Something we can learn from the US

Here’s an innovative piece of proposed legislation from Senators John Kerry and Richard Lugar.  Called EB-6, basically it says that if you are an immigrant in the US and you can convince an investor to give your new venture at least $250k in funding then you can stay in the US for 2 years.  If within two years, you create at least 5 jobs or raise a further $1m or generate revenues of $1m, you are granted citizenship.

In my view, this is inspired.  Get the smartest people into your country to generate jobs and wealth.  Other countries should look and learn and preferably copy!

Take a look at “The Startup Visa Act of 2010.”

BRIC + US Institute of Directors Conference – October 20, 2009

Last week I chaired the afternoon session of the BRIC + US conference held at the Institute of Directors in London (Hot Spots in a Cold World).

During the day, each of Brazil, Russia, India, China and US were given the opportunity to present why their countries represented significant market opportunities for companies looking to set up in their respective countries. And each of the speakers gave a fantastic picture demonstrating in clear terms why companies of all sizes should consider expansion into these countries. It never ceases to amaze me how little knowledge there is in OECD countries about the high growth emerging economies in particular so let me gave you a few of the numbers that were mentioned:

• In China, there are 274 cities with populations of greater than 1 million people and over the next 20 years, some 350 million additional people will relocate from the countryside to cities
• Russia aims to become a top 5 global economy by 2020 – just 11 years from now
• India is committed to sustainable growth of at least 6-7% per annum leading to it becoming a top 3 nation by 2050
• 47% of Brazil’s energy already comes from renewable sources making it a global leader in the field
• The population of the US will reach 400m by 2040 making it the 3rd most populous country on Earth after China and India

The message from the conference was clear, you cannot simply think in domestic terms, if you really want your business to succeed, you need to take an international perspective.

Cultural differences or trust?

Often issues when working with an offshore operation are put down to cultural differences.  But I wonder how much of the issue is simply one of trust between co-workers?  When you work side by side with someone and have lots of regular face to face interaction, it’s easy to build up trust.  With trust comes the ability to give someone the benefit of the doubt.  If a deadline is missed but isn’t usually, the natural inclination is to assume something out of the ordinary must have happened.

Add distance and a different country to the equation and only occasional face to face time, and suddenly doubt enters the equation.  The temptation is to assume the worst and be pleasantly surprised when things go to plan and deadlines are met. Fundamentally, trust goes out of the window.

Yes cultural differences will mean that people go about things in different ways but if you are able to build trust and assume your co-workers are fundamentally good at their job and have their heart in the right place, then actually everything should be fine

I’m not saying that you naively assume everything is ok from the very beginning.  Trust has to be earned, but once it is, you are better off assuming that fundamentally you’ve got good people who do their best to do a good job more often than not. On the other side, remote team members should realize that trust should not be lost of easily given away and everything possible should be done to maintain it once it’s earned.

This then becomes self fulfilling and the foundation of a high performing remote team.

Extracts from our client event yesterday

Yesterday we ran our UK client forum gathering together most of our clients as well as a few prospective clients as well as Quickstart Global team members from around the world.  Countries represented were the US, UK, India, Bulgaria, Vietnam.  Below is an extract from the opening remarks that I made:

As we have been planning today’s client forum over the last 6 weeks or so, all of you will be very familiar with the tumultuous events that have been occurring in the financial markets. I think it is probably safe to say that Government intervention across the world has probably averted complete financial meltdown. But all eyes are now on what is likely to happen in the real world and how events are likely to impact on our companies.

My belief is that although credit markets are tightening, and consumer spending is reducing as consequence, I’m not sure things are really are so bad. The risk at the moment is that we potentially talk our businesses down and we fail to take advantage of the upswing when it comes. Phillip Green, owner of BHS and other High Street retailers last week said BHS like to for like sales are down 1.5% year on year, which of course means they are 98.5% of last year. Stuart Rose at Marks and Spencer is pressing ahead with a huge store refurbishment programme so that he is ready for the return of consumer confidence when it comes.

I did notice last Friday that none the mainstream UK news programmes across BBC, Sky and ITV, contained a single item related to the financial markets, probably the first day in 6 or 8 weeks that the financial crisis has not made the 1^st or 2^nd headline in a major news bulletin. Of course, the news that overnight libor rates reduced to less than 19 basis points over base rates or that the FTSE100 index was up 5% on the week were both deemed to be too much like good news for the “bad news hungry” media networks to cover!

As for the rest of the world, China’s growth is still expected to reach 7-8% per annum next year while India’s growth should reach between 6-7%. Obviously this is not the 12% and nearly 10% respectively that was reached last year but still growth none the less. Possibly, the good news is that more moderate growth levels of just 6-8% will likely stop both of those economies from overheating, keeping a lid on inflation and therefore costs.

In the US, some companies are continuing to prosper. For example, salesforce.com profits are expected to grow by 100% over the coming months. Yet negative sentiment has driven their stock price down 50% in the last three months. I can see why Warren Buffet is voting with his wallet and announced on Friday that he was buying into US Equities, particularly as there are some real bargains out there that have been knocked back on overall sentiment rather than actual future earnings forecasts.

Another positive indicator is that ratio of directors selling versus buying their own company shares. Normally the average is 2.5 selling to 1 buying. Last week, that ratio peaking at 1 selling to 25 buying indicating that they felt their shares were significantly undervalued compared to future performance estimates.

I can absolutely see at the moment that despite the perception of very bad news, things are perhaps not as bad as we might think and companies that continue to have growth ambitions are likely to be well placed when we emerge into 2010 than those that have scaled back their ambition and fallen for bad news stories that are dominating the media.

I can also see that regardless of what happens economically over the next year or so, there are numerous mega-trends out there that will outpace the worst of any recession. Consider the following:

• Mass urbanisation will continue in both India and China leading to huge demand for literally tens of millions of new homes as well as associated infrastructure investments including airports, roads, railways, organised retail, schools and universities
• That same trend will create millions of new consumers across emerging countries. It is estimated that more than half of Brazil’s population is now middle class which means more than 100m people have a job giving them between $600 and $2,500 per month, have access to a credit card and own either a car or motorbike. And that’s just Brazil, imagine anything from 300m to 500m new middle class consumers across the world over the next 10-20 years, that’s more than either Europe or the US
• The Internet will continue to mean that knowledge workers are no longer bound by geographical constraints, leading to cloud computing, easy, low cost communications, amazing media models as well as distributed workforces and new ways to staff companies

Remember also, history shows the greatest innovations occur during periods of economic downturn. And some of the greatest companies were founded during some of the most difficult economic periods in history.

Here’s a list of examples, all of these companies were founded in the 1930’s, as we all know, another turbulent time.

• Motorola
• Hewlett-Packard
• Xerox
• Ryder
• Unisys
• Texas Instruments
• Revlon
• Converse
• La-Z-Boy

All these companies were founded during the 1930s to exploit new mega trends that emerged at the time. For example, Unisys’ predecessor, Sperry Corp was formed in 1933 to provide artificial horizons and directional gyroscopes to emerging airmail and commercial airliners.

More recently, Google’s breakout year was 2001 during 2001 to 2003 technology downturn. At that time, companies had to look for a more effective way to advertise and they found that buying leads on search engines was measurable, easy, and highly profitable. (some of this content came from http://summation.typepad.com/summation/2008/03/recessions-prom.html)

So in conclusion, what I’m really excited about is what some of our clients are up to. I am completely convinced that a combination of innovative thinking and global leverage will create the Motorola’s and Hewlett Packard’s of the future. Our clients have worked out that they can hire and manage staff across the world, can sell into global markets and can structure their cost base in the same way as any multinational and together with amazing entrepreneurial spirit that means that I really believe we today are lucky enough to be amongst future winners.

During the day today, you will have the opportunity to hear from people from our delivery centres across the world as well as hear detailed case studies from two of our clients, both of which are great examples of future winners. Both eCommera and Clear Cell Group have broken through their own glass ceilings and their only limit is their own ambition. These guys are not fazed by the thought of managing remote teams or selling into new markets. They’ve worked through the issues, solved the problems and have set themselves up as future business superstars.

I salute our clients and wish you every success for the future. I am completely confident that because of what you’ve already done with us, you are set up well to cope with whatever the next year or two brings. Your cost structure is competitive compared to your industry peers; you’re able to leverage skills to bring great new propositions to market; you’re able to access new and exciting markets to grow your companies.