Inspiring Innovation Across Global Teams

Hi, I’m Zacharias Beckman, president of Hyrax International. There are a lot of misconceptions about innovation, and what we can expect from our global teams when it comes to innovation. Here’s an example.

Jason has a technology company here in the U.S., and they’ve just expanded into Asia. Jason expected that the new team would integrate quickly, and start contributing. By adding another 8 hour shift to the day, he expected his firm to see a dramatic increase in output.

Instead, a few months in, the Asian team seemed to be underperforming. His U.S. managers complained that the new team didn’t produce new ideas. They weren’t even improving on existing ideas. Basically, they were doing what they were told… and if they didn’t have really clear instructions, they kind of did nothing.

What Jason and his management team didn’t realize is that it wasn’t a performance or motivation issue. The problem was with business culture.

Jason’s new Asian employees had been trained for task-based execution. It’s what they knew, all the way from their educational experience, to their most recent employment. The team was not accustomed to critical thinking, and the business culture didn’t support challenging authority. To make matters worse, the Western and Eastern teams weren’t communicating well. With the U.S. team’s low context communication style, they missed a lot of high context cues from their Asian counterparts. The high context communication, to the Western team, was just too subtle — and, it didn’t really come through on a conference, call anyhow.

With all this going on, the new team was set up to fail. They did not expect to be driving innovation. They expected to be told what to execute, and do an excellent job at it.

The unexpected cultural differences demanded a lot of changes in Jason’s strategy. He had to change his immediate goals for both teams, and change what the Asian team was working on. In the longer term, he had to launch a strategy that would get everyone to the same place. That meant a lot of cross cultural training and changes to their very Western, U.S. management style, and taking a much more mature, global approach to the business. Jason learned the hard way how critical it is to understand your partner’s business culture before engaging in business.

Organizing Overseas Teams

Hi, I’m Zacharias Beckman, president of Hyrax International. When it comes to coordinating international projects, one of biggest challenges we hear about is staying on top of the project.

As an international project manager, you have to know how to stay organized, and you need to know what your team is doing. When you have several different teams, all spread around the world, that’s not always easy. You also need to make sure that one of your teams isn’t being held up, waiting on another team.

This is what Tanya ran into, at one of our clients. She had been managing a U.S.-based team. Her company had just bought a smaller firm in India, intending to set up a “follow the sun” strategy. With teams in the U.S. and India, they could move faster because one team would hand off work, at the end of the day, to their overseas counterparts.

But there was a problem. After a few months efficiency was falling, not improving. Tanya found that the teams were poorly coordinated, and more often than not one would end up waiting on the other one. Tanya needed to change her strategy to accommodate a global team. She had to refocus, and figure out how to get these teams collaborating smoothly despite a separation of over 10 hours.

She made two major changes, both of which focused on improving coordination.

She took a critical look at their project management system, and decided that it wasn’t up to the job. It had worked great when everyone was in one office. But now it had to deliver a new level of coordination. She needed something that could better drive the process, improve visibility to her management team, and show dependencies between team members. It was absolutely critical that everyone know, at any time, who was waiting on them. They also needed better requirements management, and better collaboration tools. Her new system gave them the tools, but it couldn’t solve the communication issues on its own.

Tanya also changed the team schedule, setting up short, collective meetings every day. To avoid burdening one team, she set a rotating schedule: meetings where held at 9am in the US twice a week, and 7pm twice a week, with no meeting on Friday. Team members had to join at least two meetings each week, but it was up to them to pick which ones.

Tanya’s changes showed almost immediate results. The teams became more coordinated, and situations where one team was held up waiting for another pretty much vanished.

In a multinational organization, it’s important to remember that remote teams can feel like they are in a vacuum, lacking communication or cut off. To compensate, a good manager has to be extra vigilant and put in good processes, and good tools, and also make sure that no one team becomes the favorite. Tanya spread the meetings out to share the burden of after hours meetings. By doing so, she also sent the message that both teams are equally important.

This Is Horrible Management Advice

I’ve been seeing a lot of management advice lately — hopefully it’s a sign that the U.S. economy is starting to boom again, and projects are taking off. But the problem is, most of the advice I’m seeing is really horrible — at least, if you’re working anywhere outside of America.

Western Management Is… Western

Western management theory works great if you’re managing a Western team. That means a team of people that are completely and entirely Western in terms of their culture and expectations.

For example, in this recent article, Lisa Evans reports that employers are “turning away from the traditional management style of hierarchies.” This is absolutely correct — in the United States. But applying this advice elsewhere in the world could be a huge mistake, especially in the highly organized and role-driven cultures throughout the East. Much of what Ms. Evans writes is sound advice across cultures. She writes that, “Recognizing these basic human needs can create a workforce of employees who are committed to working for their leader because of who they are and how they are treated,” a management principle that is a universal truth. But, as with most Western-oriented management writers, she also adds advice that will fall flat across Asia: “Empowering employees is one of the best ways to get commitment.” Unfortunately, this doesn’t work well in countries and cultures where explicit instruction is expected. In India, for instance, delegating and empowering your team usually backfires. The culture of India, one that produces great technical minds, is still focused on rote training and clear task delegation.

Adapt Your Management To Fit Culture

Don’t be scared of looking for advice online, though. There’s a lot of great advice — but consider the author and their audience. If the article seems to “American,” look for advice from a more International source. One great example is Donna Flynn’s recent article on Managing A Team Across 5 Time Zones. She writes that it’s important to share the burden of communication in a multinational team: “Several months ago we started a rotating meeting schedule.  Every month, each team member now has one evening, one mid-day, and one early morning meeting, and misses one meeting that falls in the middle of their night.  No team member is expected to attend a team meeting between 10 pm and 7 am.”

Ms. Flynn adds, “No tool can replace being together in the same room.  I bring my globally dispersed team together twice a year for workshops,” advice that I heartily agree with. It’s one of the key success strategies that I teach to our clients.

So choose your source. There are even products that focus on overly “Americanized” management techniques. One is The Time Timer. It’s a clock, big, bold, and designed to sit on a conference table and get people to stay focused on the agenda. The product pitch resonates with Americans: “You’re in a meeting, there are only two minutes left, and you’ve been talking around and around without even getting into the most important topic. There was no sense of urgency. And now it’s too late.”

But there’s a problem. This agenda-driven mentality is too Western. It only works in those Western cultures that prize time above all else — such as the U.S., Switzerland, Germany, and a handful of other European countries. But deploy this strategy in South America, and your partners will think you don’t care about getting to know them. Try it in most of Asia, and you’ll be labelled impatient and opportunistic, and they’ll think you don’t want to build a real business relationship. Most cultures around the world do not value time like Americans do. In fact, the most important business cultural preference for them: Relationships. That means taking time to build a relationship, and letting the meeting run long. Long meetings are prized because it’s a sign that everyone is getting to know each other. Short meetings send a different signal: “I don’t value this relationship very highly.”

The most important thing to keep in mind: Be aware of the business culture you are working with. Make sure that the management style you apply is going to be the right style for that culture, and for your team.

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.

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.

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.