The annual Forbes 400 list is out, and Americans continue their downhill slide. It used to be that one out of two billionaires was an American.
It is now down to one out of three.. a drop in market share from 50% to 33%.
So which countries are gaining the most ground?
It’s the BRIC countries – Brazil, Russia, India, and China.
Those economies are growth economies – both in the short run and long run.
Here’s a summary article on this trend:
I think American business owners are hugely disadvantaged in the global marketplace for the simple fact that the average American simply does not think globally at all.
If you pick up a copy of Newsweek on a newsstand in any city in the U.S. and do the same at any newsstand in Europe, you will notice the articles are completely different.
The U.S. Edition of Newsweek is all about U.S. news.
The version sold in Europe is about global news (not just the country the magazine is sold in, not just Europe, and not just the U.S. — but all of it).
When your focus is overly narrow, you risk missing out on opportunity.
I admit that about three years ago, I did not think globally about my own business. After all, I run a small business, not some multi-national Fortune 500 company which one more commonly associates with doing business across borders.
But, when the Great Recession hit, I anticipated that at some point in the future, given all the economic stimulus and the completely upside P&L statement for the U.S. government, there would be incredible temptations to solve all those debt problems by printing more money.
All the U.S. government has to do pay off the trillions and trillions of debt is to push one button, and it can “print” trillions of dollars. This of course creates an entirely different problem called inflation. When (not “if”) inflation kicks in, in the U.S. economy, suddenly revenues generated from customers in more stable economies outside the U.S. become incredibly valuable.
At the time, I generated perhaps 7% of my revenues from outside of the U.S. Given the macro economic trends, I decided this was increasingly risky and started to keep an open mind about more global opportunities.
Today, my company generates about 40% of sales from outside the U.S. This rivals and even exceeds the geographic revenue mix of many U.S.-based Fortune 500 companies.
Most CEOs artificially constrain their global opportunities due to their own self-limiting beliefs about what is possible in their business.
And while it is true that some types of business will never be global in nature, often it is easier to go global with a subset of one’s business.
For example, I recently met with the CEO of a heavy industrial construction-type company. In their local market, spending was literally non-existant.
The problem was that all of the equipment, facilities, and staff were based in a city where no demand existed. It was not cost-effective to transport everything to other areas just for a single project.
Meanwhile in this exact same company, there was one revenue stream that was growing 100%+ per year.
What was it?
One of the top people in the company got tired of sitting on his rear all day with nothing to do. So he picked up his phone and started calling other construction companies in other regions of the U.S., attempting to do the kind of work this firm specializes in (I forget the exact specialty).
So his pitch was:
“We’ve done 100 of these projects, know exactly what to do, but our local economy is non existent.
“I know you are bidding on five of these kinds of projects in your area, why don’t you hire us, and we’ll buddy each of your key people with one of our key people and we’ll mentor you on the whole process.
We’ll have our proposals guy show you what has worked for us. Our foreman will be the advisor to your foreman. Our CFO can walk your CFO through the cash flow cycles unique to this kind of work,” etc…
So in this case, the equipment and bodies could not be moved to other geographical areas, but the expertise of the staff could.
This is just one example of thinking differently about your business.
The key is not to think about your business defined in terms of your target customer and current product/ offerings, but rather think in terms of:
“What the heck is my company extremely good at?”
If your answer to this question is a specific product or service, you are missing my point.
A product or service is simply one way your core capabilities or competitive advantages is expressed.
If you get wedded to how your competitive advantage is currently expressed, then you miss out on all the opportunities for how your competitive advantage could be expressed.
Once you think this way, the next, more practical step is to ask how these competitive advantages could be re-packaged to provide a different type of value (and perhaps to a different kind of customer) that is in better alignment with the current economy vs. the way those advantages are currently expressed.
This is the essence of being more strategic about your business and the environment you operate in.