Article: Ten Steps to Prepare for Global Business Interactions
Let me break the bad news first: that “magic formula to conducting business anywhere in the world” some people are looking for, it doesn’t exist. Others argue that in international business we should all “just be ourselves”, assuming that since everyone’s a human being, we all react in similar ways anyway. Unfortunately, that argument falls flat on its face when put to the cross-cultural test. Business cultures around the globe differ way too much to be easily addressed though any standard approach, and the best of intentions will get you nowhere if you cannot translate them into the sort of “cross-cultural language” the other side will understand. If you want to successfully expand your business abroad, be it through partnering with someone, outsourcing, acquiring other companies, or building your own international organization, you will need to spend time to individually prepare for each of the countries and cultures you plan to engage with. Failure to do so before engaging often has huge penalties, from excessive start-up cost and reduced efficiencies to complete rejection and project breakdown.
Not to despair, there’s good news, too: it doesn’t take a rocket scientist to get it right.
Making international engagements successful is easy if you follow a systematic approach. Here’s a ten-step
checklist that will help you get ready for any international business interaction:
#1 Realistically state your objectives
As with any business initiative, start with the end in mind. Clearly define the goals and desired end state of your international engagement. This will help greatly when it comes to making some of the tough decisions you may face down the road. If you are clear about what you want to achieve, it’ll be easy to decide whether it’s worth the price of admission, i.e., the effort required to make your cross-cultural business interaction successful.
Be realistic about what you intend to achieve. Reviewing your goals with someone familiar with the
target culture may help a lot. For example, if your objective is to win a significant share of a market
segment in Japan within five years, starting from scratch, that may or may not be realistic. But if
you’re shooting for the same goal within only two years, any expert will tell you you’re kidding yourself. In Japan, fast changes in vendor bases rarely happen, and any successful business
engagement requires a long-term commitment to the market. As an American, used to working in one of
the fastest-paced societies in the world, this may be difficult to accept. But you may still find the
opportunity to be valuable enough to make the commitment.
#2 Understand your own cultural values
This is the hardest part for many of us. Analyzing our cultural biases is just not something we normally do. Although we embrace them and act in accordance with them in almost everything we do, our values and cultural preferences are mostly invisible and often remain subconscious. Nevertheless, they are exceptionally powerful, determining the way we interact with others and how we make decisions. They can become huge obstacles in cross-cultural interactions if we let them steer us without even noticing.
Not sure yet what this means? Let’s explore it a bit further. Everyone grows up with a set of cultural values that influences behaviors and beliefs about what’s right and what’s wrong. If you grew up in the United States of America and have not been extensively influenced by another culture, you may strongly support core values such as these:
the autonomy of each individual to make his/her own choices, as opposed to submitting to group authority and decision making,
an expectation that everyone should have similar chances in life, independent of one’s family background and status,
a commitment to the freedom of speech, allowing anyone to freely speak their mind even if they don’t agree with what the majority of people thinks,
the belief that action speaks louder than words, and that it is better to get going and correct the course along the way than to profoundly analyze a problem, allowing a long time before taking any corresponding action.
Obviously, this is not a comprehensive list. Also, not all of these values will be shared by every American to the same degree – after all, we’re all different. But, all of them are preferences shared by the vast majority of people who grew up within American culture. Any of these values may meet with much weaker support when polling a sample of people in a foreign culture. For instance, many Asians respect group authority over individual autonomy in certain aspects, most Latin Americans think that one’s family background rightfully has a huge influence on where one can go in life, people in some Asian cultures may view speaking one’s mind freely a sign of immaturity, and few Japanese will ever launch into action before they and their group have carefully analyzed the challenge and planned their approach.
Being clear about your core values and preferences before interacting with other cultures is important.
It is only when you know what really matters to you that you’ll be able to decide when to stand firm and when
to compromise if the (sometimes inevitable) culture clash happens.
#3 Understand the values of the target culture
Once you mastered Step 2, this one will be easier. It will take inputs from others, though. Either find a good coach whose insight into the fundamentals of the target culture is extensive, or take the time to read a good book or two about it. You will need to understand people’s orientation towards individuals and groups, their orientation towards time (past/present/future), achievement and power, what defines authority, and so on. All of this will help you greatly in defining your strategy, bridging the communication gap, and building trust across cultures.
In most countries, it is also advisable to learn a few facts about their history and cultural
traditions. Not only will people appreciate the effort you made, which strengthens the relationship,
but it will also help you better understand their values and beliefs.
#4 Decide whether to accept what you may not appreciate
By far the biggest threat to the successful outcome of any cross-cultural encounter is the unresolved clash of conflicting cultural values. All too often, such clashes result in low mutual trust and the adoption of win-lose attitudes between the parties. You, however, having already completed Steps 2 and 3, now have the knowledge required to identify potential areas of culture clash, so you’ll be able to make conscious decisions rather than “letting it happen to you”. The importance of this step cannot be overemphasized. It is pivotal to the success of your future cross-cultural business interactions.
Once you have identified areas of potential culture clash, you get to choose how to deal with any conflict. There are three options at this juncture:
Don’t engage. This may sound harsh, but at times it could be the right conclusion. Gaps between cultures can sometimes be too deep to be crossed, so if they are deemed critical and if an alternative exists, it may be best to not engage. If, for example, you value action orientation and “go-getter” mentality very highly, and you are looking to hire hard-charging employees for a new subsidiary in Asia, you may not want to engage in countries like Laos and Cambodia, where most people believe that one has little influence over what will happen in the future. While workers there can be highly motivated, their attitudes towards achievement could nonetheless become a continuous source of frustration for you, likely causing ongoing cultural confrontations that hamper productivity. You may want to consider alternative locations for your subsidiary.
Identify ways to bridge gaps. Being able to manage cultural differences gives you a distinct advantage when conducting international business. Through proper communication and trust building (see also Step 7), you will be able to keep many potential culture clashes from impacting your engagement. Openly bringing up the differences may sometimes be the best strategy. However, it is advisable to take that route only if the other side had previous cross-cultural experiences of their own. In many other cases, the key to success will be to show respect and understanding for the other’s values while explaining how your own ones are different. You will likely find the other party willing to reciprocate, demonstrating their respect for your own values. Both will help tremendously in building a trusting relationship that won’t eliminate any differences but will make them seem smaller.
Decide to accept what you may not appreciate. Any great leader will agree that what ultimately matters in business is the end result, not how you got there. This way of looking at things helps in the intercultural experience.
Let’s pick the example of a German work team. When starting a new engineering project in Germany, a local team may spend considerable time on upfront planning. When they finally start executing after might have seemed like forever, they’ll usually move rapidly with high efficiency. An American team, on the other hand, may spend limited time in the planning phase of the project, so the implementation work will start much sooner. Corrections to the plan will be made as necessary, which every now and then introduces a need for rework loops, now slowing the progress. Which approach is faster overall is often hard to decide – they both have their pro’s and con’s. If you choose to focus on the end result, it may be much easier for you to appreciate the German approach in spite of its initial slowness, which somewhat conflicts with the strong action orientation found in American culture.
Mind you, the point is not at all for you to give up any of your values when engaging in
international business. But by being fully aware of your preferences and making conscious decisions
about how to deal with conflicts with the other side’s beliefs, you can now influence and control the outcome
of your cross-cultural interaction.
#5 Learn about the other side’s objectives, strategies, and common business practices
As a good business leader, you wouldn’t interact with any other party without proper preparation.
If that other party belongs to a different culture, you will need to spend more time preparing, but the approach
won’t be fundamentally different. The fact that you now work across cultures introduces another layer,
so in addition to finding information that is specific to the other party, you now also need to obtain
comprehensive information about the country and culture. Try to learn as much as you can about objectives,
strategies, and practices you are likely to encounter, such as how people in the foreign country deal with
risk and uncertainty, their preferred negotiation tactics, their ways to make decisions, and more. As
before, seek the help of an experienced coach or read extensively
to get the required information. The knowledge you acquire in this step will give you a decisive edge
in your foreign business interactions.
#6 Familiarize yourself with local customs and manners
“When in Rome, do what the Romans do” is sound advice when it
comes to customs and manners abroad. Not knowing what is deemed proper behavior in a foreign country
can be damaging. Inevitably, your credibility and perceived trustworthiness will suffer if you
commit cardinal cultural sins. It is amazing to observe how seemingly little things, like publicly
blowing your nose in Japan, taking notes on another person’s business card in Korea, eating with your
fork in your right hand in France, or quickly calling a business partner by their first name in Spain
or Argentina, can hurt your reputation. It doesn’t matter much whether the interaction takes place
abroad or at home. Since few people ever manage to overlook what they have been taught to be
improper behavior, you will still want to avoid cross-cultural hooplas even on your home turf.
Fortunately, countless books and intercultural training courses are available to assist you with your
preparation. Make sure you know everything you’ll need to know.
#7 Define your strategy
You have defined your goals and objectives, you analyzed your own and the other party’s values and beliefs, you familiarized yourself with the target culture. Now, you’re ready to formulate a strategy for your cross-cultural business interaction. At a minimum, it should include these phases:
Initial contact. How are you going to make the right contacts and get the relevant people to interact with you? In many cultures, for instance in several Arab and Asian countries, using a intermediary is a good idea. In Step 5, you learned how to best establish credibility in the target culture. This is often critical for the ultimate success of your interaction. Be prepared for the challenge to be greater than in the U.S., where people are more receptive to dealing with relative strangers once they see a benefit in doing so.
Trust building. How are you going to move from the initial contact to the point where the other party trusts you enough to consider a serious business engagement? Again, this may prove more difficult abroad than at home. In many societies, businessmen may not be willing to engage in any negotiations before they have gained sufficient trust in you.
Negotiation. How are you going to reach satisfactory business agreements while maintaining and deepening the other side’s trust? What tactics are you going to employ, and how are you going to deal with negotiation techniques the other side is likely to use? These vary widely between cultures, so make sure you’ve done your homework.
( For more on this subject, see International Negotiation: How Do I Get Ready? )
Engagement. How are you going to convert the initial interaction into a lasting business relationship, assuming that is your objective? In some countries, this can take a very long time, maybe even several years. The rewards of establishing a strong business relationship can be huge, though. At the end, your business partner may be as committed to your success as they are to their own.
#8 Prepare your team
Leadership is a team sport. Nowhere is that more true than in the cross-cultural field. Every member of your team will need to be sufficiently prepared for foreign interactions, going through a preparation process similar to your own one. It is especially important to establish a cooperative culture within your organization, with people understanding the strengths and weaknesses of all parties involved well. It is also critical to establish your team’s trust that all parties involved share the same set of objectives.
Otherwise, you are likely to find that a business relationship with a foreign partner can be
severely damaged by someone on your own team acting in a culturally clumsy way. Numerous companies have
experienced situations such as employees sending e-mails that foreign business partners interpret as hostile.
As isolated events within your own culture, most such incidents can be quickly resolved. In international
business, however, they may have a deep and lasting impact, requiring extensive efforts to repair the relationship.
Properly preparing everyone involved helps avoid this and is very important for the success of any
international business interaction.
#9 Time your approach right
Timing includes two components here: when to start, and how much time to budget. A decision
about the former needs to consider local work / off-work cycles. Trying to arrange contacts around Lunar
New Year in China, Golden Week in Japan, the July / August summer vacation period in Western and Southern Europe,
and the like, will be read as a sign of cultural insensitivity and may hamper or even stall your progress.
Trying to rush through the phases outlined in Step 7 is risky and, at least in some cultures, can be outright
lethal for the relationship. Always keep in mind that the U.S. is one of the fastest-paced societies in
the world and that most people you deal with abroad will prefer a more leisurely approach. In international
business, it pays to be both patient and persistent.
#10 Engage
Once you have completed the above steps, it should be mostly smooth sailing from there. You are well-prepared for the cross-cultural engagement, and you will be able to control many elements that determine its success. A final caveat is that it is wise to continuously monitor your progress and the status of the relationships you are trying to build. Successful engagements will be characterized by both sides feeling throughout their interactions that the other is “different, but cooperative and trustworthy”. If anything happens that might adversely affect that feeling, you’ll need to take action right away.
Conclusions
Preparing for a global business interaction by taking the above ten steps requires time and effort. Cross-cultural business success just doesn’t come for free. But the opportunity usually more than warrants paying the price of admission. To meet your business objectives, you’ll want to control your own destiny.
One question that is brought up frequently remains unanswered: “Why me? In my cross-cultural encounters, can’t I simply expect the other side to do the preparation work, so they’ll understand what matters to me and act accordingly?”
The answer is obvious: Yes, you can do that. It just won’t work well. The ideal scenario is that both sides go through the proper preparation process to maximize the efficiency of the cross-cultural interaction. However, consider that if one side is prepared and the other is not, the former will always keep the upper hand. They will be better positioned to control the interaction to their advantage, they will know how to influence the relationship between you, and they will be in a much stronger negotiation position.
In other words, they will be in control of the interaction. Don’t you always want your side to be that party?
| Printable PDF version | written by Lothar Katz |
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