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intercultural businessmen, cultural misunderstanding, cultural awareness

Why Cultural Awareness is Crucial for Global Business

Your sales presentation has just concluded. You have a good feeling about it. This is the first time you’ve done business in this country – on this continent, in fact! – but no matter. You gave your very best sales presentation, the one that always scores when you’re at home. You eagerly await the client’s reaction. But there’s no reaction. None. Only silence. The young, energetic guy you pitched to finally tells you, “Thank you. We will let you know.” The older guy sleeping in the corner, the one you ignored, stands up and everyone follows him out. The meeting is over.

You go back to your hotel room and wait. And wait. The answer never comes. You call, many times, trying to get an answer before your flight leaves that evening. For some reason nobody is taking your calls. Finally, a week after you’ve returned home, you receive a terse email, “Thank you for your presentation. We have decided not to do business with your company.”

What went wrong?

What happened? You gave your very best presentation. When you’ve pitched clients at home using this same presentation, prospects have been eager to sign contracts with you. Why didn’t this client react the same way?

The problem is, you may never find out. Because what went wrong was most likely based on something you don’t know and couldn’t possibly recognize. Was it that you focused on the wrong target? Was it your presentation? Too long? Too short? Not enough information? Too much? Was it that you wanted to skip the lunch they offered and get right down to business? That you also skipped the dinner invitation in favor of getting right back to your home office? You don’t know because you don’t know. You’re not culturally aware.     

When doing international business, there are certain things you must know. The basic business information is not enough; you also need to develop cultural awareness.

Cultural awareness

Appreciating that individuals from different cultural backgrounds have different cultural norms, practices and expectations seems like a nice-to-know social skill. The reality is that this knowledge is vital if you want to be successful in international business. Awareness of cultural differences isn’t simply about making people feel comfortable with good manners at the dinner table. Or knowing when to bow or when to shake hands. People from different countries and different cultures have their own ways of doing business. At work, they react to inputs and suggestions differently, they communicate differently, and they make decisions differently. Being aware of these differences is crucial to doing global business.

What are cultural differences?

Cultural differences exist in virtually every human interaction. You will experience these as differences among the individuals you interact with. Even your good friends might have different perspectives, interpretations, understanding and behaviors to yourself. This is an indicator of cultural differences, which may stem from influences such as racial difference, local or family culture, or historical influences. The key is that you will notice the person’s perspective and habits are different from yours.

In the workplace, you may experience a struggle with either colleagues or clients. You want to perform a set of tasks, and you know how to do them, but sometimes colleagues or clients insist on things being done ‘their’ way. It seems that no matter what you say or do, they keep on doing it wrong!

At the international business level, these differences can be magnified many times over. An international client, in some cases, may not feel heard and respected, even though you have been trying your best to communicate with them. Moreover, he or she has the luxury of simply rejecting your proposal if they feel disrespected. The most frustrating part is that you may not even know why they rejected your offer.

Why become culturally aware?

Research shows (KPMG, 2012) that poor appreciation of cultural differences and communication can lead to a loss of potential business by as much as 26%. Additional research by McKinsey (Diversity Matters, 2015; and Delivering Through Diversity, 2018) has shown measurable positive financial performance in companies which take active measures to manage cultural differences through diversity. Lastly, had our salesman in the opening anecdote been culturally aware, his client may have been just as eager to do business as his clients back home.  

By recognizing the cultural differences and becoming more culturally aware, the differences no longer become a source of conflict or poor results. On the contrary: we can learn how to leverage these differences to improve work processes, create business excellence and improve overall performance. No longer will you wonder why the business deal went wrong

How to become culturally aware

Developing cultural awareness is the basic foundation to courses offered at ELM Graduate School through our partner BRIL.Solutions. To find out what your level of cultural awareness is, and how you can improve your intercultural business skills, contact us for more information. 

For more information regarding our course offered 12 – 13 June, please refer to our website: Intercultural Business Skills – open course.  
Leo Salazar
29 April 2019
Kuala Lumpur, Malaysia

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I’m encouraged when I find real-world examples of finding value in differences. It reaffirms my belief that we are doing good work, the right work, in helping companies do better business through valuing cultural differences.

The latest example appeared last week, in a podcast interview that Vox-founder Ezra Klein conducted with distinguished economist Prof. Dani Rodrik,  It’s a fascinating conversation, one that challenges you to look at the world of trade, finance and economics differently. There is one passage in particular that caught my attention. At 00:26:00 the following exchange occurred (excerpted for relevance):

[Ezra Klein] People look around and they say, you know, “Wouldn’t it be great if we all just became more alike? If we all just moved down the path towards enlightened technocratic rule together?

Okay, pause here for a moment. It’s statements like this that have me shaking my head in grave disappointment at the podcast app on my smartphone, “No. No. No.” Mr. Klein went on:

And something I see in your work is a real emphasis that, No, countries are different. They have different cultures, they have different needs – there is much more that we don’t understand about them that economists like to admit. I see you as making an argument for an economics that has much more appreciation of difference and how little we understand about what makes different countries work differently, and, as such, places a lot more value on the institutions that allow them to continue working differently. Is that a fair reading both of you and of your critique?

Prof. Rodrik’s response is one for the ages:

[Prof. Rodrik] I don’t think that there is a single, ideal way of running an economy or organizing a society. There’s no one-to-one mapping between what markets need and how you can organize these supporting institutions. So there is huge multiplicity in terms of how can do these things, reconfigure these things, and still achieve outcomes that are broadly prosperity-producing. The range of variation that we observe – it’s probably tiny compared to what we could have. In some sense we ought to be much more imaginative and courageous in terms of thinking about how we can reconfigure our systems. The notion that we’re all sort of converging on an identical model of capitalism is not just empirically and historically wrong, but also counter-productive to the deployment of that kind of imagination. Which is our only chance of saving ourselves because of where we are right now.  

I admire Prof. Rodrik’s curious and searching approach to economics very much. I find it healthy and eye-opening. In fact, and he says it as well, I also believe approaches like his are necessary to future survival, economic as well as societal.

Throughout developed capital markets, namely the US and Europe, there seems to be a great deal of fear that the world is changing and the only way to deal with the change is to put up walls, construct barriers. Among the current ruling classes there is fight to the death to keep things, not as they are, but the way things were and, in the popular imagination at any rate, have always been. Brexit, Trump, autocratic rule, tariffs and trade barriers are not only futile fights against the inevitability of change, they also limit people to the possibilities of what could be. As Prof. Rodrik puts it, by focusing on the comfortable models of the way we’ve always done things (supposedly), and to only consider one ‘right’ way of doing things, is counter-productive to finding new solutions.

What are these new solutions? There are two publications I’m currently reading that may provide some clues:  

China’s Cosmological Communism: a Challenge to Liberal Democracies by Didi Kirsten Tatlow of the Mercator Institute for China Studies (MERICS – Berlin). Makes a convincing case that the future may belong to the Chinese.

The Dawn of Eurasia: On the Trail of the New World Order by Bruno Maçães. The author weaves history, diplomacy and travelogue to give a convincing view of a new world that has China as the driver.

You can find the podcast between Mr. Klein and Prof. Rodrik here: The Ezra Klein Show – What economists and politicians get wrong about trade

A transcription of the passage excerpted above can be found here: The Ezra Klein Show – Prof. Rodrik, partial transcript

No Fishing Poles - sign

‘No Polish fishermen’ sign removed after outcry

There has been much ado around Billy Evans, the owner/manager of Field Farm fisheries, who decided to ban Polish “and other Eastern bloc” fisherman from using his farm-stocked recreational fishing ponds near Oxfordshire (UK). After hearing that “there’s Poles or somebody stealing fish,” he erected a sign at the entrance reading: “No vehicle access. No Polish or eastern bloc fishermen allowed. No children or dogs.”

Mr. Evans stated, “I do not tolerate thieves, wherever they come from,” he said. “I will stand up for what I believe in. If they want to call me a racist for stopping thieves coming on to my property then that’s what they’ll do.”

Especially angered has been Radoslaw Papiewski, 35, from Doncaster, who said his fellow anglers had told him about the notice. He said, “This disturbing sign should have never been displayed as it clearly discriminates against people from Poland and other eastern European countries.”

Race-baiting? Or misinformation?

Mr. Papiewski is not your random angry Pole. He is project manager for Building Bridges, a project aimed at integrating fishing communities from mainland Europe – much of which allows anglers to keep their catch – with anglers in the UK, where fish must be returned to the water. He helps educate non-British anglers about the difference between the laws governing angling in mainland Europe and those in the UK, in an effort to ensure they abide by British rules. The purpose of British laws requiring anglers to return their catch is to improve conservation and prevent the depletion of fish stocks.

The upshot of all this is that the Equality and Human Rights Commission (EHRC) has become involved and has threatened legal action unless the sign was removed. A huge public outcry has ensued, and Mr. Evans has been demonized as a racist. “My family has been threatened,” he stated. All around bad feelings, a divided community, and potential bankruptcy, due to legal fees and the closure of the business.

An alternative route

So let’s imagine what might have happened, had Mr. Evans attended a course in intercultural communication from BRIL.Solutions and had been culturally aware. Let’s look at it objectively:

Problem:

Non-English fisherman, specifically those from Eastern bloc countries, are (allegedly) catching fish and keeping them rather than returning them carefully to the water, as is custom (and law) in the UK.

Let’s now look at two possible decision paths leading to a solution. The path on the left is the one Mr. Evans is now on. The path on the right being after he attended a course from BRIL.Solutions.

No Fishing Poles! (1)

What’s so ‘intercultural’ about all of this?

You might say, this is all well and good, but isn’t this a simple information and communication problem? What does culture have to do with any of this? A fair question, so let’s explore it.

As a fisherman myself, I understand the position of the Polish fishermen. There is something fundamentally satisfying about keeping and eating your own catch. It fulfills a primal instinct in being able to provide for yourself, your family and your community. This may be especially true in Poland, where cultural values around traditional masculine roles are ranked medium-high and, combined with high power distance (see Hofstede cultural dimensions comparing Poland and the US), may lead Polish fisherman to feel that leaving his catch behind is threatening his role in society. A man is the boss of his family, and is expected to provide for his family, while his wife prepares the meals and looks after the children. To come home empty-handed after a day of fishing means failure. He’s not fulfilled his role as head of the family.

In the UK, especially in stocked ponds like Mr. Evans’, fishing is seen as more recreational, more a hobby. Something to do with the kids on the weekend. There are few, if any, societal implications with fishing. It’s fun; a lark. I can imagine that Poles see the British attitude as a colossal waste of time.  

Secondly, you might think, “Reaching out to so many people, organizing meetings – who’s got time for that?” Indeed, the culturally aware path requires a heavy up-front investment. But look at what the alternative course of action results in: an alienated community and a failed business. Either course of action will result in costs of some sort. Why not invest the costs up front and have a positive, value-building outcome?   

The story of Mr. Evans’ fishing hole is but one example of many where there’s lost value due to a lack of awareness of intercultural differences. It pains me to see potential value-building gone to waste. Not to mention the human side of this story, the feelings of exclusion and rejection. The opportunity to build, create, bring together and encourage mutual understanding was squandered, in favor of divisiveness, hard feelings and more misunderstanding. 

I can be a bit of an idealist, but wouldn’t it be wonderful (not to mention more value-building) if we could approach all of our challenges with openness and willingness to learn, especially about others, before we go erecting signs, walls and barriers?

 

“I firmly believe that whether you’re building a company or leading a country, a diverse mix of voices and backgrounds and experiences leads to better discussions, better decisions, and better outcomes for everyone.”

In the week following Republican candidate Donald Trump’s loathsome proposal to stop all travel in and out of the US based on religion, until “we figure out what’s going on” with “terrorism,” there have been a number of voices raised in protest. Finally. Trump’s brand of nationalistic fascism is nothing new,  and we’re seeing a resurgence of it around the world as crisis and change make people afraid. But Trump has hit a new low for Americans, at least since Japanese-Americans were interred and stripped of all possessions and dignity in the panic following the attack on Pearl Harbor in December , 1941.

One of the most eloquent voices is Google’s CEO Sundar Pinchal, who speaks with the voice of experience and authority. It’s worth the read for anyone who is concerned about allowing everyone from different cultures the possibility to be respected and to perform their best.

Let’s Not Let Fear Defeat Our Values.

Herd Behavior, Useless Meetings, and Solomon Asch.

An interesting blog entry from a Blanchard consultant. On the “uselessness” of meetings, his conclusion states, “When describing the attributes of an outstanding team member, we frequently include the word loyalty. Some well meaning leaders see candor and honesty as potential indicators of disloyalty—but actually, it’s the other way around. Pioneers should be honored, but frequently they are punished. Leaders should be informed, but frequently they are shielded. High performing teams are willing to tell it the way it is. This may be uncomfortable initially, but the long term payoffs are priceless.”

My response follows:

The reasons for meetings are highly contextual: on intended purpose, style of meeting management, level of personnel involved and situational urgency, as well as on company and national culture. Meetings in some countries are simply public confirmations of decisions already taken beforehand, whereas in others they may be truly necessary to gain consensus, and in still others a generator of new ideas through brainstorming. Or all three. In Dr. Asch’s research example, were the others around the table of equal social stature, higher or lower? Were they subject matter specialists and you are the only generalist?

“Truth” and “right answers” are almost never as clear-cut as Dr. Asch’s example. Nor are “high-performing teams who are willing to tell it the way it is” always the way to achieve results, long-, medium- or short-term. One person’s “candor and honesty” is another’s social faux pas or lack of respect, causing more damage than good. Don’t forget that any one person’s opinion is highly influenced by their own individual perspective, one that you may not necessarily share.

The best leaders, in my opinion, are those who leave open the possibility that they may be wrong, and are willing to “sacrifice face” in order to get to the more essential, more elemental shared truths. In Dr. Asch’s experiment, the true leader wouldn’t have given an answer at all, but instead would have asked “Why?” Why have you given an answer that I see as different? Why have you all answered the same? Am I missing something? It takes courage to ask these questions, and true leaders are those who display this sort of courage, instead of contrariness through “candor.”

An interesting experience over the weekend. In the course of last week a couple of Jehovah’s Witnesses came to my door. Young fellows with an appearance that would be familiar anywhere in the world: white shirts and ties, short cropped hair, youthful. We had good conversation and afterwards I asked them if it was possible to join them in their service. As regular readers of this blog may know, not only am I busy with intercultural dynamics in businesses, I’m also active in interfaith activities. I’m slowly becoming acquainted with various faiths and their forms of worship.
Last Sunday was their gathering at the Kingdom Hall in Almelo. I was a few minutes late and even though the parking lot was full, there was nobody to be seen. The security gate securing the lot was shut tight, but a walkway fence was unlocked, so I walked my bike inside the immaculately kept grounds. At the main door there was, again, nobody in sight and I tried the door: locked. Even before I let go of the handle, though, a clean cut, smiling young man bounded towards me and welcomed me inside. On leading me into the building I realized why his timing was so good: he was sitting behind a bank of security cameras which monitored my arrival.
 
I was asked to wait in the foyer and was then introduced to a smartly dressed gentleman, my age. He asked me a few questions and after determining my intent was benevolent, showed me to a seat near the front of the main hall. A group of maybe 75 equally smartly dressed, freshly scrubbed churchgoers of all ages sat listening to a handsome young man giving a sermon. I glanced around the room and noticed that everyone there was neat, clean, good looking and well dressed. A diverse group, probably one of the most diverse gatherings I’ve ever seen in Almelo. The average age was somewhere in the late 30s, which is about half the average of the parishioners at our St. Georgius Catholic Church. I was joined by Wesley who was one of the young men who came to my door, and he stayed with me during the nearly 2-hour service.
 
It was very interesting, the service. After the sermon (which, I learned, is performed on a rotating basis by any number of fellow parishioners – apparently JWs believe in a very flat organization), there was an interactive reading of an article from “The Watchtower.” Parishioners were called on by a moderator to contribute, and most of the responses included relevant quotes from the Bible. What it lacked in spontaneity was made up for in thoroughness and preparation. Nearly everyone in the hall contributed at some point, from 5-year old kids to seniors well into their 70s.
 
Afterwards, a great number of people came up to me, welcoming me to their church. In addition to Wesley’s entire family (mother, father and brother), the most interesting was a family from Armenian background: they had just returned, 3-days earlier, from a month-long holiday in Glendale, California, where they were visiting family. A great number of Armenians in Almelo, including Anton who cuts my hair, have family in Glendale. The most interesting comment of the day came from Gert Hollander, the my-age man I initially met in the foyer. I told him my very positive impressions of the service while sitting on my bike in the parking lot upon leaving. He said, “You know, if more people were open, like you, and would experience our service just once, the overall impression of Jehovah’s Witnesses would be far different in the world.”
 
I guess the same could be said for all religions and cultures, couldn’t it? 

The rule of the Kingdom of the Netherlands will transfer from Queen mother, Beatrix, to her son, Prince Willem-Alexander, on 30 April, in little more than one week. In preparing for the celebration, the State has commissioned various art and cultural works to commemorate the occasion.

Schermafbeelding-2013-04-19-om-10.49.06One of these works, the so-called King’s Song, has generated much negative commentary in the Dutch press. “Old fashioned drivel,” “schmaltzy,” and “forgettable,” are some of the more tame comments. Some commentators, perhaps full of Dutch courage, have even suggested that the composer be tarred and feathered, and worse. The critique has been so intense, and in some cases so personal, that the composer, John Ewbank, has resigned his commission. I’ll admit, my first reaction to the song itself was little more than lukewarm: “What do you people have against melody?!” was my first comment to my wife, who wisely holds her tongue against defending “her people” against my tirades. She knows I’ll eventually come around.

And come around I have. I came here to rant about the lack of diversity in the song’s text. To point out the irony that both the man who will be King and his wife who will become Queen – Princess Máxima of the Netherlands (née Máxima Zorreguieta Cerruti, of Argentina) – are both “allochtone,” of non-Dutch ancestry, yet there’s nothing explicit in the text about the diversity this country usually celebrates.

But then I watched the song’s accompanying video. I’ve been completely won over. I find the video a marvelous and genuine Screen Shot 2013-04-22 at 12.55.26 PMrepresentation of all sorts of diversity in the Netherlands. And without the “Coca-Cola commercial” artificiality, where you magically wind up with exactly one of each national type – exactly one Asian, one black, one Pacific Islander, etc. The King’s Song video shows all sorts of diversity in a broad variety of Imagesettings: white, black, asian, young, old, all socio-economic levels, rural/urban, handicapped, obese (the heavy guy munching on friet at the train station is my favorite – just your ordinary “kerel” enjoying a snack), LGBT (lots of gays!) – even a hipster! And what comes through when you watch the video is these people aren’t from any sort of casting agency, but are truly the people you meet every day in this country. Well done! Image

Okay, the song’s not the strongest. And, as they are now saying, if your goal was to unite the Dutch in their dislike of something – mission accomplished! But my lesson learned is what it often is in multicultural situations: before you pass judgment, get the whole picture. And remember, as always, that context is everything.

Earlier this year I had the honor and pleasure of hosting Aebi Schmidt at De Baak Seaside during their annual 2-day strategy meeting. Aebi Schmidt Holding (AHS) is based in Zurich, Switzerland, and 50 top managers from the global company came to the Netherlands for two days to take a look at the year past, reinforce their company values, and look at the way forward for 2012.

Aebi Schmidt is the leading system provider of innovative technical solutions for the cleaning and clearing of traffic areas as well as the mowing of green spaces on difficult terrains

Regular readers of this blog perhaps notice that I often take the intercultural view of doing business. I’m always looking for ways to help leaders to recognize differences and to leverage those differences for mutual benefit. And in preparing for Aebi Schmidt, my colleague at De Baak, Raymond Eilander, and I sought ways to highlight cultural value differences while helping the participants align to company values.

To my pleasant surprise, there was remarkable homogeneity amongst the values of the managers. Not cultural homogeneity — far from it. Amongst the Swiss, German, Italian, Polish, Swedish, Dutch and Spanish participants there was a great deal of difference. The homogeneity was among the company values. Regularly, consistently and pervasively, I heard the following values expressed:

  • The importance of innovation (how to find it, encourage it and enable it)
  • Building trust
  • Shaping change
  • Working positively towards solutions
  • Respect for others’ position and perspective

How was this possible? How were the cultural differences of seven different nationalities trumped by a strong company culture? Of course there are many reasons and causes to defining a culture, many if not most of them invisible and difficult to define. But in the case of Aebi Schmidt for me there was a very strong defining element to the company: the CEO Walter Vogel.

Mr. Vogel at first blush appeared to me, when I first met him in Zurich during the planning stages of the meeting, to be the epitome of the Swiss executive: impeccably dressed, formal, stiff and encouraging to deference. Even though I was on the mark regarding his sartorial taste, I was way off base about the rest. Walter (please don’t call him “Mr. Vogel”) put me immediately at ease and we had a very pleasant 2-hour conversation about what we should plan for his company.

Later, during the 2-day event, Walter clearly showed outstanding characteristics of an excellent leader. He was engaging, participative, continuously present but low-key, encouraging and supportive. During the entire 2-day event, he excused himself exactly one time to “tend to an emergency.” Within 15 minutes he was back and again in the flow of the program.

We’ve worked with many companies at De Baak. Some with success and some less so. Seeing the positive, supportive leadership style of CEO Walter Vogel was truly an inspiration and, in my mind, the well-spring of a strong, positive company culture. I find it significant that Walter’s #2 man, CFO Stephan Naef, has won Switzerland’s CFO of the year award. I can imagine the the supportive, encouraging leadership style of his boss had a great deal to do with it.

 

I got an email from my daughter Mary today. She is 25 and lives in Riverside, California.

Hey Dad! I was watching a rerun of Late Night With Jimmy Fallon (which I see as the late night show for tech-savvy youngsters, compared to Jay Leno or David Letterman.) and thought of you! You were (/are) the only one excited (and recognized) the new scan [QR-code – see the left column of this blog]. This particular episode had Steven Colbert and a crazy dance and song in it. One random guy in the dance scene was holding a cardboard sign with a scan! I paused the episode, scanned the code and got this website: http://www.latenightwithjimmyfallon.com/blogs/2011/04/fallon-colbert-project-bonus-video-thank-you/ It’s way cool seeing where technology is taking us! Moving forward every day! [See the episode here: Late Night with Jimmy Fallon – Stephen Colbert Sings ‘Friday’ with The Roots (4/1/11) – Video – NBC.com]

It’s wonderful Mary associates me with the “tech-savvy” culture. She could have just called me a “nerd”!!

During De Baak’s “Who Are We: Reflections on Dutch Leadership and Society,” we reflected on what leadership in the Netherlands was and what, if possible, other cultures could learn from the Dutch.

On 15 March I attended a MoveOn rally in Riverside, California (US) to express solidarity for the public service workers unions in Wisconsin who were being stripped of their collective bargaining rights. Again I stressed the benefits of working together, espousing the “Dutch model” as an ideal way to achieve sustainable solutions.

You can find my contribution at 04:35 🙂

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