Taking on America: the trials and tribulations for SMEs
America. The land of opportunity, where “the streets are paved with gold” if the old adage is to be believed.
The U.S is the world’s largest economy, accounting for 25% of global GDP and it is the number one export market for UK companies by a significant margin – so it’s no surprise that for many burgeoning businesses, this is the place to be.
However, if building a business in your home market is a challenge - it is nothing compared to trying to make it big overseas in the United States. Yet for those who succeed - it brings with it huge opportunity, indeed recent ONS figures reveal that many are already doing it; in the year ending June 2019, exports of goods and services to the USA increased by 9.3% from £115.7 billion in the 12 months prior, to £126.4 billion – a promising show as trade talks continue.
However, this does not automatically make it a ‘golden ticket’ as the reality is, many companies will fail as they lack the insight and expertise required to succeed. Exporter beware: expanding to America is certainly a challenge, but it is also one that is worth UK companies taking on.
This is why Newable has launched America Made Easy – an initiative with our good friends and business partners over at Avitus - an American co-employer and business services group. Through this, we aim to help businesses ‘land and expand’ in the United States, minimising the hassle and the risk. So what are some of the pitfalls to look out for?
One of the obvious attractions of the U.S market is the familiarity we have with all things American. From holidays, to Hollywood to the headlines, it is easy to think we know the place. We have so much in common across language, culture and history that companies can be seduced into diving in head first. After all, how hard can it be? This apparent similarity should not lead to a belief that the US is the same as the UK. In fact, it doesn’t take long to appreciate that, in fact, there are lots of dissimilarities with the United States and a lot of dissimilarities within the United States itself. Even at the level of stereotypes – which have some basis in reality – the laid back approach to business in West Coast, is very different from the frenetic pace at which business operates on the East Coast. UK companies should take a moment to consider which market within the United States their operations are suited to best.
Meanwhile, some businesses make the mistake of perceiving the U.S as a single entity. There are vast differences in legal regulations that exist among the 50 states. For example, Californian employers must pay employees at least twice a month, whilst in Wyoming there are no pay frequency laws at all, aside from a few industries. Each state is starkly independent and it takes know-how to understand why respective legal, social and economic climates may or may not align with your business objectives. UK companies may encounter different regulatory frameworks at local, state and federal levels in a way quite different to the UK.
When it comes to choosing a location - some UK companies demonstrate a reluctance to be open minded and flexible. Many can be attracted to the bright lights, glitz and glamour of New York, Los Angeles or Miami for example. However, in reality these locations might not be a good fit and of course, they are expensive markets. This can lead to expensive mistakes. Whilst these cities might be perfect, UK companies should consider what might be considered to be ‘tier two’ locations. Competition may be less intense, the legal framework might work for you, or grand infrastructure improvements and economic investment might beckon. Therefore, this could be a sensible strategy to test your proposition in America before going ‘all in’. It takes an open mind to think that way.
The old saying has it that your business is only as strong as its workforce. Some might consider this to be the number one priority of all businesses. It is certainly true that a failure to consider the employment environment in the United States is a major potential pitfall. British businesses need a clear understanding of employment costs, which can vary significantly. That applies to employee benefits as well. These are all fundamental considerations that need to be addressed. Too often they are not. Our business partners over at Avitus told us the story of a medical device manufacturer about to be set up at a new branch in San Diego. Unfortunately for them, that just wasn’t going to work with a workforce of doctors and nurses and not those working in manufacturing. It is certainly advisable to use a locally based expert to support you in this area.
Finally - tax liabilities. You need to get to grips with the taxation policies that apply to your business and your geographical situation. Being chased by a taxman as a result of your naivety is not the right way to kick off your relationship with a new market. Employ an expert to do the heavy lifting. The UK has never been renowned for its straightforward taxation landscape, but the U.S can be far more complex. Especially when you’ve got 50 states to consider. Again, consider teaming up with local partner like Avitus who can make this headache disappear.
As with all new business ventures, with opportunity comes risk. A reluctance to appreciate and prepare for the challenges that lie ahead will come back to bite even the most talented of entrepreneurs. But if done properly, with the knowledge and know-how of how to tackle them head on, great opportunity beckons. When it comes to dynamic, exciting and rewarding places to do business, the US is about as good as it gets.
For more information on business topics in the United States, please take a look at the latest edition of Business Chief USA.
Marketing matters: from IBM to Kyndryl
Prior to joining Kyndryl as Chief Marketing Officer, Maria had a 25-year career at IBM, most recently as the tech giant’s CMO where she oversaw all marketing professionals and activities across North America, Canada and Latin America. She has held senior global marketing positions in a variety of disciplines and business units across IBM, most notably strategic initiatives in Smarter Cities and Watson Customer Engagement, as well as leading teams in services, business analytics, and mobile and industry solutions. She is known for her work with teams to leverage data, analytics and cloud technologies to build deeper engagements with customers and partners.
With a passion for marketing, business and people, and a recognized expert in data-driven marketing and brand engagement, Maria talks to Business Chief about her new role, her leadership style and what success means to her.
You've recently moved from IBM to Kyndryl, joining as CMO. Tell us about this exciting new role?
I’m Chief Marketing Officer for Kyndryl, the independent company that will be created following the separation from IBM of its Managed Infrastructure Services business, expected to occur by the end of 2021. My role is to plan, develop, and execute Kyndryl's marketing and advertising initiatives. This includes building a company culture and brand identity on which we base our marketing and advertising strategy.
We have an amazing opportunity ahead at Kyndryl to create a company brand that will stand apart in the market by leading with our people first. Once we are an independent company, each Kyndryl employee will advance the vital systems that power human progress. Our people are devoted, restless, empathetic, and anticipatory – key qualities needed as we build on existing customer relationships and cultivate new ones. Our people are at the heart of this business and I am deeply hopeful and excited for our future.
What experiences have helped prepare you for this new opportunity?
I’ve had a very rich and diverse career history at IBM that has lasted 25+ years. I started out in sales but landed explored opportunities at IBM in different roles, business units, geographies, and functions. Marketing and business are my passions and I landed on Marketing because it allowed me to utilize both my left and right brain, bringing together art and science. In college, I was no tonly a business major, but an art major. I love marketing because I can leverage my extensive knowledge of business, while also being able to think openly and creatively.
The opportunities I was given during my time at IBM and my natural curiosity have led me to the path I’m on now and there’s no better next career step than a once-in-a-lifetime-opportunity to help launch a company. The core of my role at Kyndryl is to create a culture centered on our people and growing up in my career at IBM has allowed me to see first-hand how to prioritize people and ensure they are at the heart of progress in everything Kyndryl will do.
How would you describe your leadership style?
I believe that people aren't your greatest assets, they are your only assets. My platform and background for leadership has always been grounded in authenticity to who I am and centered on diversity and inclusion. I immigrated to the US from Chile when I was 10 years old and so I know the power and beauty that comes from leaning into what makes you different from other people, and that's what I want every person in my marketing organization to feel – the value in bringing their most authentic self to work every day. The way our employees feel when they show up for themselves authentically is how they will also show up for our customers, and strong relationships drive growth.
I think this is especially true in light of a world forever changed by the pandemic. Living through such an unprecedented time has reinforced that we are all humans. We can't lead or care for one another without empathy and I think leaders everywhere have been reminded of this.
What’s the best leadership advice you’ve received?
When I was growing up as an immigrant in North Carolina, I often wanted to be just like everyone else. But my mother always told me: Be unique, be memorable – you have an authentic view and experience of the world that no one else will ever have, so don't try to be anyone else but you.
What does success look like to you?
I think the concept of success is multi-faceted. From a career perspective, being in a job where you're respected and appreciated, and where you can see how your contributions are providing value by motivating your teams to be better – that's success! From a personal perspective, there is no greater accomplishment than investing in the next generation. I love mentoring younger professionals – they are the future. I want my legacy as a leader to include providing value in work culture, but also in leaving a personal impact on the lives of professionals who will carry the workforce forward. Finding a position in life with a job and company that offers me a chance at all of that is what success looks like to me.
What advice would you give to your younger self just starting out in the industry?
I've always been a naturally curious person and it's easy for me to over-commit to projects that pique my interest. I've learned over years of practice how to manage that, so to my younger self I’d say… prioritize the things that are most important, and then become amazing at those things.