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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
Another great article from Sukh. Very practical: 5 concrete tips:
1) Be good (not great) trainers
2) Be consultative about the organization
3) Interact with the organization’s leaders
4) Be aware of the public image of the organization
5) Read business related material.
So you know how we hear lot’s in the profession about being more business minded to give ourselves value? Well, I’m onboard with that as a concept and as an ideal. It helps me to understand there are things I can and should be doing which will help me to be better at the job I do. If I choose to.
But what does it mean to be more business minded? How do you get more commercial acumen? How do you gain business acumen? As an L&Der, does this stuff actually make a difference to the job we do?
Well, it can make a big difference. It’s what sets ‘trainers’ apart from ‘L&D professionals’. To my mind, there’s a role for both in organisations.
We need trainers. That is people who are proficient (or even possible expert) in a particular skill set, and can help others learn that skill set…
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Professional Capital, a sales training organization, offered a “knowledge seminar” in Rotterdam this week, “Effective 
Sales Management.” Even though I’m not a sales manager, and the last time I worked in a full-on sales position was back in 1990 when I worked F&I at Cypress Coast Ford in California, I wanted to gain more insight into more modern sales practices. As well as some of the challenges salespeople are dealing with in this brutal economic environment. The organisers were gracious enough to make a place for me and I attended the small gathering.
The first thing I noticed was how tall and good looking the other men were. Yes, all men. All tall and good looking. And white. All in their mid- to late-30s. That should have signaled to me what was coming. Even though they were from a broad variety of industries (construction supply, financial services, IT), they were dressed identically in the uniform of the urban Dutch professional: jeans or slacks, open dress shirt, good shoes.
It was a good session. An excellent and well-moderated format by Maarten Colijn, from the organization. Lots of good ideas exchanged, case situations explored and the challenges of being a sales manager in a tough economy the order of the day. But there was an undertone which disturbed me and it wasn’t until the drinks and informal session afterwards that I discovered what it was.
“Salesmen are born, not made,” stated one. “Agreed,” said another, “In fact, you can tell within 30 seconds of an intake interview whether he’s got ‘it’ or not.” I found myself initially nodding in agreement, but then caught myself. Hey, wait a minute! What is “it”? And why only “he”? Then I realized. What they really mean is, “When I find someone who is exactly like me, I know I’ve got someone I can work with.” Even though many of the problems, many of the challenges they talked about earlier, upon reflection, were a by-product of this “like searching like” procedure.
Today’s Sales Manager – an archetypical sampling
Their need for salesmen clones in their organizations, and their inability to tolerate diversity, were evident in the problems we examined:
- Difficulty in developing new markets;
- Difficulty in seeing new opportunities with existing clients;
- Difficulty in finding “common” ground with which to motivate their charges;
- Difficulty in motivating their people in a difficult economic environment;
- Difficulty in accepting other ways, other than “my way,” to the client.
It was particularly this last point that later confirmed for me the value of seeing output, rather than input, as the only valid measurement tool.
Input/Output
Appearances are input. Method is input. Approach and planning are input. Individual behavior and reward systems are input. In the sales world, there is only one output, and that’s getting the customer to sign on the line that is dotted, to quote Blake in David Mamet’s Glengarry Glen Ross. One of the participants said it well, “The sales world is binary: you either have the sale, or you don’t.” Yet these otherwise accomplished sales managers were racking their brains to find better and more efficient ways to manage their input. Not in the name of efficiency, but in the name of homogeneity. How to find more people just like me? How to get them to toe the line and do the job exactly as I’ve done it all these years? After all, my way must be the right way – it’s worked for me!
The challenge is getting them to reframe the problem. Instead of seeing it as a problem of control and with managing input, a question of letting go, accepting any input that their people attempt, as long as the outcome is acceptable. Getting them to focus their energies on defining targets that are purely focused on output (sales results), not on input.
In other words: do they have the courage to accept any input as long as it meets the agreed-upon criteria pertaining only to output?
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.
Roland Berger says, “NO!”
Diversity & Inclusion is a strategic issue that belongs on the CEO’s agenda. Diverse and inclusive companies clearly outperform their competitors on the hard financials.
As CEO, surely you could be forgiven for seeing Diversity & Inclusion as a bit of a soft issue, more political correctness than business concern, and, if anything, a topic for HR.
Well, no. In fact, you would be neglecting a topic that drives tangible financial results and is a strong indicator of management and leadership performance.
More from an outstanding report from Roland Berger Strategy Consultants.
Elmer Dixon, one of the former leaders of the Black Panther Party in the US, will be visiting the Netherlands. He is currently the President of one of
the foremost executive training institutes in the US, Executive Diversity Services. Mr. Dixon will be a featured speaker at the 
“Freedom Festivals” on May 5th.
In addition he will engage students and managers from companies in discussions around the value of diversity. This tour provides many opportunities to engage Mr. Dixon to gain the benefit of his many decades of working within society for change.
You can read more about Mr. Dixon’s life and visit to the Netherlands here. 
While not exactly a New Year’s resolution, which usually wind up in the trash anyway before the first month of the new year is out, this is a realization of sorts. If I’m doing anything other than focussing on the business, I’m not only wasting my time, but also that of my contact.
Okay, this seems like a patently obvious statement, but there’s a situation in particular that I’d like to relate. Earlier on this blog I’d spoken of my plans to start an Interfaith Dialogue here in Almelo. My goal is to do in my private life what I do for business, namely: facilitating those from different cultures to work together for greater understanding and benefit. I related in my post from 15 September, 2010 (“The Imam says . . . “) my first visit to the mosque to discuss the possibility of a cooperation with my own church. Why the “business-like” approach should even be a question says a lot about my approach until now.
It suddenly dawned on me, as I was sitting with the Imam and the Board Secretary for a follow up visit on the last day of 2010 that I hadn’t stated my case clearly enough: what’s in it for them? Worse yet, I was waiting for them to offer me something. Why? For some reason I had the idea that they would welcome an enthusiastic non-Muslim in their midst. As if they were sitting and waiting for me all this time. Somehow I was expected a hearty handshake, a brotherly slap on the shoulder and shouts of, “Welcome!” Instead, their attitude was somewhat suspicious, as if my motive was to try to sell them something. Or, worse, to convert them. After some time of circling around the main issue, the Secretary confided in me , “Listen, we’ve got plenty of volunteers. That’s not the problem. What we need, however, are volunteers with vision, experience and education.” Ha! Bingo! The light suddenly switched on – of course: if the added value is not crystal clear, why invest in it? Just because it’s my so-called “free time” doesn’t give me the right to waste their time. Time is valuable, whether it’s for business, pleasure, personal or private. 
So that means back to the drawing board. Or, rather, to the drawing board for the first time. Project proposal, official position from the church (something like “Intercultural Dialogue Coordinator”), and presentation to both church boards. Let’s get to work!
I’ve been a bit disturbed by the general tenor of the conversation on the LinkedIn group ExpatWeb (members only) the past week or so. The opening question was, “Cross-cultural training: waste of time, money and efforts?” The reaction from the cultural professionals was, of course, unanimously “NO!” with a host of reasons why not. Most of these reasons I use myself, seeing as we all reference the same research materials.
That was predictable.
What was disturbing were the answers from businesspeople. The ones who eventually are, or are not as the case may be, our clients. Their responses were all, to a man: “Yes!!” that cross-cultural training is a colossal waste of time, money and effort. Some of the responses were telling:
- “Absolutely [cross-cultural training is a waste of time]; time better invested in a nice holiday!”
- “The most expensive consultant can give you cross-cultural coaching in Spain about communicating with Arabs, but a good Arab friend can give it to you over a nice meal and a few drinks…”. I assume he means non-alcoholic drinks.
Of course my immediate response to these businesspeople is to quote Donald Rumsfeld *, of all people, about “unknown unknowns”. In other words: they don’t know what they don’t know.
Vin Morar, Intercultural Entrepreneurship Expert Extraordinaire!
But much better would be to let my client from the past couple of days do the talking for me. This client sent 23 managers to De Baak to follow a 2-day training in Intercultural Communication & Negotiation. The client has managers who deal with professionals from across the EU as well as, less often, the Americas and Asia. My colleague Vin Morar and I performed a quick inventory at the beginning of the course which uncovered the following culture-related problems:
- Multiple cultural interpretations of meeting agreements
- How to relate/associate with “distant” cultures
- Gaining a consensus from a large number of organizations
- Gaining a consensus from a large number of diverse cultures
- Gaining a consensus from a large number of individuals
- Gaining commitment / involvement of all the cultural positions
- Overcoming language / physical / technological barriers
By the end of the course I can confidently state that the participants increased their understanding enormously, as well as being in a far better position to recognize and deal with intercultural difficulties in the future. But that’s not the point of this post.
The point is: there are very distinct problems endemic to this particular organization, and I suspect many many others, that heretofore have gone unrecognized as having a cultural origin. These problems can benefit enormously from an increase in knowledge, expertise and tools to deal with cultural conflicts. How that should be approached and what possible concrete tools the participants gained from this particular training will be addressed in a later post.
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* I’m aware that “unknown unknowns” are well known postulations in epistemology and decision theory circles. But it’s more fun to quote the then-Secretary of Defense when he stated, “There are known knowns; there are things we know that we know. There are known unknowns; that is to say, there are things that we now know we don’t know. But there are also unknown unknowns; there are things we do not know we don’t know.”
Resolve cultural conflict? Smooth things over? Why? This is a waste of potential creative power. By using the energy inherent in cultural conflict, it is possible to leverage the differences for added value.
The model, based on the research of Prof. Joseph DiStefano and Prof. Martha Maznevski, both of IMD. A summary of this research can be found here https://srleosalazar.wordpress.com/resources-and-links/ as well as on the IMD site: http://www.ft.com/businesseducation/imd
The following “6 Simple Rules for Effective Global Team Management” are from a conversation I had with Sandra Biets, former Global Director, Product Quality Management, with Nike in the US. I met Sandra at an event organized by the WTC Almere, the Netherlands, an “Internationals Day,” at the end of June, 2010. We had a conversation with each other on 23 September, 2010, at Dauphine, in Amsterdam, to get to know each other better. This article is a result of that conversation. 
Background
Sandra Biets was asked by Nike in 2007 to manage their global product integrity team from the US. Team members were located in Europe, N. and S. America and Asia. Her experience with this team provide good lessons for intercultural team building. It’s a clear demonstration how the differences in the team were leveraged for added value, delivering results that far surpassed what might have been achieved by a homogeneous team.
Her qualities
Sandra found the assignment exhilarating. It fit perfectly to her strengths, which are process and project management, with a very structural and analytical approach to everything she does.
The assignment
In assembling this global team, it was the first time that she had brought together such a complex group: team members from three different continents (Europe, Asia and the US) as well as teams from two different divisions from each continent. This meant that not only did country cultures play a role within the six teams, but also different regional company cultures even within the same country.
The assignment for the team had to do with leveraging all tools available to drive/inform product decisions (i.e. sales data, trend reports, product integrity data, consumer insights, etc.); and coordinating product integrity within product conception, design and development. Because it was a global assignment, it was necessary to analyze and interpret mountains of data from various global locations.
The lessons
There were a number of significant lessons that Sandra took away from this experience.
- Build on team values: the team values were set very early in the process. She requested that they begin their project with a face-to-face and focused on defining the team values during this meeting.
- Create ambassadors: instead of directly managing each team, Sandra chose one team member as her surrogate. It was important that these were not direct reports, usually one level below her. These ambassadors managed their teams directly, and reported back to her.
- Open communication: Open communication crosses cultural boundaries. Every culture values open communication. The difficulty arises, however, in how “open” is interpreted. Often cultural signals are not explained and, as a result, can be misinterpreted. Under this heading of open communication there were a number of specific practices that created organically, from within the group, and in direct response to actual situations.
- Direct communication: No “triangulation” – even though she was team director, and encouraged members to communicate conflicts, Sandra always pushed the solution back to the participants, instead of going between. She would provide guidance and coaching, but ultimately they were responsible for solving their own problems.
- Simple techniques: By adopting simple yet effective techniques, Sandra got the team to focus on the positive interaction between the team members. For example, one of the techniques she used was to have the participants create index cards to help them as a handy reminder of conflict areas and agreements. The front of the card would show the value (i.e. “respect for each other”); the back of the card the method (i.e. “give room to allow everyone to express themselves”) needed to hold the agreements they’ve made with each other.
- Ownership: many of the practices that Sandra implemented consistently reinforced the concept of self-management and responsibility. The feeling of ownership – of the team, the assignment and the results – was, as a result, very strong within the team.
The results
The results of this team showed very clearly that there was a close relationship between performance of the team and support by the organization. Nike is truly a globally-thinking organization that spares no expense in getting the best from and with its people. Nike’s structure and culture reinforced these practices. As one of many examples, performance reviews were based 50% on achieving targets, and 50% how much a team player the employee is. This helped reinforce the cooperative aspect of intercultural teamwork.
Even though Sandra developed these rules for global team management in retrospect, they can be very effective in planning in advance. She was presented with a unique opportunity and made the most of both what the organization had to offer in terms of support, as well as the talent and commitment of the team members. This triangular relationship (Sandra, the Nike organization, the global team members) all worked together to create a remarkable success.
To contact Sandra Biets, her profile can be found on LinkedIn. If you wish her direct contact information, please leave a message on this site and she will contact you.
Effective Intercultural Business 