[MUSIC] Now let me switch gears to a brand I truly admire, which is Disney, but I'll call these the Disney don'ts. They don't always get everything right. And this is just across the channel here in France, and that was what originally termed Euro Disney. And we're going back in time here, but Disney used to just have two theme parks, one in Florida and one in California. Both hugely successful. And their first venture on to foreign shores, if you will, was their theme park in the outskirts of Paris. Now, it's started out with naming of this brand extension if you will, which was Euro Disney. Now, to the Americans, they thought of Europeans. And I remember this when I arrived in the US for the first time as a student in 1984. One of the other students said, so you're European. I said, I'm not European, I'm German Iranian. This is not, I don't get this concept of European, even though with the European Union. This was really not a concept. I think it's evolved over time but it's certainly wasn't back then. And the Euro is also the currency that the European Union has or the European community has. And so imagine you named the US theme park, Dollar Disney or the Japanese one, Yen Disney. So that's sort of how people thought about the Euro Disney here. So it started with the brand naming which kind of highlighted that cultural distance, the top management team had. Often, when you're successful in your home market, it also gives you this false confidence that you can replicate your success. Ironically, the more similar the culture is that you're entering, the less sensitive we are to local differences. So when Tesco for example, went into America, the United States, with Fresh & Easy. They didn't listen quite as closely to local differences as they did when they went into Korea. And of course, it's those small differences that make the difference between success and failure. So here's some of the things that Disney did. The whole management style, we know what we're doing, really alienated some of the local management. Their HR practices, which were all about standardization of a certain dress code, even you know whether you could have facial hair or not. Men were asked to share for example. This was not aligned with local practices, it actually offended some other local workers. And they actually got the French labor unions to come in and investigate, they even had strikes back in 2009. You can go to YouTube and see some of the Disney workers with their plaque cards in the theme park. Which was not great for the customer experience as you might imagine. There were also some strategic mistakes. California and Florida both have beautiful weather, year round. Now, they knew France didn't have beautiful weather year round, and it rained. And they thought they accommodated that. They had, you know? They would cover you, for example, so you wouldn't be rained upon. But that wasn't really, people didn't really feel like going to a theme park for much of the year. So, in terms of attendance, they didn't really get what they expected. They also didn't think of some of the cultural differences when it comes to parents. In the United States, parents would take their children out of school to take them to this theme park. Whereas, in Europe, school was not really something you'd take your kids out of. So, it was really in the summer vacations where you had most visitors come. Which of course, created real issues in terms of the number of people in the park and stuffing levels. They also thought of simple things like meals. In the United States, people will walk around while they are looking at things with a snack in their hands. This is not what Europeans typically do. They want a sit down meal, they all want it at the same time. So now you have thousands of people converging on a limited number of seats at the restaurants at the same time. This is not what was experienced in the United States. When it came to breakfast, they thought of the French breakfast, which is quite minimal and light. But of course, they didn't think of the other Europeans who were coming to the theme park. They used all English only signage which offended some of the tourists. The attractions were quite American, and they didn't travel quite as well as anticipated. Something like Frontierland which was all about exploring the west and cowboys, wasn't really the childhood heroes Europeans had. They had Asterisk and they had Tin-Tin, which were characters, cartoon characters, that the Americans weren't even aware of. So everything really have to change, in terms of the way they built the theme park, down to having kennels for Europeans who like to travel with their dogs. Lots of small differences that made a big impact on the customer experience. Now, they've had to change it, and they've continually had to change it, and they're still trying to work out some of those kinks. One way to avoid the Disney don'ts is to think of a tool which T.A. Hagler actually came up with in the 1950s, which he called comparative analysis. And this is, there's a simple trick to this tool, and it says, don't think of yourself as successful because of your genius. Think of the environment you operate in which made you successful. So imagine, you took a whole bunch of strategies, and threw them out there. And the one that survived. The one that customers adopted is the one that had to survive because the environment forced it to survive. This really gets away from your management, as I said, competence. To focusing on the environment. So, what Disney should have done is think about, well, what forces to succeed. They would have found the weather in California and Florida. They would have seen the American culture as helping them, have all their different service offering from breakfast to lunches. They could even think of the regulatory environment. In France for example, people cannot simply work during peak hours without taking a break or seven days a week. And take extra time off during other times of the year. In the US, you can. In France, you couldn't, which had a huge effect on their labor costs. So think about this compared of analysis. You might think of this, the framework. We tend to think of the five season marketing which is this analysis of your customers, your competitors, your collaborators, the context as a whole. Whatever lens you use, think about your strategy succeeding. Because the environment, the context forces it to succeed. And then think about what is different in the environment you're about to enter. And that might give you grounds for thinking about changing your strategy. So to summarize, there's a simple two-by-two you might think of. One is, what are the forces for globalization. What is forcing you to have standardized approach for your brand around the world? This could be from the customer, because they're present around the world. Because the communication channels are global. Because of a cost structure that's global. You might think about BP when they supply jet fuel. Their customers are truly global. They're flying from country to country. Their planes are standardized. You have to have a standardized approach. If you stick with BP though, the forces for globalization are quite low, if you think of local gas stations. There's not a strong force for globalization, but there's also not a strong force for local adaptation. People fill up their cars pretty much the same way around the world. Now where are there strong forces for localization and globalization? One of the companies I worked with for about eight years is HSBC, and I helped them roll out this concept of world's local bank. And what that really drove is that kind of paradox, that yin and yang between the global and local. That inherent tension that you have between standardizing and adapting. And they realized they had to be the most global brand, they needed to be global to serve their customers. To assure their customers. But they also needed to be super local. To the extent if, here in London, when you are in a neighborhood that is, let's say, predominantly Arabic. You then have to have Arabic people behind as tellers, serving them. The language is have to be in Arabic, you have to think of Sharia laws when it comes to lending. And you have to introduce them into your local markets. So for HSBC, they had to develop on both of those aspects. So, think of this trade off, this yin and yang between standardization and adaptation. And if you do so, you might escape this trap of being mindlessly global, or hopelessly local. [MUSIC]
