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Strategic Management of Corporate LocalizationMaking localization central to corporate strategy
As the market continues to be volatile, many companies are looking to cut expenses and hold on to their cash – conversely, leaders are also aware that an economic downturn is the perfect time to capitalize on competitors troubles and leap ahead. Expanding into new global markets is one example of where planned expansion can reap big competitive rewards.
What do successful global-companies know that you don’t?
The most successful global companies understand three things better than their competitors
1. Their industry 2. The markets that represent opportunity for that industry 3. The level to which their product-offerings must flex to meet the needs of individual markets
Understanding which products for what needs and where in the world that applies is critical in developing a strategy for global-scale operations. Knowing when to invest in preparation and how to create competitive advantage from that is the thing successful global-scale organizations know that others don’t.
In today’s current markets, companies risk potential losses from entering a market too late, too early and of course, not at all. Being unready to take the opportunity – being unprepared for globalization – is a critical sin, but it is the situation most companies find themselves in. Whether you are a localization manager fighting to prove your team is not overhead or a run a line-of-business that believes there is opportunity in new markets – finding budget to prepare in advance of the global push is tricky.
The question is, “How do energize the company to prepare for global-markets ahead of the need for timely entry?”
Is your localization strategy suitable for global-scale localization?
A company’s content, and the translation of that content, is often seen as a “cost of doing business outside the home market.” In reality, that global content is a collection of assets to be leveraged. Like a piece of hardware, a physical installation or a number on a balance sheet, there is inherent and tangible value that can be placed on the content – as long as it is leveraged appropriately. Before this becomes an op-ed piece on global content management, let me put it into the context of localization and your localization strategy.
What those successful organizations know is that an effective global strategy requires a flexible, global-scale localization strategy. Translation is not a core-business for most organizations. Localization is typically seen either as something to be taken handled by line-of-business managers, on an as-needed basis by in-country managers or through localization departments – none of which are particularly flexible methods of working.
So the original question was “How do energize the company to prepare for global-markets ahead of the need for timely entry?”
Assuming your organization already operates in more than one market you have the basic skeleton. Next you must show that when new markets are suggested you are able to quantify what your management need to know; how long will it take, how much will it cost, what is the risk, how difficult will it be?
Unfortunately most localization departments are forced by circumstance to focus on the tactics of dealing with today rather than the strategy of supporting global-business. Shifting your organization from the one to the other is hard but it is necessary if you are to demonstrate how your organization is prepared to meet the competitive challenges of 2010 and beyond.
What Can You Do to Mirror the Successful Global Organizations
There are three things that truly successful localization departments that separates them from the rest of the pack:
First, you cannot generate lasting change without executive support. Especially now, with corporations tightening the grip on spending, areas like localization need to be seen as essential, rather than just a means-to-an-end. To do this, you have to “provoke” your executive champion to take action and support you.
Saying, “localization is important” will generate nothing from your executive, but helping them understand, “we have consistently lost 15% profit margin for the past 2 years in these 3 markets because we reacted to need for local-language materials instead of being prepared” should get their attention. If you are working closely with a partner vendor they should be able to support the creation of this kind of messaging and the presentation to back it up. If you are treating localization as a commodity it will be more challenging but still not impossible – if in doubt seek help from an external consultant with experience in this area.
Your next job is to help your executive understand that although localization has a very narrow scope, it has a large business impact – this translates to opportunity!
Every part of the organization is touched by those handling the localization. It is one of the few operational processes where the impact is felt across the entire company from sales and marketing to product development and customer support. This breadth is important, because part of provoking your executive champion is to showing how vast the impact of localization can be to the organization.
Last, you need to know that there is no “cookie cutter” fix. Every company will have a specific solution for localization that is right for them. Every localization strategy has to be fluid to account for new markets, products and business need. No matter how similar in size and scope to others within their industry the problems – and therefore the solution vary. The key is to develop a global-scale localization strategy that can account for those changes when they come.
So, in summary
5 comments to Strategic Management of Corporate Localization |
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Excellent article.
My mid-range objective is to gain executive support, in order to achieve our long term goal of successful localization of our web presence. One of our short term goals is to build a series of quick wins to establish successful localization stories, in order to make gaining support of an executive easier.
However, this seems like a case of “the chicken or the egg.” We struggle with regional support, and corporate support, both from a funding and resource perspective.
Can you offer insight on some of the ways other companies are dealing with this part of the journey to localization success?
My words of wisdom on the topic.
Organizational change with regards to localization doesn’t happen fast, unless you have an executive that gets it and most don’t. So you have to speak their language and not the localization language.
Execs language is money. So you need a story that addresses money in some way to get anyone to listen.
Depending on the maturity of your organization with regard to globalization, you have a wide range of approaches.
1. Start in the area where you have some control over the factors. External spend goes right to operating costs or costs of goods sold depending on the work being done and the accounting practices being followed. If you look at your external spend numbers and they are really large, say $3 million and you identify ways that can reduce that amount by say 30% … with little investment, then you should be able to at least get the attention of an exec.
That analysis could entail … reviewing all the costs you’re paying translation agencies, translation, project management, tm management. What of any of those costs can you eliminate or reduce through better process or better tools. Tools investment, if you’re putting forth suggestions on this, be wary of how long the return is on the investment, if you can show a quick return, then a common sense exec should see that as a no brainer move.
These types of things are things you can influence and get the small wins. Then you’re getting the attention of the execs hopefully.
Then you need to be ready with the next things that impact costs.
Localization is a downstream team in most processes, the rate of change above is too high, and it’s causing us to translate and retranslate and put extra resources. We’d like to look at that process and try to optimize it.
This optimization is where you get your in to other departments and educate them on the impacts they are having.
There is no silver bullet. It took my teams 7 years to get the well oiled machine we had. Lots of education, lots of trial and errors. Lots of successes and some failures. As long as you aren’t looking for a silver bullet.
And be wary of service providors who call saying they can save you 20% on your costs. I used to ask, and how exactly are you going to do that … it will give you ideas, but what you’ll find, if you’ve already started doing optimizations … then the 20% isn’t there. But use the opportunities to get ideas.
Verbose and I probably could go on and on … but this is where we started and now we simship in 17 langauges.
Domenic –
The good thing is, you have already started thinking strategically. Putting a skeleton together of short, mid and long-term goals for the localization strategy that align with what the corporation is trying to do goes to go a long way towards the success of your localization efforts.
I would like to dive right in to addressing your concerns about regional and corporate support. Regions are often centers of power because they hold the money (because they are responsible for their P&L). Whether or not a coordinated, centralized approach to localization is appropriate may well be moot if your organization entrusts regions with those decisions. That said, there are three things you can do.
First, understand what benefit your organization brings to the regions. If your message is centralist in nature you won’t be bringing anything to the table of a regional manager. Use internal case studies that demonstrate cost savings, quality improvements, better time to market or removal of internal administrative headaches – whatever makes a compelling case for your company. Put that information, along with a short description of your strategy into an easy to deliver PowerPoint and make sure you know how to deliver it in a way that doesn’t put people to sleep… if there is one thing I have learned in this business it’s that most people don’t care as much as we do!
Next, make sure you have a thorough understanding of your company’s decision making structure when it comes to localization – however formal or informal that structure is for each market. Identify the people you need to convince by name and role bearing in mind that the structures may vary greatly between regions. While you are at it, work out how services are internally billed and managed and how much of a headache this is for the regions.
Last, once you know the people and their roles, put it all together and start talking to them. Oh, and don’t forget your day job!
Jonathan, thanks for this article, and the timing is perfect.
I had made some comments in the LISA LinkedIn group (Global Strategies: Watch Your Language) about Don DePalma’s article that was published in the “American Executive” magazine ( http://www.americanexecutive.com/index.php?option=com_content&task=view&id=7124&Itemid=103&goback=%2Envr_60478_1243593038761_1 ).
We from the localization business know that it is important to localize. However, in many cases this message has not arrived yet at executive management level. Even if the hierarchy is flat, as a localization project manager or localization manager one cannot walk up to executive management and tell them that localization is important. And if you go through the normal channel then the message might never be delivered. Companies would like to penetrate foreign markets – be it from East to West or vice versa – but I think there is the notion that one can do it without localizing – taking a shortcut, which might work in the short term, but not in the long run.
Therefore, I think that localization and localization strategy should be part of curricula of e.g. an MBA degree and programming classes as well so that the future executives and programmers are sensitive to this aspect.
Don DePalma speakes of the “localization maturity model” ( http://www.gala-global.org/GALAxy-article-localization_maturity_model-5955.html ) where he describes how companies approach localization, and he hits the nail on the head.
Whatever your strategy was, you had probably changed it recently as the financial and consuming rules have been changing worldwide.
I believe flexibility is indeed the one thing you should never compromise on. That’s what gives our clients the competitive advantage nowadays.