Did you know India has a little more risk today?

Euler Hermes, the 100-year-old trade credit insurance firm, has a fantastic little tool for assessing credit risk around the globe. Euler Hermes monitors country risks in 241 countries and territories. Their country risk map aims to assess the risk of non-payment by companies in a given country.

In other words, if you’re thinking of developing a new market, you can use this little tool to see how likely (or unlikely) it is you’ll get paid. The map is interactive, and updated periodically to reflect changes in the global economy.

As many of you know, we do a lot of business in India — so, I was pretty surprised to see that Euler Hermes upgraded India from “low risk” to “medium risk” this year. In retrospect, while it took me by surprise, it probably shouldn’t have. India still suffers from an immature business market. I can see how this can translate into higher credit risks.

Country Risk Map
Country Risk Map, Euler Hermes (click to open)

It also underscores how important it is to work with a trusted source, and an experienced partner, no matter what country you go into. Euler Hermes is one such resource when it comes to insuring your revenue stream — whether its import/export, manufacturing, or even R&D. If you’re doing International business, trade credit insurance is a must, and these guys know how to do it well.

Getting back to India: Yes, maybe it is a little bit more risky today, at least when it comes to credit risk. But that’s no reason to stay away, it just means you need to account for those risks. Engage with a partner that really knows how to work with India, take the right precautionary steps (such as using trade credit insurance), and move forward with your eyes open. India is an incredible market opportunity, and not one to shy away from!

Overcoming Communication Barriers

There are many reasons for communication failure. What is said may not be received exactly the way the sender intended. Different business cultures view directness, harmony, saving face, and confrontation in different ways. How do these differences affect communication, and how do you overcome the obstacles?

Hi, I’m Zacharias Beckman, president of Hyrax International, and I want to talk briefly about overcoming communication barriers. It’s important to understand that throughout the business world English is usually a second, third or fourth language for people — even though it is a commonly used business dialect.

Fluency takes years and includes slang and idioms and local references. For example, in the U.S. you might hear, “If this doesn’t work we’re sunk” or “that’s a home run,” which is a baseball reference of course. In India someone might say, “you are gone,” to mean that their position isn’t very positive. And, I’ve had people stand up and storm out of a room saying “that’s it, I quit,” but it’s sarcasm and I know they just mean they need a break.

In an international setting it’s best to avoid sarcasm and slang, and even jokes. Instead slow the conversation down. Give your partner time to digest what has been said, so that they can understand it and ask questions if they need to.

Also, be very aware of body language. It’s very easy to misinterpret body language. The Indian head waggle, for instance, many Westerners will assume that it means “yes” because, more or less, it looks like a “yes,” but it isn’t. It definitely doesn’t mean “yes.” Instead, ask questions when you see something you don’t understand and look for multiple confirmations, so that you know that the message is properly understood.

Our number one tip for the Westerners — don’t assume that agreement means agreement. Many cultures are very much oriented on preserving harmony and preserving face, so they won’t be confrontational. They won’t directly say “no” and they won’t be terribly critical. And for Easterners, our tip is: When your Western partner seems to be overly confrontational and critical, don’t immediately assume they mean offense. They may not. Perhaps they’re being open, honest and direct.

What Is Monochronic?

Different cultures view time along a spectrum with monochronic or polychronic at either end. When planning to do business overseas it’s a good idea to understand which end of the spectrum your native culture falls closest to, and where your overseas partner’s time orientation lies. Zacharias Beckman guides you through what it’s like to be “monochronic” in this week’s video blog.

Hi, I’m Zacharias Beckman, president of Hyrax International and I want to talk about monochronic time orientation. Do you feel that being late is unprofessional? Or that, your entire day could be thrown out of wrack if you are delayed just a little bit?

Monochronic cultures tends to be focused on the schedule — on doing one thing after another, usually in sequence. Sometimes this is called sequential orientation. Western cultures are very monochronic. Particularly countries like the United States, or perhaps Switzerland or Germany. In the west its common to schedule a day full of meetings, back to back, maybe eight meetings in one day. Agendas end promptly and move into the next meeting, one right after the other.

This approach doesn’t work too well in the east and middle east where culture is polychronic. Polychronic cultures have other priorities and this western schedule driven approach can send the wrong message and often offend the people that you are meeting with.

This sequential approach, this focus on time, is very often a problem when working with eastern or middle eastern cultures, which tend to be polychronic. Polychronic cultures have very different priorities and they think about time differently. By focusing on the schedule, the wrong message can be sent, and misunderstandings can result.

Dealing With Timezone Differences

Working in the global economy means spending lots of time connecting with clients and colleagues on the other side of the world. But multinational teams also face “multi-timezone” management problems. What seems like an obvious, potential problem can cause management nightmares for multinational leaders. Here are few tips on how to deal with time zone differences and build smoothly functioning, multinational teams.

Hi, I am Zacharias Beckman, president of Hyrax International, and today I want to talk about dealing with timezone differences. In my work, I’m frequently fixing problems with projects that have gone off the rails. That often means a lot of travel — going to international partners, finding out what’s wrong and fixing it. And when I’m traveling, then — that means being able to collaborate with my team, back here in the United States, is also a problem.

Timezone Challenges For Teams

Focus on finding a method for seamless communication, throughout your entire company, worldwide. You want your teams to break down barriers. You don’t want a team here to be thinking “Oh, I just cant call the other team because they are in different time zone, they’re half way around the world and I can’t bother them.” You do want them to pick up the phone and call or use Skype or whatever it is. The teams need to get to know each other. One way to do that is through co-location. Bring the foreign team home for a while. Or, send some of your team members there, so that you can build a tighter relationship.

But when co-location isn’t an option, you can turn to frequent short meetings — by phone, by Skype, it doesn’t matter. It’s the frequent contact that helps. It breaks down barriers so that the teams starts to operate as a single team, not as a bunch of different team separated by distance and culture. You don’t want your teams to feel distant, because then they are going to act distant.

The other thing you want to do is work on implementing collaboration tools that work really well with remotely located teams. So, project management systems that are easy to access, information radiators and easy to use communication tools. Plan your work days to overlap a little bit. It wont do to have your team in India working from 10 to 6pm and your team in the United States working from 9 to 5 because there is no overlap, there’s no communication. Instead adjust schedules a little bit on each side and try to have about an hour or so of overlap, so that your team can then have a daily or semi-daily stand up meeting. The idea is just to get everyone on the phone and in the virtual room together, so that they can find out what happened on the other side of the world and the they can ask the other team for what they need in order to move forward. The frequent contact and the direct connection is going to go a long way towards breaking down barriers between the team and making them more efficient.

But the meetings are short. They are just to touch base. They’re there for one team to let the other one know what happened and what they need so that they can move on and make progress, the next day.

Who Is My Outsourced Team’s Decision Maker?

When it comes to decision making, it’s important to know who is the decision maker at your overseas partner or vendor (and it might not be who you expect)! Business culture around the world varies a lot. It’s very likely you will experience misunderstandings when Western and Eastern firms work together. Here are some tips on how to avoid the misunderstandings.

I’m Zac Beckman, President of Hyrax International, and I want to talk about who it is at your partner firm, overseas, that actually makes decisions. You might be quite surprised to find out who can and who cannot make decisions. For example, let’s say you’re Asian, Chinese or Indian, and you’re working with a European firm. You might be completely shocked when a subordinate seems to go out on his own, make a decision, and act on it. That’s because many cultures expect decisions to be made at the top and then directed down to the subordinates.

Subordinates are expected to inform their superiors. Their superiors will take this information and weigh it, and then make a decision and convey that decision to the subordinate. So this can cause problems when Western and Eastern firms work together.

Westerners thinks that anyone is empowered to make a decision. They’ll have a conversation with an Eastern partner, and they’ll hear agreement to a particular recommendation or decision; it comes across that the decision has been made. But it hasn’t. All that’s happened is, the Eastern partner whom they are talking to has expressed agreement to the decision. They have expressed the idea that this would be an agreeable decision. But that doesn’t mean its within their power to make it happen. It’s up to the Western boss to communicate to the Eastern, boss at the same level, to make sure that decisions happen. This will not happen by itself.

Here is an example: We had a client who had engaged a firm in India. And they wanted to go visit this firm in India. Get to know them better, which is a great idea. The CEO hopped on a plane, but when he got to India, nobody was there to meet him. The President of the firm that he wanted to visit wasn’t even in the office! The entire trip had not been coordinated, it had not been communicated up the chain properly because the CEO who was coordinating this trip should have been talking to the CEO on the other side.

We have to make sure that the decisions are made at the right level and those decisions need to be communicated multiple times, back and forth. And you have to look for more than just agreement. You have to look for confirmation that the decision is being acted upon.

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.