The medical wire business within Sandvik was looking to expand operations in the US, but the pandemic hindered our search for a new site. So, they did it entirely virtual instead.
Biotech is booming right now, and many companies are looking to expand into new locations and markets. Certainly, this was the case for Sandvik medical wire business. The high-tech business segment, which develops precision wires and wire-based components for various fields of medical technology, was looking to expand in the US before the COVID-19 pandemic hit.
Rewriting the rulebook
“Normally, we would be jet-setting around the country, our itineraries packed from dawn to dusk with hard-hat tours and working lunches,” says Gary Davies, head of the medical wire business within Sandvik. “Beyond the standard meetings with local officials, we’d want to get a true feel for each city on the list of contenders, take the temperature of things on the ground, and ask ourselves if we could see this being the next outpost.”
However, in this instance one of the key steps in the selection process – physically visiting a location – was made impossible by COVID-19 and its associated restrictions. “So, we realized that if we wanted to proceed with our plans for growth, we’d have to rewrite the rulebook: We took the whole process online,” adds Davies.
After countless hours of virtual tours and negotiations in digital meeting rooms, Sandvik was able to announce the opening of a new location in Tucson, Arizona, in September 2020, with plans to be fully operational by early 2021. But what was most unusual about this was the fact that neither Gary Davies nor the vast majority of the Sweden-based executive team, had ever set foot in Tucson.
Nevertheless, Davies and his colleagues still found reasons to be excited about operating there. They knew that the city is emerging as a thriving biotech hub, with a world-class technical workforce coming out of the University of Arizona, Pima Community College, and Arizona State University. They were also impressed to learn about Southern Arizona’s record of economic growth and stability, a key factor in any major corporate decision in these uncertain times. And although it involved a bit more screen time than they were used to, they are no less confident in their decision to open a plant in Tucson.
“In fact, we’re planning to replicate the all-virtual site selection process for expansions moving forward, global pandemic or not,” says Davies.
5 tips when starting a digital office
1 - Choose your team strategically
Handpick each member based on their background, experience, and knowledge of the project needs, and only enlist the help of other company departments (legal, risk management, etc.) as needed in order to keep everything streamlined.
2 - Narrow your options upfront
Start the site selection process with the most basic parameters that any company should consider—for instance, proximity to customer base, available labor pool, and a business-friendly economic environment.
3 - Use digital platforms
As an alternative to visiting locations in person, as you typically would during a site selection process, use a web-based tool to accomplish this process virtually. You can also use online video platforms to work with local commercial real estate agents to help find sites that fit your size and configuration requirements.
4 - Lean on local partners
After identifying sites that met your needs, start probing the local economic development groups in each of the target areas to gain a better understanding of how the region would match up with your criteria: location, logistics, talent pool, cost of doing business. Finding partners that can connect with you virtually while advocating for you physically is invaluable in the new operating environment for growing businesses.
5 - Virtual or bust
Ultimately, the time and money invested in the virtual process was considerably less than if it had been approached in the conventional manner. This will be the de facto way of making expansion decisions moving forward.