- Grow to support existing clients’ needs…
In planning and executing its advance on the US, adm was able to develop an opportunity with its largest global client. That relationship was the reason for choosing to locate in Stamford, Connecticut, just 15 minutes’ drive from that client’s then HQ in Norwalk.
“Of course they didn’t simply hand it over – my predecessor, Lee Allen, and the team had to convince them that adm could get started up and prove credible in this market,” says Ed. “But they’ve been an incredibly supportive and understanding partner.”
- …but be ready to diversify
adm avoided the pitfall of being entirely dependent on one big client in its new market. “That journey of diversifying, and not being a one-trick pony, was a key part of the plan from the outset,” Ed says.
“US clients are very technology-driven, and the approach to sales and execution are definitely underpinned by a technology-led solution. This was a departure from our engagements in many other markets around the world that were less technology-led.”
- Get the infrastructure right
Establishing key support functions was one of the biggest challenges experienced by the US arm of adm. The business is highly dependent on finding the right supply chain partners: establishing these relationships and setting up systems to deal with them inevitably took time.
“Our business is highly focused on taking a brief, understanding the design elements, finding the right sourcing partner, then production execution and delivery,” says Ed. “The procure-to-pay process is a critical solution point, with a lot of moving pieces.
“I would say it took three to four years to get that in place. We still have work to do to be as efficient as we can be, and portions of the processes are a bit more manual than we would like. When you’re dealing with a hundred thousand order lines, it’s an awful lot of data to track.”
- Consider alternative entry models
The achievement of the infrastructure to support those processes could have been much swifter, Ed recognises, had adm decided to advance through acquisition or partnership.
“The expansion of an existing client relationship made building from the ground up the obvious option,” he says. “However, it’s undeniable that it would have been possible to speed our movement into the new territory by buying a small, US-specific player. You can then add your business expertise to their operating foundation.”
- Supplement your expertise
While it didn’t use acquisition to enter the market, adm has since bought the Russian and US entities of Supremia, a packaging specialist company.
“It’s given us new capabilities and extended our business lines in value-added packaging,” Ed explains. “This isn’t just a benefit for the US business – we’ve done many sessions around the global business to share this expertise and help drive the sales process.”
- Get the right people in place
Attracting the best talent is tough when you’re an unfamiliar name. Lack of premises at the start of adm’s US venture made that harder still: Ed’s predecessor had to perform early job interviews in Starbucks.
But there’s no room for compromise in staffing a new venture: “Our business planning provides a clear line of sight to the opportunities we would like to pursue, and the talent we need to bring on board to make those ambitions a reality. Our business plan gave us the proper roadmap to the right type of talent,” Ed says.
“There’s a certain level of expectation when you’re dealing with large multinationals: we don’t have any room for error in these relationships.”
- Be realistic about payback time
Ed counsels businesses targeting a new market to think through not just the upfront investment, but the detailed timescale of achieving growth.
“Businesses might properly set up the investment, but fool themselves into thinking the growth curve will be a lot faster than it really is,” he says.
“In our business, the typical cycles for new business pursuit can take 12 to 18 months. You also have to factor in that a significant amount of your leadership time will have to go on doubling down on the operating process to execute for existing clients, rather than driving new business.”
- Get the right support
Drawing on external expertise is critical to a new venture. In adm’s case, HSBC was a key ally.
“We couldn’t have funded our expansion without HSBC’s strong support,” says Ed. “They really take the time to understand our challenges and find solutions.
“Some of our requests are not the most normal – we have clients that ask for 180 or even 360 days’ payment terms. HSBC have provided invoice financing to enable us to do our third party buying without a funding gap.”
The business has made use of HSBCnet to keep a firm grasp on its global cash management: “HSBCnet has been a very easy to use, flexible system that has enabled our team to work seamlessly across the globe in support of the US market,” says Ed.
Moving to the US has generated strong growth for adm over a relatively short timescale. “In 2021 we will pass a significant threshold, with revenues of $90m in the US and $100m in the Americas as a whole,” says Ed.
“More widely, it’s given us a truly global proposition for our client roster. We’re now in a place where we can take our clients on a value journey across all the key global markets.”