This was originally published in ANZ Bluenotes blog on June 2018 link here
There is a list of actions that Australian business will need to do if it is keen to tap into the economic transformation of Asia. One of them is to find a suitable business partner.
This, like most aspects of doing business, takes effort and time. It is not a quarterly-reporting metric. Putting in the effort and knowing that it may not immediately pay-off is a crucial mind-shift that Australian business must take if they are to succeed, or even decide if they can succeed, in an Asian market.
Finding a good and trusted partner can help a business navigate regulatory changes, better understand consumer sentiment, and assist in a competitive market with different cultural and business norms. A good business partner knows the mis-steps to avoid when it comes to tricky issues such as corruption, and understanding government policy trends.
In my experience Australian business does not understand how valuable this component is, and how to go about finding someone. However there are steps that can be taken.
The first step is to commit to creating a genuine partnership, and again, this takes time and effort. Think of taking the Australian way of getting to know others in the industry or field, and then strip out some of the straightforwardness, and desire to make a decision and move on. Instead, take a curious approach, talking and learning, and seeing where different ideas may work. Learn about the potential partner’s background, the work they have put into their own business.
For business going into a market in South East Asia, or China, for the first time, there are some good resources available to find people to talk to about possible partnerships.
Firstly, the Australian government trade offices (Austrade) in the region have local staff who are highly knowledgeable about the industries and key people, and suggest where there could be a business match. Some Australian state offices also have the resources for introductions and business-matching.
Add to that the many private consulting businesses (with on-the ground experience) that can go a step further from the initial contact and guide a business in the process of learning more about key industry people and helping steer the parties together in a constructive way.
There is a lot of talk about the value of face-to-face conversations, and in a country like Indonesia it is essential. There is simply no substitute for getting on a plane and meeting someone. This is especially so for traditional industries. Newer industries, fuelled by young entrepreneurs, can kick-start a conversation a different way and are comfortable with distance. However in the end there is nothing more powerful than taking the time and effort to meet someone, showing yourself and a willingness to learn.
When considering a move into a new country, it’s helpful to understand the background of a company, its people and its credentials. Please note that this is exactly the same for an overseas business looking in to Australia. They would want to eventually do due diligence on your business too.
This may take longer than expected due to the different complexities of business in the region, and again there are private advisory firms, including legal and financial, which can provide background information and detect possible hurdles, especially in keeping business aligned with the laws of both countries.
There is also a growing number of Australians who have lived and worked in Asia and have an incredible stack of Asia capability and networks, the value of which is not yet recognised or understood by Australian business. Add to that the number of Australians with an Asian background who are also under-recognised for the insight they can bring to finding a good partner.
There are also the many business associations, including for China, Indonesia and Malaysia who have connections or ideas on being smart in finding a potential partner. Joining one of these and going along to the events is a good first step.
As is attending trade fairs and industry forums in-country can also to meet like-minded people.
Even when these steps have been done for a business, and they have met a potential partner, what seemed like an enthusiastic opportunity can quickly slide away.
I saw this occur particularly after large and well organised trade delegations which were great for making initial introductions but not so good on the follow-up. This is where some extra help may be required. And again, once you have started a potential relationship, and it feels right, it is vital not to let it slip. It can take multiple visits and calls to maintain a relationship to the point where the business is actually on the table.
A senior trade official in Asia once remarked that “A third of our time is spent dealing with problems, usually through miscommunication with partners.”
If this is not always physically possible, then there are other culturally meaningful ways to stay in touch and develop trust and respect. Finding a partner with a shared intent, who has similar values and a shared vision can help pave the way to a stronger presence in-country.
For some, this seems like too much trouble; all that time and money on an opportunity cost for an unknown return. However it is by getting to know someone, in market, that the opportunities become more clear.