Are You Culturally Savvy?
By admin | July 14, 2006
By Mike Myatt, Chief Strategy Officer, N2growth
What do I mean by “culturally savvy“? I am not addressing the topic of being politically correct, rather I want you to focus on the importance of simply being cognizant that there is a larger cultural impact on how business is conducted today than ever before. Cultural differences often exist within the same companies…they certainly exist between different companies. Without question there are different cultural business practices in different cities or regions within an individual country. These differences are almost exponentially complicated when you start doing business on a global basis. For purposes of this post we will address how to best blend and manage your internal cultural characteristics with those of your vendors, partners, suppliers, customers and investors who may be located in foreign countries.
The impacts of globalization are being felt by all of us at some level whether we realize it or not. Moreover, it is likely that businesses that once would never have had to deal with global concerns most certainly will as time marches forward. Every culture has their own unique way of functioning, and if you want to remain competitive in today’s market you will need to develop a cultural sensitivity and maturity to your business approach that may not presently exist.
I have been doing business internationally since the mid 80’s. I have done business in Canada, Central and South America, the Mid-East, Europe, India, and Asia. What I have learned in my travels and experiences is being culturally savvy can not only shorten your initial time to market, but also help insure that entry into a foreign market is profitable and sustainable. Learning the language (or at least some common pleasantries), customs, values, and usual and customary business practices are a must for not embarrassing yourself or your company. False starts in a new country can be very costly and often times there a no second chances…
While the basics of cultural awareness mentioned above will get you in the door, it is becoming culturally savvy that will keep you there. I liken international business to acquiring a new company. It is rarely the acquisition that is a problem, rather it is the post acquisition integration issues, many of which are cultural, that often determine the long-term viability of an acquisition. Similarly it has been estimated that the mortality rate of international joint ventures exceeds 50% within a three year period of time. It is rarely technical competency that is responsible for the high failure rate noted above, rather the reason most often noted for the dissolution of ventures are the problems surrounding the inability to manage and deal with cultural constraints, barriers, and conflicts.
What works in one culture often times simply does not work in other cultures. In fact, many times what works within one country can deeply offend someone from another country. Regardless of what you think about Richard Gere’s acting ability, political beliefs, or religious views there is much that can be learned by peeling back the layers on his recent unwitting and very public faux pas. Mr. Gere who has long been a strong supporter of the Indian, Tibetan, and Chinese cultures essesntially unwound years work during a recent public appearance in India in what I’m sure he believed was nothing more than an innocent gesture of public affection. However his cultural perception of an innocence actually insulted much of the Indian public in such sever fashion that he had to be rushed out of the country for his own safety and to avoid potential legal consequences. The bottom line is that it pays to do your homework well in advance of doing business abroad.
The most effective way in which to insure your success abroad requires a blending of two key components. The first is selecting the right “in country” partners and advisors. These should be locals who know the ropes from a political, regulatory, legal, tax, and cultural perspective. The local partners should already have a solid network in place that will help you hit the ground running. A common mistake is to just open an office, staff it up, and expect to get the same results that you would by opening a branch office domestically. This rarely works, and in fact can be very costly on a number of different levels.
The second component needed to be successful abroad is to hire a consultant to advise and train your domestic staff on the finer points of cross-cultural integration and interaction. You may select the perfect set of foreign partners and advisors, but if your domestic staff doesn’t understand how to communicate and do business with them on a culturally acceptable basis the venture will be very short lived.
To conduct business successfully in today’s international marketplace requires a commitment to global team building in a multicultural environment.
Topics: Mediums & Markets, Miscellaneous, Operations & Strategy, Uncategorized |
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