Taking the Optimal Route

This week, I had the pleasure of speaking on a panel at the Forbes Asia CEO Conference on “taking the optimal route” – How do CEOs lead across borders? How do you innovate and serve consumers worldwide who have different tastes? Since people are our greatest asset and competitive advantage, how do CEOs ensure they are hiring the best and brightest talent?

I was joined by fellow panelists Mr. Fu Jun, CEO and president of China-based Macrolink Group,  Herb Kohler, president and CEO of Kohler Companies, Gary Loveman, chairman and CEO of Caesars Entertainment, and the head of public policy for Ernst & Young Beth Brooke. Kohler and Caesars are both good Dell customers, and Dell works closely with E&Y on many of our entrepreneurial ventures including the Dell Women’s Entrepreneur Network and their Strategic Growth Forum and Entrepreneur of the Year program.  Probably the most fun we had during panel discussion was when the conversation turned to technology and toilets. A first for me, I have to admit, but something Mr. Kohler and team have been working on for a while to meet the needs of customers in Japan and now worldwide! There were many meaningful topics covered, and I’ve highlighted a few key takeaways that most CEOs I encounter are thinking about as they grow globally:

  • Credit availability was discussed a lot – if people don’t have adequate cash flow they can’t make technology purchases, remodel their homes or head to the blackjack table. Consumer spending in mature markets has slowed in all of the industries represented on the panel, but technology spending in the SMB sector has continued to grow and is growing substantially outside of the U.S. and U.K. That said, lack of access to capital is impeding innovation – if these businesses had the capital they needed to fuel growth, we’d see even more innovating and hiring from the SMBs. The bigger companies don’t need the financing the banks are willing to give them. We need to invest more in smaller companies that need the capital to build products and bring their great ideas to market.
  • For the companies that do have the means to invest back in the business – investing in things that improve productivity and efficiency are the priority. Spending money to save money. And that’s what Dell is here for – to help customers take advantage of emerging technologies like cloud computing, virtualization (software that allows you to split workloads worldwide and share capacity), and server and storage architectures to help manage the data deluge. The connection from data center, whether on-premise or in the cloud, to the person accessing that data is stronger than ever, and Dell is committed to being the end-to-end technology partner customers can count on.
  • Because of slower growth in mature markets, companies are investing in countries like India and China; however, understanding local laws and restrictions is critical. There are restrictions in many industries customers have to face, like the gaming industry as Gary discussed, making public policy at the local level especially important.
  • It is also critical to get close to your customers, segment various customer types and geographies. For example, technology spending is typically a multiple of GDP growth. We’re seeing 4 to 5 % growth in technology  spending in the U.S., for example, and in countries like China and India it’s growing at 20-plus percent.  We are seeing a slowdown in consumer spending and consumer confidence in mature markets, but business spending (80% of Dell’s business) is healthy as companies look to invest in productivity tools like IT. By segmenting customers and geographies, companies can better navigate when, where and how to grow. And technology is leveling the playing field for companies of all sizes to access the information and analytics they need to do this effectively and affordably.
  • Investing in the best and brightest talent is something Beth and I discussed a lot. E&Y’s business is people and investing in markets ahead of their clients investing there is key for E&Y. This is a priority for Dell as well. We have a $12B business in Asia with 40,000 employees and run many of our global functions from the region including Global Procurement and Consumer, Small and Medium Business Services. Over the years, many of our best practices have come out of Asia like our Caring Manager program and new product designs that took off in Asian markets first. In the beginning, we had a lot of expat leaders running our divisions and country teams, but have found that customers and employees don’t want westernization to come in and run the local business. Business is done locally, and we are investing in local leaders and teams to best meet the needs of local customers while leveraging the scale, talent and innovation of Dell globally.

Beth said it well when she said “Great leaders understand the need for difference. But leaders must go beyond understanding to a passion for difference and diversity. Manage the friction. Harness it.” I’d love to hear your thoughts and how your company is “taking the optimal route” to global growth.

About the Author: Steve Felice