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.

What Is “Saving Face” In Other Cultures?

What does “saving face” really mean? Westerners tend to think “face” means preserving one’s reputation… but that’s not right. It’s particularly important in high-context cultures, including most of Asia and the Middle East, where tradition is highly valued and the interests of the group outweigh the interests of the individual.

Hi, I’m Zacharias Beckman, President of Hyrax International and I wanted to speak briefly about “what is saving face.” Face is a collectivist notion. It’s something that applies in many Eastern cultures and as such it’s an extremely foreign idea to Western culture.

Misunderstanding “Saving Face”

So, here’s an example of how not understanding face can go wrong with Western and Eastern interaction. Let’s say you are a Western Manager, applying western management theory. So, if one person does a particularly good job, the natural thing to do is to reward that person, to call them out and tell them they did a better job, possibly give them a raise or some kind of a reward within the firm.

But, in Asian society, this actually sends the wrong message. What you’re doing is saying that the individual failed in their responsibility, to their group, to their fellow employees, because that person did not show those individuals how to perform well. So, the net result is you tell one person that they didn’t do a good job, and you tell the entire group that they also failed to do a good job, in this respect. It backfires terribly when Western managers do that with Eastern cultures. And this is a great example on why it is so important to really understand what face is whenever you are doing business with the East or the Middle East.

What is Face?

It was first defined by David Ho, a social scientist working in Hong Kong. He basically defines saving face as saying that face is lost when an individual, or someone who is closely related or connected to that individual, act in a way that fails to meet the social obligations that are set up for that person. In other words, if they don’t meet their social responsibility with family, with work, with their friends, then they loose face.

In Asia and the Middle East, having face is a very bankable notion. It is a literal translation, or a literal representation, of your status in society, of your reputation and your abilities to fulfill your obligation within that social network. Because collectivist societies are so tightly integrated and tightly social, there is only one face. Social, work, family, it’s all integrated into a single representation of who that person is. That means that your face at work and your face at home can be damaged in the same way.

If you’d like to see another take on saving face, check out this short video (the bit on saving face is in the latter half of the video).

Should I Translate My Business Card?

Exchanging business cards (or “name cards” as they are called in China) is an important ritual throughout the business world. The business card is part of your introduction and, in many cultures, it’s unforgivable if you don’t have a professional card. But in an increasingly Global business world, there are linguistic and cultural considerations too… So should you translate your card, and if so, how many times?

Hi, I am Zacharias Beckman, President of Hyrax International. I recently had a client ask me if they should translate their business card into another language, for the clients they are working with around the world. This really depends on what kind of a business you are in, for one thing. Let’s say, for example, you are a U.S. based importer bringing products into the U.S. from around the world. You probably wouldn’t need to translate your card in this case because for one thing, your suppliers are going to expect to doing business with you in English. But, on the other hand, translating your card into many different languages, for every country you do business with, would probably be impractical.

Now, another possibility is, let’s say you are a language translation company and it’s important that you demonstrate competence and ability in certain languages. In this case you probably would want to translate your card, or at least some part of your card, to indicate that you support all these different languages in your translation service.

Reputation also matters. Having a U.S. based business does bring a certain degree of credibility to you. So, translating in English card into other languages isn’t always necessary. Sometimes leaving it in English is actually the right choice. We actually have had our clients tell us that we should just leave our card in English, because it provides a certain amount of credibility.

But probably the most important deciding factor is going to be whether or not language is a barrier. For example, if you’re doing a lot of business in China, with people who predominantly speak Mandarin, you should definitely translate the back side of your card into Mandarin. On the other hand, if you’re working in India, this strategy is unnecessary. Almost every professional is going to speak English and they are probably going to give you an English card, anyhow. Different countries have different rules. In Africa, for instance, you’ll be fine with English cards. But, if you’re going into South America, most likely you should have a Spanish translation because Spanish is widely used in business throughout South America.

Whatever you decide, be practical. I recently met somebody who had not less than five different business cards stuffed into his wallet, and it took him about thirty seconds to find the right one to give me. And it was a very awkward moment. If you work predominantly with one country, then consider translating your card so that you have your native language on the front and a foreign language at the back and leave it at that. On the other hand, if you work with many different countries, then you might want to consider translating your tagline or perhaps your company slogan, and you can do that with a couple of different languages. That will indicate your support of different languages without having five different cards stuffed into your wallet.

Overseas Vendor Versus Partner

While doing business overseas, the very term “outsourcing” implies a certain detachment and distance, ripping it out of your own company and leaving it for another to do. This is usually justified by the argument that the partner/vendor can get the job done more effectively and quickly. That may be true, but will they do it on their own, just because they have signed a contract to do so? Or should you build a closer, more trusted relationship?

Hi, I’m Zacharias Beckman, President of Hyrax International, and I want to talk briefly about working with vendors versus working with partners, in your overseas adventure. Choosing the right kind of relationship is really critical. Sometimes a vendor relationship is a right way to go. Vendors are going to be easy to find. You can search the internet and quite likely come up with a number of vendors that’ll fulfill your need. They are going to be turnkey. They are going to be ready to business. Vendors are easy to engage, but, at the same time, they are not going to be looking out your best interests. They’re going to be making a profit, looking at their bottom line.

In an international setting you are throwing a lot more complexity into the mix. For example, legal agreements are going to have different meanings in different cultures. They’re also going to be much harder to enforce if you do need to enforce the agreement. And then, finally, you’ve got to deal with different country law and international law. So, the bottom line is many times when you engage a overseas vendor, if there is a problem, it’s just not practical to actually enforce a legal agreement.

When you engage with a partner, you are looking for somebody who is vested in your own well being. This is going to be a long term relationship and mutual success is what’s going to drive it. The advantage with a partner is that they are going to understand the local market better than you do. They are also going to understand local business culture and business law. So, they are going to guide you in your efforts overseas.  They will give you strategic advice that is better than your typical vendor relationship will deliver. They are more vested in mutual well being.

But, that said, finding a partner can be lot more difficult. Getting a partnership off the ground in the East or Middle East or South America is not going to be a simple numbers driven equation. Most cultures are going to want to build a strong relationship before they start talking about their partnership. It’s going to take time. It will take months in many cases and it requires a personal presence. Going to the other country, meeting with your prospective partners, socializing, developing the personal relationship, getting to know each other, and then opening up the door to a long term, very successful business relationship. Most business relationships around the world take time to build. The cultures of Brazil, Russia, India, China, most of Asia — these are relationship driven cultures. They are not going to just jump into business.

10 Tips For International Business Success

I’m very pleased to announce our 10 Tips For International Business Success booklet is now available for free download. This first book in the series is a concise companion for International executives and managers. It provides 10 absolutely critical lessons when working abroad or with overseas partners and teams.

Tip #1: Time After Time

10 Tips For International Business Success (Zacharias Beckman)
10 Tips For International Business Success (Zacharias Beckman)

Americans associate being late with being unreliable. But in many cultures, timeliness is not expected and can be construed as being rigid and uncompromising.

Unlike some Western cultures, many Asian and Latin cultures have higher cultural priorities than timeliness. For example, in some cultures it would be unthinkable to end a meeting because the allotted time had run out. This would be taken as a direct insult, essentially sending the message that your host is less important than your own time. It’s understood that if someone is late, it’s because they are invest- ing time with another person. In time, your turn will come as well. This difference leads to cultural conflict and misunderstanding…

Read the rest of this tip, including which countries and regions it applies to, strategies for working successfully with these cultures, and how to adjust to different business practices by downloading your copy today!

Get 10 More Tips, Free!

We wanted to make sure you get a fantastic value here, so there are actually 10 more tips in the book, along with quotes from business leaders and luminaries throughout the Global business industry:

Relationships are built between individuals, not between companies. Thus it’s important to keep the same people coming to India so the process doesn’t have to be repeated for each neophyte. When Western companies reassign resources too quickly and put someone new in charge of an India initiative, they program themselves for failure. — Gunjan Bagla, Doing Business in 21st-Century India

Look For More Tips…

Look for our other International guides, as soon as they go to press! Our other guides will be posted here, just like this one… Look for:

  • 10 Tips For International Travel
  • 10 Tips For Managing International Teams
  • 10 Tips For Communicating Globally

We’re delighted to offer them to you completely free, and hope you will enjoy reading them as much as we have enjoyed creating them.

What Is Collectivism?

Americans are motivated by personal choice and gain. But, many Asian cultures are not. Instead, these “collectivist” cultures are motivated by what’s good for the group, what’s going to benefit a person’s family and raise their personal “face” and their standing in the eyes of society. Understanding this fundamental difference is critical.

Hi, I am Zac Beckman, President of Hyrax International, and I want to talk about collectivism. When working with people from around the world, you’ll be quite surprised at how different their habits are and their expectations are. For example, if you’re working with Japanese partners, you may notice how surprised they are at how much free time Americans seem to have. Americans use this time for fitness, for taking time with their kids and family, going to movies. But they do it during the week. In Japan, the week is for the business. Business comes first. Personal time ends up on the weekends.

Indians have a similar cultural orientation. They may go to work kind of late in the morning, work a long afternoon, take a dinner break and then end up going back to work and working late into the evening until 10 or 11; even midnight. And that’s a practical matter because many Indian firms work with so many companies around the world that they need to adjust their schedule. But that again is putting the business first, ahead of family. This is what collectivism is.

Collectivism Is Thinking “We,” Before “I”

Collectivism is thinking about what’s good for the group, what’s good for the business, before thinking about what’s good for the individual. Americans are extremely individualist. This means that they make decisions based on what’s good for them personally. They move out of the house early because they want to be on their own. They make career decisions because it’s what they want to do. It’s really important to understand this difference, because it fundamentally changes how different teams, how people around the world, are motivated.

Americans are motivated by personal advancement and by personal gain. But, many Asian cultures, collectivist culture, are not motivated by those same things. Instead, they are motivated by what’s good for the group, what’s going to benefit their family the most, what’s going to raise their personal face and their standing in the eyes of society. For example, an American might be motivated by career advancement or a career change. But that exact same choice to somebody in Asia could mean loss of face, it could mean a lack of ability to hire friends into a new company, where they are relatively new themselves.

It’s the difference between knowing how to motivate individuals who are primarily concerned with their own career and their own advancement in society, versus knowing how to motivate somebody who is concerned about their social group. They are concerned about the well being of everybody around them and their standing in the eyes of that society.

Building International Business Relationships

The Importance of Relationship Building: How business is developed in the East is very different from the West. Building personal relationships is critical.

Allen is sharp, straight forward, and he’s got a great reputation as a “no nonsense” lawyer. He’s got a dream client in Japan. But, there is a problem. He can’t seem to make the right connections within the company, with the right people, to grow his business.

When I spoke with Allen about his client, he explained he had been doing basic U.S. contract work for the company — when he could be doing so much more strategic international work. Although he knew he could bring a lot more value to his client, those decisions were made at a high level. Every time Allen tried to approach the President of the company, his efforts led nowhere. Everyone he spoke to was always very polite, telling him they would pass along his request. But after two years, his work with his client was stagnating. And he felt like he must be doing something wrong. He was right, but he had no idea how to move forward.

It turns out he is being treating his Japanese client the same way he treats his Western clients. That was the root of the problem. Building business in the East is done very differently. Allen needed to learn the business culture of Asia.

For example, relationships are very important through out the East. Real business doesn’t happen unless a strong relationship at a personal level has been built before hand. This is completely foreign to many Westerners, where having a good product and a good price is good enough. Even more important though, was how Allen had been approaching the President. Power distance, the distance a boss and an employee are separated by culture, is tremendously important in Japan. Despite his best efforts Allen was thought of as a vendor, not a strategic partner. He had to completely change the way he was approaching the President. His new strategy had to be appropriate within Japanese business culture and it had to focus first on taking the time to build that relationship.

We worked with Allen on different strategies he could use and today his business is flourishing. He built the right foundation and now is a strategic partner with his client. And the last time his client’s CEO visited Los Angeles, they even went to a ball game together.

This is just a one small aspect of global business development. But it really shows how business cultural preferences will influence the future. It’s why we created the business synergy compass, to guide businesses to success in the new global economy.