High Involvement Managerial Strategy

Building The Global Startup: A Roadmap To Success In International Expansion

In my last post, I discussed the importance of developing an explicit international strategy. But who should drive the process, and how can you best achieve commitment to its execution?

The Loudcloud Experience

The first couple of years of Loudcloud, one of the original cloud computing companies, which later became Opsware and was sold to HP for $1.65 billion in 2007,   provide a useful illustration of the challenges of rapid international expansion, even in the best-managed companies. The business had taken off like a rocketship from its founding in late 1999--revenue grew from $2 million to $55 million in a year. While that growth was exciting, it led to a very high financing valuation for such a young company: $820 million for a company just nine months old. High valuations mean high expectations, and bookings expectations for Loudcloud were sky-high. To add to our challenges, we had more than 30 competitors rushing to grab market share. Faced with a large bookings target and nearly unlimited funding, our head of sales came up with a plan to expand internationally, opening European offices and hiring aggressively to build the business as rapidly as possible. The entire business was moving at breakneck speed, and the other functions of the company (including sales management) had their hands full just meeting U.S. customer demands. As a result, the European offices didn't all get the time and support they needed to achieve productivity.

In the extraordinary circumstances of the time, that was understandable, but it proved costly when the rules changed. I joined in March 2001, and when the recession of 2001 hit, we had three fairly expensive European sales offices with varying levels of productivity and maturity. While the U.K. office was contributing, our offices in France and Germany were burning cash that we didn't have, with few bookings to show for it. We ended up shutting them down, at a cost of major management distraction and substantial severance and legal expenses, especially related to exiting France.

Kataweb.it - Blog - TUSITALA » Blog Archive » 'Management Reset ...

http://www.huffingtonpost.com/ed-lawler/manufacturing-jobs-us_b_935584.html

With more than 14 million people seeking work in the U. S. there is clearly a critical need for more jobs. Numerous politicians have stated that the number one concern of the U.S. government should be to focus on this initiative, particularly within the manufacturing sector.

But is manufacturing really the right place to zero in?

I would argue that there are a number of reasons that prove otherwise.

There is no doubt that the U.S. has lost millions of manufacturing jobs over the last several decades and the recession only continues to accelerate this increase. However, often overlooked in the discussion is the fact that many U.S. manufacturing corporations are performing quite well financially. The auto industry, for example, is doing very well in part because they have reduced labor costs dramatically over the last decade — in fact, General Motors recently reported that its labor manufacturing costs have gone from 30 to 10 percent.

There are two reasons why General Motors, Ford and many others have significantly reduced labor costs. One, perhaps the most obvious, is the advancement of new technologies. Machinery and computers have replaced people throughout most modern facilities. Second, management innovations have reduced the need for labor and as a result require fewer employees. Employee involvement, slim organization structure and work teams have made jobs more interesting, demanding and challenging while reducing the number of individuals needed. Employees are now cross-trained; performing duties outside of their main focus including maintenance, set-up and operations management. They do not have to wait for someone to come to repair a machine or reprogram it; these services are now built into a company’s strategic staffing plans.

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