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:
The BCG report highlights three key areas of concern:
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 email@example.com
After a lifetime working on Global Supply Chain & Logistics, Think Global Growth’s founding director Neil Moon (ex-Agility Strategic Enterprise VP) realised that many of the key pinch-points within global Supply Chains are actually the direct result of globally differing views about how business is done in various parts of the world. He saw that many of the problems around such issues as communication break-down, planning, contracting, dispute resolution and adequate staffing were all caused by the fact that people in China simply did things differently than people in the UK and that people in the UK did things differently than their counterparts in Germany. The problem was that nobody really understood these issues.
As Founder of Global Business Culture I have worked for years on helping with the operational efficiencies of organisations who work cross-border. Working with many of the world’s major corporates I had also come to realise that the cultural dissonances found within global supply chains were causing huge problems which people often lacked the awareness and knowledge to overcome.
Our meeting resulted in us developing the world’s first programme which fuses global supply chain excellence and global cultural competence. The programme, called ‘Global Business Culture and Supply Chain Management’ is aimed at helping industry experts hone their skills and really get a better understanding of how global business culture can impact on key elements of supply chain management and what steps can be taken to ensure global effectiveness.
This one-day programme fuses deep global cultural knowledge and a lifetime of supply chain expertise – it’s an essential ‘must do’ for people who look to continually improve their operations.
If you would like more information on the specifics of this programme, please contact me at: firstname.lastname@example.org
International cultural differences will have an impact on absolutely every element of any global supply chain. Every single element of the complex chain you have developed will be touched by the effect of global differing mindsets. However, I’m going to take just four illustrative issues and highlight why lack of cultural knowledge and the practical application of that knowledge can seriously damage the health of any supply chain:
Contracts: In the west we have a fairly standard understanding of what a contract is. Generally speaking it’s an agreement between two or more parties which binds those parties to the terms of that contract. It is the end of the process of negotiation and it is a full stop at the end of the sentence.
Unfortunately broad swathes of the world don’t share that definition of a contract with us. In many parts of the world (and in virtually all emerging markets), a contract is an agreement on the best set of terms possible at a specific point in time – but if those circumstances change it is unreasonable to expect people to keep to the original terms of the contract. Therefore ta contract is not binding – it is intrinsically fluid.
People go into supply chain agreements with fundamentally differing views on the nature of the contract. That’s great for lawyers but not so good for supplier/customer continuity of relationship.
Time and Schedules: It’s a cliché I know but attitudes to time really do differ around the world and many countries just don’t feel the same sense of urgency as people maybe do in the US or UK. They do have a sense of urgency but just not the same sense of urgency as in most of the West. Deadlines in some countries are seen as guidelines and couple that with infrastructure problems, over-zealous bureaucrats and even issues around corruption – then schedules can easily drift.
In a recent seminar I was running for a major global MNC a non-native English speaking delegate confessed that he’d only recently realised what ‘asap’ actually means to Americans. He had taken the abbreviation literally, thinking that he meant he should do the task as soon as he had a bit of free time in his diary – even if that meant next week or next month!
Supplier selection: Do you really understand what ‘good’ looks like in China or India? There are obviously ‘good’ and ‘bad’ in both places but do we really have the country-specific knowledge to make the call?
In my experience too many decisions are made based on what the home team’s view of the world is when very often the home team has little or no knowledge of any culture other than their own. We end up buying what we’d by at home – but that is very often not fit for purpose in countries as vast and complex as China, India, Brazil etc.
Communication: No common language, no common style of communication and no agreement on protocols around communication. That just about sums up the situation we all find ourselves in.