Power Distance 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.

I’ve posted in depth on power distance and how it varies from one culture to another. To recap, power distance, or “PDI,” is the degree of inequality in society and the emotional distance that separates subordinates from superiors.

Many Western cultures thrive on very low power distance principles. Since most of today’s modern management theory has come directly from the West, this means these theories work great in Western cultures but tend to have problems in the East.

Most modern management expects employees to think independently, be honest and critical, question the status quo, and openly voice disagreement. Many recent management tools, such as Scrum and Agile methods, empower the employee so much that the line between “boss” and “employee” becomes blurred and — sometimes — almost eradicated.

Across much of the Middle East and Asia, this approach fails miserably. Traditional organizational structures don’t tolerate this approach. Direct criticism and questioning tends to be viewed as dissent. Respect for seniority, wisdom, and age play into it. Decision making happens at higher levels in the company, and decisions flow downward. Employees are expected to act in unison, provide information when requested, and respond like a well-oiled machine to the strategic decisions of their senior management.

The Global Project Compass™ (introduced previously) covers 27 project management disciplines. It identifies the following management disciplines as being most directly affected by power distance:

  1. Goal Setting
  2. Organizational Structure & Policy Setting
  3. Standard Compliance
  4. Business Case Validation
  5. Positive Assurance of Compliance

Goal Setting

As pointed out in the introduction, different cultures have different expectations about where their goals come from. Employees that are used to low power distance will feel slighted if they are not closely involved in setting goals, or if their voice is not heard. On the other end of the spectrum, those accustomed to being told what to do may conclude that their boss doesn’t really know what’s going on if too many questions are asked or if the boss seems to rely on subordinate opinions.

Organizational Structure & Policy Setting

Closely related to goal setting is policy setting, and that includes the hierarchy (or lack of hierarchy) in an organization itself. Employees from high power distance cultures tend to feel far more comfortable in an environment that provides clearly defined roles. That translates into greater hierarchy, and more clearly responsibilities. As Honeywell learned, without adequate training and management programs, their Chinese R&D department really had no idea how to go about inventing truly new products.

Standards Compliance

Compliance is an interesting topic to explore, because it shows off a reversal of competence along the power distance spectrum. Employees accustomed to high power distance and being given clear guidelines tend to flourish when it comes to compliance. Such standards provide a clear set of instructions, set boundaries, and make the job an easy one to follow (at least, when the standards are well documented).

Unfortunately, with poorly defined or conflicting standards, problems occur. Poorly written rote instructions rapidly lead to chaos when those instructions are in conflict — and high power distance cultures also tend to demonstrate little critical thinking or problem solving here.

On the other hand, with a team that is used to low power distance, standards can become a “thorn in the side.” These teams — trained to think critically and voice their opinions — often struggle to see the rationale or validity of standards. They might push back against them, although when the standards themselves are questionable this can be a boon: Those same teams will quickly point out flaws (and perhaps push to have the standards disqualified).

Business Case Validation

Critical thinking, scenario planning, and a talent for seeing the future are traits needed when validating a business case. These skills tend to flourish at the executive level in high power distance cultures, while the critical thinking of low power distance teams can be incredibly valuable to examine every aspect of a business model.

Positive Assurance of Compliance

Making sure that you are complying with standards is often the responsibility of the quality assurance department or a separate standards body. Power distance and organizational structure play a huge role. Assurance of compliance carries with it a need for authority. Failure in compliance means, potentially, putting a stop to project activities, and challenging the organization and the team (at least, in so far as ensuring products conform to agreed standards). Organizational structure is important, but often the standards compliance body is not set up with adequate authority — in some cases, being subordinate to conflicting objectives (such as project management). Ensuring that the right structure exists; that there is a separation of concerns; and there is authority to act, is critical, and very dependent on the cultural biases at play.

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.

Recovering From The Holidays & 10 Tips To Ease Business Travel

Getting back into the swing of things after a major holiday break or personal vacation can be a challenge. It’s January 14 already. Two weeks have flown by and I’m already behind writing this article.

It’s not just about getting back to work and getting caught up, though. For International business people, the rest of the world runs on a different schedule — and that means business kept right on moving while you were out. As I was enjoying Christmas and the New Year break here in the United States, many of my colleagues have been sending emails and patiently awaiting my return to the office. My to-do list on January 6, my first day back, was so long I didn’t even know where to begin.

Business Travel And The Chinese New Year

I remember a client’s story about his first trip to China. Bill had been talking with his manufacturing partner about visiting after the New Year’s holiday for some time. Bill always had at least three calls every week with his partner, most often talking with the production floor manager to get updates regarding progress, issues with the design process, or resolve any questions that came up. Bill’s role on these calls was to make decisions. Most often he spoke with Dewei, who ran the design and production operation. When Bill brought up a visit, Dewei was thrilled to know that he would be coming and made it clear Bill would be very welcome. He said he would take care of all the details, so after New Year’s break Bill decided it was high time to see his operation in China. He sent a note to Dewei suggesting a trip near the end of January. Dewei’s reply was enthusiastic, telling Bill it would be a great time to see China because he would be just in time for the Chinese New Year celebration. Dewei promised to give Bill a grand tour and make him feel very much at home.

He’d never been to China before, and didn’t really occur to Bill that Chinese culture would be dramatically different from American culture. Of course he expected the obvious differences: Language, food, and customs. But business was business around the world right?

Bill arrived in China the evening of Tuesday, January 27, 2009. The Chinese New Year varies from year to year, but in 2009 it started on January 26.

Dewei had arranged for a car to pick Bill up at the airport, and true to his word had made sure all the details were in order. His hotel was nicely appointed, and the hotel manager personally greeted him. Bill was looking forward to a productive week touring his factory, looking over designs, and seeing the final preparations as the factory tooled up for production.

His trip was not going to go as planned.

Even if you live and work there, you can never be entirely sure you understand. It is best to assume that you do not. — Muhtar Kent, Chairman and CEO of Coca-Cola Company

Dewei met Bill on Wednesday afternoon and announced plans to see the city. Bill was eager to see the factory, but Dewei told him it was closed for the New Year celebration. They would absolutely visit it, but there would be no point in seeing it before next Monday since all the employees were taking vacation: It was the Chinese New Year! Nobody would be working that week, and hardly anyone would be coming to the office on Monday either. The Chinese New Year is very much like Christmas and New Year’s combined in the United States. Bill’s visit to China became a cultural tour, spending the first three days and a weekend seeing the city. There was no visit to the factory until the following week, and even then only a skeleton crew showed up, mostly to meet with Bill. His agenda was completely changed, and Bill ended up having two New Year’s holidays that year. Fortunately, he was able to extend his trip and stay an extra week. As things got rolling the week after the holiday, Bill was finally able to get to know his factory.

In the long run, Bill learned a few important lessons, but he also built a strong relationship with his team in China. Spending that extra week over the holiday meant meeting the family and friends of his partner’s team. It meant getting to know everyone a little bit better, and it meant learning some small bit of Chinese culture. All of this built a stronger relationship, and it was time well invested. At the time, of course, Bill was aghast that nobody had told him he shouldn’t come until after the Chinese New Year. Much like in America, everything shuts down for the holiday, and people don’t get any work done for about two weeks. A good rule of thumb if you’re planning on visiting China is to wait at least a couple of weeks after the New Year’s holiday before visiting — and of course, check your calendar to see when it falls! This year, the Chinese New Year is on January 31. That means the first week of February, nobody’s going to be working. For two weeks afterwards, people may be on vacation, or they may be coming back to work and looking at all that email that piled up from their International partners. As they’re catching up, you’ll be waiting patiently to get back to business.

Learn To Be Flexible

Bill’s trip could easily have been a disaster, but fortunately, Bill was an easy going fellow who really cared about his employees and his partner. I’ve met plenty of Americans that are too focused on schedule and would have been absolutely furious to have had their’s interrupted. Planning your International visit is going to take some extra thought and preparation.

For example, why didn’t Dewei tell Bill it was a bad time of year to visit? I’ve written about power distance and communication quite a bit in the past (and will write much more). In this particular situation, it simply wasn’t appropriate for Dewei to correct Bill. That would have been presumptuous and Dewei’s part, and from his point of view, would probably have meant a loss of face for Bill — who is, after all, his American customer and the CEO of the company. When the CEO tells you he’s coming to visit, you say, “Wonderful, we can’t wait for you to arrive!”

10 Tips For International Business Travel

Here are a few more tips that you might not think of when planning your International business trip:

  1. Get an International calendar and be sure to coordinate around foreign holidays. If you don’t know what a holiday is, find out. some might just mean a few people won’t come in to work, but others could call for a two-week long shutdown!
  2. Look into cell phone use a few week’s ahead of time. You may need to rent a tri-band phone, or get a disposable phone on your arrival. It may not be that easy, either. On my last trip to India, it took an entire afternoon to set up an account, largely because of laws intended to limit terrorist access to data and cell networks.
  3. Plan to take more time than you think you will need. Most countries, especially Eastern and collectivist cultures, will move at a different pace. You’ll want to take time to build relationships, get to know people, and accommodate a different pace at the office. You can’t have the mentality that it’s a quick “get in and out” visit.
  4. Find out if your credit card will work while abroad, and take plenty of cash (in a well protected place). Depending on where you visit, credit cards may not be widely accepted. Also, it’s probably worth upgrading to that Platinum American Express or getting a Capital One business card, just to save the 2.7% foreign currency conversion rates (there are no conversion fees on either card).
  5. While it may seem like a lot of trouble to be interviewed by Homeland Security, getting a Global Entry pass really makes travel go more smoothly in most International airports.
  6. Consider sending your bags ahead, and confirming their arrival at the hotel before you leave. This can save you a huge headache, and makes the trip a little bit less stressful.
  7. Rely on your International partner to help you find good accommodations, set up your travel itinerary, and provide you with a car, but also be sure to explain what you are looking for. “Good” accommodations in one country may not be what you’re expecting! Knowing that you will be taken care of while visiting takes a lot off your mind.
  8. Don’t forget about insurance. Check with your medical coverage to see if they provide services and coverage where you’re going. If not, look into a short term travelers medical policy from a provider such as HTH Travel Insurance, Medex International, or Worldwide Assistance. Also check the CDC site before you go, and make sure you have appropriate medication and shots (such as anti-malaria tablets when visiting Asia, and remember most inoculations are taken 3 weeks before travel).
  9. Plan a day after arrival to recover from jet lag, and don’t forget it happens coming home too. You won’t do anyone any good if you keep falling asleep at the office.
  10. In my last post on travel and International relationships, I mentioned the work week. Be sure you anticipate the local work schedule. It might not be Monday through Friday!

Best wishes for a happy and prosperous new year!

4 Tips For Avoiding Problems With Your Overseas Partner

Have you ever set a goal with your overseas partner, just to watch that goal go whooshing past with no apparent warning? I hear this far too often from Western companies doing business with Eastern partners. It’s become commonplace. What companies in the West don’t realize is that there’s a very different approach to doing business in the East. Most of the time, the problem gets put down to “poor communication,” but that’s a mistaken assumption. In the East, what they’re thinking is “why haven’t we been given the right information to act?” Looking deeper, the root of the problem is actually power distance.

Understanding Power Distance

Power distance is the strength of social hierarchy, or simply the imposed psychological distance between a boss and employee.

You can think of power distance as the distance separating a boss from an employee socially.

In the East, high power distance cultures rely on structure and employees stay within their defined role and authority. Western management relies on low power distance and empowered communication, neither of which apply in the East. These two management approaches, the Eastern high power distance and Western low power distance, are directly at odds with each other.

The Eastern Perspective (High Power Distance)

Most Eastern (or “BRIC”) cultures are very hierarchical and structured. Direction comes from the top, and employees expect management to make decisions. Employees expect to work within their role in the organization. Stepping outside of one’s role or job function is rare, because it implies that someone else doesn’t know how to do their job. Directly telling your boss that you have a differing opinion, or that he or she is wrong, is unacceptable and would be a terrible loss of face. Instead, subtle and appropriate cues are often exchanged to communicate information to the boss, so that ultimately a new decision is handed down.

Kevin, the project manager at one of our clients, continually complained that his India-based team was “blindly doing what they were told, without thinking about it first.” He expected his team to look critically at their instructions, think about whether it made sense, and make creative improvements to the product. But at the same time, the criticism we heard in India was very different. “We keep telling Kevin we need more information, but we don’t get an answer. If we stop working, the project will be late, so we just do the best we can,” the team lead in India told us. He added, “Once they see it, we’ll get better direction.”

The culturally rich, high-context communication of the East is lost on Western partners, who are so focused on direct, simple communication. From a Western perspective, all this formality can seem to slow things down and is therefore by-passed or disregarded. Remember that the rich, high-context communication channel your partner normally relies on is missing. In its place is a vacuum, and quite often you’ll feel like your Eastern partner isn’t communicating with you. That’s probably not the case, so you need to compensate. Here are a few tips to get you started.

  1. If you are in a management role, understand the differences in power distance. Employees of your partner’s firm will rarely, if ever, disagree with you or offer their own opinion. “Over confirmation” is a possible sign that something isn’t right. (This is one reason that India has a reputation for superb execution of detailed tasks, but a poor reputation when it comes to creativity and autonomy.)
  2. Slow down communication. Your partner may need more time to socialize a problem and come up with a solution. Employees will act to inform the boss, and the boss will circle back with you.
  3. Don’t interrupt silence. Silence is a form of communication, and many Eastern cultures will use that silence. Pushing forward with an agenda too quickly will just rush your partner.
  4. Make sure that decisions are made at the right level. Just because you talk about something with your partner, don’t assume that person has the authority, or even the role, to make a decision.

The Western Perspective (Low Power Distance)

In stark contrast to high power distance cultures prevalent in the East, the West’s low power distance culture fosters flat organizations. Individuals are empowered to make decisions on their own. Pointing out problems is expected and rewarded — even when that means telling a supervisor they made a mistake. Western management style relies on this in order to work correctly. For example, Scrum and Management By Objective (MBO) both challenge employees to find creative solutions, be vocal, and be direct about problems. Individuals are expected to take charge and make things happen on their own; they are rewarded for discovering problems, and even more so for discovering solutions.

For many Easterners, this almost feels like everyone is the boss. It can be very disconcerting. Here are a few strategies to keep in mind when working with your Western partner.

  1. Westerner’s will value you “at your word,” which means it’s important to do exactly what you say you will do. Remember that you are empowered to make decisions, but that also means you must actually do what you say. They probably won’t pick up on subtle cues, so be sure to say exactly what you mean.
  2. Remember that most Western cultures tend to be strongly agenda driven. It’s best to prepare for meetings ahead of time, and don’t expect to socialize or build relationships during meetings. This is usually done after business hours.
  3. If you feel rushed or out of time, it’s acceptable to ask for more time. Tell your partner you are still discussing the topic and require more time to reach a decision.
  4. Don’t forget that you are expected to question what you and your team are doing. Your Western boss will value opinions, especially if you catch a problem or mistake before it turns into a bigger one.

Probably the toughest change for someone from a high power distance culture to understand is that everyone is expected to provide critical feedback, challenge assumptions, and question what is going on. In business cultures such as America, Germany, and the United Kingdom, these are distinguishing characteristics.

The Best Strategy

Western businesses assume they should put their latest management theory into practice, not realizing that Management By Objective, Agile, Scrum, and other Western “best practices” don’t work in Asia. Managing a global team only works if everyone understands business cultural preferences. Management style needs to be appropriate within the team’s own culture. Also, make sure your project manager has ample experience in the culture at hand. Managing a team in China doesn’t qualify someone to manage a team in India.