September 2018 | Global Business Culture

Monthly Archives: September 2018

It’s probably not a great idea to start a post by appearing to insult most of our clients…

… So I’d better quickly explain what I mean by calling you WEIRD.

Joseph Henrich, Steven J Heine and Ara Norenzayan issued a research paper a few years ago showing that most behavioural science theory is built upon research that examines an intensely narrow sample of human variation – disproportionately biased towards US university undergraduates and that this has skewed the findings of a great deal of research when you try to make it fit a culturally diverse world. Their definition of the sample base was that they were quite simply WEIRD


I think that all of this seems very likely to be true but I think that you can take the hypothesis way beyond the fields of behavioural science into the world of politics and it also seems incredibly true in the world of commerce.

I spend my days working with (mainly) western companies who are international in nature and who struggle with the complexities of interacting across the boundaries of global culture, time zones and geography. We help them understand how significantly and deeply cultural differences can impact on the effectiveness and efficiencies of their global operations. The longer I work in this field the more I come to realise that this WEIRD issue is at the heart of a lot of the dilemmas our clients face.

I have come to realise that (either consciously or subconsciously) people who are WEIRD in North America and Europe look around the world and think that the rest of the world is also WEIRD or, if they are not, would really like to become WEIRD at some stage in their ‘evolution’. The problem is that probably 80% of the world (by population) actually are not WEIRD and have no desire to become so. In fact the 80% of the world’s population who are not WEIRD look back at North America and Europe and think ‘those guys are seriously WEIRD’.

Where are most global compliance policies driven from? Europe and North America on the whole. We are moving around the world trying to apply WEIRD policies, processes and ethics into an un-WEIRD world and people simply just ‘don’t get’ what we are talking about. Our core values and beliefs are simply an irrelevance to people in many parts of the world.

A very good, very topical example of this would be the reaction of the majority of Russians to Vladimir Putin’s close association with the recent Panama leaks which highlight tax evasion amongst the rich and powerful. A BBC reporter, when interviewing ‘the man in the street’ in Russia was greeted with this reaction. “People high up have always had accounts like these and they always will. Putin can’t keep an eye on everyone.” In other words – it doesn’t matter and I don’t care. Contrast that with the reactions to the news that the Icelandic Prime Minister, Sigurður Ingi Jóhannsson, was associated with the scandal or that David Cameron’s father had been named.

I’m not saying that I disagree with the ethical and commercial standpoints espoused by the WEIRD – I’m WEIRD myself – it’s more about getting people in the WEIRD countries to recognise that the ‘universal’ truths that they see as ‘self-evident’ are only ‘self-evident’ to a very small minority of the people on the planet. The starting point should be that ‘there may very possibly be a fundamental disagreement on this issue’ rather than am assumption that everybody, everywhere will ‘get it’.

It will be interesting to see, as China and India evolve as global super-powers, whether these WEIRD ideas will prevail globally or be eclipsed by other philosophies and approaches. Any thoughts from my WEIRD (and non-WEIRD) contacts?

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A report published by Control Risks titled ‘International Business Attitudes to Corruption’ succinctly highlighted some of the extreme challenges faced by Compliance Officers within global organisations.

As regulators increasingly extend their global reach whilst at the same time anti-corruption laws become ever more comprehensive, Global Compliance comes face-to-face with culturally differing norms around the world.

The report points out that an over reliance on a belief that centrally driven compliance programmes will be understood and actively implemented in all parts of the globe can produce a dangerous disconnect between the perceived effectiveness of any programme and the actual reality on the ground. The danger is that the process looks comprehensive and watertight at HQ but leaks like a sieve when it lands in different geographies.  This can lead to an increase in non-compliance – thereby unwittingly exacerbating the problems.

Why might this disconnect occur and is it a process or a people problem?

I think the answer comes in one particular sentence in the Control Risks report which says that ‘you need to really know who you are dealing with at every stage of your value chain, what motivates them, how they behave and how to forge compliant and collaborative working relationships’.

In reality this sentence is saying that you need to have a comprehensive understanding of the cultural drivers and expectations of the people you are interfacing with around the world and how those things will impact on the way in which your compliance programme lands.  That’s a tall order and requires a huge degree of global cultural fluency – a degree of cultural fluency that is possibly quite rare in global compliance departments.  In my experience some compliance professionals shy away from looking at the cultural nuances of all of this because it simply makes their jobs more difficult.  It may indeed make their jobs more difficult but without the requisite amount of global cultural knowledge, their jobs are actually impossible!

If, for example, your cultural background is one where corruption is so endemic it is as much a part of life as buying bread, where it is considered very bad behaviour if you don’t try to manipulate the system for the benefit of your family, friends or tribe and where it is an insult not to lavish extravagant entertainment on a potential client – then being presented a new programme or process from a faraway head office is unlikely to change your perception of what the world looks like.

How do we address the difficulty of trying to shoehorn a benchmark set of compliance principles into a world in which vast swathes of people simply ‘don’t get it’ or are just not interested?  We want to be ‘global’ but rail against it when the local comes through strongly.  We want people to be fully integrated into the local market place so we can compete effectively but complain when people act as the locals act.  We want people to be able to compete against the local competition who do not have to conform to the policies of an alien Head Office which might be counter-cultural in that location.

The answer to this has to be education – both at Head Office and throughout the international network – but this education has to go way, way beyond the typical compliance e-learning programme (which is often seen as a backside covering exercise anyway).  The education has to be designed to help people develop a global mindset where all parts of a global organisation can see where the other parts are coming from.  Globalisation is a mindset, not a word.  Compliance is also a mindset, not a word (and certainly not a set of processes).

As Control Risks put it ‘you need to really know who you are dealing with at every stage of your value chain, what motivates them, how they behave and how to forge compliant and collaborative working relationships’.

Over the past decade, I have worked with some o the world’s greatest international law firms and have been heavily involved in their globalisation processes.

This has been a fascinating journey and I’ve learnt an enormous amount along the way. Many of the firms have grown from local powerhouses to global super powers and their progress has been fast and furious. Looking at various Acritas surveys over the past few years, it shows how the legal landscape has changed dramatically with many of the historically stellar names falling away as newer upstarts begin to assert themselves.

One thing, however, that all the major international firms struggle with is trying to make the dream of ‘a seamless service across the jurisdictions’ become a reality. All the firms purport to deliver this seamless service and yet behind the scenes all the firms realise that this aspiration is easier to write in a brochure than it is to achieve in reality. Making global firms ‘work’ cross-jurisdictionally remains a challenge to even the most sophisticated outfit and close attention is required to prevent the undoubted benefits of a global footprint becoming a colossal millstone around the neck.

One of the key essentials for any global firm is to ensure that they work hard to develop a ‘global mindset’ across the entire fee earning base as well as within the support functions. Far too often partners and associates are parochially focused – they often don’t see beyond their practice area let alone across national borders. This is not just my opinion – it’s borne out by the facts. The level of cross-selling across jurisdictions is often very poor in major firms and this remains a real break on the growth and profit levels of those firms.

So from my perspective the 3 key reasons firm’s need to work increasingly hard to develop better levels of global awareness and cultural fluency amongst their employee base are:

Clients demand it from their trusted advisers

As well as working with global law firms, I work with in-house counsel teams and Global General Counsels are getting tired of firms telling them they work seamlessly across the jurisdictions and then not delivering on that promise. One GC from a global corporation recently told me he has moved away from using firms across multiple jurisdictions and gone back to a model of hand-picking firms in specific counties. ‘It’s much more work for us but I owe it to my company to get the best level of service I can. I’ve tried a number of global firms and none of them have delivered on their promise.’

The more offices a client works with, the stickier the client

All of the statistics show that the more international offices a client works with, the more likely they are to remain loyal over the long term – and the more offices a client works with the more profitable the client becomes. These facts are well-known and yet high volumes of cross-border, cross-selling remain a distant aspiration for many firms. I have often encountered levels of mistrust across offices which manifests itself as a suspicion over quality levels in other countries. However, this mistrust is often based on a lack of knowledge about ‘how things are done’ in that other jurisdiction and what ‘good’ might look like over there. Working with a large UK firm who merged with a large German firm I heard a lot of comments along the lines of ‘the way they do things over there – it’s all wrong’. What people really meant was that things were different over there and they simply didn’t like it.

If you don’t understand an overseas client’s expectations, you can’t deliver against them

Not all clients think the same way and not all clients have the same expectations from lawyers in terms of approach and service. If you are working into a global client base you need to develop high levels of knowledge of different cultural approaches to business around the world – and that is not about how to hand over a business card in Japan. You need to understand what psychology (the result of your own country cultural programming) you are taking into any client engagement, how that differs from the psychology of your overseas counterparty (the result of their country cultural programming) and what the impacts of those differences are for you and your client. Without this knowledge you are fighting with one hand behind your back.

In a modern, ultra-competitive, cut-throat global legal market place, developing high levels of global cultural fluency within a firm is not a ‘nice to have’, it’s a ‘need to have’. At Global Business Culture we have unparalleled experience of working on these issues with global law firms. If you would like to discuss how we can help your firm gain a competitive edge in this area please contact us.