Visionaries

INSIDER: What were the objectives of MIIS in running this survey? Why did you choose LISA as your partner?

As part of the research objectives of the Center for the Globalization and Localization of Business Exports (GLOBE) at our Fisher Graduate School of International Business (see below for more details), we wanted to gain a clearer picture of the business dynamics of globalization. We needed to answer questions such as, How is the process of globalization managed within companies? and How do top managers perceive or value the importance of language and localization in relation to other issues of international market development? One major objective was to define the extent to which language service providers could add value to their services by venturing into the realm of international business consulting. We have observed that despite being intimately related, there is a definite disconnect between the localization of marketing strategy and the localization of language. So the question becomes, Can language service providers fill that gap?

We chose to partner with LISA because of the organization’s recognition, its contacts with large numbers of clients and language service providers, and its corresponding aspirations to better define those business issues that will add value to the industry. LISA has been very helpful in administering the survey, and the report provides excellent, substantive analysis backed up by data.

INSIDER: What are the most significant findings from the survey?

The survey confirms our suspicions of a significant hierarchical gap between the boardroom and the localization process, especially in large companies. As a result, language service providers perceive that their services are more valuable to the client than the clients perceive them to be. However, there is hope for providers in that they may make inroads by focusing on certain business consulting areas noted in the report and by targeting internationally minded small- to mid-sized companies where the spread in decision-making is not so great. I believe that the localization industry already has a lot to offer in terms of language and technology solutions, and it would be short-sighted for a CEO to disregard these possibilities.

The survey also provides valuable, practical data on industry prices and technologies used. Language service providers reading the report will learn of areas where their practices and objectives differ from those of their clients. Probably most importantly, this survey and report begin to properly place the localization process within the context of business globalization. We can now begin to understand the international business activities (exporting, outsourcing, international marketing) and the regions (via language pairs) that must be better addressed by the translation and localization industry.

INSIDER: What are the three most critical issues that companies face today as they conduct their international business?

In terms of the exporting companies in Northern California (which is our focus at GLOBE), we know what the major challenges are, since we have survey data on this. The top three challenges are:

• Understanding the legal environment of foreign markets
• Protecting copyright and intellectual property
• Understanding business partnership options in local markets

Other major challenges include understanding the business practices of local markets and understanding international distribution options. Interestingly, translation and localization were considered to be very low barriers to export. This could reflect a low priority on the part of companies, or simply the fact that there are many translation/localization service providers that can help in this area.

In terms of international business in general, it is hard to say what is most critical, but I would point out the following three issues:

• Addressing international market development early on. Many U.S. companies fall into the trap of complacency due to their large domestic market, only to find a steep, uphill battle when competition or saturation leads them to consider international markets.
• Reworking strategies to fit the conditions of globalizing markets. Simply put, people do things differently in other markets. Orit Gadiesh, Chairman of Bain, Inc. has been talking about the importance of localization quite a bit these days. She is not talking about adding a multilingual web site; she means the adaptation of the actual products, the marketing messages, the management practices, the distribution channels. This means companies have to actually create a plan and develop the necessary resources and knowledge – which goes contrary to the haphazard approach that many companies take.
• Getting the right information about local markets. Companies deal with questions such as, Who will distribute our products in foreign markets? How do consumer preferences differ from the domestic market? How should we develop partnerships, and with whom should we partner? What is the regulatory environment with respect to our product and how should we adjust to it?

INSIDER: MIIS received grants last year to establish a Center for the Globalization and Localization of Business Exports (GLOBE) at its Fisher Graduate School of International Business. What is the purpose of this Center? What have been its accomplishments over the past year? What are your plans for its future? What are two ways can LISA Members partner and support you in this endeavor and vice-versa?

The GLOBE Center is the pre-eminent academic resource in the areas of globalization and localization. GLOBE was established to conduct research and to provide consulting, education and training programs. Since its inception last summer, GLOBE has:

• Surveyed over 6,000 companies and organizations of partner's local membership regarding their needs for assistance in adapting products and services for export to foreign markets.
• Created a new information clearinghouse web site (http://globe.miis.edu) that shares information on publications, organizations, research and networking opportunities relating to globalization and localization.
• Gathered over 150 articles from scholarly journals and practitioner sources that relate to business globalization and localization.
• Conducted a workshop where faculty research on business globalization and localization could be shared and critiqued.
• Provided two new MBA courses, three redesigned MBA courses, and one new master's degree with over 100 student enrollments. We have also created an on-line, on-demand, web-based training program with nine seminars to help the business community export their products and services.
• Conducted five consulting projects with teams of 4-6 MBA students plus faculty to help local companies adapt their products and services for foreign markets.

In the future, we intend to:

• Collaborate with companies in order to identify those areas where GLOBE could add additional value.
• Continue to enhance the curriculum offerings in localization through an MBA specialization and by developing additional non-degree training programs for companies.
• Conduct new research on globalization and localization.
• Develop our consulting capabilities by tapping into our global network of associates and applying proprietary methodologies.
• Leverage our affiliation with Middlebury College by drawing on their resources, especially from their twenty campuses abroad.

LISA members can partner and support GLOBE by contacting us (globe@miis.edu) and

(1) Proposing new areas of research

(2) Requesting consulting projects

(3) Recruiting among our student body for jobs and internships

(4) Serving as GLOBE sponsors

(5) Joining the discussion (go to http://globe.miis.edu/discussion_forum.html to make a posting on the online discussion forum)

(6) Sending employees to participate in degree or training programs

INSIDER: Please describe one or two consulting projects through GLOBE that have been successful and why.

Boma Systems is a start-up company with an experienced management team, abundant venture capital support, and an innovative technology product. The company turned to GLOBE this spring to gain knowledge and to develop strategies with respect to ‘glocalization.’ The MIIS team identified target markets, delineated Boma’s strategies into key components and attributes, and then conducted specialized quantitative and qualitative market research and analysis (including the proprietary GOLD framework) to determine those areas that had potential for global standardization and those areas that should be locally adapted. Finally, the team developed recommendations for new strategies that could solve localization challenges by shifting preferences toward global endorsement.

Select Sector SPDRs is a $15 billion financial index that divides the S&P 500 into nine industry sectors (e.g., energy, health care). Its web site provides detailed information tracking for the financial performance of the index. The company turned to GLOBE to conduct a study on how to effectively globalize the web site. This summer, the MIIS team will examine the various markets for this product and determine what types of content adjustments will be necessary, based on the investment needs and preferences of the targeted local markets. In addition to examining appropriate strategies for handling technical and linguistic localization, the team will focus on adjusting marketing and content for local legal, financial and cultural requirements.

INSIDER: What areas could companies most benefit from in terms of globalization consulting services?

Companies need to know how to adjust their strategies and marketing to international markets. They need to know how to develop a staging strategy by assessing and prioritizing markets, and choosing effective entry modes. They need to know how to examine the full global competitive landscape for opportunities and threats. They need to determine whether their competitive advantage would be sustainable abroad and how. They need to know how to adjust to cross-cultural differences, how to adapt product designs for foreign markets, and in some cases, how to develop entirely new designs for global markets. They need to know how to structure their global organization. They also need help finding and maintaining communication with business partners abroad, as well as complying with local laws and regulations.

The top consulting companies address some of these areas, and language issues are certainly handled by localization service providers. But there are very few organizations that focus systematically on the localization of marketing and strategy to the extent that they can consult effectively. MIIS/GLOBE is providing the resources and expertise to meet these unfulfilled needs.

The survey report notes that perception problems may prevent language services providers from immediately jumping into these areas of service. It also highlights some good areas for making inroads.

INSIDER: What two pieces of advice would you give to a small- to medium-sized enterprise that is developing a strategy to adapt its products and services for sale and support outside of its domestic market?

1. Think carefully about the best entry approach. Some companies may initially need to go to an ‘easy market,’ such as from the U.S. to Canada, where the languages and cultures are similar, to begin building international experience. But given today’s information availability and advanced technologies, others should consider a ‘sprinkler’ strategy. As opposed to a trickle-down, phased expansion or ‘waterfall’ approach, more companies are considering the simultaneous entry of multiple foreign markets. This has definite advantages, but requires a good plan and strong management resources.

2. Go glocal! I prefer the term ‘glocalization’ because it epitomizes the concept of pursuing the benefits of both standardization (globalization) and adaptation (localization) simultaneously. This means adapting certain attributes, standardizing others, and inventing new strategies that are inherently ‘glocal’. How do companies do this? By innovating, taking advantage of global knowledge and research, applying advanced manufacturing methods, and utilizing the multilingual technology solutions offered by the language services industry.

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Ernest J. Scalberg, Ph.D., has been Dean of the Fisher Graduate School of International Business and Associate Vice President at the Monterey Institute for International Studies (MIIS) since August 2001. In 2005, Dr. Scalberg created the Center for the Globalization and Localization of Business Exports (GLOBE), a unique research, consulting, and training center to adapt products for foreign markets.

Dr. Scalberg was Dean of the Graduate School of Business Administration and Dean of Faculty of the Schools of Business at Fordham University from 1994 to 2001. He established the Beijing International MBA Program, a joint venture with University of Peking, which has been ranked the number 1 MBA program in China by both Chinese and U.S. business media.

Dr. Scalberg is the recipient of six U.S. Government research and project grants and has authored more than 20 publications on a variety of higher education and business issues. He has served as a director, advisor, or trustee for nine non-profit organizations. He is currently a Trustee for Select Sector SPDR, an S & P 500 Index Investment Fund on the American Stock Exchange, and is Chairman of the Board of the International University in Geneva (Switzerland). He also serves as an Advisor to the United States and China Foundation.