Frequently asked questionsPosted: August 31, 2007
I’ve now been interviewed a few times about internationalization, with respect to the US market in particular. I have noted that in every case there are basic questions that reporters are looking to get answers to and I would like to take this chance to answer in more depth.
1. Does the US market really provide a better ROI than a making the same invest to a European country closer to home?
Answer: If we look at the situation in absolute figures, the US market it is by far the largest homogeneous market in the world. It also has the highest IT spending of any homogeneous market. Most of the IT spending in the US is conducted close to the Washington – Boston railroad and US Highway 5. Then you have the a few stand alone metro areas like Atlanta, Dallas-Fort worth, Chicago and Seattle.There are only so many hours in a day and with such a large percentage of the global IT spending being concentrated geographically in fairly focused areas it can be argued that the higher concentration of prospects within easy access and minimal investment of time and capital would lead to higher sales productivity.As an example it would cost a comparable sum to establish operations in Stockholm as it would in Dallas. The Stockholm metropolitan area has a population of approx. 1.7 million, whereas the Dallas-Fort worth metroplex has 5.7 million within easy access.
At the end of the day it’s about opportunity, access and ability to deliver.
2. What are the strengths and weaknesses of Finnish companies when entering the US market?
Answer: I like to phrase it through phases or "dilemma stages". First you have the dilemma of innovation. Finland has a wonderful support structure for nurturing innovation. As a society we are highly educated and enjoy one of the lowest wage structures of any European country. This dilemma is often covered. Secondly we have the "value articulation dilemma". Often we come up with a technological innovation and then we start to think "how could my target customer use this technology to generate more share holder value". This is where Finns are often lacking. Understanding of how large global organizations in specific verticals operate and how they need to evolve to stay competitive in a global economy. Thirdly we have the "sales dilemma". Finns tend to approach prospects with a technical solution to a given problem, whereas Americans tend to present and expect a business solution that is enabled by a certain technology. If we look at large companies like IBM, Microsoft, HP, etc. verticalized organizational structures messaging are relatively new concepts. And lastly there is the "delivery dilemma". Finns tend to have less growth flexibility and one sizeable deal can bog down a Finnish ICT company for a year.
3. How would you comment the horror stories of huge law suits?
Answer: Liability risks management is the major issue in operating in the US market. With skilled legal services partnering these risks can be minimized and managed. I would say that the horror stories we hear result from inexperienced selection of legal services partner, lack of management of that relationship and poor understanding of the US system general. This is where we get the saying that the "blue eyed Finn was taken to the sausage stand". Hundreds of thousands of legal transactions are made each day in the United States. Where one runs in to litigation is with poorly written contracts and lax sales management. I personally see European labor law as a far greater nightmare for a company that needs to adapt to changing markets to remain competitive.
4. What is it like to work in the US?
Answer: As in Finland a hard working ethic, honesty and delivering on what you promise define who you are in a professional setting. One’s ability to access opportunities is defined by the reach of one’s network of contacts and your quality of character. The question is how do you build a contacts base? Americans tend to be less shy and socially more aggressive than Finns. By Finnish standards you have to be an extravert and really put yourself to the front. This requires a certain type of personality and for a Finn often means wondering out side one’s social comfort zone.To begin with all is new and exciting… "the honey moon". Then you need to expand and move outside your comfort zone… "the depression". When you acclimatize and learn the rules of social interaction I guarantee it will be a rewarding growth experience.