How do businesses reach across the globe?
Any large organization has multiple stakeholders with different needs. And a truly global business has to deal with tremendous variation in cultural and regulatory contexts. For example, in the U.S., per capita credit card penetration is 2.5—meaning there are more than 2 credit cards for each person in the country. In Saudi Arabia, where Islam forbids the use of credit, the penetration rate is .04. How can a company cope with exponentially increasing complexity as it moves to more and more markets? And are there some businesses that don't translate easily—or at all—across borders?
Q: How does a U.S.-based business connect with customers and other stakeholders in diverse global markets?
Tolan Steele: Visa has about 60% of its revenue from outside the United States and we have a lot of different payment products that are issued by banks around the world. I think there's a couple ways to tackle that.
I find my company constantly fighting the U.S.-centricness that can happen when a company is headquartered and based and gets most of its revenue from this economy. The way you combat that is, and I'm an exhibit of this, you rotate your people around the company. I've been there for 14 years, but I'm now four months in Singapore, going to be there for two years with my family.
It's comic to me because I've gone from the guy screaming at the phone with the people in the distant markets in the field saying, "You guys don't get it. You have no appreciation for structure. There's a way we do things here at Visa," and now I'm the guy saying, "You guys are the flunkies who have no idea what's going on in the marketplace. Oh my God. And would you speed up, because you're so slow." You can channel your people and flip them in different places. Again, I think consistent of what's been said, it's the flexible people that hopefully rise up to become your leaders.
The other thing I would say is really pressing for diversity of a product set and being willing to let that product set grow within the markets in a way that reflects the natural-you talked about a lot of things, but there's cultural dimensions, there's economic drivers-but my example would be, so Visa does both credit and debit.
Everyone things we're a credit card company. We're not. We do the processing. We do the branding, but we issue credit-we have products that are credit products or debit products. As you then go around the world, for example, in the Middle East, credit is actually a bit heretical and a little bit against their religion in Islam. So debit is big and that becomes, actually, a very smart business strategy for us, 20 years ago, to have gotten into debit because MasterCard is not as big in debit. So we're growing faster than they are in the Middle East.
The same is true in Russia where people actually don't have a lot of trust in big organizations or big systems, perhaps big government, and so they really like cash. All they do is they use their card to go and get cash. So we have a big ATM business.
Again, our product set, I guess I would say, it's common globally and yet, where it grows locally reflects some of those differences I think that you're talking about. Again, being open to that and embracing that and not trying to force fit a certain product mix or a marketing message down any one channel or into any one market, I think, is critical.
Sudeshna Basu: As far as globalization, there are-again, and when companies are termed to be global companies, I broadly see two categories that they fit into and some companies fit both and some are one, but not the other. So in Tolan's example, I think Visa fits both the categories, one being global in the sense of having a global market and actually serving a customer base and having revenues from a global...across the world. And the second being not so much as serving a really broad global market but actually having their development and services being built globally.
The reason I mention that, again, just from personal experience at Intuit, I feel Intuit has done a really good job at the latter, which is being successfully able to leverage the global talent pool mainly out of India and expanded their development and the scale of development and built up a successful development center out of there.
However, they have done a really-they haven't succeeded at all in being able to capture the global market, specifically the local market, with the products they had envisioned. Initially, going with-they have flagship products which are very U.S.-centric; TurboTax, QuickBooks, Quicken Tax, and accounting products which work really great for a U.S.-centric market. They tried the strategy there, did not work, and I think they're still learning how to sort of capture the market.
Again, to your point, I think being able to be successful globally depends on whether it's more on the development side of building the products as opposed to actually serving the market from a customer point of view.