Should We Be “Culture-Blind”?

Last week, we hosted a housewarming party in our new home and hired someone to tend bar. Our friend had told us this gentleman was from Ireland but when we met him, he spoke with a perfect American accent. When I asked him about it, he switched immediately to his natural Irish diction.

I’m always impressed when someone can switch accents so effortlessly, but I was more curious about why he did it. When I probed, Ben confessed that using his Irish pronunciation led to a constant onslaught of tiresome questions. People in the US don’t know a lot about Ireland and the assumptions they make and questions they ask have not been particularly inspiring for him. So Ben said he chooses to avoid them all together.

This conversation got me thinking about the notion of being blind to others’ culture. What does it mean to embrace, honor, and be excited about languages, accents, and cultures? If we aren’t celebrating and embracing our differences in a way that doesn’t have genuine interest or knowledge of the world, should we ignore them and not talk about them? Should we just embrace them as part of the diversity that we live with (particularly in the United States)? Or, should we use them to so that we have richer conversation about other parts of our world?

Ben, the bartender, seemed to prefer that we might interact as if we are “culturally blind.” That is, that we treat all people the same and ignore the differences we may have. That goes a bit against my nature but it’s what I have experienced in the business world, too. For example, a workshop I recently held in Silicon Valley was attended by people from all over the world. The differences in these professionals’ backgrounds were never discussed between them. Working in a melting pot – with diverse cultures, languages, and accents, was nothing new for them in Silicon Valley.

After some reflection, I don’t think the solution (in either case) is to act culturally blind. Instead, I think it’s time for us to become savvier in the ways that we operate in a globalized world while at home or in the workplace.This means developing a global mindset or truly having the desire, knowledge, & skills to operate effectively in today’s world—in business and elsewhere.

The Najafi Global Mindset Institute developed a three-pronged framework with “capital” or “competencies” to define global mindset. I used this framework below to suggest tips to help you on your way to developing your global mindset.

Intellectual capital: Be knowledgeable about the world. Know where countries are and what cities there are named. Learn how things work, logistics, politics, and how they approach business dealings.

Psychological capital: Check in with yourself. Are you open and willing to learn about others? Do you have interest in exploring or learning about cultures or languages?

Social capital: Obtain specific skills in diplomacy and empathy. Learn about how diverse cultures prefer to be communicated with.

If we switch our minds to think in a more global context, our lives will be richer, our businesses more successful, and people won’t feel they have to hide their accents from us. To learn more about global mindset, view this video.

How to Go Global: Questions Execs Ask

I meet a lot of executives from all over the world and they ask me a lot of questions about expanding their business globally. Perhaps frustratingly so, my answer often starts with —“It depends”.

Let me explain.

No country, culture, or community is the same. So, when an executive asks what will be the return on investment in country X, the answer for country Y may be completely different due to differing tax structures, laws, and regulations. IKEA, for example, started in Sweden but is headquartered in the Netherlands due in large part to tax considerations. Another question execs often ask is about which markets make sense. Well, Walmart thought Germany made sense. It is a large country with a robust economy and strong legal and regulatory environment. But it was a bust because Walmart did not take the time to learn about the country, follow on others’ successful tactics, and adapt a plan as needed.

The problem with these high level, general questions about where and how to expand across borders is that they don’t delve deep enough to give you a clear picture of the market. That doesn’t mean that you shouldn’t ask high level questions. The trick is to ask the questions a little differently. For example, better questions to ask would be:

What’s a reasonable level of risk and reward for us?

Companies have different tolerances for risk. They have different expectations of reasonable ROI. For most expansions, you should expect ROI to increase as you do businesses successfully in a new country.

What kinds of markets make sense for us?

What are the characteristics of markets where we’re more likely to be successful? Analyze your company by looking at your strengths, weaknesses, and experience. Then, consider your strategy and look for markets where you’re more likely to succeed.

So, before thinking about going global, here’s a homework assignment.

Analyze your own company. Highlight your strengths and weaknesses. Analyze your tolerance for risk and your expectation of reasonable reward. This takes a while to do if you do it formally, but you can probably make some rough-cut judgements in a meeting or two with knowledgeable people. Whatever judgements you come up with will be preliminary. As you do your research, you will loop back and modify them, but they’re a good place to start.

Next, make a list of the countries where you may want to expand. Then you can start doing some background research.

Make an appointment with yourself that for 15 minutes every day during the next month you’ll scan international news, go to websites, read the Wall Street Journal, the Financial Times and the Economist. Look for stories about the countries on your list. Scan for stories about companies from your home country who do business in the countries you’re considering. Find out more about them. Take notes.

Even better, have several executives at your company do the same thing. Then compare notes once a week. By the end of the month, you will have developed an intuitive sense of how things are in the countries you’re researching.

Remember, you’re not looking for generic great opportunities. You’re hunting for clues about what global expansion makes sense for your company and your strategy.

5 Considerations to Expanding Your Company Internationally

So you are ready to go global? Before you do, there are issues you need to consider first. There are many different ways to assess these issues in the external environment for doing business either in your home country or another country. Almost all of them use an acronym to help users remember all the dimensions, but these always seemed very academic to me. I prefer to be more straightforward and practical. So I don’t have another fancy acronym for you to remember, but I do have a list of five kinds of issues you should consider when you analyze a market for potential expansion.

Politics. This is the political and regulatory environment. How do the official laws and regulations affect the way you will do business?

Every year, the World Bank issues a report on how easy it is to do business in 187 different countries. The report measures how the regulations in ten areas affect the ease of doing business and ranks countries accordingly. The areas are starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, and resolving insolvency. The report also measures labor market regulation, but does not include it in the rankings.

It’s important to dig down to the details to discover how the government is involved in business. China, for example, has state-owned companies. In South Africa the Black Economic Empowerment (BEE) initiative is taken quite seriously and prioritizing job and economic opportunities for Black South Africans is a very important aspect to investing in the country. Government officials are going to ensure requirements are fulfilled.

Infrastructure. The physical environment can make things easy or more difficult to do business. Transportation, communications systems, sanitation, water, and the electrical grid are all examples of infrastructure. When the systems are good it makes it easy to do business.

It’s not enough to know the rating of a particular country’s infrastructure. Once again you’ve got to get beyond the basic numbers to the details of the infrastructure to know how it will affect your business and the people who work for you. In many emerging economies, reliable electric service is rare. If you expand there, will you need to provide your own, reliable electricity, or will you allow for the disruptions that blackouts and brownouts can cause?

Here’s another example. In India and Brazil, there is a young, well educated, workforce hungry for opportunities, but logistics is a major concern. Many high-tech firms provide transportation for employees in order to minimize downtime and maximize productivity. Traffic is very congested in the cities and it can take hours to travel back and forth to work sites.

Something that seems simple, like participation in conference calls at non-peak work hours is normal in the US and Europe. People commuting to and from the office by car can be on a call undisturbed. Calls taken on a noisy, densely populated bus become impossible and can impede productivity, particularly working across time-zones.

When you’re analyzing infrastructure you should analyze the effect on your operations and also on your people. Ask yourself what special things you will need to do so your operations will run ethically and profitably.

Safety. Safety is important everywhere but it’s an especially critical in certain markets. In some parts of the world occurrences as extreme as kidnapping can happen. Foreign executives make good targets. They usually work for companies who will pay a ransom. And because they’re not familiar with the area, they may put themselves in danger without realizing it. Be aware of your surroundings and make sure you’re prepared.

Security has two aspects whether you’re analyzing the situation for people or facilities. First what is the threat level? Once you’ve assessed that you can develop tactics for preventing an incident or for dealing with one.

Society. Be aware of the strength of family ties. In countries where the people have exceptionally strong ties to family, the workforce may be less mobile which will affect recruiting. You may have to make provisions to include flex-time and support familial connections in countries where family ties are especially important.

For example, Volkswagen, in South Africa, grappled with how to handle days off for employees who had a death in the family. Two weeks for burial preparation and grieving is not unusual there. And sadly, given the high rate of disease, the rate of death is a bit higher than elsewhere.

Culture. There are many cultural aspects that influence the success of business negotiations. How quickly relationships are built, motivators for driving business, and the importance of third-party introductions. Be aware that money may not always be the key driver, but considerations you may not have thought of. It’s very important to have conversations with local partners to determine the best path forward.

If you take the time and make the effort to learn as much as you can about yourself, your company, and the market you’re considering, you are setting yourself and your company up for success in any market you target.