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Blog Category: Globalisation

Globalisation


Why should an organisation build cultural fluency?

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

The process of changing global mindsets in any international organisation is a three step process:

  • Awareness building: You have to get people 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. Sounds like an easy step but it isn’t.
  • 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 good quality training interventions.
  • Embedding insight into corporate processes: Once people have awareness and knowledge, they need to embed the lessons learned into the warp and the weft of the organisation. 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.

In my experience – and I’ve worked with major organisations all over the world on these issues – this process is rarely approached with a consistent, whole organisation plan and progress towards better quality and more effective global co-operation is slow.

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


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


Off-shore Partners in India

Over the years I’ve been involved in a number of major projects where U.S. or European companies have looked to transition work from their home countries to outsourced facilities in India.  The drivers behind these projects have been many and varied, but I suppose that cost reduction is always a major component of any such decision.  Personally, I’ve always thought there are a number of advantages above and beyond cost arbitrage but for many clients that’s their starting point.

If your main motivation for going through the transition process is cost then it stands to reason that you have to make the transition work efficiently or any imagined cost savings can be quickly eroded through well-documented problems such as high attrition rates and client dissatisfaction.  Cultural issues play a huge role in creating disconnects between the home teams and the India-based teams – but cultural issues are not the only challenge.

Another area which is fraught with difficulty is in the partner selection process.  Lots of clients have got a year or two down the line only to question their original choice of partner but are then loath to jump ship and go through the pain of transition for a second time – better the devil you know etc.

Based on our experience at Global Business Culture here are five issues you need to consider when selecting an outsourced partner in India.  The list is not exhaustive but it’s a good starting point:

The Tender Process: A western-led tender process will only get you so far in India.  I’ve seen situations where the responses to tender have led clients to the wrong supplier, in the wrong location, staffed by the wrong people.  ‘Do you have experience of the banking/insurance/automotive/pharma sectors?’    The answer will be ‘yes’.  People move company and position all the time in India and employees pick up experience across a wide range of sectors – but that knowledge can be quite superficial.

You need to effectively pre-qualify your tender short-list and the best way to do that is on the ground.  Start with a long list and whittle this down until you have three or four bona fide contenders and then, and only then, get on a plane and spend time with each of the candidates.  It should be as much about chemistry as it is about commercials.

Management Capability: I cannot stress how it is important to assess the management capabilities of an outsource partner.  The India offshore business has grown exponentially over the past decade or so but management capability has not necessarily been able to keep pace with that growth.  It is not a question of education or technical ability; it is more an issue of commercial experience and acumen.  Many Western clients who transition work to India are looking for people who can operate with a knowledge of home country market conditions and – even more difficult – an understanding of home country cultural expectations.

This is a tall order and those two demands can be very difficult to meet.  Don’t expect too much at the outset and be prepared to invest in training people to make up the skills and knowledge gap.

Attrition rates: How does your potential partner manage its attrition rates?  Attrition rates are notoriously high in the offshore industry in India and this can cause you serious difficulties on an ongoing basis.  Attrition leads to knowledge and skills seepage and massive recruitment and re-training costs (which can eat away at any cost arbitrage you were looking to harvest.)

Try to get some accurate figures on attrition from any potential partners and don’t just look at the numbers, look at the trends over a few years.  Ask your partners how they manage this issue, what policies and processes they have in place to address the challenge. If they just brush it off as irrelevant, be very wary. When we talk to home teams, lack of continuity of contact in India is often cited as the biggest headache.

Size: Should you team up with a large, well-established player in the market who has size, scalability and well-tested procedures, or with a smaller outfit who are growing and hungry? With a larger player, you might end up being a small fish in a very large pond and feel you are of little importance whereas a smaller partner may see you as strategically vital but lack the sophistication you are looking for.

You need to balance these conflicting arguments and find a solution that you are comfortable with in the short and medium term.  Again, it has to be about chemistry as well as commercials.

Price: If you are going through the whole process as a cost-reducing exercise then this obviously becomes a key factor in the final decision-making process.

But just a few words of caution, which come from experience. If you drive too hard a bargain, people will resent it. You are shedding people back home (this is resented at home) and you are squeezing the pips of your new partner (this is equally resented in India). The whole process can become pretty sour very quickly and you end up with massively resentful workers in two locations.

In addition, your India partner often becomes critical to the well-being of your global business.  In fact, the better your partner performs, the more critical they become as you invest even more heavily in them in terms of time and emotion.  What are you going to do if they turn around and say, ‘we can’t support this level of work anymore at the price we are charging?’  You may find they have you over a barrel.

The deal must be fair from the outset – that’s what will bring the cost savings in the long run.

For more information on this, contact me at keith@globalbusinessculture.com


Global Virtual Teams: Should you email or call?

Intra-team communication within virtual teams who are working across the barriers of culture, language, geography and technology is bound to present certain challenges which are less problematic amongst co-located teams.  Many of these communication challenges are cultural in origin and this blog highlights one such challenge.

One major cultural difference in terms of global communication is that some cultures place far greater emphasis on the importance of oral communication between people whilst others prefer the written word.

In countries such as Germany and Sweden, only when something has been communicated in writing does that issue become a reality. However, other cultures (such as Italy or Saudi) place much greater emphasis on the value of spoken communication – things are only really believed when they have been communicated by people with whom they have a strong, trusting relationship.

This simple fact can have a major impact on communication flow and the achievement of objectives within, for example, an international team. Do you communicate to each team member in exactly the same format regardless of their cultural background? Might it be a good idea to communicate more information orally to certain people if you want them to fully ‘buy-in’ to what you want to achieve whereas email communication may be more successful with other people?

Agreeing communication protocols in advance is a critical element in making global virtual team work effectively – and this is just one specific example of the things that need to be looked at.

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

 


Ethics and Global Culture

Global Business Culture works with a large number of major global corporations and as they become more and more engaged in business activities outside their home bases in North America and Western Europe, they seem to be asking increasingly difficult questions about the difference between cultural sensitivity and ethical correctness. I suppose the question boils down to a simple one – should we always play by the rules of the country we find ourselves operating in or should we always apply the rules that work in our home country? Those of a culturally understanding nature, as well as those who place the commercial imperative before all else tend to argue that ‘when in Rome do as the Romans.’ But is it really that simple? Should local norms always trump home country beliefs?

One of my North American clients placed a female employee as the project lead on a project with a certain Asian client. They received an email from the client in Asia saying they would prefer a man as the project lead. What should the North American company do? Should they acquiesce to the demands of the client even though that would contradict both the law in their own country and their strong corporate policy of being a gender blind employer? When I pose this question to clients around the world, responses vary enormously and not just, as might be expected, along gender lines. I’ve had female managers in the US saying that the client is always right but then being argued with by male colleagues who say that corporate policies should be adhered to regardless of the commercial consequences.

I spend a lot of time explaining the impact of differing attitudes to meetings, decision-making styles etc. on global business and my usual advice is to adapt to the expectations of the client as this can help you meet your goals on time and on budget. Nobody objects to the idea of adapting to a different meeting style – but condoning gender bias or bribery is a whole different ball game!

These issues are really complex and there is no simple answer to them. However, I strongly believe that a global company needs to address these difficulties rather than sweep them under the carpet. Organisations need a clear policy on all of these issues which is then effectively communicated and they also need to be strong enough to apply that policy in all situations – no matter how commercially uncomfortable that might be. It just not fair to say ‘we don’t pay bribes’ but then to punish a sales guy for losing a contract because they were competing with someone who did. It sounds bizarre but it happens.

If you’d like to discuss how increased cultural fluency can help you develop and implement effect global compliance policies, please contact me at keith@globalbusinessculture.com


English as the Global Communication Language

Like it or not, English is the common global language adopted by most international companies.  The trouble is that language levels in English vary around the world – even within one organisation.  Native speakers often assume that ‘if somebody is working in my company, they have to have really high levels of English.’ This is often a dangerous assumption.  Just because people don’t tell you they haven’t understood, doesn’t mean they have understood!  People often don’t tell you – it’s a face thing.

So when communicating in English in a global environment, everybody needs to think very carefully about the way they use English.

Be aware of the following at all times:

Control Your Speed

  • Keep at the forefront of your mind: slow down, slow down, slow down.
  • Speak at the same pace regardless of who you are talking to.
  • Don’t speak more slowly to non-native speakers only to speed up when conversing with other native speakers.

 Vocabulary 

  • Native speakers use all kinds of vocabulary that non-native speakers simply do not know.
  • When working internationally it is a good thing to use the same vocabulary over and over again.  It is the message which is important, not the style of the messenger.

Sayings

  • These figures of speech such as ‘cheesed off’ (unhappy), ‘sticky wicket’ (difficult situation) are usually very difficult for non-native speakers because they are often illogical.
  • Colloquialisms (sayings) are very confusing when used in an international situation.  There is always another way to say the same thing – choose the other way.
  • Colloquialisms (‘sayings’) are a good thing to talk about in social situations as people love to learn them.  In serious meetings, however, they can cause great confusion.

Humour

  • Humour is usually at the edge of linguistic difficulty.
  • Humour is very often culturally specific.  What one country finds funny, people from another culture may find irrelevant or even slightly surreal.

Abbreviations

  • Very few abbreviations are universally understood and it is best to be very careful about their usage.
  • Abbreviations are usually short forms of common phases such as a.s.a.p. (as soon as possible) or abbreviations of Latin phrases such as n.b. (nota bona).
  • TLAs (three letter acronyms) – which are often used to describe products or parts of your organization – should be used very carefully.  Does everybody understand them?

Silence

  • When people do not respond quickly to questions, non-native speakers usually answer the question themselves or simply move on and ignore the silence.
  • Often, non-native speakers do not respond immediately because they need a little more time to form an answer than they would if they were speaking their own language.
  • Give non-native speakers a little more time and space in which to operate.

Non-native speakers

  • Never be afraid to say you don’t understand
  • Never worry that people will think badly of you if you ask them to repeat things
  • Ask people to slow down if they are speaking too quickly
  • Ask people to follow-up in writing if you are worried you might have missed or misunderstood something

You can probably think of other useful hints and tips but these are a good starting point.

At Global Business Culture we run training programmes on global communication all over the world – if you’re interested to find out more please email 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


India as a key growth market – here’s what you need to know!

There is little doubt that India will be one of the most exciting growth markets for the next twenty years or more but turning potential into a sustainable business takes know-how and planning.  Here are my top issues to consider when contemplating entering the India market:

  • Understand the cultures – it is really important to stress the fact that there are many different cultures in a country of the size and complexity of India. The country is vast and the cultures vary significantly from State to State.  One thing is common though – things tend to move slowly.  India is an enormously relationship-driven culture and this means that things can take time to come to fruition.  You need to build this into your planning as it may have a significant impact on cash requirements and the time needed to get to break-even
  • Do some quality research – do not see this phase as an unnecessary expense. Good quality research on the market, competitors, the regulatory environment etc. will pay dividends in the long-run.  Many companies skip this part of the process only to regret it further down the line
  • Be very careful who you chose as a partner – people in India will often promise the earth but produce very little after the initial conversations. You cannot afford to make the wrong decision about which partners to use in India.  Do some very serious, on-the-ground due diligence on anybody you are looking at entering into a significant long-term relationship with.
  • Get to know the country – commit to spending time in the country so you can really get a feel for how it works. Get out into the second and third tier cities and discover the enormous energy and vibrancy of the place.  These visits will give you the best feel for how your products and services will work in-country, what adaptations you may need to think about and what the challenges will be.
  • Hire wisely – the key to your success will be quality of the people you hire. There are great employees in India just waiting for an opportunity to work for a company like yours but finding them and knowing which people are best fit for you and India is complicated.  You need to work with recruitment people who understand both India market needs and western parent company needs.  In addition you need the cultural knowledge and sensitivity to hire people who are right for India – too many western businesses hire people who are like them and would fit in well back at base.
  • Don’t listen to the ‘bad press’ – lots of western businesses are put of entering the India market because of horror stories they have heard about red tape, bribery and IP theft. Let’s not shy away from the issue, these things exist but at no greater levels than in other emerging markets such as China, Brazil or Indonesia.
  • Engage with experts on the ground – you will benefit enormously from engaging the services of people in India who really understand how things work and who have a track record of helping western business succeed in market. This will cost but it will prove a great investment.
  • Commit to the long haul – India is not a ‘quick win’. The size, complexity, culture and, above all, the need to build strong relationships all point to the need to take a long-term perspective.  If you stick it out, the rewards will come and India could become your key overseas market but only if you get things right from the get-go and commit to being there for the long-term

For further information on Global Business Culture’s ‘Doing Successful Business in India’ programme contact me at keith@globalbusinessculture.com

This post was originally p