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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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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.

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’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.

 

My co-trainer with client @deBaak, 12 October 2010

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:

  1. Multiple cultural interpretations of meeting agreements
  2. How to relate/associate with “distant” cultures
  3. Gaining a consensus from a large number of organizations
  4. Gaining a consensus from a large number of diverse cultures
  5. Gaining a consensus from a large number of individuals
  6. Gaining commitment / involvement of all the cultural positions
  7. 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.

———————-

* 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

In another outstanding editorial column in the NY Times, on “Özil the German,” Roger Cohen uses the metaphor of the absence of “the Big Man” in the 2010 World Cup in promoting not only teamwork, but intercultural teamwork.

Mesut Özil - Germany National team WC2010

First, the intercultural part: “My technique and feeling for the ball is the Turkish side to my game. The discipline, attitude and always-give-your-all is the German part,” Özil is quoted as saying. And isn’t this what it’s all about? Searching for the added value in the marrying of different cultures. Of course it can be different – it often is different. But by looking for positive examples and potential role models such as Mesut Özil, especially for the youth, we open the possibility for more to follow in his path.

Secondly, on the second theme of Cohen’s article: how the Germany of Özil and Aogo is such a victory over the Big Man who destroyed Europe, and how we hope that the rest of Africa, not just South Africa, as well can see this as a model. I find the reader’s comments instructive, and there is one in particular that is very appropriate:

“I would disagree that South Africa doesn’t have a ‘Big Man’ His name is Nelson Mandela.”

Is it too much to hope that this year’s World Cup can provide an impetus for global change and universal acceptance?

I’ve found the best quote in this article to be “Unless a company can connect diversity to business goals, it’s tough to keep investing in it.”

The only real business solution to diversity is to 1) recognize the differences, 2) link those differences to one’s own behavior and 3) integrate this behavioral change into business processes. This way it is possible to use the differences inherent in diversity to generate added value. This makes diversity investment a true investment that delivers returns, rather than a cost. Even more importantly, it justifies even more investment when times are tough, rather than reduction.

Read more: The business case for diversity – Washington Business Journal

This question was placed on De Baak International’s LinkedIn Group page in reference to the Dutch doing business with Indians. Armijn Peltekian of NexusNovus gave a detailed, very complete and, in my opinion, spot-on answer that deserves a wider audience. I’ve reprinted it below:

__________________

[It] is of great importance to understand the socio-cultural differences that exist between the two countries. However, India is immensely multicultural with a large number religions, castes, sub-castes and regional differences. To generalize all Indians as equal in terms of politeness, humility and sensitivity would be an error. In my opinion the most important lesson to be learnt is that since you have to deal with a vast array of cultural differences, your approach needs to be tweaked on a case-to-case basis.
Experience is crucial when conducting business in India. SME’s in general neither have the required in-house experience, nor can they afford to hire an experienced expat to conduct business functions for them on location. The task of facilitating an effective entry into India would prove to be extremely challenging to them.
MNC’s too, face a number of problems, particularly in management styles. Deputing an inexperienced expat to carry out necessary business functions in India very often fails to generate expected results. This boils down to the cultural differences as mentioned by [a previous respondent]. A very direct style of management might be counter-productive. The cost perspective of Dutch managers is quite off from the point of view of the existing reality as costs are generally much lower in these regions. However, many managers fail to understand the extent to which the costs are lower. In India, it would be a grave error to come across as one who gives in to unnecessary splurges. To pay “too much” for something is a sign of weakness. Hindustan Lever (now Unilever), McDonalds and Maruti-Suzuki, have attained their position of success due to the fact that they have completely Indianized their functions and processes.
[The original question] however questions whether the Dutch will have the skill sets to compete in a new (flat?) world. In my opinion, the greater majority of people in Europe lack the skill sets required to conduct business efficiently in Asia. But with the rise of the new economies there will be a large premium on people who have acquired these skill-sets and this will result in adjustments/ training for people currently lacking those skill-sets. If one takes some historical aspects into consideration, throughout past centuries the Dutch have been able to trade with many different Asian and African countries as well as all different cultures contained within Europe. If that teaches us anything, it shows us that these skills-sets can be acquired.
To conclude, India is extremely multi-cultural, multi-ethnic and multi-religious. Your approach needs to be custom designed on a case-to-case basis, and to do this, one requires a great deal of experience. Entry into India can be tough for SME’s due to cost restraints and lack of experience. MNCs do face hardships as well due to the large cultural difference that exist, as mentioned by [the previous respondent]. I also feel that Europe currently has a lesser focus on India than America does. Outsourcing and the flat world are well known concepts in those regions. Europe has not yet been exposed to India to the extent that America has, but that is rapidly changing. I fail to recognise any factors that would inhibit The Netherlands in any attempt to reap the benefits of lower sourcing costs and tremendous market potential of India.

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