And leave smarter we did. Richard is incredibly knowledgeable about an array of subjects. When watching him speak, you can see the gears turning in his head, pulling together the dispersed pieces of knowledge he possesses to deliver a well-thought explanation of the subject at hand.

Here's a clip of his presentation. In this segment he talks about the question that's on everyone's minds -- where's the economy going? (Side note, turn the volume up a bit; no microphone on this video.) For another view, here's Richard on CSPAN.

Thanks for joining us, Richard. Hopefully the taxi found you.

Murphy recounts his abrupt decision to move his life and family to Paris, his early struggles to gain a foothold in a foreign business culture, and his eventual success with McArthurGlen Europe, "which created nearly 8,000 jobs, opened 1,500 stores featuring 500 brands, and attracted nearly 40 million shopping visits per year." The Wall Street Journal calls Le Deal "a tale fraught with frustration and filled with insight." In the essay below, Murphy explains the challenges he faced when attempting to run an American business model in a European market, and the ways he had to both change and be changed by the work culture around him.

The Management Mirage: Creating Teams in Foreign Cultures
by Byrne Murphy

In late 1992 I found myself alone at the kitchen table of a rented apartment in Paris. I had just arrived in Europe with an idea for a new business. In front of me was a pencil, paper, and a phone. The only thing missing was someone to call.

I didn't know anyone to call; not in Paris nor anywhere in Europe. Yet, eight years later, McArthur Glen Europe had opened thirteen specialty retail centers in five countries featuring 1,200 stores, over 300 brands, and was generating nearly one billion euros of sales from almost three million square feet. Approximately eight thousand jobs had been created. The company had restored abandoned factory buildings in England, added revitalization to small towns in France and Scotland, created leisure destinations in Wales and Austria and much more. The company was a success.

But it was a success born out of agony...in fact many agonies.

The toughest challenge was not with the ruthless local politics nor with blackmail and graft nor even the grinding, endless hours. The most relentless, exhausting challenge was the most fundamental of all management tasks--creating an effective team from an ever-growing group of multi-national, multi-cultural, polyglot Europeans who held as many centuries-old biases about each other as they did about Americans.

The challenge was elemental but was also mission-critical: within a few years the company comprised nearly two hundred people featuring more than a dozen nationalities working from seven offices across Europe. The pressure was intense. Our success had attracted serious competition in every market. The race was on and time was not our friend. Effective teamwork was the key success factor. The question was how to get all those national oars rowing in the same direction and to the same cadence?

Americans have an advantage when operating overseas. Despite our reputation for being naive and heavy-headed there is respect for the longstanding success of American business. There is often a willingness to grant the benefit of the doubt to American managers regarding the many new concepts and innovations emanating from the States. But this benefit of the doubt is precariously balanced, as though on an old-style scale with two plates on which a new substance is measured against known values. On one plate is a heap of respect for America and what it stands for. On the other plate is resentment for what America has achieved and how it handles those achievements. When starting up an American-inspired venture abroad, if the listening and hearing skills of the American manager are not acute enough to take into real consideration the context of the culture in which the venture is operating, the weight of resentment will quickly outweigh that of the respect. The benefit of the doubt has worn off and the scale is out of equilibrium. The manager's task becomes infinitely more difficult.

At McArthurGlen we were most successful when we derived clear objectives and worked hard in listening to each office on how best to achieve them. We did put in place a classic, American-style profit-sharing scheme to reward success in one's home market and to encourage cooperation across borders. Interestingly, the plan met with only partial success and eventually lost credibility. Bare-bone entrepreneurial tools only go so far in most European settings. The more effective tactic was the listening and the hearing.

Europe is not America, not in its values nor in its practice. It is not the land of entrepreneurs but rather the land of large governments which play pivotal roles in the economy. Many Europeans--in some places most Europeans--do not live to work and to constantly achieve in the traditional American sense. Those differences must be taken into account. It is vital to realize that though it may be your concept, it's their country. Context matters--a lot. The host culture matters...a lot. If managers ignore the context in which they are working then surprises are surely headed their way--most of them unpleasant.

At the same time a manager is striving to understand the host culture he/she needs to quickly establish him/herself as the unwavering leader in the effort. And not just any leader but one exhibiting certain key attributes. These attributes include:

• Leading decisively from the front, ready to spearhead the struggle and, importantly, to absorb the first and the second wave of adversity, showing the team he/she is willing to suffer more than they are expected to suffer. They need to know when all the external responses to the team's efforts are "NO NO NO," that their manager insists on "YES YES YES"--they need to know, in effect, their manager is sincere. Over time, sincerity and integrity transcends all languages.


• Believing completely in "The Mission" in order to have others buy-in. If the manager does not truly believe in The Mission, the team will perceive that and will not commit themselves.


• Setting and maintaining simple and clear goals, easy for all to understand even with language barriers. A lack of clarity leads to debate, then to confusion, then to lack of buy-in and a "not my job" mentality. Once that sets in, there is no team.
  Our newly globalized world presents both significant challenges and great opportunities to American businesses and entrepreneurs. Only by recognizing that when operating abroad it cannot be business as usual can those opportunities be realized. After sixteen years of working overseas, I have found that the most important step to take is addressing management philosophy.

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Byrne Murphy, MBA, is an entrepreneur who has created several companies across Europe over the last fifteen years. His book, LE DEAL: How A Young American, In Business, In Love, And In Over His Head Brought A Multi-Billion Dollar Industry To Europe, was recently published by St. Martin's Press.

The clout of the African economy has plenty of room to grow. For that very reason, Vijay Mahajan set out to research and tell the world about Africa with his book Africa Rising. He found like that, like many growing regions in the world, there's a growing middle class in Africa. It includes secretaries, computer gurus, merchants and others who by virtue of education, geography or luck have benefited from economic growth of around 6 percent annually in such countries as Uganda, Ghana and Kenya, and around 8 percent in Rwanda.

That group of people is numbered at 300 million. Vijay dubbed this group (Africa 2s) to describe people who are neither desperately poor (Africa 3s) nor obnoxiously rich (Africa 1s), and says the middle group is one of the most important drivers of economic growth in Africa.

Earlier this month, Jack wrote a review on Africa Rising. The book has since had plenty of media coverage. Perhaps it's because it's one of the first times we Americans are hearing about the upside of Africa. It's rare that the Africa portrait is painted with optimism rather than bleakness. Thanks to Vijay for giving us an opportunity to see the big continent through different eyes.

If you're looking for more on the book, start with Vijay's video.

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You're Not Just Competing for Customers

In the era of globality, we will all be competing with everyone from everywhere for everything. I want to talk about what everything means.

Customers, of course. The big multinationals from the West and Japan -- the "incumbents," as we call them -- suddenly find themselves competing with the "global challengers" (based in the rapidly developing economies) for customers in the challengers' home markets, in the incumbents' home markets, and in every other market around the world.

Commodities, too. I'm talking about bauxite and aluminum, palm oil, shipping containers, iron ore, natural gas, cotton -- every raw material that's needed to run a business could suddenly become scarce or pricey.

Talent is another big consideration. Human resources used to be mostly about recruiting (or poaching) the best people for the slots you needed to fill, then doing your best to keep them happy and motivated. Now it's different. There's a real scarcity of specialized talent. Some employees don’t want to live and work where companies need them. And, in many countries, there just aren't enough people with the right skills to run factories or manage services.

Everything also includes: capital, intellectual property, brand awareness, press coverage, real estate, equipment, partners and suppliers. You name it.
Almost everything is up for grabs. Almost nothing can be locked up.

With the cost of fuel skyrocketing, you may not even be able to book a flight from wherever you are to wherever you want to go!

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Thanks to Hal, Arindam, and Jim, authors of GLOBALITY for hosting our blog this week! If you're interested in learning more about the book and/or the authors, check out their website.

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The New Competitors Come from Everywhere

In the era of globality, where will your competitors come from? Short answer: Everywhere.

At The Boston Consulting Group, we've done extensive research on a group of companies that we call the "global challengers." These are very successful companies that come from 14 rapidly developing economies: Argentina, Brazil, Chile, China, Egypt, Hungary, India, Indonesia, Malaysia, Mexico, Poland, Russia, Thailand, and Turkey.

They operate in virtually every industry: industrial goods, durable goods, resources, food and beverage, cosmetics, technology equipment, pharmaceuticals, mobile communication services, shipping, and infrastructure.

The big multinational companies, the "incumbents" as we call them, have been taken by surprise by these challengers, precisely because they seemed to pop up from unexpected places or enter industries where no challengers had been before.

Who guessed that the world's top maker of children's strollers, Goodbaby, would come from China? Or that the leading maker of regional jets of 120 seats or less, Embraer, would be Brazilian? Or that the leading supplier of natural gas, Gazprom, would be based in Russia?

And the speed! The challengers move faster than incumbents. They grow faster. Create more products faster. Complete acquisitions faster. And enter new markets faster.

They're everywhere!

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Tomorrow, join us for the final day of blog hosting by the GLOBALITY author Jim Hemerling.

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Your Competitors May Not Be Who You Think They Are

The subtitle of our new book GLOBALITY: Competing with Everyone From Everywhere for Everything pretty succinctly describes what this new business era is going to be like. Today, I'm going to describe who the Everyone is. Tomorrow my co-author Arindam Bhattacharya will define the Everywhere and on Thursday Jim Hemerling will get into the Everything.

So who's everyone? In the "old days" of globalization, the big Western companies pretty much knew who their competition was going to be: other companies that looked a lot like them. The "incumbents," we call them. GE, Siemens, Toyota, etc. But while the multinationals were outsourcing their production in the developing countries, something unexpected happened. Their suppliers and vendors, little companies in China and India and Brazil and elsewhere, watched carefully and learned well.

Those companies grew up and became "global challengers." Goodbaby of China, which didn't exist twenty years ago, sells 80 percent of children's strollers in China, and has 28 percent of the stroller market in the U.S. Tata Group of India recently bought Land Rover and Jaguar. Embraer of Brazil is the world leader in regional jets under 120 seats.

So the message for Western companies is that your toughest competitor could be anyone. A start-up in Argentina. A state-owned monolith in China. A network of non-profit councils in India. An entrepreneur in Turkey. There's a very good chance they won't look at all like you. Which is why you may not see them coming.

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Stay tuned. Tomorrow, GLOBALITY co-author Arindam Bhattacharya will be stopping by.

On Tuesday, we'll hear from Hal Sirkin, Wednesday from Arindam K. Bhattacharya and finally, on Thursday from James W. Hemerling. They'll be checking in periodically to take your questions.

Feel free to chime in!

1) Blue Ocean Strategy by W. Chan Kim and Renee Mauborgne - Malaysia

2) Fire Them Up! by Carmine Gall - Norway

3) One Billion Customers by James McGregor - Switzerland

4) It's Not About the Coffee by Howard Behar - Canada

5) Citizen Marketers by Ben McConnell and Jackie Huba - United Kingdom

6) Rules to Break and Laws to Follow by Don Peppers and Martha Rogers, PhD - Singapore