A couple of weeks back, I attended the RSA Conference at Moscone Center, San Francisco. Hundreds of booths dealing with cybersecurity were pumping up their software to handle security. Many had international origins. For one in particular, I bumped into its Latin Manager, who, by looking at his name, I concluded that he was Brazilian. He confirmed I was I right, and he related to me he handles the whole Latin America region, when I spoke to him in Portuguese. That short conversation reminded me of the many shortcomings I see in technology companies hiring “regional managers.”
In one previous employer, I was delegated at the time of my offer to handle Spain and Latin America, given my language skills. When I met one of the three co-founders later, he related to me that the company has decided to hire someone located in Madrid, who worked in the cable business and whose wife was Dominican. And supposedly he spoke Spanish fluently. I asked him how many languages did he speak, and he replied only English. Later on, I did meet this so-called manager who had hired Spain’s most expensive law firm at the monthly retainer of $25k per month – something that made me suspect something was wrong. His role was to be the business development chief for Spain to bid for cable business. And now he was outsourcing that role to a Spanish law firm – not quite the way to go about it. European law firms don’t function like the ones in Washington, D.C., that have on their staffing, professional lobbyists. I did meet with him in Madrid, and discovered that his Spanish was dreadful. After losing about several hundred thousand dollars in Spain with not one dollar in revenues, that Spanish representation was shut down. So much for choosing the “right” country manager.
I always believe that to select a country manager or regional one, that person has to have the language and social and business skills that fit that region or country. For example, I have traveled throughout Latin America, and I know that the Spanish spoken in each Latin American country has adopted local expressions, accents and vernacular to be substantially different. Even the word “guagua” has different meanings in each country: in Mexico/Caribbean, it means “bus” (in Spain, “autobus”); in Venezuela/Colombia, it takes a different meaning, “pregnant woman”; and in Chile, it means the “youngest child” in the family. Or take the word, “wonderful”. In Spain, one uses “vale”. In Venezuela, “chevere”. In Argentina, “barbaro”. Finally, in Chile, “macanudo”. Same meaning but very different words.
I prefer to delegate the role of marketing to someone who can interface locally. So, at the RSA conference, I thought of this Brazilian handling all of Latin America and how he would relate to the rest of Latin America. Now Brazil is not an insignificant market. But neither are Mexico or Argentina, where they speak Spanish – although with their local flavors. And would this factor result in sales outside of Brazil? I do question that.
Another factor I look at is their local schooling. Well to do and influential individuals in Latin America all attended Catholic schools and universities. Why? Only upper and middle class families can afford to send their children to those institutions and schools. As a consequence, they have access to political networks than other demographic groups.
As a student of “structuralism”, I do feel that only certain managers have access to their political and business infrastructure. And even when I select outside counsel, I might select a Chinese lawyer who had been involved in one form or another with the Chinese army, since that experience might influence my dealings with the Chinese government. And structuralism tells me that I have no choice but use this ploy to deal with internal political and business organizations.
I also advised a publicly traded software company in the D.C. area, which expanded throughout the world, and honestly admitted in its 10Q that its international expansion was of first impression, and believed that it would make mistakes. How true! Its labor lawyer was undoubtedly from a major D.C. law firm, but with no language skills whatsoever to head international labor. Now, in the U.S., we practice “at will” employment. Not so in Latin America. To fire someone in Latin America, the employee has to violate some Employee Manual or contract. This U.S. lawyer had hired an appellate lawyer in Buenos Aires believing that the company had every right to fire this person. Wrong! And appellate lawyers are twice as expensive as regular trial lawyers, and I expected the company to lose every Argentinian appeal based on what I know of the local labor laws. But the U.S. lawyer did not understand the local issues. The appropriate prophylactic approach was to prepare an employee manual written in the local language and labor laws so that any dismissal would be backed by the written documentation. The fault lies with the General Counsel, who appointed the U.S. lawyer with no language or international skills to speak of. The GC’s experience was SEC. Not running an international corporation. That is a recipe for disaster.
Again, I always try to avoid those recipes for disaster while appointing international managers. Fortunately, I have had considerable international experience. Whenever I visited a country, I would visit the U.S. consulate’s foreign desk, meet with major accounting and legal firms, to draft an outline on how to do business locally. And I make sure that the local managers were vetted, speak the local languages, and have the experience to handle major deals, while I have made sure that the foreign company’s infrastructure is protected.