Does our DIY mindset help or hinder us on the international stage?
As Kiwis we take pride in our innovative nature and attitude. This approach enables us to adapt to a raft of situations and to solve most problems, locally at least. Perhaps this was borne out of our geographic isolation and a necessity to be self-sufficient.
On a trip to the US last June however, I couldn’t help but wonder if the ‘jack of all trades’ and ‘do it yourself’ Kiwi mindset hinders our ability to get a foothold in highly competitive international markets.
Through a series of visits to American companies I got to experience the US market firsthand. With a population in excess of 300 million people, GDP of US$14 trillion and imports of US$1.5 trillion the sheer scale
alone is an attractive prospect. But stats aside, what else should Kiwi companies know about the US?
In the San Francisco Bay area, American’s entrepreneurial mindset and the infrastructure in place to support that really stood out. Cafés in downtown San Francisco were alive with young entrepreneurs planning their next venture. A visit to Plug n’ Play Tech Center (a Silicon Valley business incubator) revealed a global community of more than 300 tech start-ups.
Business ideas were discussed very openly. They weren’t giving away their IP as such, but people were actively sharing what they were bringing to market and engaging the investment community and potential partners in the process. They would much rather have supported an idea and failed than to have not tried at all. In the US failure does not carry the stigma it does here in New Zealand – it is a natural part of business, some even consider it a badge of honour!
The level of focus, expertise and commitment was second to none within the companies we visited. The Nestlé Direct-Store-Delivery (DSD) team was one such example. They were responsible for planning the distribution requirements for two business units, across 115,000 store locations, 30 distribution centres, and seven production facilities –
a US$4.2 billion business. Their expertise in distribution planning allowed them to offer supply- chain solutions to their competitors, a unique feature of their business model that improves capacity utilisation and generates additional revenue streams.
Underpinning their business model are philosophies of employing a highly skilled well-aligned team, robust fact-based processes, best-in-class planning tools and continuous improvement. Significant opportunities genuinely exist for companies with niche solutions and a high degree of commitment.
A collaborative long-term approach including an in-market presence is another key ingredient to succeeding in the US. Toyota Motor Manufacturing Kentucky (TMMK) has established a very strong presence through such an approach. Established in 1986, its Georgetown facility employs 7,000 Kentucky residents and manufactures 2,000 automobiles per day for the US and Canadian markets. It supports ‘American made’ by sourcing many of its materials, parts and accessories from US suppliers. The people of Georgetown absolutely buy into the value Toyota, a foreign company, brings to their local economy.
So how do we get our high-value innovations out of the garage and into a large-scale foreign market such as the US? Creating a culture and infrastructure that supports entrepreneurial behaviour, shaking the ‘jack of all trades’ mentality, learning to collaborate locally and abroad, and developing an in-market presence seem like good places to start.
Nigel Pedersen is operations analyst at Rural Fuel. He is currently completing an MBA at Massey University, and the visit to the United States was a requirement for his course on Applied Strategy.