Cross-cultural business skills

Today many people believe that translating a document is enough and that explaining a product in the right language will be enough. They claim to be international because they have translated their website, their marketing collaterals and their receptionist can speak Spanish.
How wrong can they be?

Many brands, many companies have tried to do Joint Ventures or purchase companies outside their home soil and only 2% of them have succeeded. Examples like Daimler/Chrysler; Sony/Ericsson; Sony/BMG… can testify, it is not easy to do business in a foreign country and the language, being one element, is not the problem. 

Different cultures mean different ways to do business, different ways to approach an issue, solve a problem, different ways to manage staff and different ways to manage the financial accounts.
Are other cultures wrong because they do things differently? Absolutely not!

This is the reason why companies that decide to do business outside their culture need to adapt. Yes, first they need to understand the language but most importantly they need to trust locals and understand their way of thinking. This is good for all cultures. A German company cannot impose its way of working to Americans, an American company cannot impose its direct approach to a Japanese company where consent amongst managers is the key and a Japanese company cannot impose its way to a Swedish company. How could a socialist culture succeed in a country where individualism is king? 
Companies need to act differently and individuals need to learn how to live, work and behave outside their comfort zone and outside their own culture. You cannot claim to be an international executive unless you have experienced and understood the way other culture work. This is not easy but the rewards are great as you will learn a lot and you will then be able to work with people who will bring to you great experience, know-how and different thinking.
Adaptation is important but open minds is key. When working or living abroad, try to put yourself in the locals’ shoes. Why do they believe their way of doing business is the right way? Is this because customers expect a certain way to approach them? Is this because it is part of their habits?

You have all heard about one of the largest deals in the car industry history. The joint venture between the German car manufacturer Mercedes Benz and the American Chrysler. A lot has been written about it. On paper a great idea: using each other’s synergies to become the largest car manufacturer in the world and developing a great platform for Mercedes to confirm its US market presence and for Chrysler to develop in Europe. The new company named Daimler Chrysler was doomed from the beginning. No analysts, no consultants hired to make it work saw it coming.

First, the Germans entered this relationship with a feeling of being better, stronger and producing better cars. The Americans, disappointed about the negotiation and how Chrysler gave up on a lot of points, entered the relationship with a very negative feeling. They were not in the best spirit to make the venture work. So between the mistrust on the American side and the arrogance of the Germans, the communication did not flow. The American car industry is an institution (as is the German one), so the importance of such a deal should have been to ensure that both parties were treated the same way. It was clearly not the case.

Once the deal was done and the teams started to work together, the difficulties arose. The Germans used a privately chartered plane from Stuttgart. This was seen an invasion of the Germans by the American workers. Then, the differences started to show. The Germans being very organized, arrogant and communicating differently than the Americans (remember they thought they were superior) had a tough time understanding how the Americans were functioning. The Germans found them disorganized, individualists and not capable of producing the cars that were desperately needed to ensure a win/win situation.

This lead to the worst-case scenario, the companies split up.

How could have this venture have worked?

·       by entering the relationship at the same level
·       by respecting each other’s cultures
·       by understanding that neither party had the secret of success alone but rather by working together at the same level
·       by communicating based on each other’s differences
·       by behaving as responsible cross cultural educated workers (at all levels of the ladder – from workers to top management)
·       by only focusing on one goal: making the newly formed company a success (individual goals could only come in the way of this)

It is important to understand this now and with hindsight this is much easier. New ventures should learn lessons from this and avoid failing in conquering new markets. However, other companies have failed the same way and will continue to fail. All of this for one simple reason, misunderstanding of cross cultural differences.

Feel free to comment or ask any questions, I will be happy to discuss this.