Operating a global business in a post-9/11 society presents a huge list of challenges. Global trade expert Tom Travis’s “Tenets of Global Trade” can help any international entrepreneur meet those challenges on a global scale.
We have all heard that the world is flat. And while that may be true, the world is also very large and populated by divergent peoples. Boundaries are becoming blurred as world governments and multinational companies seek to further their economic reach. And as business becomes increasingly global, entrepreneurs must organize, plan, operate, and execute in new ways.
“Sometimes, the complexities of doing business on a global scale can feel overwhelming,” says Tom Travis, author of the book Doing Business Anywhere: The Essential Guide to Going Global. “But there are certain basics that define successful global enterprise that hold true for senior executives as well as entrepreneurs new to the global stage. While fluency in the language of trade won’t guarantee you success, it will certainly maximize your chances of competing on a global scale.”
Travis says he wrote his book to help global entrepreneurs understand trade opportunities and avoid costly mistakes. In it, he isolates six “Tenets of Global Trade” that any successful entrepreneur must know. These vital principles apply to doing business across the globe, regardless of country, commodity, or culture. Using real examples and real industries to explain global commerce, Travis shares the keys to business success on the global stage.
Take advantage of trade agreements: think outside the border. To successfully compete in today’s global marketplace, you must understand trade agreements and preference programs and how they can impact your business. “Decisions about where to set up a business venture, how to locate the best sourcing opportunities, and how to develop a strategic plan for the future are all dependent on a thorough knowledge of the trade opportunities these programs provide,” says Travis. “Global entrepreneurs need to aggressively pursue their interests not only during trade agreement negotiations by defining a clear agenda and getting involved in the trade policy formulation process, but also after the agreements have been implemented to take advantage of new opportunities. Companies participating in such negotiations and those that scrutinize the details usually end up winning. Those that don’t frequently lose their competitive edge.”
Protect your brand at all costs. Protecting your brand means protecting your company’s image as well as its intellectual property. While the proliferation of piracy and counterfeit goods requires vigilance when it comes to worldwide copyright, trademark, and patent protection, every global company must also protect its international reputation by paying attention to the human rights and environmental practices of offshore facilities with which it does business. “With a global business, you want to be producing the best products possible under the best circumstances possible with the best foreign business partners possible,” says Travis. “Do this and you can protect your company’s reputation with its most important constituency: its customers. If you don’t take care of your brand and its reputation, not much else matters.”
Maintain high ethical standards. Maintaining the highest ethical standards, and requiring your trading partners to do the same, has become a business necessity in today’s international climate. Your company must establish its own standards of acceptable conduct, communicate those standards both internally and to all trading partners, and enforce those standards through internal monitoring systems. “We’re operating in a world where watchdog groups and governments are constantly looking for unscrupulous business practices,” says Travis. “If your company is doing something it shouldn’t be, I guarantee you it will be uncovered eventually. That’s why it is so important to have a clear set of values and practices that all your employees follow without question. Hold your overseas business partners to those standards as well, and make sure you never partner with anyone who might not conform to local or international laws. Ethics, social responsibility, and other issues of corporate governance are an absolute business necessity in today’s global marketplace.”
Stay secure in an insecure world. In the post-9/11 world, transparency in the supply chain has become a clear priority. While security of cargo from theft and loss has always been of great concern to global traders, the tragic events of 9/11 ushered in a new era of compliance with global security requirements. As companies tighten up security, they are beginning to see that there are ancillary benefits to greater control over the supply chain in the form of improved efficiencies, inventory management, and loss prevention. “The September 11, 2001, terrorist attacks were the catalyst for sweeping changes in the way international trade operates around the world,” says Travis. “If your company isn’t doing everything in its power to follow new security requirements and get involved with government-sponsored programs like the Customs-Trade Partnership Against Terrorism, your company and its cargo will get left behind. New security dynamics are not only necessary to protect international borders from terrorists, but have become an integral part of conducting business around the world.”
Expect the unexpected. When managing a global business, you must be prepared to deal with situations that aren’t covered in traditional business plans. Whether the event creates opportunity or peril, how you prepare and plan to react to the unexpected must become an essential part of your global strategy. Whether the issue is a natural disaster that disrupts distribution channels, an outbreak of influenza that can shut down commerce, worker strikes that close down ports, currency crises that turn a region’s economy on its head, or a surprise coup d’état in the country where you just opened a new factory, the longer you are involved in international business the more likely it is that some issue will arise that was unanticipated and unplanned. The smart global entrepreneur always expects the unexpected and has a flexible enough infrastructure to change course when circumstances dictate.
All global business is personal. Resolving disputes in business is always a challenge. When the person or group with whom you have a dispute is halfway around the world, finding a resolution can be next to impossible if you don’t already have an established personal relationship with them. Forming personal, face-to-face relationships is key in global trade. In fact, a great rule of thumb to follow is the farther apart you are geographically and culturally from your offshore counterpart, the more important it is to meet face-to-face. To be the best global entrepreneur, you’ll have to do a lot of traveling to maintain these personal relationships, and you’ll have to make yourself available at places and times that may be inconvenient or even perilous. “Creating these one-on-one relationships with your overseas business partners will have a huge payoff,” says Travis. “Whether facing a business dispute or pursuing a new business opportunity, personal relationships, especially at the senior level, can make a big difference. International business is not a 9-to-5 job, but the extra time you spend building personal relationships with your foreign counterparts will help your business achieve success in the global marketplace.”
These “Tenets of Global Trade” should serve as the backbone of your efforts to build or expand successful global businesses. Equally important to the Tenets themselves is the unique way these principles work together to develop the critical element of transparency for your company. Because the Tenets help global businesses become transparent, they not only enhance compliance with government rules and regulations, but also are critical to the management of global enterprise. Transparency facilitates communication of responsibilities, goals, and standards of conduct among the different players, teams, and affiliations that comprise the global business model.
“If you follow these six Tenets of Global Trade, you will be better able to handle the realities of today’s global trade environment. You will have systems in place to avoid public relations disasters that can result from scandals, security breaches, or ethical breakdowns,” says Travis. “And with proper planning, unexpected natural disasters, financial market drops, or government breakdowns will not stop you from doing business. Your company will be prepared on every level. And you’ll be operating under a set of principles that show corporate governance and social responsibility are important goals that go hand in hand.”