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Volume 3.2 Table Of Contents
- Build your global awareness
- Trend Watch: Getting rid of the “Ugly American”
- Digging Deeper: A checklist for global awareness
- Ask the Business Performance Expert:
Global mergers, acquisition and alliances are on the rise, yet these deals are being conducted at a time of anti-U.S. sentiment abroad (see “Trend Watch” below). This becomes a major challenge, as business cultures must be integrated within the context of different national cultures. How can you maximize return on investment under such complex circumstances?
One of the most overlooked and underestimated ways to increase the chances of success for international deals is to develop your organization’s “global awareness” (see “Digging Deeper” below). This is a three- part process that involves:
- Understanding the major characteristics of both national cultures, including values, beliefs, practices, styles and language.
- Using these insights to develop bridges to overcome differences.
- Adjusting everyone’s expectations accordingly.
Bottom line: You may discover that one or both organizations may need a number of new competencies, processes and systems in order to build effective cross-cultural bridges. Therefore, the earlier these issues are identified during strategic thinking and planning, the more likely it is that you will be able to set realistic expectations for milestones, and increase the accuracy of your projections for return on investment. For more information, please contact us.
Trend Watch: Getting rid of the “Ugly American”
On a promising note, an article in the April 11, 2006 Wall Street Journal discusses an initiative under way, funded by the National Business Travelers Association, to improve the reputation of the U.S. in the world. The nonprofit Business for Diplomatic Action Inc., will provide guidelines for Americans (especially those in big companies) to be better perceived when they are doing business in another country. This initiative is a good step in the right direction, but needs to go further for anyone who wants to create long-term business relationships on a global basis.
While it is true that Americans can use improvement in becoming more sensitive to different cultures, I have also addressed situations where culturally insensitive behaviors were flowing in reverse from employees of multi-national companies that were expanding in the U.S. Cultural insensitivity from either side is one of the main reasons for what I call “strategic gridlock” (persistent problems that can grind progress to a halt) when companies are integrating global mergers, acquisitions, or alliances.
Just as with every other type of relationship, individuals from both cultures must learn about each other and adapt their behaviors in order for business to flow smoothly. Especially when doing deals, rather than being about “my way” or “your way,” the best results stem from mutual understanding that evolves into “our way.”
Digging Deeper: A checklist for global awareness
Here are a few, but not all,
issues that are important to consider when building
global awareness. How savvy is your organization
regarding the following?
- Communication Style and Language: In addition to the obvious language barriers, there are differences in nuances and meanings of words and concepts that can lead to clashes. For instance, does “success” mean a positive outcome next quarter, or in ten years? Also, while some cultures tend to be very direct and open, “laying one’s cards on the table,” other cultures prefer a more indirect and private style of communicating.
- Planning, Problem Solving, Decision Making: Some cultures emphasize facts, figures and individual risk-taking to arrive at decisions, while others depend more heavily on consensus, and are bound by historical precedents, intuition and philosophical reasoning.
- Relationships: In some cultures, business decisions are made with an emphasis on long-term, harmonious relationships. But in the U.S., relationships tend to come and go much more quickly. Different cultures also place varying amounts of importance on hierarchy.
- Time: There are cultural differences in how time is perceived and managed. For example, in the U.S. punctuality is valued. However, in some cultures, it is perfectly acceptable for meetings to start a half hour late.
Building your organization’s global awareness as early as possible before committing to mergers, acquisitions and alliances will enable you to more smoothly develop relationships, negotiate deals, minimize any problems that do occur during integration, and accelerate progress toward your strategic objectives.
Ask the Business Performance Expert:
Q: We have
standardized alliances policies and practices
based upon the “best practices” from
our other alliances – all based in the U.S.
What should we be aware of as we develop our first
global alliance?
A: While sharing knowledge based
upon past success is important, trying to clone
policies and practices can be a hidden roadblock
to future success when forming global alliances.
By going through the process of challenging your
assumptions about economic, strategic, cultural
and political factors, you may find that it’s
necessary to make some adjustments in your policies
and practices to allow for the unique nature of
each global relationship. The most successful
alliances take into account best practices, but
are not trapped by them.
Quote: “On the highway of life expect delays”
-- “Ziggy” comic strip by Tom Wilson