In 2020 U.S. companies were forced into a new world of lockdowns and virtual relations, where work norms had to be refashioned. A commercial officer looks at the way ahead.

BY AILEEN NANDI

The year 2020 redefined many jobs and businesses. Contending with the pandemic, plummeting international trade and investment flows, and crippled international travel routes, many U.S. exporters found their business and work situations dramatically altered. To help our American clients, diplomats of the U.S. and Foreign Commercial Service, along with interagency colleagues, quickly pivoted multiple times to assist with lockdown emergencies, supply chain resilience issues and payment concerns, and to identify or vet foreign sources of supply of pharmaceutical and medical products, and much more. In addition to coping with these evolving needs, most of us commercial officers found ourselves working longer hours virtually, on our personal computers.

As the months passed, we watched many countries’ economies enter the doldrums. Some governments responded by enacting inward-looking policies to focus on domestic production and erecting protectionist market barriers, which make it harder for U.S. companies to compete fairly. These changes propelled us into a new world. For many of us—and our clients—it was like entering into an entirely different environment where we had to relearn or refashion work norms.

At this point, we all want “our real lives” back. But a dose of pragmatism is in order. Given that the International Civil Aviation Organization estimates that international travel won’t rebound to 2019 levels until 2024, it behooves us to find ways to help U.S. companies succeed and thrive amid these unprecedented difficulties for the foreseeable future. What are the lessons learned and proposed ways forward to help U.S. companies succeed in this era of disruption?

Challenge Begets Opportunity

U.S. and foreign companies are keen to connect virtually. We are witnessing unprecedented demand for our services, largely as a result of a fee-waiver granted by the Office of Management and Budget for part of Fiscal Year 2020. Initially, this was a surprise for us in India, which is still a face-to-face market where personal relationships matter. U.S. companies normally have to travel to India (or host their prospective partners in the United States) to cultivate the relationship. Indian companies can take longer to finalize a business deal because they work on the basis of trust, which takes time to develop. We were delighted to find that Indian partners have been very responsive to connecting with U.S. companies virtually.

Though Facebook made an exception—and waves—when it invested $5.76 billion in Reliance Jio in April 2020 after several months of virtual negotiations, these are large, well-known companies that can afford top-notch Wall Street investment and advisory services. Regular U.S. small and medium-sized enterprises will want to know that the foreign buyer will pay them, comply with all contractual terms and represent their product or brand well. In turn, the foreign buyer will want certainty that the U.S. company can commit to after-sales service and a long-term effort to make the partnership a success. These factors are much harder to assess and commit to in the virtual world.

Virtual efforts can provide broader reach more quickly. In one notable example, we worked with a U.S. company to host almost 400 potential Indian partners from across the subcontinent for a virtual promotion event. That company would otherwise need at least a week in the country to do multiple promotional events in different cities to reach a fraction of that audience. Indeed, because American small and medium-sized companies now don’t need to factor in travel time or costs, they have more bandwidth to connect with many more potential customers. Savvy, export-focused companies can create multifold new business leads without leaving their laptops. However, these leads will still need vetting and the U.S. business will have to devote time to pursue the partnership.

Does Virtual Work Work?

Will this virtual world yield successes? We hope so. In many cases, virtual meetings are a way to keep the discussion alive until people can meet in person again. From my perspective, virtual meetings are much more beneficial for an existing relationship than for a U.S. company reaching out to foreign partners for the first time. Some consumer and software products can be sold internationally without human interactions on platforms such as Amazon or eBay or downloaded from the cloud.

But for the vast majority of American companies, especially those dealing in specialized or customized equipment, products or services, an in-person visit or meeting is often required to finalize the specifications or negotiations. In short, virtual meetings are a stopgap measure in this interim period to keep businesses talking or afloat until conditions allow them to travel to meet with potential partners.

Virtual meetings are a stopgap measure in this interim period to keep businesses talking or afloat until conditions allow them to travel to meet with potential partners.

During a previous tour in India, in 2008, I worked with colleagues to coordinate virtual introductions and meetings after the terrorist attacks in Mumbai. I did the same in Central America from 2014 to 2017 when dangerous conditions hindered many U.S. companies from routine business development trips. In these instances, we brought U.S. and foreign companies together easily, but we did not see many results and experienced higher-than-usual no-show rates. Though companies are more and more familiar with and capable in virtual environments now, I predict that many will revert to most pre-pandemic norms once conditions warrant. If you’re in a competitive situation, you can’t resort to negotiating with a partner on a screen when others are making the effort to woo the potential client in person.

The quality of the virtual platform matters. We’ve deployed a lot of virtual platforms, ranging from WebEx, Microsoft Teams and Zoom to BlueJeans, Remo and more, depending on the nature of the virtual interaction and our clients’ preferences. Some virtual platforms have worked through well-documented security issues and require authorization to use. In addition, the old adage “you get what you pay for” applies, and spotty internet connections, background noise, home commitments and other factors can all make virtual interactions more challenging than a focused meeting in a board room.

Numerous memes have popped up spoofing real-life examples of virtual meetings gone awry, and there’s much more room for error when incorporating different time zones, language barriers, translation difficulties, technological failure and, well, life. It’s easier to explain these mishaps to a known partner than during an introductory phase.

A Cautionary Tale

Under these unusual circumstances, many people feel they’re working harder than ever before, which can lead to employee burnout. This is especially true in countries that have a significant time difference with the United States. For example, India is 10.5 hours ahead of EST, which requires colleagues here to do the virtual matchmaking in the evening hours. Even when allowing colleagues to shift their work hours to accommodate this new schedule, they are still routinely missing family and other home duties and events. Previously they would do this work for visiting U.S. companies during the workday in most instances. Paying attention to colleagues’ emotional health in these challenging virtual environments remains of critical importance.

Though it is popular in some quarters to envision the widespread adoption of “virtual work” on a permanent basis, there is little chance that we will lose our jobs to virtual reality in the foreseeable future. Commercial diplomatic work is as important as ever; since American companies cannot travel, we are their eyes and ears on the ground. U.S. small and medium-sized companies tell us they need actionable market intelligence. Our insights can inform them whether a potential foreign company is a trustworthy partner. Our counseling can help shape their strategies in approaching government officials and formulating sales plans in our respective countries.

With the rise of protectionist measures worldwide, our in-person interactions to advocate on behalf of U.S. commercial interests will remain an essential function.

And while our locally employed (LE) staff is instrumental in helping us win every success, U.S. direct hires remain essential for delicate commercial diplomacy engagements with host-country government officials. When dealing with government counterparts on thorny issues like market access barriers or complicated advocacy interactions for U.S. companies’ international procurement bids, a U.S. direct hire can have a significant impact. In some countries, LE staff colleagues may have legitimate security concerns if they directly advocate for U.S. government policies or companies.

With the rise of protectionist measures worldwide, our in-person interactions to advocate on behalf of U.S. commercial interests will remain an essential function. To be successful in commercial diplomacy and advocacy, one must know their government counterparts and understand their language, way of thinking, negotiation tactics and culture. This requires building interpersonal relationships, just as leading U.S. companies do with their partners.

The Way Ahead

The year 2020 tested everyone’s resilience. Ideally, it has forced us all to grow stronger. Companies are also adapting, transforming and realigning themselves to meet their clients’ needs. As we work virtually to help U.S. companies remain competitive overseas, we’re shifting our work approaches and services to meet our clients’ ever-changing expectations. When the pandemic eventually subsides, as it will, we will see whether virtual work has a lingering influence.

I predict that while virtual meetings and telework will find increased acceptance compared to pre-pandemic days, human interactions will remain paramount. Even the best technology cannot substitute for personal connections. Having the opportunity to really know your partner, share meals and engage in discussions to define and crystalize long-term partnerships will triumph over the best meeting software or matchmaking service.

In my crystal ball, the future will see a broader mix of virtual and in-person work. If you’re finalizing negotiations with a foreign partner, it may be acceptable to do some meetings virtually, but in-person interactions will remain vital. If you’re not willing or able to hop on a plane to meet your negotiating partner to demonstrate your commitment, your competitor probably will. And that may make the difference.

In the meantime, the present pandemic circumstances demand we raise the bar. We’re helping U.S. companies to clear the heightened bar and navigate evolving international business procedures and norms with aplomb. May we all emerge stronger.

Aileen Nandi is minister counselor for commercial affairs in New Delhi. She has served several tours each in India and Latin America, regions where personal relationships often define business connections. These views are her own and do not necessarily reflect official policy from the U.S. Department of Commerce.

Read More...

• “What Is Economic Diplomacy and How Does It Work?” by Tony Wayne, The Foreign Service Journal, January-February 2019
• “Six Elements of Effective Economic/Commercial Diplomacy,” by Shaun Donnelly and Daniel Crocker, The Foreign Service Journal, January-February 2019
• “Economic Diplomacy in the Era of Great Powers,” by Dr. Linda Yueh, Chatham House, September 15, 2020