How Leadership Differs Around The World

British linguist Richard D. Lewis has explored in depth how leadership style differs across cultures and countries. His diagrams of Leadership Styles, published in When Cultures Collide, offer wonderful insight into why so many multinational efforts run into problems. Anyone doing business across borders needs to understand these differences and adapt their own style accordingly.

Different Culture, Different Leadership

Leadership Styles
Leadership Styles

The variation of styles — from structured individualism of America, to consensus rule of Asia — fit  preconceptions about foreign culture. Even so, it’s important to understand the meaning behind each model, and also be aware of individual variation. The models are not unilaterally true across a country. Every individual will have their own blended style of leadership.

See Lewis’ Leadership Styles diagrams, inset, but also be aware that stereotyping is risky, as Lewis himself warns: “Determining national characteristics is treading a minefield of inaccurate assessment and surprising exception. There is, however, such a thing as a national norm.”

Lewis also argues that these cultural characteristics won’t change anytime soon. He writes, “Deeply rooted attitudes and beliefs will resist a sudden transformation of values when pressured by reformists, governments or multinational conglomerates.” While the “Westernization” of many Eastern countries gets a lot of press, most of these changes are superficial. Cultural preferences are deeply rooted. We learn about our culture from birth. Especially in countries with thousands-years-old history and culture, changes are slow to emerge. Stated more directly: Individuals may jump at the chance to adopt foreign practices, such as capital investment, but this doesn’t mean they are also adopting Western culture.

Management gurus have time and again tried to quantify and distill the secret of successful management into an easily followed formula. Peter Drucker, James Champy, Frederick Taylor, Henri Foyal, Frederick Brooks, and Mike Hammer have all put down their thoughts on the topic. But each has placed a Western emphasis on their particular management magic (and, except for Foyal, a very American emphasis).

As I’ve pointed out many times, cultural conflict is common across multinational organizations. Learning how to avoid the conflict — misunderstandings, misinterpretation, and direct cultural incompatibility — is the first step.

Multinational Leadership Success

There is no single management tool that can work in the global landscape. The cultural intricacies that define how people interact, both in a business setting and a social setting, run far too deep. And, just as management styles depend on environment, so do our relationship-building tools. Creating a successful International business relationship depends so strongly on cross-cultural awareness, in fact, that without extensive exposure to foreign culture most efforts are rife with failure.

Check out this short six-part series that talks about how business cultural preferences affect 27 project management disciplines.

How To Go Global

How do you learn to “go global” and take your product, and your company, to an International scale?

Hi, I’m Zacharias Beckman, President of Hyrax International. I founded this company because I believe that American businesses, in particular, are really embracing the global economy. That means learning how to adapt products to different cultures around the world; changing a business’s internal culture in order to be compatible; changing how projects are managed, because the traditional Western management style that most of these American businesses employ, those styles are not going to work in Asia or South America or the Middle East. So, American businesses need to start to adapt.

Adapting To “Global”

A new level of business cultural awareness is needed. We need to understand how to communicate with each other, how to adapt to each other’s way of thinking about time, how to manage people with a different concept of power distance or the separation between a boss and an employee. It’s a complex landscape.

Taking a product into another country means adapting that product so that it fits well with the culture there. For example — lets say you wanted to take a product that was a four pack of golf balls, here in the United States, and sell it in Japan. It’s probably not going to work — because the word for “four” in Japan sounds very much like the word for “death.” So taking that product and simply slapping a new label on it in Japanese and shipping it over there — that’s not going to work.

This is why we created the Global Project Compass (see our six-part article on the Compass). It’s a map that takes 27 different project management verticals, things like quality assurance; time estimation; acceptance testing, and it maps them to business cultural preferences. And we see how, for example, communication is going to change each one of these 27 different project management disciplines.

We are global project experts. We understand the technical execution and we understand the cultural implication. Our programs will make sure that you succeed taking your products overseas and building a multinational organization.

The Global Opportunity

Global activity has broadly strengthened and is expected to improve further in 2014-15, according to the April 2014 World Economic Outlook (WEO). Much of the impetus for growth is coming from advanced economies. As the global economy returns to growth, it’s clear there are expanding international opportunities. Businesses are focusing on global economic strategies and new, emerging markets.

But outsourcing, forming a joint venture, or extending supply chains across the globe isn’t easy. Engaging with your partner is, in many respects, like hiring new staff located on the other side of the planet. How do you manage these new employees that aren’t in the office, don’t speak the same language, work a different shift, and will probably never meet your customer or understand the local market? More than likely, they are accustomed to doing business in a completely different way from what you find normal and acceptable.

Doing Business In The Global Economy

Understanding the strong cultural biases and preferences of our counterparts overseas is critical to success. I run into these differences all the time when working internationally. Here’s an example: In a survey conducted across Western and Eastern businesses, respondents were asked to choose whether they strongly agree or strongly disagree with the following statements. Consider your own answer to these questions:

  1. At work, we do business with the firm that has the best product, regardless of our relationship with them.
  2. To avoid a conflict of interest, I avoid doing business with someone solely because of a personal connection.

When presented to Western business people, responses tended toward agreement with these statements. More so, when presented to American business people, the score is almost always very strong agreement. It demonstrates the strong Western preference to be unbiased in the evaluation of products and services. In fact, in many Western companies, there are rules and regulations that specifically forbid preferential treatment because of personal relationships. These companies go out of their way to completely remove personal preference from any buying or hiring situation, making the process one that is as objective and fact-based as possible.

But when presented to Eastern business people, respondents registered strong disagreement with the statements. In India, the Middle East and China, the response is almost uniform: Intense disagreement. These cultures are strongly relationship oriented, and that cultural preference permeates the business environment. A business person making decisions in the BRIC (an acronym for Brazil, Russia, India, China) will focus on how well they know the person or group they intend to do business with. Strong personal relationships are an integral part of doing business. These strong relationships are what keep things moving smoothly. For instance, Japanese business contracts are much shorter than those drafted in the United States. This is because many of the expectations of the business environment are so deeply embedded in the culture that long, detailed contracts are unnecessary and even offensive. Furthermore, the value of “face” and one’s reputation is so intrinsic that it provides a much stronger motivation than a legal document.

Business Culture And Conflict

These fundamental differences in values and business practices lead to huge misunderstandings in the business world. Just some of these differences include how we manage people, what kind of relationship a boss and a subordinate have, and how we communicate.

Studies conducted by KPMG and Standish reported that 70 percent of projects are failing to meet their goals when it comes to quality, budget, and time — and nearly one quarter (24%) of all projects can be counted as complete failures. These projects are either cancelled outright, or are so off the mark the customer never even uses the finished product.

Frank Ridder, research director at Gartner, has commented that, “[We] found that 55 per cent of global organizations manage their sourcing activities tactically and at an operational level, failing to add a strategic management layer and invest enough in developing critical multisourcing competencies.” In other words, these organizations fail to effectively manage outsourced projects because they don’t plan far enough out, and they don’t take the time to understand the markets they’re developing.

These figures are becoming more and more widely accepted. According to Brandi Moore, a respected consultant on multicultural projects, fully two-thirds of outsourced projects are unsuccessful, and at the same time 65% of Western managers cite culture as their biggest challenge in multinational organizations.

The emerging global economy is creating challenges that Western and Eastern business are just learning how to deal with. As Geert Hofstede, of the Hofstede Institute, aptly wrote, “One of the reasons why so many solutions do not work or cannot be implemented is that differences in thinking among the partners have been ignored.” It’s impossible to build a global organization when each of its parts operates in a cultural vacuum, unaware of how the other parts work.

How Business Culture Affects Your Business

Hi, I’m Zacharias Beckman, President of Hyrax International. We get a lot of questions about how business culture affects business on a day to day basis.

Sarah, a project manager here in America, is very successful at what she does. She’s got a lot of successful projects under her belt. But right now she’s having problems. It looks like the project that she is working on is going to ship late. There are lot of quality problems with it.  It’s over budget, it’s behind schedule, and Sarah is very frustrated. All of the techniques that she’s been using in the past aren’t working for her now. She feels like she is  not getting the feedback from her team that she’s used to getting. For example, she proposed some changes to quality assurance system and instead of getting feedbacks, there’re silence, delays and  then finally the team agreed to implement what she had proposed.

In a typical Western style, she is expecting very clear communication from her team.  Direct, critical feedback on the project and on the proposed changes that she is making. The problem is, her team is in Asia and they don’t think  that she knows she is doing. She asks too many questions. She doesn’t demonstrate the authority and the wisdom necessary for the team to feel like she’s in charge of the project.  They are not accustomed to this kind of management.

Sarah’s run into a couple of business cultural preferences. She’s experiencing power distance, which is the separation between a boss  and a subordinate, and how they ‘re allowed to communicate because of cultural constraints. And she’s also experiencing differences in communication style — the low context, direct communication of the West versus the very high context, rich and subtle communication of the East.

Sarah’s solution in this case is to get business cultural training and understand how her management style differs from what her team is used to and then adapt  her management program, her project management technique, to work well with her team is Asia.

Check our website for more information on both of these business cultural preferences. I’ve blogged about them quite a bit in the past.

And if you are managing an International multicultural team, it’s really important to understand how much business cultural preferences will affect your project and your management style. You need to be sure that the project management methods you’re putting into play, are going to work with your multinational team.

Are You Being Polite?

Global Manners
Quick guide to going global: 35 tips for 10 countries

Zendesk recently published a great little infographic, a Quick Guide To Going Global. It offers some great contrasts between different cultures, and how the rules of being polite in one country may get you in trouble somewhere else. As Andrew Gori writes:

Being polite might seem easy: Someone does something nice, you say “thank you,” right? As it turns out, that all depends on your location. Manners are different all over the world.

As Andrew points out, there is one thing that’s consistent: To be polite you have to treat people with respect. But memorizing a handful of superficial rituals isn’t the way to do it. Instead, take the time to understand your own culture, and become sensitive to business cultural preferences. You can get started by taking a look at my videos on business culture.

Just as every country and every region and every people have social cultural preferences, the corporate world has business cultural preferences. These preferences define how we communicate, how we relate to our boss or employees, even how we manage time. They can’t be taught, trained, or educated away, either. It’s not about knowledge, it’s about feeling how to act properly in a particular social environment. Culture is something we start to pick up as a child, and that includes the culture of business in our country. Most of us don’t even think about it. It’s “just the way things are,” and that’s what makes it so hard to change our cultural preferences.

Be sure to check out Andrew Gori’s original article on Zendesk.

Identity And International Success

If you missed the first part of this six-part series, see: Part 1 of the series, Creating An International Culture Of Success, or see the entire series right here.

Identity is how we perceive ourselves in relationship to our family, associates, and friends. The individualist focuses on the personal. Such a typical Westerner might think about how they can “get ahead” of everyone else, “stand out from the crowd,” and show off their individual capabilities.

But the vast majority of cultures don’t prioritize the individual. Where the Westerner might think of “I,” someone from a collectivist culture would often think “We.” The group comes first, and is placed ahead of the individual. There is a core belief in the power of the group, and a corresponding feeling that individuals can only play a useful role in society through group involvement. Rather than stand out, the collectivist wants to be a part of the group and support common group goals. In this case, “standing out” is actually a bad thing.

Understanding this is absolutely essential to healthy team dynamics.

Why Identity Matters

Roy, a project manager in the United States, learned about identity the hard way. He had been overseeing work with a partner firm in Japan. The partner firm, responsible for tailoring Roy’s product to fit into Japanese culture, had done a great job. In particular, Roy felt that Masakuni, one of the product designers, had really done exceptional work. He wanted to reward the team, and he wanted to show everyone what a great job Masakuni had done.

As a reward, Roy called the team together to celebrate. He told everyone that the product redesign was a success, and he asked Masakuni to step forward. He told the team that because of Masakuni’s exceptional efforts, their U.S. employer was particularly happy. He went on to add that everyone would be receiving a bonus, but that Masakuni could expect “something extra” for all of his hard work.

Roy shook everyone’s hand. There were smiles all around and it seemed to Roy that he had done the right thing — until the next day. Masakuni did not come to work. Roy had an unexpected meeting on his calendar with the Japanese firm’s general manager. The general manager — fortunately, someone that was very multicultural, and who understood American culture — explained the problem. Masakuni had resigned because he had failed his coworkers. Roy’s congratulatory speech had in fact singled out Masakuni as someone that had not supported his own team. He had not shown them how to excel, just as he had. And by keeping that knowledge to himself, it was self serving: Masakuni had lost face with his group, and with his employer.

The Global Project Compass identifies the following management disciplines as being most directly affected by identity:

  1. Team & Human Resources Management
  2. Training Needs Assessment
  3. Independent Verification & Validation
  4. Assessing Outcomes

Team & Human Resources Management

As Roy learned in the story above, team dynamics is complicated in a multicultural situation. How we motivate team members, how we communicate with them, and how we expect them to communicate with us is essential to good management. Without understanding the more subtle aspects of business culture, managing a team becomes impossible.

Training Needs Assessment

All employees expect to have opportunities for growth. But people in different cultures anticipate receiving these opportunities in varied ways. For example, in many collectivist cultures the boss is expected to look out for employees, and provide guidance regarding a career path. But individualists expect to take action on their own, let their boss know what they would like, and push for what they want. If you don’t understand the right approach, team members will soon be left wondering if there is a future for them at the firm.

Independent Verification & Validation

Independent expertise can be highly valued. But, trusting a third party to ensure the success of a product or service is rife with cultural implications. The individualist approach tends to favor unbiased service providers with a strong track record, and no connection to the firm. The collectivist approach tends to favor trusted, well-known partners with strong connections within the group. It’s a different point of view that can lead to internal conflict in multinational organizations.

Assessing Outcomes

When assessing outcomes, a skilled multicultural manager needs to understand the dynamics of the team. A manager accustomed to individualist teams will naturally look to identify high performers. The individualist team, while working to succeed as a group, will ultimately be motivated to achieving individual goals (such as career advancement). But the collectivist manager will instead assess the team as a whole, understanding that individual performance (whether strong or weak) is, in many regards, left to the group to manage.

Identity is core to a person’s view of self image. The strong individualist employee will look for validation of their abilities, performance, and self worth. The collectivist employee will instead perceive their value in terms of how their work benefits the social “in group,” including family and associates. Benefits and rewards must be appropriate. For example, offering a great opportunity at a new company may not be exciting to a group-oriented person. Such a change means leaving their “in group” behind. It might be viewed as a loss of face — whereas the individualist is more likely to see it a chance to excel.

Cover graphic attribution: The artist and visual designer Yang Liu was born in China and lives in Germany since she was 14. By growing up in two very different places with very different traditions she was able to experience the differences between the two cultures first-hand.

Engagement Style And International Success

If you missed the first part of this six-part series, see: Part 1 of the series, Creating An International Culture Of Success, or see the entire series right here.

Engagement Style

Do we get right down to business, without knowing much about the other person — or, do we build a strong and trusting relationship, only talking about business after we know each other well?

Sending a delegate to represent an American company must be well thought out before departure. This delegate must have authority as well as longevity in the organization. Replacing delegates during the relationship should be done with care and planning. The new contact will need to be brought in slowly to transition the relationship. It is wise for American firms to engage more than one delegate to a relationship with the BRIC or they risk the business leaving with a delegate who departs. — Moore, Brandi, The Little BRIC Book.

Most cultures throughout the world choose the latter path: A relationship-driven engagement style. Conducting business outside of the “in group,” the trusted circle of family, associates, and professional contacts that you know well, is unheard of. It is far better to go into business with someone that you know well, even if the price or product isn’t the best. You know what you’ll be getting. Furthermore, the combined influence of your in group means everyone will do their best for you — and if they don’t, there are always solutions to improve the situation.

The Western, venture-driven style is very different. It’s found in relatively few cultures — probably less than 10% or so of the world. America is perhaps the most dramatic example of a culture that believes in doing business first. It’s a message driven culture, promoting products, uniformity, and a “best product and best price gets the business” ideal. Some of this ideal is beginning to leak into other cultures, but culture doesn’t change quickly.

The Global Project Compass identifies the following management disciplines as being most directly affected by engagement style:

  1. Accounting Policy & Costing
  2. Risk Management
  3. Procedure & Outsourcing Management
  4. Business Continuity & Recovery
  5. Information Assurance & Security

Accounting Policy & Costing

Policies regarding accounting and cost management are deeply affected by engagement style. Strongly relationship driven cultures tend to support more relaxed, flexible policies when it comes to managing the flow of money. This flexibility affords hiring family members, awarding favored contracts to close allies, and giving favors such as gifts for professional favors.

Unlike relationship driven cultures, many cultures focus on cost and performance first, and enact policies accordingly.

Venture driven cultures tend to support stronger accounting and cost management policies, leaning more heavily on the rules of business. This is particularly true in countries such as the United States, Switzerland, and Germany. In such cultures, the favoritism afforded by strong relationships is regarding as nepotism or corruption.

It’s important to remember that both systems are unique and both kinds of cultures feel their system works very well.

Risk Management

Different cultures approach risk from very different perspectives. Cultures that prioritize relationships tend to view those relationships as a means to avoid risk. Awarding an important contract to a close relative or friend provides security. The close relationship helps eliminate unknowns. While price and performance may not be the best, they are known. The strong “in group” network that defines the relationship means everyone will want to support the in group. Performance becomes a matter of saving face.

Venture driven cultures tend to equate risk reduction with choosing the best performer. Giving favored treatment to friends and relatives is viewed as a risk, and potentially disastrous. This usually means taking as objective an approach as possible. Contracts are awarded based on price/performance analysis, and risk is reduced by evaluating past performance. Contingency plans for poor performance generally involve financial penalties or having a contract revoked (not something a relationship driven culture is comfortable with).

Procedure & Outsourcing Management

As pointed out above, the typically “Western” venture driven style eschews anything that seems like favoritism. When talking about outsourcing this is probably one of the biggest differences between venture driven and relationship driven culture. The relationship driven culture will stick to its in group, favoring existing relationships. The venture driven culture assumes that every project must be objectively awarded based on performance criteria.

This also shows up in organizational procedures. Venture driven cultures tend to have written procedures that are enforced through business mechanisms (such as forms, systems, and policy review). Relationship driven cultures, on the other hand, rely more on informal, cultural procedures. Important policies are enforced not by forms and systems, but by the peer network and cultural environment.

Business Continuity, Recovery, & Security

Who is responsible for the continuity of the business? Many venture driven cultures will push for a separation of concerns, using an objective, often outside third party. This might be a service provider responsible for auditing and securing an information network.

Relationship driven cultures tend to prefer a more closely-held approach. Sensitive information is often controlled internally, and important individuals within the organization are tasked with ensuring continuity.

Each culture’s approach to security and information management can be very different. Probably the most dramatic example of this is the American view on intellectual property protection versus that of Chinese culture. While China is definitely changing, the American perception that intellectual property is owned and protected by law is not commonly shared in China. We routinely hear stories about how products are copied in record time in the Chinese market — and U.S. firms are constantly evolving strategies to stay ahead of the Chinese copycats.

Cover graphic attribution: The artist and visual designer Yang Liu was born in China and lives in Germany since she was 14. By growing up in two very different places with very different traditions she was able to experience the differences between the two cultures first-hand.