Companies
are losing business simply because they fail to recognise their international
partners have a different way of working.
Pepi Sappal looks at how this cultural hurdle can be overcome
Just
a few months ago, SwissAir HR director Matthias Molloney complained that
finding leaders with global skills and multicultural experience to help expand
the business internationally, was extremely difficult. "We’re not just
looking for languages, but transnational thinking. People with these qualities,
however, are a scarce commodity," says Molloney.
It’s
a common complaint. Although international companies have been around for many
years, cultural nuances still get in the way of doing business.
"We
still hear tales about Westerners walking away from meetings under the
impression that a deal has been struck between them and, say, their Eastern
counterparts, but they are often shocked to discover that there’s actually no
deal when they arrive home, and can’t understand what went wrong," says
Richard Little, international consultant at UK-based training firm Impact.
"The problem, it seems, is that we’re still struggling to produce
international managers capable of dealing with cross-cultural dilemmas. This
makes it difficult to reach business goals and profit targets, whether they
arise from cross-border alliances or within international teams."
A
recent study by professional services firm KPMG confirms that relational
aspects of cultural differences and lack of trust are responsible for as much
as 70 per cent of all cross-border alliance failures. And HR directors and CEOs
continue to complain that cross-border alliances and acquisitions just haven’t
brought the results they expected.
Business
guru Fons Trompenaars of Netherlands-based cross-cultural firm THT Consulting,
and co-author of Riding The Waves of Culture, blames this inability to produce
managers capable of conducting successful international business on training
and old-fashioned attitudes. "Global corporations have learned that the
‘we’re all the same strategy – by standardising business processes worldwide’,
doesn’t work. They’ve also discovered that the ‘we’re all different, so let’s
create different processes to accommodate for local nuances’ scenario just
creates chaos," says Trompenaars.
"This
time round, it’s about ‘finding a common or middle ground’ that works for all
parties by leveraging on the values we share. And the sooner companies come
round to that way of thinking, the better," he says.
He
believes sending managers on short courses that do little more that point out
the differences simply isn’t enough to succeed in today’s complicated
international business arena. "This approach can often make conflict
resolution far more difficult. So it’s imperative to find courses that look at
the similarities too," he says. "Only then can managers find middle
ground that everyone will be happy to work within." He describes this
skill as the ‘transcultural competency’ – the ability to not only recognise and
understand differences, but reconcile them and leverage them for business
advantage.
Professor
Fred Seidel, of French business school EM Lyon, agrees. "As companies go
global, you need managers that are able to build a bridge between their own
culture and others," he says. "To do this, they need to understand
the differences, then look at where they can build commonalities in order to
work with their international colleagues effectively," says Seidel.
"This way no one culture dominates another, which is where conflicts
usually arise."
Yet
skilled ‘transcultural managers’, capable of finding ‘a common ground’ are
rare. But it’s not all bad news. Trompenaars claims that this transcultural
mindset can be learned, and once mastered, can be transferred from one country
or culture to another with ease. That said, it’s not something that can be
learnt overnight, but acquired through a combination of training courses and
personal developmental skills.
"Global
managers must acquire cultural sensitivity and savvy at two levels: generic
understanding independently of the countries involved (cross-cultural
preparation) and country-specific understanding of the dos and don’ts of
business etiquette and practice (country preparation)," says Lisbeth Claus,
professor of international HR at the Monterey Institute of International
Studies in California.
"A
short cross-cultural course will help acquire a generic cross-cultural
understanding. This will give an insight to how cultures differ, based on the
works of cross-cultural gurus such as Trompenaars and Geert Hofstede. For
example, they will learn how other cultures value life. Is it an individualist
culture like the US, or a collective one like Japan. Once they have that kind
of knowledge they will find it easier to manage and reconcile
differences."
Claus
has developed a Transcultural Competency Toolkit to help understand these basic
differences. It helps to compare cultures and increase cultural savvy in
international business situations. "It allows firms to compare the
implications of say, offering an overseas promotion to say a British person
from a highly individualistic culture and an Argentine person from a
collectivist culture, which is also highly paternalistic."
The
concept of ‘commonalities’ is also beginning to appear in short courses as
well. "Working on what we have in common is a strategy we use to build
rapport and an element of trust between, say, an international team," says
Philippe Nitzer, senior trainer at Farnham Castle, the UK-based international
briefing and conference centre. "One way we do this is through sharing
emotions – such as fear, joy or excitement – that are common to everyone,
through action or role play. This helps to develop a genuine trust between
everyone. Once this bond has been established, the differences don’t seem to be
too big, and they can then find a way to negotiate and work on their
differences."
Theory
alone, however, is not enough. Experiential learning, via exposure to
international business through overseas assignments or working in multinational
teams, is also important. Through a combination of experiences and
cross-cultural training, international managers will learn how to get the best
out of people, by knowing which buttons to press. To make a joint alliance between
China and the US work, for example, managers must adopt two different
approaches to get them working together to reach the same goal.
"So
to get the Americans on your side, you need to talk about future goals and
objectives, forecasting the type of return they would get as they are
future-orientated," says Claus. "But for the Chinese, who are
past-orientated, the way to get them on your side is by referring to history
and what their ancestors would have done, because that’s what they respect."
Those
being groomed for international leadership positions, however, will need
further cross-cultural development and international training – usually
acquired through a longer course, preferably at a business school.
"Here,
they’d get a deeper understanding of culture on top of international business
skills. For example, an understanding of institutions like education systems
will give a clue about the way certain cultures learn and solve problems,"
says Seidel. "This can be done by analysing environments by looking at
company growth patterns. For example, why the Japanese have been able to build
huge organisations, whereas the Chinese haven’t. As the Chinese rarely trust
people out of their own clan, their businesses tend to be smaller and family
owned. Again, this gives a clue as to just how trusting and loyal certain
cultures are."
Ongoing
support
Once
managers acquire these skills, they will be able to go to any country and find
their own way in business, claims Seidel. "They’ll be able to distinguish
what is important and what isn’t. They’ll know how to go about finding the
knowledge they need – and in many cases, eliminating the need for cultural
training briefings each time they go to a new location, because they’ll know
what information they need and how to get it in order to adapt to the new work
environment quickly and effectively."
But
it doesn’t stop there. Skills must be continuously topped up with just-in-time
country-specific preparation and supporting skills. "It’s amazing how many
US firms will acquire a European firm, thinking they can fire at will, like
they do in the US," says Stephane Brahey, director of intercultural
management training, at Cendant International Assignment Services, based at the
Chicago office. "So firms send staff to us for tactical training, to help
prepare staff who are about to negotiate a joint venture in China, for example.
We’ll give them an insight in to how deals are done there, help them understand
the legal implications, and so on, with ongoing coach and support along the
way."
The
need for transculturally competent managers will steadily increase, not only
for overseas postings, however, but on companies’ home countries as well.
Considerable labour movement is occurring throughout the member states of the
European Union, and the face of the US domestic workforce is also becoming more
multicultural: Hispanics are likely to become the US’ largest minority group by
2020, and according to the US Department of Labor, two-thirds of the US
population increase between now and 2050 will be due to immigration.
In
short, cross-cultural training is a time-consuming investment, and adapting to
a broader view of bridging the cultural gaps a considerable commitment, for
individuals and companies alike. But long term, those investments pay off. As
Fons Trompenaars points out: "Leaders such as Michael Dell and Richard
Branson have this transcultural mindset that can deal with ambiguity. Not only
will those who have this skill thrive in business, but so will those firms."
Cross-cultural
savvy and how to acquire it
Acquiring
cross-cultural savvy does not happen overnight, says Lisbeth Claus, professor
of international HR at the Monterey Institute of International Studies in
California. She offers some tips that can help HR and their staff increase
cross-cultural skills within their organisations:
–
Make globalisation an integral part of your company’s mission. Increase global
awareness among your employees by communicating your global strategy, by
educating them about your international suppliers, customers and competitors.
Help increase their understanding of global interdependence
–
Know your own culture: an in-depth knowledge of your own culture is a
prerequisite to identifying and eliminating stereotypes about other cultures
–
Do not stereotype others: having a global mindset requires us to be flexible
and adaptable to change. Do not base assumptions about others on stereotypes,
but on an understanding of a culture’s various value dimensions and how
business is conducted
–
Recruit staff with cross-cultural and language skills: an increasing number of
potential employees already have an international background, education and
experience. It’s easy to teach new recruits about your business practices and
industry than it is to develop non-existent cultural and language skills
–
Promote people from different cultural backgrounds to management positions. By
diversifying the cultural background of your managers, your company will be
less likely to view the world solely from a domestic perspective
–
Provide opportunities for cross-cultural learning and languages. Consider the
acquisition of cross-cultural and language skills as a part of your employees’
personal development. Provide them with learning opportunities through education,
training and international assignments. Working in a global environment
requires people to become proficient in at least one additional language.
Language acquisition is the basis of socialisation into a culture, and a
competitive advantage to conduct business better in that new environment
–
Learn from your international experiences: share the knowledge of your
international successes and failures with everyone so that everyone may learn
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–
Shift your emphasis from short-term task accomplishment to long-term
relationship building. This will make it easier to conduct business in
countries such as Asia and Latin America
–
Remember the global rule: treat people from other cultures as they would like
to be treated
