Building castles in the sand? How to ensure enterprise resilience when expanding internationally

The UK government is pushing the expansion of UK business abroad. This week (7-11 April) it’s UK Trade & Investment’s (UKTI) export week and there are a series of events aimed at helping businesses look overseas.

For many companies, emerging markets are providing an increasingly significant proportion of their sales and profits. Unilever, for example, generated 57% of its sales from these markets in 2013, with growth of 8.4% compared to 4.3% for the whole business.   

At the same time, many businesses are grappling with the challenges of managing their overseas operations. So how can businesses plan their overseas expansion, while at the same time ensuring that the resilience they have built at home translates into a completely new operating environment – with all the challenges that entails?

Baking resilience into your expansion plan

Before entering any new market you will want to be sure what impact it might have on your overall resilience, both over the short and long term.Resilience is about the ability to spot, react to and recover from short term disruptive challenges. In the longer term it’s about adapting to and evolving in response to more significant changes in your operating environment.

As a starter, you will need to understand the business landscape of your chosen country – including some of the issues discussed in previous Pioneer blogs:

In order to work towards a more resilient future, you would also need to consider longer-term issues such as possible nationalisation of industries, the impact of ageing populations, increased employee rights and the adaptability of your in-country employees if the global demand for your products changes.

All of these questions would help to inform a “go” or “no-go” decision, and form part of your transition plan by providing the basis for a series of actions to help mitigate the risks. Comprehensive horizon scanning and stress testing of strategies will support this activity.

Building in-country resilience

Once in your new territory you will also need to think about how to protect your new operations. Traditional forms of operational resilience provided by functions like risk management, business continuity, IT resilience, security and safety will all need to be considered, among others.

However, it won’t be as easy as applying the processes in the UK to new markets. They will need to be tweaked to reflect local risks, cultures and the regulatory environment. This is where the quality of your initial country assessment will pay dividends.

And expecting the unexpected

And finally, you will also need to keep in mind that being resilient is never completely achievable. Black Swan events and human errors are two key reasons why no organisation can say they are completely resilient. So, on top of all of this, you will need to ensure you have a robust response capability to manage the impact of a crisis both in-country and at your operations back in the UK.

 

For further information on our Resilience and Pioneer programmes, please click here. And read more about Enterprise Resilience in our blog here.

 

What’s impacted your enterprise’s resilience in new markets? How have you overcome them? What would be your advice to others? Share your thoughts below or contact us to set up a meeting to discuss things more confidentially here.

James Crask | Enterprise Resilience Specialist
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