Taking the First Steps Into International Expansion

Smart leaders who are preparing for global expansion naturally tend to focus on concrete challenges. Areas where performance is more visible and tangible – from supply chains to market strategies, from risk management to regulations.

While that makes good business sense when you’re taking first steps towards international expansion, it’s important not to underestimate the people factors.

This article is a people-first guide for you and your organization, because today’s global leadership demands a high degree of cultural intelligence.

When you master this skill set, the operational pieces fall into place more easily. But if you overlook these so-called “soft” skills or fail to invest in culture early in your growth journey, your technical expertise may not bridge the gap between ambition and success.

Intelligence Beyond the Business Case

Let's assume that your ambition is matched by the market analysis. The financial models for expanding internationally project attractive returns, the business logic is sound, and the rewards outweigh the risks. It’s all systems go...

But even your market research numbers and understanding the economic, legal and consumer landscapes in your target regions only tell you so much about the future.

Even when the business case and the fiscal projections are rock-solid, your global expansion demands qualities that traditional leadership playbooks don’t emphasize enough: the human elements.

Consider research from PwC reveals that one in four CEOs have cancelled or delayed international initiatives. Not due to weak financials, it’s leadership talent constraints. [1] Those leaders who are happy to listen more than they speak, and question more than they direct.

Leading an organization that’s changing direction and moving into new territories and markets requires what, international management specialist, professor emerita Joyce Osland, calls "meta-level competencies." And these run deeper than strategic thinking or operational expertise. [2]

Confidence Never Trumps Understanding

The most successful global leaders bring a studied humility to their work, recognizing that their existing knowledge, no matter how extensive, only partially prepares them for new cultural contexts.

In practice, this kind of cultural intelligence is the ability to read rooms you've never been in before, to hear what isn't being said, to sense when to step back instead of pushing forward.

Strong global leaders develop an almost anthropological curiosity and an analytical mindset about different ways of working and thinking.

Take "Tom," an executive in a multinational technology company interviewed in the Osland research. When he faced a critical product issue in a new market, his approach to the challenge wasn’t as a problem to solve, but as a culture to understand.

"I spent more time listening in those first few months than I had in the previous ten years," he says. This humility and honesty opened doors that confidence alone couldn’t unlock.

On the reverse side, British supermarket giant Tesco's "Fresh & Easy" expansion into the North America market demonstrates the inherent danger of confidence overriding understanding.

Tesco invested $1.5 billion but wrongly assumed their U.K. experience was a template for American consumers.

While the convenience store model works in the U.K., it’s proved a poor fit for U.S. shopping patterns [3].

Sometimes, conventional business wisdom from one market becomes a liability in another, when knowing becomes more of a priority than learning.

Building Trust Through Authenticity

Globally, the key to building trust is through authenticity rather than authority. That’s as true for brands and businesses as it is for individuals and global leaders.

Each market also brings its own web of relationships between headquarters, local teams, partners, regulators, and stakeholders. All these groups have different expectations and ways of working. And this complexity calls for openness over certainty, and genuine connection over command.

One of the ways that leaders turn this “authenticity principle” into practice is through shared discovery. In an interview, Tom highlighted the example of "inquiring minds want to know" – an exercise reframed as a game to encourage difficult cross-cultural conversations to happen.

This informal approach helps to surface cultural misunderstandings and build bridges far more effectively than formal meetings or centralized directives.

As another leader interviewed in the Osland report reflected, "My personal challenge was to meet the needs of the corporation but to also consider the individual human level impact whenever I could."

This dual vision – having one eye on organizational goals and the other focused on human connections – marks the difference between managing globally and leading with cultural intelligence.

Charting Unfamiliar Regulatory Waters

Each new market brings its own matrix of rules, regulations, protocols, and practices. Successful global leaders approach this complexity not as obstacles to overcome, but as systems to understand.

For example, banking regulations, data protection laws, and employment standards can vary dramatically across borders. There’s no one size fits all, which creates a need for authentic engagement with local authorities.

This was Michelin's approach in Brazil. When the French tire maker was divesting a rubber plantation, the company put cultural concerns at the center of its decision making.

So, instead of imposing an exit strategy, they worked closely with local agricultural authorities, labor representatives, and community leaders. This involved the transfer of ownership to local farmers and required a deep understanding of regulatory requirements and cultural context.

Early on, Michelin's leaders recognized the balance between technical compliance, genuine engagement with local stakeholders, and respect for community values. [4]

Global Takes Time to Meet Local

Finding the balance is also a key element of talent management. And when it comes to global leadership, technical capabilities and cultural dynamics are inseparable.

Both cultural fit and trust factors are critical when choosing effective leaders. It also sends strong signals of intent about how the company will operate.

This could be described as a geocentric approach, where “borderless recruitment” practices prioritize experience and skill over location.

This concept also applies to how firms select local partners. Global leaders recognize that lasting relationships grow from genuine cultural exchange, rather than purely commercial advantage.

According to research by Harvard Business Review, those who succeed internationally often spend months building relationships before any formal partnership agreements take shape [5].

Authentic Leaders Make People Priorities

The most effective organizations nurture leaders who can inspire trust through authenticity. They’re people’s people, who have a natural ability to work across time zones and cultures precisely because they have genuine respect for different perspectives.

In an increasingly technology-driven world, global expansion will continue to rely on human connections.

Of course, the technical expertise of leaders plays its part. But the ability to communicate effectively and transparently with both internal and external stakeholders, build relationships, navigate cultural complexities with humility, and create trust through genuine engagement will be a determining factor in long-term success.

Leading a global organization is more about the capacity to learn what will work, as opposed to the certainty of knowing what already works. In practice, it means putting people before process.

Frequently Asked Questions

Why is cultural intelligence important in global leadership?

It helps leaders navigate new markets, build trust, and adapt strategies to local cultures, ensuring long-term success.

How can leaders build trust in international markets?

By leading with authenticity, fostering open dialogue, and prioritizing relationships over rigid authority.

What challenges do businesses face when expanding globally?

Misunderstanding cultural dynamics, poor local adaptation, and underestimating the role of trust in partnerships.

What’s the key to balancing global and local leadership?

Combining strategic goals with respect for local expertise, fostering collaboration, and adapting leadership styles as needed.