The mission of Going Global,
which appears on MidwestBusiness.com on most
Tuesdays, is to educate and inform Midwest technology
companies on what local technology companies are doing
internationally so other firms can learn from the
successes of like-minded peers.
 CHICAGO – George Filley is the
vice president of product management for Chicago-based
NAVTEQ, which provides digital map
data. His responsibilities include managing the firm’s
current product portfolio as well as defining future
products and services.
Prior to his current role in product management,
Filley had responsibility for the consumer business unit
of NAVTEQ and supported the location-based content needs
of companies like Microsoft, AOL, Garmin, Google, Sony,
Yahoo! and AAA.
Filley joined the company in Oct. 2000 after 15 years
with Motorola. He holds an M.B.A. from DePaul
University’s Graduate School of Business and a
bachelor’s from North Park University. He sat down with
MidwestBusiness.com to discuss NAVTEQ’s global
organizational structure and its plans for growth.
Organizational Structure,
Management
Michael Muth: What is Navteq’s global
organizational structure?
 George
Filley: It’s a portfolio. We have acquired local
companies to get access to markets as well as their
capabilities. We do have joint ventures (i.e. in China)
to accelerate our deployment there. Due to local
regulations there, it’s easier to do business if you
work with local entities.
We do a combination of sourcing local content
providers and outsourcing technology capability from
local consulting groups that do map specification. There
is a difference between mapping the road network and
local content provided from local consulting groups that
do map collection. We have to differentiate the map from
the road network.
We have to make a make or buy decision wherever we
go. We need to maintain local knowledge and quality
wherever we go. We make a decision based on the time
frame and what’s already there. The bottom line is there
are two main requirements: quality and the
specification. One of the basic benefits NAVTEQ provides
is a single specification for the navigable map.
Quality is a generic term. Quality is accuracy and
standardization. The quality of the map has multiple
issues. From the eyes of a customer, we provide a
standard understanding.
If we offered a map based on local ways of doing
things, we’d have to modify or do a different build for
each country. As our customers have become global, we
have created a standard specification that can be used
anywhere because we have to from a company standpoint
and a time-to-market standpoint.
MM commentary: I’m surprised at a portfolio
organizational structure. The typical transition is to
first sell through partners and then either to open
sales offices (which lead to service and support
offices) or leave these functions to partners to
minimize costs and resource drain.
While a preferred method of operations usually
becomes apparent, there is no one prescribed way to grow
the business.
MM: Where are NAVTEQ’s resources
located?
GF: If done right, it’s actually a mix.
People need to understand that the mapping world is not
static. As soon as a version is done, it’s changing.
Maps change all the time. Depending on the level of
business, size of the population and maturity of the
market, we have to allocate resources to maintain our
commitment to continue with the same level of quality.
What does it take to effectively maintain that
quality? It has to do with the size of the population,
intensity of the road network, number of kilometers of
roads, concentration of population and the amount of
driving that is centered around major metros with higher
density. If all of those line up, it’s likely we’ll
create an office there.
If it’s an island like Bermuda or the Bahamas, we
periodically bring people in to drive the island. Our
resources in mature areas are based on maintaining
quality as well as the expectations of our customers.
Looking at new areas, this year we’re launching in
India. We need individuals who have local knowledge. We
take advantage of that.
We use the highest level of expertise available.
We’re opening an initial six cities this quarter in
India and up to nine in the third quarter. We use
individual consultants to do that. We’ll open a local
office soon due to the size of the business opportunity.
It depends on the expectations, level of business
requirement and expectations for growth.
There isn’t a pat answer. It depends on the
requirement and expectations of our customers. We’ll
sometimes take a leadership position for strategic
purposes and develop the market before it’s mature.
MM commentary: NAVTEQ is different from many
businesses. In addition to just offering a database,
they need to update that database on a regular basis.
This requires local human intervention. The question is
who does it: NAVTEQ or a partner?
They can’t just open a few sales offices and claim to
be international. They have to back it up with new data
supported by people everywhere.
MM: How does NAVTEQ cover 60 countries from
offices in 27?
GF: If
you take into account our newest release called Entry
Map, which will be introduced soon we have a global map
with global coverage. We will cover the world. It
depends on the level of requirement. When you have
contiguous states, you can concentrate resources and
handle a region.
MM commentary: Covering BeNeLux (Belgium, the
Netherlands and Luxembourg) and the Far East from Hong
Kong or Singapore are good examples.
MM: How do you manage 2,200 employees located in
140 offices in 27 countries?
GF:
It’s broken into a logical organizational structure. We
have a map division with responsibilities for product
management, production and field activities. The
headquarters resides in Chicago and that organization is
broken out regionally based on our focus.
We have a hierarchy that manages at a country level,
which reports to a regional level and feeds into the
global headquarters. Local knowledge must be there. It’s
the difference between an adequate versus an inadequate
map. Understanding the nuances can make all the
difference in the world. You can’t get that in Chicago.
When you look at our customer base – the automotive
industry, Internet, wireless, new devices and portable
navigation devices – the vast majority are international
or global. They expect us not only to provide the
product but also the local knowledge. They base the
success of their products on the accuracy of our
database.
We can’t afford to be myopic from a Chicago or
Americas perspective. Our organization is broken up
regionally to make sure that doesn’t happen.
MM commentary: It appears as if there is a
defined organizational structure.
NAVTEQ gets almost 60 percent of its revenues from
EMEA (Europe, the Middle East and Africa). My impression
is while they need to maintain standardization from top
to bottom, they still need to be somewhat decentralized
to address differences in different countries.
International Business
Development
MM: How have you prioritized which countries to
enter when?
GF: That is not an easy question to
answer. It’s a battle. You have to juggle strategic
priorities, customer-specific priorities and
customer-segment priorities versus what’s right to do
from a business perspective. No one has infinite
resources. At a minimum, we have to maintain our
commitment to quality.
We get RFQs and RFPs. When we go into a contractual
agreement with a customer, that’s the highest level of
commitment we can make. We have to be a part of their
product plan. That prioritization happens as well. For
example, let’s say there’s a strategic requirement to
enter Australia, but from a regional standpoint, to do
Australia isn’t enough.
You have to do New Zealand, too, or even Singapore
and then Indonesia. Our priorities depend on the
commitments we’ve made and where we need to go. It is
clear to us that Eastern Europe is a significant
opportunity. We know we have to prioritize Hungary, the
Czech Republic, Slovakia and Poland.
We have to do that whole band of countries. It comes
down to economics as well. Where is the biggest bang for
the buck for the next 12 to 24 months?
MM commentary: It appears as if they’ve
already covered most of the developed world. The
question now is where they can get the most
profitability growth with the least risk in the
developing world.
Michael Muth is managing director of GATA, an international business
development consultancy that helps technology companies
build international partnerships. He can be reached at
muth@midwestbusiness.com.
Click here for Muth’s full
biography.
Previous Columns in
2006:
Q&A: Robert C. Meltzer, CEO of VISANOW
in Chicago, on Electronic Passports
(12/19/2006)
Q&A: Robert C. Meltzer, CEO of VISANOW
in Chicago, on H-1B Visas (12/12/2006)
Q&A: Robert C. Meltzer, CEO of VISANOW
in Chicago, on Online Immigration
(12/5/2006)
Q&A: Morningstar CEO Mansueto on Role
in International Investing Scene
(10/31/2006)
Q&A: Morningstar Founder, CEO Joe
Mansueto on Mutual Funds, Investing
(10/17/2006)
Q&A: World Business Chicago on Chicago
as a Success Story (9/19/2006)
Q&A: World Business Chicago’s Tom
Bartkoski on Chicago vs. Other Cities
(9/12/2006)
Q&A: World Business Chicago’s Tom
Bartkoski on Economic Development (9/5/2006)
Q&A: Robert Noe, CEO of 1SYNC in
Chicago, on Enforcing Data Standards
(8/15/2006)
Q&A: Robert Noe, CEO of Chicago-Based
1SYNC, on Data Standards (8/8/2006)
Q&A: Robert Noe, CEO of Chicago-Based
1SYNC, on Data Synchronization (8/1/2006)
Q&A: Mike Jakob of Sportvision in
Chicago on Creating Sports Innovation
(7/11/2006)
Q&A: Mike Jakob of Chicago-Based
Sportvision on What’s Coming Next
(6/27/2006)
Q&A: Mike Jakob of Sportvision in
Chicago on Enhancement Technologies
(6/20/2006)
Q&A: Christos Fotiadis of ProtoGroup in
Chicago on Japanese Culture (6/6/2006)
Q&A: Christos Fotiadis of ProtoGroup in
Chicago on Japanese Expansion (5/30/2006)
Q&A: Christos Fotiadis of ProtoGroup in
Chicago on Compliance, Partners (5/16/2006)
Q&A: Lakeview Technology Founder Bill
Merchantz on Trade Shows (4/4/2006)
Q&A: Lakeview Technology Founder Bill
Merchantz on International Partners
(3/28/2006)
Q&A: Lakeview Technology Founder Bill
Merchantz on Overseas Expansion (3/7/2006)
Q&A: Steven Ganster of Technomic Asia
on Chinese Readiness (2/7/2006)
Q&A: Steven Ganster of Technomic Asia
on Chinese, U.S. Differences (1/24/2006)
Q&A: Steven Ganster of Technomic Asia
on Approaching Chinese Expansion (1/17/2006)
Click
for 2005 column archive.
Click
for 2004 column archive.
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