THE BLOG

The New Global Leader, Part I: Andreas Fornwald, Master of International Relationships

Apr 25, 2013 | Updated Jun 25, 2013

This is first in a series of interviews with highly successful but little-known global business leaders who combine expertise in their fields and fully embrace both the established and emerging markets. The golden thread running through all of their success: openness, intercultural sensitivity, optimism, originality, drive and a keen sense for market opportunities anywhere on the planet.

Andreas is a Stanford University Sloan Fellow MBA. His expertise is in High Tech (engineering, automation, oil & gas) and renewable industries (solar, etc). In a truly international career, he has held leadership positions spanning global giants such as Siemens and German Mittelstand (mid-sized) corporations, driving sales from the Middle East to Europe to Asia to Latin America. Impressively, Andreas is fluent is seven languages including Russian, Portuguese, Spanish, Romanian, French, English and German. He embodies globalization.

O'Brien: Andreas, what's your take on the current status of the global business environment?

Andreas: The business world has changed dramatically since the 2009 financial crises. In my view, business people are cautious but looking for new growth avenues. Large multi-national corporations often have to struggle in this new environment while SMEs (small & medium sized enterprises) have experienced notable success, especially in Germany, because they are more flexible to market conditions and have less internal bureaucracy. American SMEs have great international growth opportunities but unfortunately most of them prefer to stay at home.

O'Brien: Interesting. Are American SMEs too cautious about going global?

Andreas: Yes and no: They are driven by innovative and courageous CEOs but when it comes to international business they tend to play it safe and place their bets with mainstream business hubs like London, Mexico City, Shanghai and Singapore, etc. The problem here is that these hubs are by default designed for big financial and corporate players and often too costly for SMEs. They get lost in these crowed mega-cities and huge lands and struggle for visibility. Just like they do in the USA, American SMEs should go where the business is and not were the big financial/corporate players are.

O'Brien: How can SMEs successfully go global? Please elaborate.

Andreas: Sure. There are some simple rules to follow. Firstly, avoid crowded places; go the where market needs you. Secondly, offer viable solutions. Your pitch should be: "We're not selling pens; we're helping people to write". Third, realize that global business is all about customizing and adapting to local cultures and their needs. And lastly, listen carefully to what local businesspeople are telling you and show them unlimited respect. Don't be arrogant or superficial.

O'Brien
: Good. But how do you find the right partners?

Andreas: That is one of the biggest challenges in international business: whom to -- or not to -- trust. The key is: never work without local partners. I have three rules for partner selection: 1. Avoid partners who work for several companies; they are mostly cheery pickers and will not be loyal to you. 2. Search in the (upper) middle class; the elites are pampered and have many other things on their agenda. Your ideal partner should be somewhat hungry and not distracted by other business. 3. Determine his ability to overcome local red tape, his ability to learn fast about your product or solution, and his network -- ask him to connect you to high-ranking people, to take you to VIP events, to be introduced to influential families, etc.

O'Brien: OK, so you've followed these rules and found a partner: now what?

Andreas: Great question. Now it's all about strengthening and maintaining this relationship. My advice would be to be stingy with upfront payments. Your partner should invest in the business, too. Establish a clear roadmap, make sure he understands and is committed to it, set milestones and always ask for feedback to check progress.

Talk, talk a lot: in some cultures it takes time until you get to know the real issues. The more you talk with your partner, the more information you'll receive to help them with their issues, even if he talks on for hours about his grandma and his favorite soccer team. Always remember: you're building trust and laying the foundation for a solid relationship. And please be aware that the failure of your venture will affect him much more than you, and I am talking about his reputation: nothing is more embarrassing for a businessperson than to admit that he worked with the wrong partner in the wrong business.

Be open and give as much advice as you can but be careful with know-how transfer. Do not to overwhelm him with NDAs (non-disclosure agreements). Outside of the West, an NDA is just a piece of paper of little value and difficult to enforce. In other words, never forget to make him feel that he is more than a business partner for you; he is your friend. Never second-guess him -- which does not mean that you should not check him out from time to time!

Finally, be kind but diligent, have tolerance for mistakes but intolerance for any wrongdoing: there's no culture out there, which accepts dishonesty.

O'Brien
: That all sounds very commonsensical to me, Andreas. What, then, is the secret to global business success?

Andreas: Easy: do your homework, build relationships and realize that the time is now; don't wait because these opportunities come and go in a flash. Nowadays, the competition is global, and very good.

O'Brien: Excellent. Thanks so much for sharing these valuable insights, Andreas.

Andreas: My pleasure.