“Growth” has become the mantra of businesses large and small. While growth is an admirable goal, one of the biggest mistakes businesses make is to grow without a structure in place to support its expanding operations.
Without the right structure in place, your business will hinder its own successful growth.
Most companies focus on tall or flat business structures that either concentrate the chain of command back to a corporate base, or operate many departments and satellite locations to allow for quick decision making and local flexibility.
Smarter businesses incorporate both traditional structures as they grow internationally, consolidating what they can at the global level, and creating vertical operations that allow for flexibility and ingenuity. The ideal international structure differs from business to business.
So how do you determine what your international structure should look like?
1. Evaluate your existing structure first
Determining what your international growth structure should begin with an examination of your business’s existing structure. Evaluate which elements of your current structure will work with your international growth plan.
Inevitably, you will need to add to your business structure as you enter new markets or take on international suppliers or manufacturers. Will those new positions and departments fall under your current business structure, or will you add legs to your structure? When adding legs, will they be horizontal or vertical to your existing structure?
It can be a cumbersome task to restructure your business, but you are best off to make changes to your business structure as you begin your international growth initiative, rather than waiting until you have a firmly ingrained structure that hasn’t supported your international growth.
2. Assess existing and potential locations
For many businesses, the first instinct is to keep their business’s headquarters, and the majority of their business’ personnel and operations, in place even as they expand their business to new quarters of the world. That might be the convenient way to structure your business, but that doesn’t mean that it’s best.
Many businesses know that they’ll need a team on the ground in a new market or manufacturing location at the beginning of their international expansion. Those feet on the ground can help get operations up and running make on-the-ground decisions that will keep your business as flexible as it needs to be.
Resist the common temptation to limit those locally engaged people to a bare minimum, which can hurt the long-term structure of your global business.
Think about the market you are entering, and the part of your operation you’re moving abroad. Should there be a larger team or field operation in place? Should you rotate in executives or employees with skills sets that apply to that location? New markets often take greater numbers of personnel to get started – then you might be able to scale back once sales or operations are well seated.
3. Keep your operations connected
One of the biggest mistakes that businesses make in creating their global business infrastructure is that they fail to connect related departments. Too often, the business remains connected only through the top-to-bottom reporting structure, or along the straight line of the supply chain. The problem is departments that are doing the same jobs in different locations, or whose decisions and operations impact one another, aren’t given the opportunity to communicate.
Create a structure that connects related departments so they can share feedback, ideas or efficiencies as they work. The result will be a more innovative business that’s constantly improving its operations.
4. Continue to appraise your structure as you grow
It’s crucial that as you grow your business globally, you do so mindfully.
Rather than adding on to your business structure on an ad-hoc basis as you expand, take the time to evaluate and create a structure for your business that will support your operations ahead of expansion.
And as your business continues to grow, make it a routine to regularly evaluate the business structure to make sure that it’s operating efficiently and optimally. Putting the work in ahead of time will allow your business to grow with the structural support it needs, and you’ll likely be able to avoid the pain of a major restructuring down the road.