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One of the most important reasons why companies do not export to the European market is their mind-set. We learnt this over four years working with a range of companies in several African countries on behalf of CBI. This surprising conclusion helped us to design and implement effective export development processes. In this article we will show you how we address these findings in our day to day export development work.
In 2016 we completed several export development projects in African countries. During the final phase of these projects we discussed with the participants the benefits and concerns of the interventions. Their feedback was very clear. We learnt from them that the most important result of the projects was a change in mind-set. The practical tools, techniques and tips they got were very much appreciated but they stated clearly this these can only be effective if you got your mind around the idea that Europe is an accessible market for African exporters. In the programme the carefully selected companies have learnt that their product can be sold and how to do it in a sustainable way. They have seen and experienced that the European market has unique characteristics which need to be understood and that doing business with European’s may not be easy, initially at least, but can be rewarding over the medium to long term. The potential exporters have come to realise that it is within their reach to become a successful exporter to Europe.
This raises the questions as to why the mind-set is an issue in the first place and what can be done to change that mind-set within a training programme? The answer to both of these questions is based on the experiences of many African exporters. For many years these traders and producers have done business with companies from all over the globe, trading in the old style which assumes that African companies cannot meet the buyers’ requirements. We call it “the commodity trader” style as opposed to the “food ingredient buyer” style. Exporters learnt that price is the single (only) issue, that quality is not important because there is a price, (usually low) for every grade and that value addition is achieved at destination not at origin. By doing business in this way companies never developed the necessary skills and procedures for export to high value markets. The short term impact of this this has often been hidden by the overall rising price levels for food but the long term impact, the lack of value addition and secondary processing for export in African countries is clear.
In the early days of each programme we were surprised by the views of some experienced business people. For example, there was one veteran businessman who informed us that EU import duties were limiting access to the European market. He insisted that the only solution was to ask the “European President” to change this. In fact, the products that he supplied are free of duty for import to Europe. His source for this incorrect information was his Chinese client who clearly was equally poorly informed. When we explained there is no import duty on the product he was selling, and that there is no European “President” involved in these matters, he was unwilling to believe us. Two years later his company now exports to the Netherlands and Germany.
In the first stage of the programme we do not try to convince our participants of the new approach. Instead we assign them to do research online about the market and buyers requirements including import duties. We show them examples of successful exporters, often from other countries, who were able to export to European markets. We bring them an experience of the European markets with missions involving retail assignments (a key eye opener), buyer visits and factory tours - not to sell but to learn and understand from the buyers’ stories and their own first hand experiences. In this way, with our guidance the companies reaches their own conclusions about the European market. By working together the group changes their own mind-set. We then translate this learning into action plans so that each company has a list of questions and objectives ranging from information needed about products to business practice , contracts, business travel, logistics and the full range of export functions.
We have learnt from this that it is important in the first stage of an export development program to have participants experience the business culture of the new market and to follow that experience with a focussed process tailored for each participant working in groups so that they seek and find the correct market information and market entry strategies through good research (online and direct), experience and communication. This experience is the catalyst that changes the mindset.
Jim Fitzpatrick is a consultant and trainer in international trade and business development. He has extensive experience in the trade of food ingredients and developing suppliers . He is an independent consultant and has implement several export development programs for the CBI , GIZ, Competitive Cashew, IFC and a range of private companies. firstname.lastname@example.org
René de Baaij is an consultant and trainer in international trade and business development. He has extensive experience in the development of entrepreneurs, their organisations and export related institutes. He is an independent consultant and has implement several export development programs for the CBI The Netherlands. Next to this he works with major companies in Europe, and he is associated with SIOO University. email@example.com
Processing the anger and sadness that inevitably develops in organizations requires a dialogue that focuses on the strength and positivity inherent in people.
Structures, processes, and routines are regularly (re)designed. This is done quickly and efficiently thanks to technology. Often with pre-configured systems and processes thanks to smart experts. "Us, as we are in the organization", frequently leaving stunned and powerless.
We experience all this as overwhelming and intimidating. Not that we're showing this. We loyally cooperate, contribute upon request, and preach the new gospel. But the processing is slower. Our logics in word, image, and action have not yet been adjusted. We experience inability, feel frustration, and develop a longing for when everything was "as it used to be". Ultimately, this causes friction and tension. Visible in subversive behaviour, in unspoken distrust, in gossip and backbiting.
These become collective emotions that nestle in the collective memory and behaviour of an organization. Until we think it's normal not to trust each other. Just finding it easy to speak ill of each other. Finding it common to manipulate and haggle. Even if this otherwise normal human behaviour goes so far that it no longer contributes to the functioning of the organization. As the lubricant of the informal, the poison gets into our system. And with it the poison in our own active existence.
Absorbing and processing this poison can or should even be a role for the leaders in the organization. Unfortunately, the opposite is also true, they themselves intentionally or unintentionally feed the undercurrent of sadness and anger.
But more is possible. By bringing the conversation back into the organization, we can look for what hinders us and what gives us energy again. Can we examine our logics and connect them to the processes and structures that have already been established. Can we bridge differences, bring people together and create connections. Everything we used to be toxic we now use to detox. We gossip until we see what helps us and what doesn't. Name our distrust to develop trust. And examine our behavior to convert subversive elements into informal effectiveness.
This is not something that comes naturally. This requires commitment, stamina, respect for those involved and positivity. Leadership to balance the hard reality in our processes and systems, with our soft and unruly reality in our thinking and doing. Learning together starts with a good conversation. Learning together is the antidote.
Rene de Baaij
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