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.

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 Power Distance?

Power distance is about how employees relate to their boss. Think of it this way: How much distance do you feel between yourself and your employees? Low power distance cultures typically empower their employees to be critical and to make decisions on their own; but, this independent relationship is just the opposite of what many Eastern business cultures expect.

Power distance is about how employees relate to their boss. Think of it this way, how much distance do you feel between yourself and your employees?

John was a CEO of a company here in California that had outsourced product development to India. The problem was the Indian team kept taking all of John’s brainstorming and ideas as if they were directives. But, the Indian team didn’t want to criticize John. So, a the same time, John is feeling, “Where is all the criticism and critique of my ideas that I’m expecting? Why isn’t my team asking real questions about what we’re doing?”

Many western cultures have very low power distance. Employees are empowered to be critical and to make decisions on their own. They are independent, and western companies value that and delegate a great deal to their employees.

High power distance cultures, on the other hand, operate very differently. In a high power distance culture, the boss is respected for this wisdom and his position in the company. Employees don’t criticize their boss, it’s just not done. And decisions are made at the top of the company and they trickle down to the employees. Feedback is only given when very directly and clearly elicited.

So, power distance is the degree to which culture and society has separated the superior and the subordinate in a company. Asia and the Middle East have many very high power distance cultures, and South America as well as Europe have quite a few cultures that are also higher power distance than many Westernized cultures.

Compensating for business culture and communication differences

By far the most common, most glaring misstep U.S. employers make in foreign markets is to assume that people, by and large, act more or less the same in a business setting. It’s a mistake I’ve seen in almost every International project, whether the global team is Russian, Indian, Asian, or South American. Business in a foreign country is not like business at home.

Business culture and communication

In the U.S. we have become very insular, expecting behavior from our workforce that simply doesn’t exist in other cultures. For example, we take for granted that employees will be outspoken and even downright vocal about anything they aren’t happy with. “The squeaky wheel gets the oil,” as the saying goes. But it turns out, that saying doesn’t apply in very many cultures. In fact, the global project manager needs to recognize that in some cultures, speaking out is an anathema, in any setting. This has come up with almost every outsourcing effort I’ve managed throughout Asia: People will seem to contribute extensively or not at all, depending on the culture.

While this looks like a communication issue, it’s actually power distance. Power distance is the degree to which a supervisor and a subordinate are separated by culture and society. Throughout most of the world (especially Asia), power distance is very important. It introduces a formality into the business relationship that doesn’t exist in many Westernized countries.

One strategy to begin overcoming this problem is to initiate collaboration up-front. This can be a particularly effective tool for establishing peer relationships early in the game. While speaking out is not a given, it’s almost universally true that people open up to their peers before opening up to managers (and this is especially true in Asia, where group orientation is predominant). Initiating a project with an on-site collaborative session kickstarts the drive for interactivity. We’ve found that it’s critical to stage the session appropriately. It has to be at one location, the entire team should be present, and the environment should be tailored to create effective, collaborative conversations. Remember, it’s more about building the team than about making real progress on the project.

Successful projects — and therefore successful project management methodologies — recognize that communication is a common point of failure, and put measures in place to compensate. That means taking steps to create strong team communication, and continuing to facilitate collaboration throughout the project, and using methods that encourage rich, complex communication (like frequent, short video calls). It’s very important that the team has the right tools to establish effective communication, so don’t skimp on them.

Dealing with negativity in the team

You are leading a star project team working on a challenging project when you noticed a particular team member spreading negativity, rumors among peers. You are afraid this negative behavior will bring whole team’s morale down. What would you do in this situation?

Every individual is different, and every situation is going to require a different response. Temper tantrums, sexist remarks, chronic lateness, information hoarding, playing favourites … people don’t always behave themselves at work. An adept manager needs to understand the individual nuances of the situation and act accordingly. You need finesse, insight into your team, an understanding of psychology, and often, incredible patience. Here are a few strategies that I always like to try.

1. Engage the malcontent

Quite often, the negative attitude comes from feelings of being disengaged from the team or the project. Perhaps the individual thinks he could do the job better; perhaps he isn’t working on what he wants to work on; or, just feels the project is heading in the wrong direction. Most often negativity stemming from these problems will surface in a team setting, such as passive aggressive behavior, grumbling, openly showing dislike for decisions. I like to engage this individual in finding a solution. Hand accountability to that individual and, in essence, give full reign to fix the problem. With accountability often comes responsibility — and the need to realize that decisions are not always quite as simple as they appear on the surface. Of course, sometimes the individual makes a mistake — but in this case, the lesson is still learned. They “get their way,” but also find out that “their way” wasn’t, afterall, the right way. Of course you’ve got to strive for a better outcome — assign responsibility, and then back them up. Make sure they’ve got resources and help in the decision making process. Hopefully it becomes a learning experience for everyone.

2. Reach consensus

Sometimes it’s not practical to let an individual run with their own ideas. Yet, still you have someone that feels “things” are heading in the wrong direction. I like to try to reach consensus or, failing that, at least agreement that we’ve made the right choices given what we know. One approach is to schedule a round table with the malcontent and his peers, perhaps 3-4 people. Discuss the problem, and try to reach agreement on direction. In the best case, his peers will sway his opinion. More often, the complexities, choices and decisions that have led to the current situation will be discussed — and the “black and white” situation fades in favor of many choices, and trying to make “the best one.” With a little luck, the malcontent employee walks out of the round table with two things: 1) a sense of having been engaged in the decision making process and 2) a new appreciation for the complexity at hand, and the decisions that have been made.

3. Make it clear that it’s a team effort

A one-on-one discussion goes a long way. Spend some time with the individual and really try to listen, and understand what the problem is. Come up with some mutual objectives — some things for the individual to work on (these might be soft skills, such as being less negative) as well as some things for you to work on (these will be things to help ameliorate the bad attitude, such as making sure his opinion is part of the decision process). Make sure it’s mutual, and show some real effort here — there’s tremendous value in demonstrating how much you value each individual’s contribution. Work with the individual to address the problems and find solutions.

4. If all else fails…

If you still have a problem employee on your hand after making a sincere effort to fix the problem, you’ve got to make it clear that continued negative behavior will not be tolerated. You also need to be prepared, so document the problems. Keep a record. After some time, it will become a matter of reprimanding and giving specific, required objectives. This is the worst case scenario and more often that not, the first step toward losing an employee. Sometimes it’s a “wake up call” to the individual, but often this kind of heavy-handed approach just feeds the negativity. Be prepared for either outcome.

Wayne McHale was a senior manufacturing executive when he heard reports that one of his branch offices was getting fed up with the arrogant, condescending attitude of a new manager. He decided to pay a personal visit to the office and put an end to the situation right away. “I made it absolutely clear that while we were delighted to have him on the team, certain behaviours could not be tolerated in a team environment,” says Mr. McHale. “He was taken aback, initially, because I think the behaviours were somewhat ingrained. He was a star and had been told for too long that he was wonderful.”

Whatever the case, make sure you have a good documented history. You can use it when talking about the problem with the employee, making sure you have concrete references to poor behavior. In the worst case situation, you can also use it to back up termination papers.

Above all else, don’t be an enabler

Some organizations actually nurture bad behaviour, according to Lew Bayer, president and CEO of Civility Experts Worldwide. For example, an all-star employee with a primadonna attitude may be tolerated because a manager decides it’s too costly or too much hassle to seek a replacement. Or perhaps certain rules may not apply to someone who has formed a friendship with a senior manager. In situations like this, it’s often the boss that’s the problem.

You can’t avoid dealing with workplace performance issues — it will come back to haunt you in the long term. Perhaps other employees will get fed up and quit. The problem employee might have a temper tantrum in front of a client. It’s hard to predict but one thing is almost certain: It’s going to happen at the worst time, when stress is high and a lot is on the line. Ignoring the issue won’t make it go away; it will just get worse.

Don’t wait until the problem becomes a problem for everyone. Be proactive, and recognize that the workplace is above all a place for professionalism. If your star performer is worth keeping, coaching can help. If your disaffected team member needs to feel involved, a few changes can make that happen. But, only if he’s open to the idea. If not, it may be time to take more direct action in order to preserve the integrity of your team.

Training is number one

As I’ve pointed out more than once, training your employees is one of the best things you can do to benefit your business and your team. Even so, fears about what happens if you train your staff and they leave to find a better job are prevalent — but consider the alternative: What happens if you don’t train them, and they stay? As Derek Christian found out, training is key to success: He successfully dropped attrition from 300% to zero in 2009, and used a strategic training and career counseling program to more than double his business’ size. The number-one reason people leave their jobs is that they don’t feel challenged, he says: “People, especially of this generation, want to learn new things.” (CNN Money Online).

Organizational evolution

A little while ago I started a topic on “Why smart people defend bad ideas.” After some of my recent work touched closely on similar topics I felt the urge to put down ink and revisit the whole subject in more depth.

Scott Berkun brings up some good points that are all too often at the root of an organization’s problems. Why do so many companies today pursue wildly optimistic or even pipe dream plans? Why is so much effort invested in seemingly random direction? And perhaps most important, how can these out of control organizations see the light and get back on track?

Most of the time I believe the problem — and its solution — comes down to understanding the people in the organization. Not long ago I had the pleasure of experiencing an organization of nearly 850 people with a development group of close to 300 people that used XP (Extreme Programming) as a top-down mandate throughout the company. The amazing thing is, it worked — there was chaos, there was limited visibility into the long term future and a host of other problems. Yet at the same time everyone in the organization was so empowered to get the job done that it created a huge sense of ownership. It worked because the people were brilliant on the whole — it was the right mix. In contrast and more recently I’ve seen a largely XP approach completely fail in an organization of about 100 people with a 20 person development group. Why the disparity?

I don’t believe it’s because one company had smarter or intrinsically better employees. Both companies have very talented individuals. It’s not as simple as choosing “smart” people. A “smart person” is an over generalization. For example, in Why Smart People Can Be So Stupid David N. Perkins writes “a strong sense involves recurrent foolishness that seems, in principle, within the intellectual reach of the person to discern.” In other words, a person can be really smart but not know how to engage their smartness. In so much as this happens, that is “stupidity,” and it can happen with smart people just as much as anyone else.

The conditions and environment greatly affect the ability of a person to function well. In one environment an individual may be able to channel and focus their energies — while another leaves that same person flailing about trying to find a purpose.

Perkins lists a number of attributes that often lead to poor decision making in smart people. Some of them you will likely recognize as traits that occasionally show up around the work place. Impulsiveness, neglect, procrastination, vacillation (dithering), backsliding (succumbing to old habits), indulgence, overdoing (obsessiveness), and walking the edge. These are the danger signs, the red flags that warn us that something isn’t right.

In working with different organizations it quickly becomes clear that the environment is created by the people within in. Certainly, management has a stronger influence on environment — and, consequently, can easily create negative influences that cause complete failure to deliver. More often, there is a slight disparity between management and team. More than anything this stems from an inadequate understanding of all the parts — and in this case, the “parts” are the people that make up the organization.

There are simple tools for combating these negative influences and ultimately eradicating “stupid” decisions. The near-term goal of these strategies is simple: To create a collaborative, unified environment where the organization executes as a whole. At the root of this lies empowerment and ownership. Individuals that take ownership in their efforts demonstrate interest in achieving a positive outcome. Likewise, the ability to achieve this outcome is mandatory if we are to avoid a sense of apathy and the opposite of the desired affect.

Empowerment of the individual means creating a holistic environment. Avoiding “siloing” within an organization in favor of collaboration is critical. Creating an environment that fosters mentorship and cross-team collaboration generates creative thinking. Creative thinking leads to ownership and a vested interest in the outcome of a problem — and this, of course, leads to involvement and an underlying desire to meet attainable goals. It also opens the door to accepting challenge — an open, collaborative environment is one where individuals are open to seek new challenges. Challenge leads to ambition to learn and grow, another benefit of an overall, holistic environment.

Of course setting lofty goals to achieve this kind of organization is one thing and executing it is another. Identifying the problem is the first step. Look for warning signs, and don’t let them run rampant in an organization. Fix the problem — we spend a third of our lives at work. It should be an enjoyable experience.

ed: Seth Godin’s blog had an interesting post recently, highlighting the difference between vertical and horizontal knowledge. This seems to be closely related to siloing and collaboration, respectively.