INSIDER: Many executives are still unwilling to deal with truly integrating globalization as a business process within their organizations. What made you decide to take on this challenge?

I would qualify that we are still in the nascent stages of defining this issue for PerkinElmer. To effectively address the issue of globalization, we first need to understand the magnitude of the processes that are affected. The needs assessment that is currently underway, which is being driven through a Six Sigma methodology, is our first step.

Fortunately, a confluence of factors exists right now at PerkinElmer that is making this initiative possible. Our drivers are two-fold: (1) the realities of being a global business – more than 50% of our revenue base and our workforce exists outside of the United States; and (2) our transition from a predominantly product-focused company to a client-centric organization, which demands that we structure our processes to align more directly with the needs of our customers.

INSIDER: What are the top two challenges to integrating globalization into your business processes?

Our two biggest challenges so far are fairly common vis-à-vis an organization like ours.

(1) Corporate Control

Cross-functional and embedded processes make change difficult. Globalization requires additional steps in our processes and additional investment. This is magnified by the fact that we run a very lean operation based on Six Sigma. This creates a cultural resistance to adding more steps to any process. In other words, the real resistance isn’t targeted at globalization itself, but to adding steps to our current processes.

Our ultimate goal in all of this from the point of view of our employees is to ensure Business Optimized Compliance at the global level. This means that we will integrate our globalization practices (cultural / legal / business / language, etc.) into all of our other business processes and support them with a sustainable quality system.

(2) The added investment that we haven’t made in the past

Globalization represents a lot of up-front investment, for which there is a lot of return. The trick for us is in educating the rest of the company to focus on the benefits – not on the added steps. We have to communicate clearly how the investment required up-front in local regulation compliance and linguistic/cultural customization will save real time, money and effort on the backend.

This education must cover why the whole process of localization goes way beyond language to show how our efforts directly benefit our customers and how the process itself fits in with the rest of our business. And perhaps more importantly, we need to communicate that the scope of the business is now driving this process as we adopt a client-centered approach. In other words, the sheer amount and pace of new (local) regulations require that we adapt in this way.

I should point out that no one is really pushing back right now. Most people already acknowledge that the globalization initiative will benefit our customers. However, it is still up to us to show them the specific benefits to the investments that will be required.

INSIDER: Can managers at PerkinElmer already track globalization costs vs. revenues? Can they readily “slice and dice” this information to make their decisions on a timely basis?

Your strategy always outpaces your system’s ability to address the need. Our managers can slice and dice by geography right now, but probably not by language. Many companies tend to automate before they understand and define their processes. We don’t want to make that mistake. Therefore, we will focus at the macro level on processes, resources and infrastructure during the globalization assessment phase as we make our initial recommendations. Once we gain the initial executive approval to move forward, we will take a serious look at automation.

INSIDER: Are you leveraging any business process model to help the company integrate globalization, or are you creating your own?

Yes, Six Sigma. The goal of Six Sigma is to eliminate redundancy and deviation in your processes, so that you keep it as simple as possible for the end user. It’s a proven operations management technique, and it is pervasive throughout PerkinElmer. We have already taken Six Sigma beyond manufacturing and applied it to transactional processes and to the “soft areas” of the company, such as Marketing.

The world has changed. And when you have grown as fast as PerkinElmer, a model such as Six Sigma helps you to implement the discipline that is required for future growth that is successful – not just fast.

INSIDER: What is your timeline for the initial approval of your globalization initiative?

I have been working together with Claude Lamoureux, the Project Manager for this assessment, for about a year now. The reason that it has taken us this long is that a number of the players on the Management Team changed over the last year, so we had to restart to engage the new players.

As luck would have it, our timing is turning out well. Claude will present our final recommendations to the Executive Committee this summer. This will be around the time that the company defines its next strategic 3-5 year plan, so our work will dovetail into this. We will outline the required investment to be made; the process will be translated into milestones; and the milestones then applied to the budget.

It’s all about working within the corporate culture. The bottom line is that we will work within the core business processes used at PerkinElmer to make change happen.

INSIDER: How did Claude come to be the Project Manager for this initiative?

As VP of Corporate Communications, I obviously have a vested interested in this initiative, since it will have a huge application to my area. However, I had never been heavily involved on the globalization side before, so I have learned a lot from Claude. He is a rare breed, with a total view of what it means to globally design, sell and support products throughout the world. Many people mistakenly conclude that we are only thinking about language issues when we first approach them, but the issues go way beyond language.

Claude is running a multilingual information service for a specific set of products, so it was natural for him to lead this project. When we began working together, translation itself was very decentralized across the organization. As the company works to transform itself from a product-driven to a customer-centric focus, many functions are being centralized. The value of Claude’s work cross-functionally is an obvious benefit, if we can apply it to multiple functions. Translation is only one aspect of this, of course.

INSIDER: How will you measure success?

The exact metrics are yet to be determined, but clearly, customer satisfaction metrics will be paramount. We will look at macro factors first. We already have customer experience / customer satisfaction surveys in place for pre-sales, during the sale and post-sales. Most of these take place over the web, with Customer Care sometimes administering them by phone.

Clearly, we will factor in what we are doing in an attempt to make a correlation. We will also use financial metrics, i.e., we will study the sales efforts required in different parts of the world.

INSIDER: What special challenges do medical device companies face when entering the markets in Brazil and China? Is there anything that can be transferred from your experience in dealing with the regulatory bodies in the U.S. or Europe?

I’m not familiar enough yet with those markets to comment on the specific regulatory issues they present, but both Brazil and China represent excellent growth opportunities for us, and we are committing significant resources – both centrally and locally – to ensure that our approach to customers in those regions is fully compliant with local regulations, laws and customs. The test will be in how efficient we can become as an organization to address those needs over the long-term. Obviously, that’s the reason why Claude and I are so committed to an overall globalization initiative.

INSIDER: Can you share how you will make your decision vis-à-vis how and when to enter the Chinese market? What criteria are the most important so far?

From our point of view, the main criterion is compliance. The registration process will dictate the pace at which we enter the Chinese In-Vitro-Diagnostic (IVD) market – it's only after a company successfully registers that it can really enter the market. This process requires, at a minimum, the translation or localization of instructions for use, labels, packaging and software into Chinese, along with the accompanying marketing materials, since the latter are also regulated. Currently, this registration process takes about one year. If the new IVD regulation comes into effect, the registration may extend to two years and include expensive clinical trials.

However, product registration is only the first step along the path to successfully entering any market. High-quality, after-sales service to customers is also required. To provide this, we will need to put local resources and sound customer feedback processes into place at the right magnitude to support our revenues.

INSIDER: What are the top three issues that you’re hearing from non-U.S. customers nowadays?

(1) Demand for local language versions of all customer communications is growing.

(2) Quality is now a given, so service is the new point of differentiation.

(3) In fast growing markets like China, localization is now a prerequisite – not an option – for success.

As technology and products mature, it requires a company to concentrate more on customer service. That’s what’s happening in our industry right now. We are taking advantage of this shift to ensure that we service all our customers well, regardless of where or how they live.

Check back with us next year, and we’ll let you know how much progress we have made!

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Kevin Lorenc is Vice President for Corporate Communications at PerkinElmer, Inc. He has nearly 20 years of marketing and communications experience in the high technology, publishing and financial services industries. Prior to joining PerkinElmer in 2001, Lorenc served as Vice President, Corporate Communications for Thomson Financial. He is an active member of the International Association of Business Communicators (IABC) and the Business Marketing Association (BMA).