Friday, April 03, 2015

What Should You Know About Culture When Doing Business Globally?

I come up a lot against the issue of culture, given that I mostly do what one would call International Business, and do so in Education, an area which is so culturally specific that most people banish both International and Business from vocabulary when dealing with it. So, in my day-to-day interactions, I both come across the Not-invented-here syndrome, that anything from a different culture should be rejected out of hand, and its inverted form, that culture does not matter.

Indeed, I have a view, and I shall claim to be qualified to have one in this case. This, not just because I migrated mid-life and settled in another country, but because I escaped the entrapment of my native culture by deliberately trying to see it from outside. This, I believe, worked better for me than just reading about culture, which I had to do for professional reasons, and indeed, doing so made me think about the limitations of engaging with culture as a technical thing, a system of acting in a certain way divorced from its reasons. I have forced myself to be an Outsider-as-Insider, questioning things that I myself do, think, believe and behave as.

So, with all that, let me return to the central question, with an added emphasis - what one must know about culture when doing business globally?

One, that Culture is NOT just Custom. The success of the culture training industry, all those Gurus and Books and Lectures, made culture a more difficult thing to handle. This is because culture has become synonymous to Custom, and every aspiring International Business Executive gets a training on assorted national peculiarities, divorced from its history, context or ideas. This will cover how to kiss, bow or shake hands (or shake heads as in case of India) but miss the stories such as why a Viennese shop may display a red-and-white spear (in memory of the Turkish siege of the city) or why the trumpet call at St Marys Church in Krakow stops so abruptly at mid-tune (because the trumpeteer was killed mid-tune by the arrows of advancing Mongolian army in the Fourteenth Century). It is stories like this, of glory, passion and victimhood, that underlie culture, which is all about understanding how people think.

Two, culture is NOT a soft thing that could be ignored. It is not a soft thing, but a hard reality. Peter Drucker said something about culture trumping strategy while talking about organisational culture. In case of global business, the culture of the market has a strategic significance many times more. It is not something that one can capture in a spreadsheet, but perhaps one can model, with a bit of effort. It is a mistake to brand culture as irrational, because it is one of the foundations of rationality - it provides the context of all thinking, in fact!

Three, that culture is NOT going to converge. This is one of the Silicon Valley assumptions, that with Internet, every one will have the same consumption pattern, and therefore, similar ways of thinking. But it is actually the opposite - cultures are diverging even further! Facebook does not change cultures, cultures change how people use Facebook! The globalisation apocalypse, the notions of flat world, has been proven to be wrong, and this is not just because of a recession. Once various cultures around the world got access to different tools of globalisation, they changed them to suit their own requirements.

Four, that cultures can NOT be good or bad. There is always a bit of evangelizing going on, given that we treat cultures as peculiarities. But then cultures are what it is - it is not a thing to be judged, but rather what defines the context of judgement. One may say that there are things which are plainly wrong, like Cannibalism or suppression of women, and surely these practises are rather abhorrent. But these debates are won or lost within the context of the culture where they were prevalent, and did not indeed invalidate the moral notion of the entire culture!

Five, that the culture of the company must NOT take precedence. And, indeed, this is a common, and common sense view! One can not run a company with multiple cultures. But, most successful global companies do exactly that - and define the company culture not around elaborate and culturally specific processes, but as a minimum common ground of ethics, commitments and ideas, where all cultures could meet. Finding this common ground is indeed the holy grail of building a successful company. In all other cases, the culture of the customer, the person who is paying, should take precedence over that of the supplier, a thumb rule I followed in my work successfully.

I made this list mostly looking at the oft-repeated mistakes, which even seasoned executives make. This is because, as Pankaj Ghemawat would say, going global is often not driven by real strategy, insight, commitment or even passion, but hubris! I have been told by companies that they dont have time, and intent, to learn too much about their markets, and I would tend to feel that this is not unusual. Such arrogance is a recipe for disaster, but they stem from the views I tried to negate here. There is indeed no royal road to cultural intelligence - it is only through humility, engagement, respect and commitment that one could learn a thing or two about how people think and behave. Angel Cabrera and Gregory Unruh of Thunderbird Business School provided an useful framework for such engagement, dividing such knowledge and ability in three CAPITALs - Intellectual Capital (knowing about the place and people one is doing business with), Psychological Capital (Understanding the place and people one is doing business with) and Social Capital (making friends with people one is doing business with) - but this, like anything serious and worthwhile, needs commitment and time to be really doing it.



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