The April 2017 McKinsey Quarterly article entitled “The global forces inspiring a new narrative of progress” really captured my interest. Since the Language Services Industry is intimately tied to and impacted by global trends, I gave it a good read. Then I read it again…and again.
There is a lot to digest, but the topics highlighted in this article offer insight and, for the most part, a positive outlook for global business. This is great news for us, but I if we are to succeed as and industry and ascompanies operating within it, I believe it’s important to consider the points the folks at McKinsey raise.
The article talks about a number of global trends that are impacting international business now and will continue to do so for some time to come. I could see so many correlations to language services that I didn’t know where to start. I’ve decided to start with something that positively jumped off the page at me and is most definitely an opportunity for our industry and that is “local precision at international scale”.
While the McKinsey authors applied this concept to businesses that would be our clients, there is no doubt in my mind that our customers will be increasingly demanding this of us when it comes to communicating with THEIR customers. They gave a couple of interesting examples of well-known companies competing “with an increasing number of world-class local players by carefully recognizing the subtle differences in local taste and custom”. If there was ever a sentence that summed up our industry’s purpose, it is that!
One company cited in the article that provided a great example for catering to local tastes was Estee Lauder, a company with a well-known and well-understood global brand. Although I’m sure Estee Lauder sells its standard line of cosmetics in China, the company decided to developed a China-specific beauty brand called Osiao to cater to that country’s specific tastes and preferences (and no doubt compete with local Chinese brands). The decision makes sense given the size of the Chinese cosmetics market, but I suspect the trend for local precision is happening globally with B2C business…probably extreme precision in some cases.
I expect this is happening at the B2B level as well. When traditional barriers to competition are removed (the Internet) and businesses want products that meet their exact specifications while having local and international supplier options, the only way for the international player to compete is to provide what the local company can deliver. This includes language.
Language will no doubt be an increasingly important part of this equation to help international players compete at a local level (or even distant, smaller players that are also global). While it will bring a different set of challenges, this is, by and large, great news for language service providers. Why?
· Local precision = more business opportunities for LSPs.
· Local precision suggests specialization, which generally commands better margins.
· Global B2B customers are beginning to behave like B2C customers: I want it the way I want it (personalised) and now. Personalisation with local precision = extreme local precision.
· Demand for certain languages is bound to increase substantially, especially in markets such as China, India and Southeast Asia, where there is scalability for locally targeted products (like Estee Lauder in China).
The LSPs that will truly win in this scenario will be the ones that understand how their customers are competing for business, where they are competing and in what way they are communicating with their “local” customers. These LSPs will be able to anticipate and more quickly adapt to their customers’ ongoing global, yet local language needs, needs that are likely to extend into very specific requirements and well beyond translation into new linguistic frontiers. This will enable them to keep delivering local language precision at international scale and remain one step ahead of their competition.
The McKinsey Quarterly article sparked a lot of other ideas and I’ll be applying some of their observations to the language services industry in subsequent posts. Stay tuned!