Australian Mining Manufacturer's Globalisation Hampered by Cultural Constraints in Home Market
A growthcurv Case Study
An established Australian mining manufacturer, perplexed about recurring challenges in achieving sales growth in offshore operations, questioned and adjusted their go-to-market strategy but couldn't seem to resolve the underlying issue.
They were referred to growthcurv by the Australia China Business Council as we had a reputation for assisting local businesses with strategy and execution of their global expansion plans.
The Background - Global expansion via foreign direct investment replaced with distribution strategy
Five years earlier, the company adopted a foreign direct investment strategy as a means of entering new markets in China, North America and the Middle East. After three years of below target sales, they withdrew all foreign direct investments and decide to partner with a global distributor instead. Two years later, desired improvement in market penetration and sales revenues remained unrealised and the CEO and his top team were again questioning their strategy.
That is when growthcurv got the call. We were asked to review their go-to-market strategy and provide advice. We worked with their top team of 16 executives comprising GMs of all functions, manufacturing and supply chain, plus sales and marketing from Australian offices and several offshore locations to identify the underlying causes of the ongoing challenge to their expansion plans.
The Cause of Stalled Growth - Leadership and Cultural
After investigation it became apparent that the problem was not the globalisation strategy, or inadequate sales systems or sales capability. Their offshore delivery was being negatively impacted by legacy leadership, culture and organisational challenges in a number of manufacturing units around Australia. Supply chain inefficiencies and delays were created by conflicts between long-time managers of production facilities in rural parts of Australia and more recently hired, highly-skilled salespeople working in Caterpillar installations in North America, Canada and Brazil. The differences between the values and motivations of the two groups was stark, but no one seemed willing to address the conflicts.
The salespeople promised northern client swift efficient service, while the production staff down-under worked at the same pace they always had - which local clients had become used to. Deliveries were late, clients were unhappy, and replacement order didn’t follow as they should have. Head office executives were focused on ‘building global relationships’ and no direct link was made between the lack of co-ordination (and cooperation) of the groups and slow sales; it was a behavioural issue that no one wanted to tackle.
The Hurdle - Re-aligning Top Team
Our investigations revealed unhelpful attitudes, avoiding behaviours, and hidden assumptions about ‘the way things get done around here’. The top team were a collection of individuals who were slow to exchange ideas and allowed operational inefficiencies to go unchallenged. Leaders and managers tolerated internal tensions as if they were 'normal office politics' and it took sometime to illustrate how the team culture was negatively impacting decision making.
In the 21st century the pace of change is so rapid that there is no room to ‘beat around the bush' and whilst it is important to value tenure and loyalty, leaders cannot shelter those who are change resistant and lack a willingness to adapt to fit in with developments.
Leaders on the top team of this mining manufacturer had to address attitudes and behaviours to boost levels of communication, cooperation and coordination before they could expect a boost in sales and revenues.
If you don’t adapt, you won't survive.
It is fundamental that all employees in all geographical locations share the same vision. Service quality and turnaround times are key to being effective in world markets, where time is money.