Santiago

Santiago, Chile Skyline

Mario Jimenez is a principal architect in an internationally expanding firm. His roles are to develop the project scope and pricing, sell the project to the client, and then manage the project and client expectations. In his home country of Chile, Mario understands the business culture and operating environment. But now that he is expected to manage projects in new markets, he is unsure about what changes he needs to make to develop a strong international reputation and grow the firm’s profits.

How Critical Is It To Be On Time & On Budget?

The answer to this question (like so many in international markets) is… it depends. In most “universal” cultures (1), a service project’s costs and timelines are taken very literally. If the project is supposed to be completed on 5 March, then it had better be completed by that date to make the client satisfied. Universal-culture countries include but are not limited to: Switzerland, Sweden, Australia, United Kingdom, Austria, Canada, Germany, Belgium, Denmark, Finland, New Zealand and the Netherlands. The challenge is predicting outside factors that would delay deliverables or increase project costs. If our Chilean architect, Mr. Jimenez is going to bid on projects in these countries he will want to add in more time and budget than he usually does to cover the project’s “unknowns”.

The rest of the world tends to be “particular” and for Mario Jimenez this means that unanticipated external factors are expected as part of the project. Mr. Jimenez would adjust his actions based on new circumstances. Likewise, any changes to circumstances would be grounds to open up a renegotiation of expectations. Particular cultures include most countries in Asia, Africa, southern Europe and Latin America. While it may be more accepted that plans change, your client still won’t be particularly happy.

How Do You Handle Additional Costs Incurred?

In universal-culture countries, you would be expected to take on any additional expenses that help you reach the agreed-upon deliverables. If that means that you need to hire extra people to get the job done on time, it’s just part of the agreement. That’s why having a “cushion” of extra time and budget is so important. This may mean that you are not the low-price vendor, but it means that you are more likely to turn a profit should you win the project. In particular-culture countries, there is room to negotiate. A good idea is to put aside additional deliverables or other value-added services that would not take much extra time or expense to offer. If the project is clearly going to go over budget or over time, you can use these additional deliverables to help appease your client. The client likely must answer to investors or other stakeholders, so the additional services helps him or her have that difficult conversation about why the project is delayed.

Additional Tips:

Handle conflict in person, whenever possible. Distance does not help when a client is upset. If at all possible, a visit to the client can help them feel that you truly care about their situation.

Be ready for different levels of emotional display. Mario comes from a work culture in Chile where people express their emotions more openly than in places like Thailand or Japan. It may be challenging to read how people are really feeling. Likewise, an angry Egyptian will be extremely clear about their perspective. Regardless, it is important to keep calm in most situations. Responding with anger will not resolve any issue. Calmly listen, ask questions, state your positions and discuss potential ways to move forward.

I hope this article was helpful to those engaging in international service markets. I invite you to download my free International Negotiations Preparation Checklist to help you in your next overseas negotiation.

(1) Fons Trompenaars, Riding the Waves of Culture. Published 1998.