Harlequin Enterprises – Growing Globally the Right Away

October 22, 2014 Nancy Gore

When publishing giant Harper Collins was looking for a way to gain greater traction in non-English speaking markets all over the world, it looked immediately to Harlequin Enterprises, the ubiquitous producer of romance novels.

Harlequin currently publishes in 34 languages on six continents. Over its 65-year history, Harlequin has published more than six billion books.

And this spring, Harlequin became part of the Harper Collins empire when News Corp., its parent company, acquired the Toronto-based publisher in a $400-million deal.

"Harlequin is a perfect fit for the new News Corp, vastly expanding our digital platform, extending our reach across borders and languages,” Richard Thomson, chief executive of News Corp., said in announcing the deal. "Harlequin has a devoted audience around the globe and an empathetic insight into contemporary cultures, which is itself a remarkable resource.”

Indeed, there are few other companies on the planet that have been able to succeed by finding the right mix of core and local culture while expanding into foreign markets.

Harlequin’s global expansion model is a deliberate process of exporting a small number of key principles from head office, while ensuring enough independence in its global offices to respond to local sensibilities.

“We currently have offices in 16 countries and operate in 25,” said Steve Miles, COO of Harlequin. “Our global offices are actually quite independent. We have a very decentralized organization and a very decentralized view of managing our business. Our offices are structured to be standalone businesses.”

The key for Harlequin has always been to put management of their global offices in the hands of an entrepreneur who understands the local business culture. Miles noted that this is more than an emphasis on language; Harlequin offices pride themselves on being able to relate to the realities of local commerce.

“Our philosophy has always been to hire local,” Miles said. “If we’re opening a new office, we always send someone from Toronto or from one of our bigger, established offices, to make sure everyone understands the business, corporate values, and vision. But their biggest task is to hire local marketing and sales knowledge. People who know the market and understand how business is conducted in each of these countries.”

The glue that holds the Harlequin global network together is a carefully balanced mix of central values and local practices. Like many companies, Harlequin has defined “values, strategy and common purpose or objectives,” Miles noted. However, Harlequin tries to differentiate between its core elements and the simple processes that may not be as important to retain.

“We try and separate the key elements of our corporate culture or corporate success from just the way we do things,” he said. “If it’s just the way we do things, we’re very open to having that changed by each country to make sure it fits with the local culture, community, and business.”

That means setting aside some management practices in certain countries. Miles noted that Harlequin is a big believer in utilizing annual 360 assessments to give employees a complete sense of how they are viewed by superiors, direct reports, and peers. However, in some countries like Japan, the concept of a 360 assessment is so contrary to business culture, that Harlequin does not employ this tool. “(A 360 assessment) would never work in Japan,” he said. “Peers and people who work for you would simply not assess you. Business culture in Japan is very hierarchical. So, we said, ‘okay, we’re not going to demand that people do something that will cause them great discomfort.”

Still, there are practices which Harlequin has insisted be exported into global offices. Miles said there are countries that, for example, do not have a tradition of performance-based bonuses. Even so, Harlequin insists that its bonus system is delivered across all of its offices.

“In some countries, like Sweden, people are paid very uniformly, and raises are very uniformly distributed across the business. But we think one of our fundamental values is pay for performance. We want the people running our businesses to have some skin in the game. We want to reward them for great success. That’s a consistent policy across all our offices.”

What can we learn from Harlequin about operating a successful business in multiple countries?

If your strategy is to introduce a North American brand, culture, or service into a new market, you should ensure that foreign operations are managed by leaders with the same cultural norms you are trying to introduce. If however, as in the case with Harlequin, you need your product or service to blend into the local culture, more of your team members should be local.

This same strategic thinking needs to carry through to policies and programs.  All too often, organizations assume that head office policies and programs will work in foreign countries. Harlequin demonstrated clearly that this assumption cannot always be made.

It is not unusual to see tension between corporate employees who are trying to enforce head office practices and local partners who can’t make sense of them.  As Harlequin demonstrated, if both parties are clear on the purpose, and realistic about which practices make sense, great things can happen.

About the Author

Nancy Gore

Nancy Gore is a Principal with Lee Hecht Harrison Knightsbridge’s Leadership Solutions Practice. With strengths in total rewards, talent management, organizational effectiveness and organizational design; Nancy combines her practical business capability and HR expertise to assist business leaders in navigating people challenges and leading transformational change.

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