Going global: How to plan strategy and building local relationships

Why would a nonprofit expand globally?

It has been noted that many nonprofit organizations would like nothing better than to go out of business, if that means their mission has been accomplished. But for most organizations, this is unlikely to be the case: There is always more work to be done. For many organizations, their mission may prescribe that they continually look for more ways to help their constituencies. Sometimes, organizations go global to follow the funding. Those who fund the organization may want to expand into new countries and, with the right resources, many organizations will follow through on their supporters’ priorities.

But whatever the reason, for-profit companies and nonprofit organizations alike should not expand at all—let alone on a global basis—without some careful planning.

Developing a strategic plan for operating internationally

Global initiatives do not happen overnight; they require a significant investment in preparation. It would be difficult to over plan, and hasty or short-sighted decisions can come back to haunt organizations. Creating a five to 10-year strategic plan will help management identify where and how to expand.

• Mission: Organizations should expand into countries that align with their mission. The selected countries should meet the organization’s purposes and objectives, and align with the types of donors and beneficiaries who usually work with the organization. It is important to define the scope of services that will be provided, addressing what the organization will do—as well as what it will not do.
• Vision: What do you want to achieve? Define where the organization wants to be in three, five or 10 years, and the extent of the services to be delivered.
• SWOT analysis: A common approach to strategic planning, identify the organization’s strengths and weaknesses—an internal analysis—as well as its opportunities and threats—an external perspective. This can help determine any assistance needed and identify the type of partners who can help.
• Strategic goals: Aim for measurable outcomes and targets.
• Tactics: Determine the operational tactics that will help achieve the strategic goals.

Strategic planning should be a continuous process, so the strategy should be revisited—and revised, as needed—at a minimum on an annual basis.

Making the case for expansion

Based on the strategic analysis, the organization has decided to expand. To obtain buy-in from the board and funders alike, there needs to be a compelling story—one that is supported by research, analysis and a plan for success.

• Market research: Identify where the need exists. What organizations are already there? How successful have they been and what challenges did they face? Are there partners there who can help? Conversely, look into what organizations are not there and why. The hurdles in any location just might be too high to achieve success.
• Donors and funders: Determine the needs of this cohort. They may have their own agendas regarding where they want to be, and this can inform the direction of the organization and decisions about where to expand. There may be very specific requirements to meet before funding can be appropriated for use. Funders may differ in their requirements, and the organization will need to have the proper infrastructure to accommodate them.
• Conditions for success: In addition to geographic assessments, what local help and expertise may be available? Budget needs can differ from country to country. Take the local culture into consideration, as well as the political and regulatory environments. Cybersecurity and safety should be assessed. Broadly speaking, the targeted location’s infrastructure should be strong enough to support the mission.

Defining the required support structure

From headquarters to the region to the specific locality, what administrative and program structure is needed to achieve success?  It may not be necessary to set up all functions simultaneously, and operations in multiple countries may be able to take advantage of shared services.

Market research should help the staffing plan by identifying the availability of and access to in-country staffing and expertise. Understand the organization’s core competencies and leverage partners where needed to greatly increase the chances for success.

The more an organization can reduce variations and develop a consistent delivery method for services and administration, the more efficient it will be. By measuring outcomes, management can continuously improve delivery.

Identifying and mitigating risks

On the flip side of the list of criteria for success are those elements that can work against the organization. From fiduciary and compliance risks to operational and security risks, it is critical to develop a mitigation plan. This might include an ongoing risk register to log potential risks identified by the organization, with a rating for each risk regarding potential impact and likelihood. Create mitigation plans accordingly, then manage and track issues when they arise.

Develop a project plan

Once the plan to expand has been approved, the plan can be divided into three parts:

1. Launch: Charter the initiative, secure the funding and bring the appropriate leadership and stakeholders together.
2. Execute: Deploy the startup checklist, attract program partners and the participants being served, and pilot delivery of programs and services (continuously refining and improving along the way).
3. Optimize: Measure progress and results, and adapt accordingly.

Building relationships with local advisors

Where does management start and what needs to be known? How does the organization start building relationships that will be needed in each country? The reality is that every situation is unique, so the challenges will differ from organization to organization, and country to country. From a risk management perspective, how do organizations know if they are expanding in a manner that is appropriate and prudent? As chief financial officers consider “partner, build or buy” scenarios for their organizations’ international expansion initiatives, here are some of the common challenges they are facing:

• Multiple providers across locations and service lines
• Several reporting and management systems and tools
• Inconsistent service delivery and timeliness
• Reactive communications and delays in responsiveness
• Lack of confidence into compliance status
• Limited visibility and transparency into key filings
• Passive attention to local issues and upcoming risks

Develop a global compliance approach

Organizations cannot completely eliminate risk, but risk can be diminished significantly with the right approach in place. It starts with understanding and assessing your global strategy and local needs. Management should consider the following:

1. How important are risk mitigation, efficiency and convenience?
2. What are the organization’s plans for global expansion? Has it entered new markets recently?
3. Has the organization experienced problems with meeting local filing requirements?
4. What is management’s level of confidence that regulatory requirements are being met?
5. Is management currently using multiple service providers across all entities and borders?
6. Is management experiencing inconsistent service delivery, communications or access?
7. Does the organization use several reporting and management systems globally?
8. Are global compliance results and issues escalated in a timely manner?
9. How cumbersome are communications, internally and externally, across the global organization?
10. What changes in the process would help most?

Streamlining your approach

Here are some basic steps to take when considering the “record to report” continuum:

1. Assess your confidence in foreign compliance status by country:
   a.  When and where are filings due?
   b.  Who is responsible?
   c.   Are the expertise and skill sets available in-house?
   d.  What are the consequences if risks are not managed proactively?
2. Evaluate annual in-country requirements and costs by jurisdiction (both current and expansion locations).
3. Develop standardized checklists, escalation protocols and an overall approach to execute on regulatory requirements.
4. Annually review key performance indicators, proactively manage compliance challenges and streamline processes by rolling forward structured processes.

Benefits of a coordinated approach

Transparency and accuracy are just some of the benefits of carefully planning for global compliance needs:

• Efficiency: A simplified process for managing global operations, streamlining activities year-over-year and, ultimately, lowering financial and resource costs for the organization.
• Risk management: A proven and effective approach that identifies emerging regulations and changes, proactively resolves issues and minimizes foreign compliance risk.
• Convenience: A dedicated team with attention to continuous communication, driving accountability, providing visibility and avoiding any uncertainty.

Ultimately, it is about avoiding surprises.