So you think you are ready to take your company global? Hmmm Maybe not. Consider this: Research shows that 50% to 70% of all deals fail because of culture and communication.
"It’s The Silent Killer because
it is rarely diagnosed, even after the deal is dead."
The issue comes from underestimating the role of cross-cultural understanding in the successful development of global markets. Preparation, of course is critical, but so is having a global mindset.
One of the pitfalls in global expansion comes from trying to get results too fast. There is a strong tendency to go for the quick win, to take the shortest route to a deal, and skip some of the preparation that is critical. Your focus must be on building solid and lasting business relationships that will create a foundation for long term, sustainable business. That requires understanding the culture and adapting to it.
"To do any kind of business, trust is critical.
And how can trust emerge if people are not communicating effectively?"
With business increasingly conducted in English you may have a false sense of comfort. You understand the words but you may be missing the person’s meaning entirely. I am French and when I got my first performance review in the U.S. I completely missed what my boss was trying to tell me! In France, a “low context” country, if someone says you are doing a great job, then the message is simple: you are doing a great job! There is no context that needs interpreting. The extreme opposite would be in Asia which is very "high context", meaning that most of the message is in what is not said. I would have better understood my boss’ remark if I had given more weight to the context of the conversation. This happens because we all carry our own cultural assumptions into a dialogue. A global mindset means you have learned to take your assumptions out of what is being said. It takes time and effort but the good news is that if you show a willingness to do this, your counterparts will appreciate it enormously and blunders will be forgiven.
"It is not about reading the etiquette book;
it is about opening your mind to see where the other person is coming from."
Not adapting your product to the customer in the foreign market is another very common mistake that even corporate giants frequently make. Speaking about the failed global expansion of his company in the 1990’s, the founder of Intuit, Scott Cook, said: 'We should've known better'. So what went wrong? After years of success in the U.S. with the Quickbooks accounting software, Intuit launched in several European and Asian countries. After an initial success, sales started plummeting. Cook went to the countries to investigate and was struck by this user’s question: “Why does our product look just like an American product?” Intuit had built a product in the U.S. that was highly intuitive (hence the name) for a U.S. user, but only translated the materials for foreign markets… They failed to realize that people approach things differently across cultural boundaries. Intuit withdrew from their overseas markets and didn’t attempt it again for over a decade.
To avoid such pitfalls we suggest you find a guide to help you navigate your new market.
The G2 Experience is an immersion program that helps companies trade across borders more effectively. To learn more, go to www.g2experience.org or call Sophie Lechner at +1 917 859 5268
This article (slightly modified) initially appeared in The TEP Times (Transatlantic Entrepreneur Partnership)
Thanks to the French American Chamber of Commerce Co-working Space for introducing us to the TEP Times.