Think Globally, Act Locally

June 1, 2009
There's an old saying which, I believe, goes back to the 1960s: think globally, act locally. Its meaning is pretty obvious when you think about it from

There's an old saying which, I believe, goes back to the 1960s: “think globally, act locally.” Its meaning is pretty obvious when you think about it from an activist perspective. It could certainly apply, for example, to the environmental consciousness that is growing on a universal level nowadays. Think globally in the sense of understanding that there are global consequences to our actions and that environmental pollution is a worldwide issue. Pollution spreads through the air, through the water and something that happens across the world affects us here and vice versa. But if you want to do anything about it, act on a local level. You probably can't do much about industrial pollution in Norilsk, Russia, but you can do something about the environment in the city, town or community you live in.

There is a business application to that phrase as well. During a recent interview with Tim Ford, president of Genie, he talked about the company building a manufacturing plant in China and his philosophy that to build products for the Asian market, they need to do it by thinking about the applications and culture in that part of the world. What do they use boomlifts for? What are their habits and cultural preferences, what issues do they face on construction sites? An understanding of these questions will help a manufacturer design a product for that market, not by making a boomlift in the United States and exporting it and saying here it is, use it the way we tell you and get used to our design; but look for what kind of design fits their needs and training best. Get down on the ground in that market, learn about it and figure out the best way to manufacture for their needs, not force them to adapt what we make to their environment.

The same philosophy would certainly apply to a rental company expanding internationally. For example, Hertz Equipment Rental Corp. has begun a branch in China and, Gerry Plescia, HERC president, told me in a recent interview that most of the HERC management team in China are Chinese with relationships in the very area they are doing business in Shanghai. It's not just “here's the way we do things, do it the way we do in New Jersey,” it's “what is the most effective way of doing business in your business environment?” What is the best way to communicate with local customers and what are their expectations of a rental company?

The same basic principles can be applied to doing business anywhere, even in markets relatively close to home. If you are based in Dayton, Ohio, and want to establish a branch in Akron, have some people from Akron developing the company there. Doesn't mean you don't want to send some people from the main office to help out or even to manage, but make sure you hire people from the local market to be part of the team. They will know it better and they will have relationships, and this is still, above all, a relationships business. The business culture is unlikely to be significantly different, but there are certainly subtle differences. There may be big differences in ways of thinking, in regulations, in expectations.

Ask anybody in Houston if there are cultural and business differences between Houston and Dallas? Only a few hundred miles, but, culturally, a world away. How about L.A. and San Francisco? Completely different.

And beyond those differences, as we all know, there's the challenge of establishing relationships. In the rental business it all comes down to knowing your customer — what does he rent, why does he rent, when does he rent, what products does he like? To grow market share, everybody wants to get more revenue out of existing customers as well as finding new ones. If you don't understand the varying needs of those customers, how can you get them to rent more?

Maybe failure to really know customers is one reason rental companies so often just go for the quickest discount. This customer wants mini-excavators, that's all they ever wanted, that's all they are ever going to want, so I'll discount even more so they only gets the machines from me. But maybe you don't know the different needs that customer has or what his main concerns are or that he might gladly pay 10 percent more if you delivered or swapped out broken down machines on time.

Having a global perspective enables us to learn from people all over the world. But narrowing it down to the local is essential in making a business grow.