Nearly every day, I work with colleagues who are eight or more time zones away. I’ve been doing this, with few interruptions, since the ‘80s. Back then, “geographically distributed” projects were run only by multinational corporations.  Times have changed.

Global markets have become more interdependent, and collaboration across borders is now commonplace, even at smaller companies.  Businesses know that they have to team up with companies in other regions to compete in the global “value creation” race*.

But a lot of companies struggle with this. In a June, 2009 survey by TMA World, 82% of respondents rated the performance of their company’s “global, virtual” teams as either ‘moderate’ or ‘poor’.  Yet nearly all of those surveyed said that global teams were ‘very important’ to their organizations.

The reason for this disconnect is that going global is a relatively new undertaking for lots of businesses. Many organizations simply haven’t “re-calibrated” for a global marketplace, and they don’t have all the pieces to support a successful global strategy.

“Expert” Advice?

There’s no shortage of advice from experts on how to improve cross-cultural business performance. Their recommendations — depending on what they’re selling — range from adopting more robust collaborative tools to receiving cross-cultural training.  Smart tools and interventions do have their place, but the missing piece at a lot of organizations is experienced talent, particularly at the leadership level.

Organizations interested in thriving on a global stage need leaders with high-level experience in regions where they’re operating, or at least in culturally similar markets.  This is particularly true for companies working in developing regions where business conditions are undergoing rapid change.

The Virtues of Seasoned Leaders

Leaders with relevant international business experience can bring dexterity to handling cultural differences in communications styles, approaches to completing tasks, and ways of handling conflict which can become magnified over the life of a project.

At a tactical (project) level, seasoned leaders with strong relational skills can recognize whether a breakdown in a project stems from a misunderstanding due to cross-cultural differences or from another source.  Seasoned leaders can take proactive steps to help their team to avoid the risks of cross-cultural misunderstanding.

In addition to interpersonal skills they’ve acquired, seasoned leaders can provide context to projects in developing regions where laws, commercial practices, and attitudes toward business are in flux.

Seasoned leaders can bring a rich perspective to multinational projects. Most of us who enjoy working in other markets are deeply interested in these regions. We become intimate with each country — its landscape, history, and politics. We devour every obscure book and report for the sheer joy of learning more, and we’re energized by putting the knowledge to practical use.

Lasting Value

Internationally-seasoned leaders can steer a steady course over the inevitable bumps and around the unexpected curves of cross-cultural projects.  The positive impact can extend across the organization long after the project or campaign has ended. They can help to shape their organization’s culture by passing on their knowledge to the next generation of leaders.

Courses in cross-cultural relations can inform your workers about handling cultural differences. But, there’s no substitute for having leaders who’ve managed high-level assignments in relevant foreign markets. My advice is this: Be sure to add international seasoning to the mix.

***

As always, I’d love to hear your views.  What opportunities and challenges do you see in the global economy, and how do they affect you?

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* In their ’08 book, The New Age of Innovation, C.K. Prahalad and M.S. Krishnan use the term R = G (Resources = Global) to describe collaboration across cultures as an imperative: “All firms will access resources from a wide variety of other big and small firms—a global ecosystem”. (I discussed the book here.)

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Want more info on this subject? Here are some recommendations from broad to narrow in focus:

I’d previously recommended Fareed Zakaria’s book, The Post-American World (W.W. Norton & Co., ’08) which makes a compelling case for the rise of developing countries in an increasingly interconnected economy.

Parag Khanna’s book, The Second World: Empires and Influence in the New Global Order (Random House, 2008), makes a compelling case for understanding the world from the standpoint of Second World countries. I reviewed Khanna’s book  here.

For a variety of books about doing business in cross-cultural settings, check out the resources at Intercultural Press.

INSEAD professor Horacio Falcao discusses how to avoid the pitfalls of cross-cultural negotiations featuring this short video on the subject.  (When do we underestimate vs. overestimate the impact of cross-cultural differences?)

Related post: International Rules of Engagement, April, 15, 2009, and various posts on Emerging Markets topics.

What resources would you recommend?

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Every service interaction, regardless of the market, presents a unique opportunity to build a lasting relationship.

Working in diverse, global markets has been a lifelong learning experience for me. One of the more interesting and unexpected insights I’ve gained is that the similarities between people outweigh the differences.  We’re more the same than they we are different. I found this particularly striking while on a recent trip with stops in Africa, the Middle East and Eastern Europe.

Once the patina of culture is peeled away, people everywhere crave the same things — respect, appreciation and attachment. I call these “primal drivers” because they’re powerful, deep-seated, and universal. Once we satisfy them, we engender trust with customers and can then uncover their unmet needs.  I think that’s where the real opportunity lies.

Understanding customers is an organizing principal in my work.  It’s a fertile area for many of my clients including airlines, mobile operators, and retailers — whether they’re operating in Atlanta, Amsterdam or Amman.

While each client faces a unique set of challenges, most benefit from finding what their customers need, want and expect.  This requires a customer-centric approach. It calls for dropping outmoded assumptions. And it calls for engaging in conversations with customers at various touch points.

Companies that master this approach outperform their rivals in almost every market and sector. That’s why I often recommend that my clients re-think their approach to customers and take steps to deepen their understanding of them.

The longer I travel and further I go, the more I come to appreciate how similar all of us are, at the deepest level, despite our cultural differences.  When we make the effort to set aside our own cultural lens, we find that most people share the same fundamental values. That’s an amazing insight, if you think about it.

What do you think?  As always, I’d love to hear your views on this subject.

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Want more info on this topic?

Visit my the website of my company, Osprey and read about our Deep Blue practice in Emerging Markets.

For anyone doing business  in global markets, I recommend Parag Khanna’s superb book (’09), The Second World: How Emerging Powers Are Redefining Global Competition in the Twenty-first Century.

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Paris Urban Pattern

I’ve recently noticed a subtle but perceptible attitude shift among Americans working in foreign markets. My overseas colleagues are noticing, too. American business people, they say, are displaying more thoughtfulness than usual. U.S. companies operating overseas seem less inclined to approach global business as though its epicenter is in New York or Palo Alto.

It’s too soon to call this a new Zeitgeist, but change is in the air. The global economic crisis, which has its roots in the U.S., may be partially responsible. I think the new vibe is also influenced by Washington’s new tone in its approach to global  affairs.  As an American doing business abroad, this is promising.

Historically, many American firms have approached business from a decidedly ethnocentric perspective–more so than many of our European rivals.  U.S. companies have missed opportunities as a result.

Things seem to be moving in a better direction now.

More Americans are coming to terms with the fact that global power is shifting away from America. It’s not that the U.S. is declining. Instead, other nations are rising. The U.S. is still a hothouse for science and technological innovation, but emerging markets are coming into their own.

We now find ourselves in a multi-polar world–one that Fareed Zakaria describes as the “Rise of the Rest“.  It’s a world where more people in other markets are well-informed and better-skilled than ever before. This is true in markets where living standards are considerably lower than ours.  The pool of business and technology talent in emerging markets is growing deeper every day. In my view, this isn’t a problem. It’s a golden opportunity, but one for which we have to prepare.

Globalization has created more homogeneous markets, but there are marked differences in the pace, etiquette and style of conducting business. These differences are more pronounced in emerging regions.  In any case, it’s immensely helpful to learn about the customs, behaviors and culture of markets where we’re doing business.  It starts by taking a considerate view of other cultures and appreciating what makes them unique. The most obvious benefit to this approach is that it helps build more durable business relationships and friendships.

How can greater respect and appreciation be demonstrated for colleagues in foreign markets?

I suggest five practices that we can undertake to improve the way we engage clients and colleagues in other cultures.  More enlightened business people working in foreign markets–including Americans–already use these practices:

1) Learn the language. At least learn enough to greet your clients but, ideally, strive for more. If your linguistic skills aren’t strong, at least how to how to greet, thank and toast your host in their native language. Go beyond merely learning “please” and “thank you”. Work on your pronunciation. Ideally, take language courses, download language lessons or–and this is my preference–hire a native-speaking tutor.

English is the language of global business, and it’s likely that your clients speak English. But, recognize that it’s often their second or third language. Never assume they understand your meaning.  Avoid slang or jargon. In any case, I suggest following up formal discussions with written summaries using direct, simple terms to recap key points.

2) Broaden the lens. Get as much contextual background information about the local culture as possible. It’s not only enriching, it helps you see your client’s challenges from their perspective. When I’m studying a new market, I gather market research as dictated by the project. But, I also try to learn about the region’s history and current affairs. I read as much as possible and talk to as many people from the region as I can before stepping foot in the market.

Learn about your client’s business culture, management practices and technology, but also get a feel for the “market context”. What’s the local business climate like? For example, many governments have recently privatized and deregulated  industries resulting in greater competition. Will such reforms continue in light of the economic downturn and, if so, how will they affect the problems you’re helping clients solve?

3) Be flexible. When booking client conferences, I observe their schedule. That means early morning, sometimes pre-dawn, conversations with clients who are 10 or more hours ahead of me. The upside is appreciative clients. (The downside, of course, is sleep deprivation.) It also means conferences on weekends with Middle Eastern clients whose days of rest are Thursday and Friday, or Friday and Saturday, and who observe different holidays. Flexibility is essential, but the rewards are substantial.

4) Integrate and collaborate. Happily, the days when a team of high-priced consultants flies into a region to fix problems for clients are over. Next generation collaboration tools like wikis are making it possible for distant, cross-cultural teams to integrate their skills and minimize project costs from start to finish. For example, our U.S. based technical team will work with a client’s process owners to develop solutions that neither team could produce on their own. Much of our team stays behind as the project unfolds. The result is a more cost-effective solution that is validated on a real-time basis by the client which also means fewer surprises.

5) Assume an attitude of humility and consideration. Approach assignments in other markets from the standpoint that the client knows what works best on the ground. Sometimes they need help seeing it from a different perspective, but their insights are valuable. My team lets foreign clients know at the start of an assignment that we recognize this fact.

An appreciative stance toward the client and their culture helps us build trust so we can move swiftly toward a more integrative solution.  A humbler, more considerate approach paves the way for a more enriching and successful assignment.

The global marketplace has undergone a seismic shift. Business people who bring a considerate attitude to their assignments in foreign markets will fare much better in a world that is now being defined and driven by talented, skillful people in those markets.

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Want more info on this subject? Read Newsweek editor Fareed Zakaria’s The Post-American World (W.W. Norton & Co., 2008).

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