Hello and welcome to Global Gurus! Every Friday, we explore stories of international business and speak with industry leaders around the world. I’m your host, Philip Auerbach of Auerbach International (www.auerbach-intl.com). Thank you for joining us. 

If you’re tuning in for the first time, we start each podcast with a running segment called “Faux pas Fridays” where I will show you a funny blooper or mistranslation that doesn’t quite convey the professional image your company wants to project. 

Since our guest today speaks French and has worked in France, I thought it would be appropriate to display an English sign on a Paris women’s clothing boutique that simply stated, in English, “Dresses for street walking.” 

So, with that, today’s guest is Max Southerland. Max comes to us with extensive international experience from his time on Wall Street in commercial banking, global payment projects, mergers, and acquisitions, and BIG4 consulting to his current role as President and CEO of the World Trade Center, Atlanta. With responsibilities spanning decades, six continents and numerous cultures and industries, he’s strategized, managed, or worked in almost every country on the planet at some point in his career. 

He earned his Bachelor’s degree in political science and economics from Indiana University and attended Princeton University in France, and received his MBA from Duke University’s Fuqua School of Business. 

Max speaks multiple languages and is a champion for understanding peace through trade. Hello Max, welcome!

Philip, thank you and thank you for inviting me to your podcast.

So, perhaps we could begin by sharing with us a bit about your background and how you came to be here, grew up, and how you gained global experience in addition to what I just mentioned.

There is a lot there, and I have to be honest. I was very lucky. Born to a German mother and American father, the German side of the family still resides in Germany, but visited here when we weren’t there.

I have a story that I love to share with everybody: I was a pioneer in aviation history at the age of 11, and my grandmother in Germany requested that I spend my summers with her in Europe to begin my formal training for public service, more specifically the diplomatic core.

This was pre-directed, so this was before, I think, deregulation in 1972 or 73. And I flew transatlantic from Indianapolis to LaGuardia, then to Kennedy International for Frankfurt, and finally to Nuremberg. Unaccompanied, no adult flew with me, and nobody else flew with me.

And how old were you?

I was 11 years old. 

And that was at a time when there were still a lot of kidnappings going on. So, my parents had taken out an insurance policy to pay any ransom — I found out about those many years later. Later, I knew that they had taken out a policy, but I didn’t know why. And I discovered many years later that it was to pay a ransom in case I was kidnapped. 

But most had children who did not fly with their parents; they flew with bodyguards, nannies, or, oh, some other responsible relative. And I did not so, I was lucky in that respect, and that actually kind of set the tone, the path of my education and career, and then subsequently my education and work experience, had always been in the international space due to my language skills and my knowledge of and exposure to European cultures, so a global scope was only a natural progression from that.

That’s fascinating. It’s wonderful that you grew up in such an international environment.

Man, I was lucky. I was lucky.

Well, speaking of international, what is international business? What does that mean to you? Is it if someone is simply writing a book or attending a seminar abroad—is that international or is it something more substantial?

Well, anything that happens outside of our borders is, of course, international, but there’s a lot more. There is more to it than that.

There are, of course, cultural insights, nuances, and sensitivities that have to be considered with the products, the content, the target audience distribution, marketing, financial interactions, platforms, et cetera. 

So international business is everything you would do here, but on a much larger scale, because many things are done intuitively here because you grew up in this environment.

Right.

Overseas, you have to learn what you don’t know.

Ah, yeah, that’s fascinating. 

Other guests have expressed similar sentiments, to learn what you don’t know.

It’s when you’re done.

Of course, you don’t know what you don’t know until you know it.

That’s exactly it.

Of the many ventures you’ve done or had, which do you feel have been most successful?

Having grown up in the Fortune 15 environment and worked on Wall Street and for the big banks, they have a lot of resources at their disposal. 

So, they don’t look into anything where there’s a blunder. They iron out any potential blunders long before they happen because they’ve been there and done that a century ago.

However, I do want to share that I took a little break. During my corporate career in the mid-1990s and later.  Most people want to play in a rock band or something like that. I always wanted to record an album back then. It was an album. And I asked the right questions. I was introduced to the right people, and I ended up launching.

I recorded two club songs, two dance songs. And I marketed these songs on both CDs and vinyl around Europe and North America. I had the best time of my life. I also did a music video that aired here in New York for about eight months, so I had the time of my life. While doing it, I learned a lot.

Were you in a band? Were you singing or playing something?

No, no, I was singing. All the instruments were computer-produced except one. The saxophone was the only live instrument, and that was Lou Marini from the Blues Brothers Band on Saturday Night Live which was played live for me. 

And I did it for a couple of reasons, but from a business perspective, it was to test my marketing theories, because I’d always been on the operations side of the house on Wall Street, and I felt that the operations side and the sales and marketing side were not communicating well.

So, I tried out my theories, and my theories of niche marketing worked. As a result, I ended up hitting the charts in Spain with one of the songs.

Wow, that’s great. And how old were you when you did that?

Oh my God, I was up to 35-36 / 37  somewhere in there. Yes, I’m in my mid-thirties.

Older musician. OK, I thought maybe you were a teenager or something. 

No way, no how. I took a break from Wall Street, and then I went back in.

Yeah, that’s incredible. That’s wonderful. 

You said that there were no business blunders in the banks themselves. Do you know or have you heard about any blunders that other companies may have made?

Well, you know they have the notorious one, and I understand it’s not true. It’s the Nova car, yes, but we all know that that’s supposedly not true.

Right.

We’re told that’s not the case.

I did make a personal blunder early in my career while living in Paris 19 or 20 years old, I think 20. I was invited by the wife of the Minister of Labor to a penthouse terrace party of the Minister of Finance of France. 

It was a casual event. People were dressed very casually because it was summer, and they had that cookout with hot dogs and hamburgers and that sort of thing, right?

Very French high cuisine. 

Exactly, it’s very French

I remember the line being very long, and I tried to be impressive. And I said loudly, “Mon Dieu, c’est une grande queue.” And the wife of the Minister of Labor immediately grabbed a hold of me and said, “Oh my God, you have no idea what you just said”, and what I said in colloquial French was, “My, what a big penis!”

Instead of?

instead of what a long line this is. For the buffet line, in the penthouse. At the finance minister’s penthouse in front of the guests. Yes, everybody laughed. I was the embarrassing American. And everyone had a great time with it.

That’s wonderful. 

I heard a story years ago. I don’t know if this is true, but a very prominent businessman had given his wife a very fancy diamond necklace. They were going to the opera that night, and she was dressing. She was putting on her diamond necklace, and he said,  “What are you doing? What are you possibly doing?” “Well, I’m, you know, putting on the necklace.” But you can’t put on that necklace. The Minister of Finance will be at the opera. He’ll see that we’ve got all this money. And he has the power to raise our taxes.   So, one has to be careful with the Minister of Finance.

You know what you have to know about your audience, and you have to be very careful. Right? 

That’s wonderful. 

What kind of experiences do you think people need to have when they’re in international business to thrive?

You know, I get this question quite frequently because people want to know how it was that I got into international space. 

Was this something that I was able to do late in my career? I have to say I was just lucky to have had the family background and the means to travel.

I took advantage of programs that were offered abroad during my undergraduate years, and I was never, ever afraid to experience something new. I think that’s the key to getting the exposure early, take it as an undergraduate education school, there are a lot of programs: foreign study programs, summer abroad programs, semester abroad programs, and semesters at sea.

 Take advantage of them if you can because they will set the tone for the rest of your life. Right? 

Yeah, absolutely. I took your advice. I did a college sophomore semester in France, my junior year in Japan, and during graduate school I studied in China, which back then was incredibly unusual. China wasn’t open to the world yet, but it’s fascinating.

How do you think a person should adjust to a foreign market when the culture or the country doesn’t match? What do you need to know?

Well, you’ve got to get boots on the ground. And you have learned. 

You’ve got to either tap into the local inhabitants or the businesses that are there. Or, uh, set up a joint venture agreement with a local business to get that. If you don’t have the means to get it any other way, the best way to go is through a joint venture. 

This is somewhat related. When I was at Chase years ago, I was responsible for the sales and product management teams globally in three different businesses. And the product management teams would come up with new financial instruments. And it was up to the sales teams, particularly the international sales teams, to deliver and sell these to their client base, which was not always in their home market. They may have had to try to travel.

For example, for the African accounts, most of the salespeople lived in Europe, and they would travel to Africa to visit the various financial institutions that were clients of Chase Manhattan Bank. What we realized was that sales were plateauing no matter how many new financial instruments or solutions we came up with. 

The salespeople had plateaued at whatever their sales peaks or their sales levels were, and we did some investigation into it. What we realized is that the product management team and mind you, this goes back to the early 90s. 

The product management team would produce these manuals that would describe all the features, functions, benefits, and capabilities of these new product solutions in hardcopy binder formats, and these binder formats would stay in the office at the salespeople’s headquarters. And they were traveling most of the time. They were on the road to visit clients, and as a result, they only sold and pitched the products that they knew the best and didn’t pitch the ones that were coming out of the newer products. 

So, we had to devise a new solution, as well as a new technology solution, to enable them to carry the information about all these products with them, and it was a very rudimentary solution, but we came up with flash cards.

 I mean, this was before, uh, laptops and all of that. 

Right.

We developed flashcards and gaming practice systems for them that they could utilize on planes when they were en-route to a different market. As a result, the average increase in sales went up 20% per client because of the understanding.

Understanding first off, we knew there was an issue, but we didn’t know what the issue was, so we had to go in and investigate, interview, and do some research to find out what the issue was, and then come up with a solution from that.

That’s very creative, yes. When doing business in Africa, particularly in other developing countries, there are many different packaging options. 

I’m not sure if you can share some of these stories but consider the EU. The US and Europe are developed countries. We here sell big bottles of shampoo, for example. People in developing countries cannot afford large bottles of shampoo, so they are sold in small sachets, or packets, for one day at a time, for pennies rather than dollars. 

Can you share some stories like that which you are aware of?

Not the actual sizing of products, but we do get them periodically from someone who comes to the World Trade Center in Atlanta. They’re trying to get a product, especially raw materials. agricultural raw materials into the United States to be processed and either sold to the local market or the US market or returned to the African market in finished form. 

The problem is that the US has it, and I’m sure Europe does as well. We have a strict and rigid policy. Import process. You must not only know the quality of your product, but you must also know the packaging and understand what it is. What is the makeup of the packaging which this product is sent to the US in?

What kind of wood does the pallet come from? What is in addition to the wood? Are there nails? What are the nails made out of? Where does that happen? Where do the raw materials for those nails come from? Where are the nails manufactured? Where does the plastic come from when you use plastic wrap? What is the makeup of all of that? So, there are numerous lists. We have forms that help foreign companies to better understand their products and what they’re shipping and be able to get them past Customs if they don’t know that they can’t get them into the country.

That’s fascinating; I was not aware of that.

Yeah

What is the purpose of that? Why do the Americans want to know all of this?

They don’t want any kind of foreign material to come into the United States to impact our local agriculture or our local environment. In Georgia, we have a lot of kudzus.

And kudzu comes from Asia. I believe it’s from Japan, but I’m not positive.

I know, yeah.

Kudzu is a natural plant native to Asia that can tame weeds and that sort of thing, but if you let them get out of hand, they take over the vegetation and the trees.

And it’s out of control.

We drive down streets everywhere, and if they’re not well-manicured, the kudzu just takes over, and that’s what they try to avoid. 

I believe they also contribute to the fact that, as you are aware, a large number of carp are entering our streams as a result of them. The goldfish and the koi ponds and things like that some other species are not indigenous to North America or the United States that have ended up here because they were brought in as pets or as introduced species. They brought it into the country as a plant, or it came in via a cargo container, and it wasn’t well inspected.

So, the packaging is really to protect American agriculture?

Yep, exactly. 

OK, now that’s fascinating because I would like to know what difference it makes what the nails are made of.

And so, if the packaging itself is discarded, it goes into a landfill, right? How does that impact the landfill? 

OK, so they have to know everything. Some containers arrive at ports on the East Coast and the West Coast that go through very strict surveillance and if there’s anything in the cargo container that isn’t on the bill of lading, that can be as much as one feather. 

If that feather is not indicated on the bill of lading and it is detected inside the container, that container is shipped back to the place of origin and never opened.

Wow, that’s extremely strict. 

I know we have very strict agricultural protections here. I had no idea it was that way. I didn’t realize it was that strict in terms of the import manifest.

Absolutely, and that’s why, when you travel as an individual overseas and upon your return, you’re asked if you had visited a farm in the last so many days.

Exactly, yeah. 

Because of the soil that may be on your shoes.

That’s fascinating.

When you cross the land border from, say, Nevada into California, I’ve always thought it was amusing because of what’s like a Customs station. You know you’re entering into The Republic of California, so they have their own customs post, but they’re really an agricultural inspection station.

You know, I have never seen those before, and I have driven from Nevada to California.

And you’ve never seen one?

I don’t recall seeing one now. Mind you, I may not have been behind the wheel.

Oh yeah. 

And it’s been a long time since I’ve made that trip.

Yeah, they’re just past Lake Tahoe when you come in.

I have been to Lake Tahoe before. Uh, and we started in California, went over to Nevada to Lake Tahoe, and then came back in, but I just don’t remember.

It’s long time ago.

If you have California license plates, I believe you were waved through. I think that’s the difference. So, if you have a rental car, they are not the same. 

But when I drove, for example, from Pennsylvania to California one time, they confiscated house plants because they were illegal, and I could not bring them into California.

I need to share a story that we were aware was illegal because my mother was German.  And my parents are both deceased, but because my mother was German, I grew up in a very Germanic household here in the US and on one of the trips in the 1960s.

We took some winter vacations while spending our summers there, but on one of our summer vacations my mother and my grandmother went out to the Bavarian woods and dug up a little seedling for a pine tree and we had no idea… There were three of us, three children had two carry-on bags of toys. And my grandmother and my mother had wrapped it up in aluminum foil. They didn’t do X-rays back then, right? So, they wrapped it in aluminum foil and stuffed it into one of our sacks, and none of us knew what it was. 

One of the children who carried it in, or the three children who smuggled in a little sapling from the Bavarian woods. A little seedling from the Bavarian woods and that little seedling I was playing with in Indiana, and it traveled from place to place as my parents moved and bought a new home. They would dig it up and replant it. The final residence was too big for my parents to dig up and move down to Florida, so they left it.

And it is this enormous. I mean, it was a tall pine tree, and everyone I knew had gone back in 2009 for a trip down memory lane, and I stopped at that house. And I happened to take pictures of this tree, and the owners came out, and I let them know that we used to live there. They wanted to know where this tree was from and if we knew anything about it because it didn’t look like anything from Indiana.

Right. 

Right, we’ve been waiting for this tree to hit Rockefeller Center as one of the Christmas trees one year.

It hasn’t hit yet, but it’s huge. I even got pinecones from it, but I explained the whole story. I mean, this tree has to be every bit as tall as possible. I’m not sure how tall it is—60, 70, or 80 feet high.

It’s incredible.

The entire undercut consumes the entire underside canopy. It takes up a very large part of the front yard. Wow, yeah. We did something we were not supposed to do.

Child smugglers; that’s great.

It all worked out. But I would never advise anyone to do so.

No, not Nowadays, that’s wonderful. Based on all that you know now, if you had the chance to give your past self some current advice, what would you tell yourself? What do you think?

Just have fun and stick to your goals.

That’s great. 

Have fun, stick to your goals, and seize opportunities when they present themselves to open the door and say yes, as long as it fits in line with your goals. 

If it can help you add some kind of additional depth to what you bring to the table, take advantage of it.

That’s great. Thank you. One final question: are there any countries that you’ve dealt with that were very difficult or had special issues that Americans would never consider?

Yes, I do. I mean, there are countries like that all over the world, whether it’s their culture, their language, or their etiquette. 

I’ll show you one of the big issues that knocked one of the projects off track when I was at KPMG in New York. We were collaborating with SAP, the world’s largest ERP provider. I believe they had a 40%, 50%, or so market share. I know they’re big on manufacturing. We were trying to get them into financial services. We were working together at KPMG. We were working with SAP to design a customer profitability solution. 

I was the brainchild behind the solution itself… a long story on that… then I won’t get into it right now, but I will at some point have a meeting between senior executives at KPMG and senior executives at SAP. There was a breakdown in communications. 

You know the German way of doing business is very blunt; they lay their cards out on the table. What they expect and that’s it, and the Americans tend to be non-committal. And they walk around on eggshells a lot, huh? And the Germans were frustrated. The Americans were frustrated. At one point, the American executives at KPMG got up and walked out of the meeting, and it derailed the project for a good month or so—and my grandmother on my mother’s side was passing away. 

And I had to go back to the funeral. So, I asked if I could just schedule a quick side trip. Once I land in Frankfurt and take a rental car out to Waldorf where SAP global headquarters is, and see if I can meet with them and see what I can do. I did that. I had two 45-minute meetings separated by half an hour during which they convened, and then gathered again for the second 45-minute meeting.

I then went back to the airport, dropped off my car, flew on to Nuremberg, attended the funeral, and I was there for a week. And then I flew back to New York, where, having put New York in the driver’s seat, I nailed it down too.

Next steps, deliverables, and time. All deadlines were met because I spoke the language, understood their business practices and did everything the same way, and they were very pleased. As a result, the solution is now part of the CRM module that includes that solution. It’s a customer profitability solution.

That’s wonderful. Yeah, that’s great.

So, what could have completely derailed the project was simply a case of cultural miscommunication.

Right? 

That’s fascinating. Thank you. Thank you so much. Max, it’s been a wonderful pleasure to gain your insights through your stories and humor. You’ve shared both the French and the variant trees, and so forth.

So, thank you so much. I appreciate your being here with us today.

Philip, it was my pleasure. Thank you so much for having invited me.

So, this has been Philip Auerbach of Auerbach International (www.auerbach-intl.com).  Please join us again next week for another edition of Global Gurus and their stories of international business.