September 25, 2008

News & Opinion: Essay from Byrne Murphy, author of Le Deal

By: 800-CEO-READ @ 2:54 PM – Filed under: Management & Workplace Culture

Byrne Murphy, the author of Le Deal: How a Young American, in Business, in Love, and in Over His Head, Kick-Started a Multibillion-Dollar Industry in Europe, graciously wrote this essay for our blog. Le Deal is best described as an entrepreneurship book, but there are elements of memoir, adventure, global economics, and business narrative here.
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 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.