Tech Firms Unprepared for Global Expansion?

Forbes has today published an article, Tech Firms Unprepared for Global Expansion, which confirms what we at Global integration have known for a long time – the human capital issues around expansion are far greater for technology firms than funding issues (although the irony of technology rating as a factor in expansion difficulties brought  a smile to our faces here at Global Integration).

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Many companies adopt complex or matrix structures in order to make the most of their precious resources, expertise and technology – its unsurprising that less than a third  leverage scale effectively, less than a quarter can respond to changes quickly and less than a fifth capitalise fully on their international expansion.

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The biggest challenge? “Human capital.”

Much of what the article implies are structural solutions – using crowdsourcing, cloud technologies (shared use of external resources) etc. Yet sourcing employees in new locations, allowing external partners access to company systems, new ways of working – all of these need huge changes in management techniques and approach, so it is little wonder that many of these technology companies struggle.

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Technologists often overestimate the value of process and technology and underestimate the people challenges. For traditional tech teams more complex and ambiguous matrix management, virtual team and global leadership practises may prove hard. Control, certainty, hierarchies, traditional ways of managing ourselves and others need to shift towards cultural awareness, acceptance of ambiguity and new ways of communicating and influencing those around us.

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“Beginning now, firms in this industry should look hard at their competitive essence and operating models. They need to identify their competitive essence; their magnetic pole for guiding the choices and decisions across the firm’s operations,” conclude the specialists at Accenture.

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Whilst this is undoubtedly so, the biggest single factor in this, as the authors themselves have identified, is ensuring that managers at all levels, but particularly at operational, middle management level, have the skills to unblock the perceived barriers to international success. And for the same reasons that technologists may struggle, they also have all of the skills inherently required to adapt – most are used to collaborating through technology and working to multiple demands.

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It’s not easy, of course, but neither does the change required have to be hugely challenging if approached the right way. Indeed, it can be empowering and will ultimately lead to less frustrations and happier workplaces, as well as the jewel in the crown for most of them: faster, more successful growth.