Banter Without Borders

Global Relocation: Executive Challenges

Contrary to Thomas Friedman's mantra of yore, the world is not flat. In fact, as the Financial Times commented in an August 28th editorial entitled “Rough and Smooth,”* “reality is more messy. Recent history is littered with tales of CEOs from one culture who, for whatever reason, have not stayed the course when put in charge of a company with deep roots in another.” Stuart Chambers aptly phrased it when he resigned as head of Nippon Glass: “I have learned I am not Japanese.”  

What executives must grasp is that the behaviors and attitudes that got them to the top in one culture would not necessarily translate when they assumed control of a company in another country. Culture does matter, and on several levels. For executives to succeed in crossing cultures, they must realize that the greatest attribute they bring to the table is not their previous successes or reputation; in fact, these can hinder their effectiveness in a new market. Their greatest strength in moving to a company in a different country is their ability to be nimble and adaptible, open to events as they unfold. As the Financial Times article concludes, “…there is no template for how to run an Asian business – or, for that matter, a British, French, or Russian one. Running any business requires political savvy and managerial flexibility, going outside one’s comfort zone simply requires a double dose. Different business cultures are there to be navigated, not flattened into mush.”

Every culture has its own set of values that govern not only management styles, but all aspects of business, from advertising & marketing to sales to R&D. And, the range of stakeholders, their attitudes and their issues may be quite different from anything the executive had previously encountered. Laws and regulations, investor relations, unions, employee behaviors, and corporate structures are seldom identical from one culture to another, and they seldom exhibit any degree of flexibility in the short term. So, it falls to the executive to be able to adapt to a very different environment if he or she hopes to achieve any degree of success in a foreign company.

Often, however, it is not the above-mentioned workplace related challenges, but the family issues that force an executive either to refuse a lucrative overseas position or to abort it. Family relocation issues can, for example, undermine the effectiveness of an executive when his loyalties and time are split between his family in one country and the company in another. The Japanese media often attacks Sir Howard Stringer for not spending enough time in Sony’s head office. Indeed, the importance of the family's success in managing the overseas move was given top billing in a recent Harvard Business Review* article on the subject. Simply put, "You can't be successful in your new role if your home life is in chaos." So obvious, yet so often overlooked.

Corporate boards of directors are surprised again and again by the failure of CEOs who have not succeeded in running a foreign corporation. The onus is on them, the board members, to be diligent in their search for the right executive, one who has not only the name recognition (the “his PR precedes him” syndrome) or the technical skills, but also an attitude of openness and flexibility, a satisfactory family situation, and a willingness to learn about new cultures. While that may seem an overwhelming task for a board, the consequences of not doing the requisite due diligence in their search can be even more daunting. However, finding the right executive for the right job with the right skills for a particular company and culture can send the company to new levels of success.

*http://www.ft.com/cms/s/0/673ce6aa-9406-11de-9c57-00144feabdc0.html

*http://hbr.harvardbusiness.org/2009/10/three-keys-to-getting-an-overseas-assignment-right/ar/1

Non-Verbal Communications Are Not Universal

Dollar Is Down, Exports Are Up: Cultural Considerations of Exporting

Kraft and Cadbury: Cultural Meltdown or Company Showdown?

Reading all the recent banter about Kraft and Cadbury not only unleashes my undying sweet tooth, it also gets my cultural molecules spinning. This potential acquisition, written about almost daily in the past few weeks, involves far more than simply the wisdom of connecting two companies. For one thing, on a personal level, it arouses passionate debate by virtue of its connection to chocolate, that addicting and magical substance which has captivated us for centuries. Taste, so much a part of our emotional and cultural DNA profile, is significantly shaped by our surroundings, as any global marketing team will attest. Nations do, in fact, have their own very distinct chocolate preferences, some of them surprising.  Judging from all the ruminations on the hugely nostalgic powers of Cadbury, and the attendant bashing of Hershey's, the brand Cadbury aficionados love to hate, the U.S. and U.K., never mind Kraft and Cadbury, could probably go to battle on this culturally sensitive matter alone.

Indeed, cultural preferences are at stake here, but so are corporate culture differences. How ironic, then, that Cadbury is now headed by Todd Stitzer, a "preppy New York lawyer,"* in the words of a Financial Times writer. Nevertheless, its company culture continues to run deep, and like so many organizations who entered early in the chocolate industry -- Fry's, Rowntree, and Hershey's as prominent examples -- its roots were philanthropic, perhaps further feeding into the nostalgia factor. Kraft, meanwhile, whose "tanks rolled on to Cadbury's well-tended Bournville lawns,"* is viewed as the U.S. behemoth ready to devour Cadbury's, despite recent rebranding efforts and cries to the contrary. There is a bright spot, though, and again, an ironic twist. Under Stitzer's reign, with one of the company's factories in Keynsham, England, about to shut down and move to Poland, and with Kraft promising to keep it open if the acquisition materializes, there are some in the U.K. now hoping the "white knight" from across the pond will in fact prevail.*

With rumors swirling about almost daily as to new tactics, potential suitors and sweeter offers, this emotionally and culturally infused topic will be one to watch closely -- perhaps with some "neutral" Swiss chocolate in hand.

*http://online.wsj.com/article/SB125245727048594365.html

*http://www.ft.com/cms/s/3/756b0108-a752-11de-9467-00144feabdc0.html

*http://www.ft.com/cms/s/0/2554c0f2-a322-11de-ba74-00144feabdc0.html?nclick_check=1

 

 

Japan and India: Diving Deeper into Global Waters

In my previous post, I reviewed two illuminating and complementary podcasts on outsourcing and its application in today’s global marketplace. In the discussion of multisourcing and its attendant complexity of managing multiple providers, the cultural considerations were what resonated for me. When an overlay of country culture is added to the already complicated challenge of managing corporate cultural differences in an outsourcing agreement, the challenge is manifold, even if only two nations are involved.

As with any intercultural transaction, broad questions of communication arise early on: Are the cultures at hand relationship-based or transactional?  Is overall communication style direct or indirect? How does ‘saving face’ figure into the picture, if at all?  What is the role of and protocol surrounding small talk?  Taboos?  Humor?  How is silence used and interpreted?  What is the time frame for establishing relationships?  In the business sphere, additional issues as risk tolerance, leadership preferences, entertainment protocol, perceptions of time, decision making processes and, perhaps most importantly, issues of trust are but a smattering of crucial pieces one would need to assess and address.

Such questions and issues will now be increasingly on the minds of Japanese and Indian companies, as the two nations have begun collaborating in more and more outsourcing arrangements, according to a recent Wall Street Journal article (“India’s Outsourcing Firms Lure More Japan Business”).   As a global coach and consultant, I am naturally delighted to see this, since while the two countries are markedly different culturally, on the business front this seems like a match made in heaven, with timing auspicious for both nations.  The Japanese population is ageing steadily, causing gaps in the workforce (particularly in engineering, as the article states). Indian companies, meanwhile, have been feeling the pinch from the U.S. financial sector and have been busily strategizing in hopes of entering new markets.

That said, Japan and India are entirely at odds in their respective cultural orientations. While Japan is extremely homogeneous and in many ways isolationist, India is one of the most diverse mosaics on the planet, and from this basic difference springs a whole host of cultural contrasts. In short, though, where the current outsourcing development is concerned, there are two critical issues at hand for each country. For Japan, the huge question of trust will undoubtedly be its biggest obstacle. Japanese companies have, through the ages, been notoriously tight lipped when dealing with “gaijin” (literally “outside persons”), and, as the article states, very reluctant to entrust segments of their business to others.  For India, used to the efficiency and speed so deeply embedded in the U.S. business culture, the challenge of balancing this with the perfection and assiduous attention to detail demanded of the Japanese market will surely be its albatross.

Fortunately, both countries seem to be undergoing the coaching and training so necessary in these situations.  The reciprocal nature of such programs, as indicated in the article, with both countries sending participants to their respective new partners’ locations and engaging in multifaceted intercultural talent development practices, is a formula for a successful collaboration. It is a sure bet that if the current alliances are successful, both countries will actively continue down this newly paved path.

North Dakota: the New Norway? Cultural Differences Mean Business

The expansive topic of cultural differences --- whether national or organizational, religious or disciplinary -- is, as global coaches and consultants, always on our minds. In the case of national culture, regional differences and distinctions are of particular interest, since they manifest themselves in such a variety of ways. On one end lies India, home to so many ethnic groups and religions. With 25-plus languages, each as distinctive from one another as Korean is from Italian, it is easy to imagine the sheer breadth of cultural differences by region that arise through linguistics alone. In China, too, we find an extraordinary number of regional divides, highlighted by the recent clash between Uighur and Han cultures. In smaller nations as Japan and the UK, and in larger ones such as Germany and Mexico, such differences can relate to the North/South or urban/rural dimension rather than, say language, but are every bit as potent in their own ways. Come to think of it, there is no nation without regional differences of some sort which in turn correlate to its subcultures.

This all came to mind as I thought of the apparent regional distinctions right here in the U.S. while reading a recent Financial Times article* on the economic success of North Dakota. Now crowned our country’s ‘chickpea capital,’ curiously, the area has been blessed with a timely confluence of factors.  A favorable tax structure, wealth of natural resources, array of infrastructure improvements and, perhaps most significantly, its “frugality and plains state work ethic” in this “more conservative” pocket of the nation have rendered it an economic oasis with a unique subculture in our country’s heartland.  The additional mention of North Dakota’s multi-dimensional energy profile, combined with its homogeneous work mentality, immediately made me wonder: Is North Dakota the new Norway??? Not really, even if it does sound catchy, but the two areas certainly do share common characteristics, climate and all.  With many economists questioning the sustainability of Norway’s model (see full discussion in blog below), it will be interesting in the near future to see whether North Dakota, with its own economic and ethical culture but also with its own fiscal challenges, will continue its moment in the sun during these trying times.

                                                    

 http://www.ft.com/cms/s/0/f7b9bc92-821f-11de-9c5e-00144feabdc0.html                     

The international business risks of European immigration

As someone who has been described as a serial immigrant, I read with interest the glowing reviews of Christopher Caldwell's book "Reflections on the Revolution in Europe," by Dwight Garner in The New York Times (http://www.nytimes.com/2009/07/30/books/30garner.html?_r=1&scp=4&sq=Christopher%20Caldwell&st=cse) and by Fouad Ajami in The New York Times Book Review (http://www.nytimes.com/2009/08/02/books/review/Ajami-t.html?scp=3&sq=Christopher%20Caldwell&st=cse). Ajami writes that Caldwell "gives this subject its most sustained and thoughtful treatment to date."

When we were working with a European client last year on issues of risk in their global marketing and advertising, one of the issues that arose was immigration and the way it was changing their marketplace. For most European countries, immigration is an economic necessity because of the aging and dwindling local population. However, immigration brings many challenges, especially to the established, socially liberal cultures.

Legal and illegal immigration has given rise to social, cultural and economic tensions in many western European countries. While immigrants can add cultural value and intellectual property to their newly adopted country, more often they are feared. Many reasons are given to spur anti-immigrant feelings; they take jobs from local workers and lower salaries, they overflow schools and hospitals, they cause disease, and they increase the social welfare costs. They also may be a source of crime and terrorism.

Immigrant populations in Europe from Africa and the Middle East tend to be poorer and not well-educated. The majority of these immigrants are Muslim. They are socially and economically marginalized, religious and tend to live in parallel societies rather than assimilate, as immigrants are more likely to do with the American-style melting pot or even with the Canadian-style ethnic mosaic, possibly because both North and South America have benefitted from immigration for centuries, whereas immigration is a fairly recent phenomenon in Europe.

Few immigrants in Europe enhance their adopted culture; most supplant it. Consequently, many Europeans feel threatened by newcomers who will dilute their culture, undermine their traditional values and cause them to lose their national identities. As a result, according to a poll by the Pew Research Center, large majorities in nearly every European country surveyed express the view that there should be greater restriction of immigration and tighter control of their country's borders. Unfortunately, debate about immigration is taboo in Europe since anyone there who is even remotely critical of Islam is branded as Islamophobic, as Caldwell points out in his book. That is a shame because immigration and immigration reform are topics that should be discussed openly.

The immigrant experience can be jarring, whether it is a temporary expat assignment or whether it is a permanent relocation. Having lived in several countries and having dealt with numerous expatriates, I have come to realize that there are some basic rules that can enhance the immigrant experience. First of all, it helps to make even some effort to learn the language; language does help to understand a culture. And, while it may feel safer to cling to the known, it does help, too, to become an active participant in your new home and culture; it will open new worlds to you. If you prefer to live in an enclave of fellow expatriates, perhaps you should consider repatriating, especially if you constantly continue to refer to the country of your birth as "my country." If that's where your allegiance is, that's where you belong. Equally appalling are people who become more native than the natives; you're insulting both your hosts and your heritage.

My copy of Caldwell's book is on order. I look forward to commenting further once I've read it. Meanwhile, it sounds like a worthwhile read for any executive whose company is doing business in Europe and for whom immigration might be a human resources or a marketing issue.

 

Exploiting cultural differences as a marketing strategy

 

In a July 31, 2009 New York Times article entitled: "In a Quebecer's Heart, Pepsi Occupies a Special Place", the author explores how Pepsi has been able to exploit the cultural differences of this primarily French-speaking Canadian province's population to build a brand share over double that of Coke.

Traditionally, global advertisers have entered new markets by maintaining the homegrown themes in their advertising campaigns and translating these themes directly into the local language. In the early stages these translations were simply dubbed voiceovers in home-market produced television commercials. Gradually this strategy evolved to the hiring of local talent to provide a direct translation using the same theme and dialogue. But even these local talent translations ran the risk of being problematic or highly embarrassing. As an example, Coca-Cola's, "Coke Adds Life" theme of a number of years ago translated into the Chinese market as: "Coke Brings Your Ancestors Back from Their Graves". It was not until Coke and McDonalds were faced with flagging sales and profits in foreign markets that they rectified the situation by developing completely localized campaigns in each of these markets. Although more global advertisers are adopting this strategy; many still remain in "one-size-fits-all" camp. They adhere to the global village philosophy that we all have similar tastes and behaviors.

What makes the Pepsi situation unique in Canada in general, and Quebec in particular, is that Quebec can be viewed as a country within a country. From a media perspective, it is its own market. It's separated from the remainder of English-speaking Canada, and by extension, the U.S. market. That's why a campaign featuring Michael Jackson which was successfully run a number of years ago around the world, and in English Canada, but was replaced in Quebec using a local celebrity who had wide appeal in this market. Additionally, from a cultural perspective, there has historically been a certain amount of animosity between the English-speaking population of Canada, and the French-speaking Quebecers. This has created cultural sensitivities which, if not understood, could have created a negative backlash against Pepsi. But, Pepsi and its marketing team recognized these sensitivities and, rather than avoid them, have exploited them. As an example, by using mock stereotypes of Quebecers in a humorous way, they are poking fun at themselves. This tricky approach has worked because everyone is in on the joke. However, if these approaches had been developed by English Canadians, there would be a French revolution.

Clearly, global advertisers face the cost issue of tailoring campaigns to local markets and must determine the ROI associated with these campaigns. In the Pepsi- Quebec situation, where the Quebec market has only seven million people, and the per capita costs for localized efforts were significant relative to other more populated markets, the payout in generating a share double that of Coke far outweighed these costs.

New (Cultural) Twists in Japan's Hostess Trade

As anyone who has dipped his or her toe into the global tide pool knows, doing business in Asia is never dull. Twists and turns await at every corner, and no culture there is without its various eccentricities. This week's news provided evidence of some of the fallout from the current economic downturn in the region, and one story in particular caught my eye.

Japan, a country that has, over the centuries, experienced its share of earthquakes of all sizes, is undergoing a seismic shift of a different sort: in response to the country's economic woes, women are, of all things, turning to the hostess trade for income in shockingly large numbers. Hostessing in Japan has meant not overt prostitution - illegal there, interestingly - but rather the art of entertaining male clients through conversation and stylized flirting of a sort, and has been a fact of Japanese life for ages. To me, of significance is not so much that it is taking place, since Japanese women, after all, are nothing if not pragmatic and resourceful. It is, rather, the perception of hostessing itself which has altered quickly and dramatically, all the more interesting in a country known for so vehemently resisting change.

On the one hand, this may sound shocking and disturbing, since it further objectifies women in a strongly male dominated culture. Indeed, as Japan's economy has been its continuous downward spiral, there has been a trend toward taking women off the permanent payroll and instead hiring them only as contracted and or temporary workers, highlighting the country's pronounced gender bias (it is said, in fact, that women comprise a shocking 90% of the temporary workforce - see http://www.jpri.org/publications/workingpapers/wp85.html). At the same time, however, some see the hostess trade as a glamorous one, especially lately. The New York Times mentions that, in fact, some current young hostesses have suddenly been idolized as pop cultural icons, though descriptions of 'exhausting' and 'stressful' in the same article by those in the trenches is far more typical. This will only worsen as competition for jobs ramps up -- and it surely will, now that this consensus driven culture has taken some of the tarnish off the hostess image.

What is even more serious is the negative effect this is having on these young women's salaries, with the increased supply of workers and decrease in the bars that employ them.  Additionally, this phenomenon accentuates not only the rampant gender bias in Japan, but that of age as well, since Japanese companies typically don't hire temporary woman workers over the age of 35 (see highlighted article above) . As I see it, Japan has a duality about it, some would even say a 'schizophrenic' quality at times, and this phenomenon is no exception. In contrast to the aforementioned star status these hostess ingénues enjoy is the overarching cultural dimension of being inconspicuous and unassuming, of staying ‘in the middle,' and of simply not attracting attention of any kind.    

It will surely be interesting to monitor this latest trend on Japan's cultural front, along with its economy - at least, that is, until the next unexpected phenomenon comes along in the Land of the Rising Sun. In the meantime, this provides yet more reason for companies dealing with Asia to continue expecting the unexpected.