent a lot of time @ the Olympiapark, so even if it’s not business-related, I just have to write about it.

1972 was a marker for architecture which anticipated contemporary design. Part of the intent in hosting the 1972 Olympics was to refute what transpired in the 1936 Olympics in Berlin, i.e. with no monuments, even though the Olympiapark was constructed on an old military airfield/rubble hill (debris of destroyed buildings from the war).

These were to be Olympics in the countryside, influenced by the nearby English Gardens , with small trees to emphasize the size of the manmade hill to appear larger & reflect the image of the nearby Alps.

The roofs were modeled after tents “designed by nature” itself by the Institute for lightweight structures in Stuttgart & repudiated the domes of the ’36 Olympics.  Extremely complex models were made by hand with many feedback loops, at 1st without computers until 1969.   Originally all Olympic bid-reviewers said the roofs couldn’t be made & they were still being designed even after the foundations for the buildings had been set, but they were completed.   These roofs were also advantageous because they did not cast shadows, which was good for TV coverage.

Q&A revealed that since München now has a new fußball (soccer) stadium, the ’72 stadium has become an unused catastrophic monument itself, hosting only a few events/year. Ironically, the roofs were never seen as a technological achievement in Germany.  The success was seen in the combination of natural light & materials.

I saw concerts @ the Olympiastadion Olympiahalle, & Theatron, swam in the Schwimmhalle where Mark Spitz won 7 Olympic gold medals, watched hockey games in the Eisstadion, ran through the Olympiapark, & even took a bunch of pictures of a triathlon when I was there a few years ago.  I’m a little sad that it sounds like it might be falling into disrepair, but coming up on 40 years is a pretty good run.  Europeans don’t tend to tear things down as quickly as we do, so I wouldn’t be surprised if they find some way to extend the life of this place.  I spent a great time of my life there-I’ll always go back.

I asked the presenter & guy who recorded the video to send over their materials or links, but haven’t heard back from them.

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Distressed M&A in Canada

Monday 16 March, 2009

I had lunch with Canadians down from the great white north for this panel discussion Distressed M&A in Canada .  Here are the presentations they made.  Contact information for the presenters is included with the presenations if you want to follow-up with them.  Here’s what wasn’t included in their presentations:

Restructuring & Insolvency-M&A transactions totaled only $14B in January in Canada, but bankruptcies have risen from 4% to 9% in the past year.  Canada’s deficit of $35B is just 1 tranche to Citibank.  Automotive troubles hit Canada hard because Ontario produces more cars than Michigan.  Buying opportunities are not there because financial holding companies don’t want to call in defaults yet.  The C$ is taking a beating because of commodity & oil prices.  Walmart has shut down Sam’s Clubs in Canada & the print media industry is in the same condition as in the US.  In insolvency proceedings, judges in Canada are concerned with saving jobs.

Tax-he pretty much just read the presentation, so look for the info there.

Anti-trust/foreign investment–  the Minister of Industry must approve foreign acquisitions, so there has to be net benefits to Canada in terms of jobs & capital expenditures in 3-5 years.  This is a very political topic, especially when national security is concerned.  There are implications on harmonized timing that will align better with the US but perhaps take a little longer & create a little less certainty.  Be proactive & anticipate requests to speed-up the process.

There was only time for a little Q&A-It’s been advocated that foreign ownership rules, especially in telecom, be relaxed, but again it’s a hot political topic.

My take-M&A is hot everywhere, Canada included, so give it a look, ifyou can find the financing.  Given Canada’s economy is doing better than that of the US, it would be interesting to talk about Canadians acquiring US firms, but given the size discrepancy, there will always be more US firms looking to buy Canadian firms than the reverse.  Also, it’s beyond the scope of the presenters because Blakes “opened our Chicago office in 2004 to assist our U.S.-based clients with Canadian components of cross-border transactions…As we do not practise U.S. law, we will work closely with your U.S. law firm to assist with your cross-border legal needs.”

Andrew Busch, Global FX Market Strategist for BMO Capital Markets’ Investment Banking Division in Chicago & former McCain advisor gave his take on the curent financial crisis.

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SDL localization roundtable event

Wednesday 11 March, 2009

I attended this event recently SDL Round Table Event: Chicago which provided some interesting insights into how the current poor state of the world economy is affecting global firms.  The moderator Allison McDougall of SDL posed questions to the panelists from Garmin(G), GE Healthcare (GE), Johnson Controls (JC), & (SDL).

Is localization’s visibility higher or lower now compared to 2008?

  • GE-more important now because you need to be proactive & ready to simship (ship simultaneously to all markets) when things turn around
  • JC-intense pressures are leading to a focus on emerging markets for growth
  • G-you need to go where the $ are & do more with less in seeking new markets-spend the same, but get more for your $, i.e translate software strings, but not necessarily technical documentation until needed
  • SDL-traditional markets are tapped out, so work with the minimum by testing to see how much you need.

What are the current trends?

SDL-immense focus on cost, but outsourcing to low cost locations only gets you project managers from those countries.  Otherwise you have to use the same in-country resources.  The per/word cost is only 35-40% of the whole GILT process.  CMS, XML, etc. strategies still matter.  Community-based translation doesn’t work well.

What can be done to minimize the cost of localization?

  • JC-to not translate is not an option.  Pick & choose which components to translate by asking what touches end customers in which countries.  Some (Germany) require more than others.
  • G-avoid hidden costs (i.e. indirect labor costs)by planning upfront & do it right the 1st time-revisions are much more expensive.  If your distributors do your translations “when they have time” they lack quality & timeliness.
  • GE-use a common user interface wherever possible to drive commonality.  Changing 1 word @ $.25/word into 32 languages costs $8/word.  Manage translation memory & terminology well.

What have you learned/what process would you change with hindsight?

  • GE-focus on 1 brand for the customer.  Single source & translate on an ongoing basis rather than ad hoc.  Simplify & standardize the process by using proper English to deliver on-time. Negotiate with your provider.  Reexamine 100% word matches every 2 years.
  • JC-translation costs are invisible to management, so you need to get them to understand those costs.
  • G-educate new engineers so that they don’t fear the “localization police.”

open Q&A

Are small-medium-sized businesses hunkering down or continuing global expansions?  SDL-going global is no longer a choice, but it depends on what you’re selling by balancing revenues vs. costs.

What arguements work with top management when considering outsourcing GILT?

  • G-distributors doing translation is not for free.  You lose time to market & hence missed revenues.  Quality suffers when not done by professional linguists.
  • GE-focus on quality-corrections cost more after the fact.

My take-this is all good stuff.  I was just disappointed they weren’t able to get more people out…& there should be more from smaller firms, not just the big guys.