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Blog Category: Global Cultural Difference

Global Cultural Difference


Lots of our clients are WEIRD

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

Western
Educated
Industrialised
Rational
Democratic

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?

For more information on how Global Business Culture can help you become more globally savvy contact me at keith@globalbusinessculture.com


Global Compliance and Global Cultural Difference

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’.


You really need to build your own levels of Cultural Fluency

I really believe this statement is true if any person is to be able to work really effectively across the barriers of culture, language, geography and time. The basic problem is that people are not born with an innate understanding of how business works in areas of the globe they don’t know and maybe have never visited – this knowledge and awareness needs to be developed.

The process of changing your mindset and developing better levels of global fluency and therefore the ability to work seamlessly across cultures is a three step process:

  • Awareness building:You have to intellectually buy-in to the fact that international cultural differences can have a very significant impact on the efficiencies of any global organisation – and therefore its profitability. You also have to accept that you have a role to play in this process. Sounds like an easy step but it isn’t.  If things go wrong when you are working cross-border it’s always partly your fault.
  • Knowledge development:unfortunately it isn’t enough to be aware that cultural differences exist – you then need to acquire the specific knowledge to interface effectively in lots of different markets. Awareness will get you to accept the need to be adaptive and not make assumptions but the adaptations needed when dealing in India or Brazil will be very different. This knowledge can be acquired over long periods of time and through making countless errors or the process can be speeded up through research and good quality training interventions.

  • Embedding insight into corporate processes:Once you have awareness and knowledge, you need to embed the lessons learned into the warp and the weft of the  way in which you do things on a daily basis. If you work in a global environment, every time you make a decision the impacts of that decision land differently in different places. How can you control the potential negatives of the impact of unforeseen cultural consequences and reactions? It’s not easy but it can be done if you have a deep understanding and the requisite level of knowledge.

In my experience – and I’ve worked with business people all over the world on these issues – few people really take the time to understand the impact of cultural differences.  People only tend to think about these things when something goes wrong and that’s usually too late.

If you would like to discuss how Global Business Culture can help you develop greater levels of cultural awareness and fluency personally or within your organisation, please contact me on keith@globalbusinessculture.com


Alive & Kicking – UK/Japan Cultural Differences

I ran two training sessions yesterday at the London Branch office of a major Japanese investment bank.

In the morning, I worked with a group of senior Japanese expatriates who have been seconded into the London Office – we were looking at the major differences in approach to business between Tokyo and London.  This session was designed to help these expatriates integrate more effectively into a UK business environment.

In the afternoon, I spent a few hours with a group of UK employees of the same Japanese investment bank.  The objective of second session was to help those UK employees better understand the internal workings of their Japanese parent company and therefore enable them to effectively influence at the head office level.

Both sessions contained a group discussion in which each group was asked to identify what they felt the major difficulties were when working with their colleagues from the different culture.  Thus, the British were asked to identify issues they encountered when working with the Japanese and the Japanese expatriates in turn were asked to explore the difficulties they had encountered when working in the London Office.

The output of these group discussions was fascinating.  It was almost as if I had influenced them in some way regarding the feedback they should give.  However, the feedback was completely spontaneous and merely highlighted the extreme cultural differences that can still be found within a single global organisation in 2018. Some people would like to contest that the cultural differences no longer exist, but I can assure you there are alive and kicking in 2018 even within highly sophisticated, globally experienced financial institutions.

I have put the feedback from each of the two groups into a table below.

Japanese problems with UK approach UK problems with Japanese approach
Extreme lack of attention to detail Obsessed with irrelevant detail
No preparation for meetings and therefore not possible to get to an answer Always come to meetings having already decided the answer
Make decisions too quickly based on insufficient information Very slow decision-making process caused through detail obsession
Make decisions very quickly but then change the decision just as quickly Once they have eventually made a decision they are nor prepared to change it
Prioritise private life over their working life and the company Obsessed by work to the detriment of their personal lives
Mean ‘no’ when they say ‘no’ Don’t mean ‘yes’ when they say ‘yes’
Speak too much in meetings – even when they have nothing of value to add Don’t speak up in meetings and express their opinions – why do they attend?

As you can see from this feedback, the challenges each group face is an exact mirror image of each other.  What one sees as a problem, the other group sees as a virtue.  There are no rights and wrongs in any of these issues merely deeply held convictions around how best to operate in the working environment in order to deliver the best results for the organisation.

I suppose the question that needs to be asked when confronted with such stark differences in viewpoints has got to be, ‘who should adapt to whom?’  This is a question that must be addressed by any international organization who wishes to improve the efficiency and effectiveness of their internal operations.  Unfortunately, the answer is not obvious or easy.

We spend a great deal of time working with our client base of major global organisations helping them to address these complex questions in a practical and effective manner.  If you would like to discuss how we can help your company you work smarter across the barriers of culture, language, geography and technology please contact me at www.globalbusinessculture.com

For more information on this and other global virtual team issues contact me at keith@globalbusinessculture.com


Shared Service Centres and Global Cultural Differences

It may be a contentious statement but many of the well-documented difficulties associated with getting international shared service centres (ISSC’s) to work effectively and efficiently are actually cultural and linguistic in origin.

Maybe it isn’t that contentious a statement after all because what you are actually saying when moving to an ISSC model is that ‘we think we can make things run more smoothly and more efficiently by taking operations out of the country which they service and replace the operations of 10 countries, 10 different business cultures and 10 languages within 1 remote location’.  The process sounds complex to me but, having worked on dozens of these transitions over the years, the mindset seems to be that these issues will sort themselves out somehow over time.

It is telling that in every single example where Global Business Culture has been called in to help with cultural problems at a major ISSC, we have been called into the frame well after the transition has happened – nobody seems to want to look at these issues in advance for some reason despite the fact that so much academic research and pure anecdotal evidence point to cultural differences as the key stumbling block.

So what tend to be the problems?  There are many but here are a few for starters:

  • From mono to multi-cultures: Many managers suddenly find that they are, almost overnight, transitioned from a position where all of their reports are in one country, speak one language and have one culture to a position where they are having to deal with a mass of different and new cultural approaches.  They are seldom ever given any help in addressing these issues and then negatively appraised on how they are doing.
  • Erasing of years of process and knowledge: People are expected to abandon the way in which they do things for a new approach that they don’t understand or agree with and which will often ride rough-shod over cultural attitudes and expectations.  Actually that is almost the key objective of undertaking an ISSC project in the first place – to iron out all those costly differences in approach and process and replace them with a single, ‘better’ system.  There may well be logic and efficiencies in the new process (almost definitely there will be) but if this transition is badly handled, the resentment ensuing will very, very quickly negate any benefit accrued.
  • Lack of relationship-building opportunities: In-country contacts built over many years are replaced with new colleagues in a distant location with very few, if any, opportunities to build the all-important relationships which can help to smooth out problems which inevitably arise during and after transition.  This problem is often exacerbated through the use of nameless ‘ticketing’ systems that mean most issues are handled by multiple (nameless and faceless) hands at the ISSC.
  • Attrition: This is a perennial problem at most ISSC’s and one which increases the difficulty of the relationship-building process.  After the initial adrenalin rush of the ISSC start-up phase, the work often settles down into a routine and humdrum process and then people simply get bored and move on.  This can lead to more inefficiency as new people are on-boarded and tensions between the ISSC and the home teams can slowly rise as a result.

I could enumerate many other areas of potential tension and inefficiencies but what is important is that all of these issues are addressed either before transition or as the difficulties arise, rather than trying to pretend they don’t exist or will disappear through osmosis.

You can address these issues through timely and targeted interventions and if any of these issues ring true to you and you would like to see how we could help, contact me at keith@globalbusinessculture.com

This post was originally p


The Globalisation Gap

A recent Boston Consulting Group report highlighted the capability gap companies are faced with when trying to achieve their global ambitions.  The work Global Business Culture has done over the past 15 years or so with companies going through this globalisation process would fully support the findings of this report which highlights a number of key deficiencies.  Our assertion would be that one of the core knowledge gaps (if not the key knowledge gap) companies struggle with is a lack of understanding of the profound effect local cultural business approaches can have on the delivery of any global strategy.

 

When going through this globalisation process I’m afraid you just have to face two unassailable realities:

  • In a global environment, you just don’t know what you don’t know.

and……

  • Every time you drop a pebble into the global pond the ripples will go to places you have just never thought of – and maybe didn’t even know existed.

The BCG report highlights three key areas of concern:

  1. Go-to-market capabilities:  How can you successfully penetrate a market when you just don’t know what makes the people in that market tick?  How can you sell when you don’t know what the ‘hot buttons’ are? This is completely cultural.
  2. Supply chain and logistics:   These areas are massively impacted by culturally differing approaches to such issues as attitudes to contracts, time scales, supplier selection difficulties and communication problems.
  3. Spreading best practice: This is often done in a colonial way – ‘this is the way we do it back home’ tends to go down really badly in countries who might feel their ‘normal’ way of doing things is far superior to this newly imposed dictat.  This lack of accommodation to local sensitivities often leads to international merger and acquisitions failing badly with key people leaving quickly after the merger and taking key contacts and clients with them.

I have seen all of these problems happening time after time, year after year with monotonous regularity.  Globalisation is a mindset not a word.  Understand your own view of the world, your counter-parties’ view of the world and where the similarities and differences are.  The similarities are the points of contact where you can build bridges and forge efficient common practices; the differences need to be acknowledged and worked on.

Deep cultural understanding is a ‘must’ not a ‘nice to have’ – but then I suppose I would say that wouldn’t I?

If you would like to discuss how Global Business Culture can help your business work more effectively in a culturally complex world, contact me at keith@globalbusinessculture.com

This post was originally published on LinkedIn, July 16, 2015. 


Selling in China – what works and what doesn’t

Like all markets, China plays by its own rules.  Some sales approaches that work well in your own country might completely fail in a market as unique as China – on the other had some might work really well.  So, is it just a question of trying everything that works at home and analysing the results to determine what the best approach might be in China or are there any sales techniques that are generally better regarded than others?

Here’s a quick overview of what we have found succeeds in China when working with a range of major global clients across multiple sectors:

  • Exhibitions: Exhibitions and conferences seem to be held in much greater regard in China than in the West.  Attendance at key exhibitions should form an integral part of your sales and marketing plans if you want to be seen as a serious player in the Chinese market.  Attendance at exhibitions for a number of years in a row shows you are in the market for the long-haul and can be taken seriously as a potential partner.
  • A good China-friendly website: A well-structured website in Chinese which clearly outlines your products or offering is essential these days.  With over 400 million online users, China is a digital economy with a capital D.  Potential clients will visit your website before meeting you and will form an opinion based on how China-friendly your site is.  Don’t just take your existing site and translate a few pages – get some professional advice from people who really understand digital in China.
  • Local sales representatives: China is a massively relationship oriented country and key relationships need to be nurtured over a few years.  This relationship-building process is difficult to manage from a distance.  It pays to have local people on the ground who speak the language, know the culture and who can react quickly to client demands.  Should these local representatives be employed by you or should you work with a local distributor?  That is your key decision and you’ll probably need advice to help you make the right choice from a tax, compliance and growth perspective – don’t make an uniformed decision as it will cost you in the long-run.
  • Quality: You are unlikely to be able to compete against local companies on the basis of price so you will need to compete on quality.  All of your sales and marketing materials should be heavily quality-oriented.  Western companies are valued in China for the superior quality they represent and you need to display pride and confidence in your product.  If there are three things you should emphasise to potential Chinese buyers they are quality, quality, quality.
  • Telesales: Although communication via the phone is important – this is usually for making initial contact, arranging meetings, gathering background information etc.  It is unusual to try to ‘sell’ over the phone as the sales and relationship-building process are so tightly interconnected.  Phones are useful but only up to a certain point.  Regular face-to-face contact is the key to success.

What lessons can we draw from this and what advice do we give to clients? China is potentially a highly lucrative market which could redefine the future direction of you company if you get it right.  However, China needs time, patience and cashflow – the sales cycle in China can be long and you need stamina, management bandwidth, local knowledge and cash to achieve lasting success.

If you’d like to go into any of these issues in more depth please get in touch, keith@globalbusinessculture.com