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The International Entrepreneur – Maximizing Potential in Your Multicultural Team

ConfidenceEntering the room, you can feel the tension. Your multicultural team, representing different company interests, is sitting around the table. One confident young man boldly answers your first question and others look blankly ahead. How can you possibly get this team to accomplish anything if they can’t work effectively together?

One of the greatest challenges in international business expansion is bridging the cultural gap. Team members have to understand how their approach to group dynamics affects others in order to avoid alienation and everyone counting down minutes until the meeting ends.

The multicultural team is one of the most underutilized aspects of international expansions, mergers, and partnerships. In fact, on more than one occasion I have heard frustrated managers refer to their team as “performing” and their role as one of “babysitting”. The challenge for both the team leader and members is to leave behind assumptions and find the unlocked potential of the team’s productivity and usefulness. Here is my advice:

 

Know the Likely Points of Contention Between Team Members

When various cultures mix, there is likely to be friction. One important issue is how to deal with conflict. A German team member may want to articulate the issue and how it occurred, including assigning fault. Those from indirect communication cultures find this rude and disrespectful. A key ingredient to high-functioning teams is trust, and for most from Asia, Africa, Latin America and the Mediterranean area, this directness just lost the trust.

The important thing is to know who is on the team and what can be learned about their native work culture ahead of time to anticipate some of the obvious flash points.

 

Create a Common Goal

This is especially critical for multicultural teams. The goal helps to create a common set of terms around what needs to be done and what the outcome will be if successful. The clearer the goal, the more likely it will be that the team will perform to reach it.

 

Establish a Framework for Team Norms

Team leaders often default to the social norming for teams in their home culture. And often little thought it given to how this style is received by team members. A leader from Chile may use storytelling to emotionally connect with team members. But the Canadian may be annoyed by how long it is. The direct communicators in the team will likely tune out many anecdotes. There is middle ground, but it must be defined in order for both direct and indirect communicators to speak and interpret for the same situational understanding. Perhaps this means limiting the amount of anecdotes or explaining that this is a useful tool to understand perspective.

It is also important to establish a way to make decisions as a team. Must decisions be unanimous? Is there a point where discussion will be stopped and the team votes? Or does the team leader take the input and make the decision? Never assume that other cultures make decisions in a similar way.

 

Head Off Issues Early

If the team is underperforming, then it is better to investigate the root causes sooner rather than later. Issues may have an easy fix such as clearing up a misunderstanding. A common problem is a team member that stays quiet. It may be helpful to forewarn this person that you will be calling on them and to be prepared to share their perspective. It is also helpful to give this person permission to give an answer contrary to others in the team.

A word of caution: if there are indirect communicators in the team, DO NOT bring up team communication issues in an open team meeting. Indirects do not like discussing issues in a group setting (again, it’s considered rude). Ask questions of individuals in private instead.

 

Take Advantage of Diverse Perspectives and Strengths

This is why a multicultural team can be so powerful! Instead of seeing an issue or opportunity from a limited set of assumptions, those from a diverse background can bring ideas and solutions from more varied experiences. There may be a best practice from Brazil that no one in Italy has ever heard of before. In confronting similar issues, there are infinite ways to approach solving them. When an unexpected solution is presented, be sure to ask questions to understand the underlying assumptions that led to that conclusion.

 

Stay Positive & Focus on Progress (Patience)

Multicultural teams may be more challenging to manage. But as the team leader, it helps greatly to encourage participation and stay positive with the team about any progress. That doesn’t mean sacrificing results or progress towards results. Building the team’s effectiveness may take a little more time.

Overall, building an effective multicultural team is much better than languishing in frustration. Instead of underestimating the contributions from collaboration, focus on maximizing team’s performance. This means balancing the interests, communication styles and cultural assumptions. If you need help getting more from your multicultural team or staff, please contact me.

Onward & upward!
Becky Park

The International Entrepreneur – How International Expansion Affects the Rest of the Company

How International Expansion Affects the Rest of the Company

Expanding your company internationally represents both great rewards and risks. Going global can exponentially grow well past the limitations of your domestic market. But one of the greatest challenges to success can lie within the company’s structure and staff. This article is focused on how an international expansion affects the rest of the company and where to focus your planning beyond business development in foreign markets.

Always Start With Strategy

The key to international expansion is ensuring that your plans align with the company’s overall strategy. Here are some questions to ask your leadership team:

1. Does this expansion fit into the VISION we have for where we want the company to be in 5 years? 10 years?

2. Does the expansion into global markets match the company’s IDENTITY to our customers, our industry stakeholders and our employees?

3. Does this expansion fit with our FINANCIAL GOALS and the ultimate EXIT STRATEGY?

4. Is our company’s STRUCTURE organized in a way where domestic customers and new foreign customers can both be served?

Many companies start expanding internationally while continually chafing against a clash with existing strategy or unspoken assumptions about direction. It’s better to halt expansion plans without this strategic alignment. This holds true for organic international growth as well as foreign company acquisition.

 

Incorporating International Into Existing Functions

It is critical to integrate international activity into the rest of the company. One of the biggest mistakes I repeatedly see in companies is to establish”International” into its own separate department. The problem with this structure is that the rest of the company begins to disassociate from international and decisions are made elsewhere in the company that do not optimize for all world markets and customers. Eventually leadership tends to shut down the International Department for any number of reasons. Shutting down even a successful operation is easier than working through issues with this “foreign entity”.

Here are some ways that international expansion can affect some core business functions:

  • Accounting– Different required accounting reports for government, different norms for handling accounts receivable, need for bribery/corruption strategy
  • Business Development/Sales – Different customer buying patterns, different negotiating styles & techniques, different compensation structures
  • Customer Support– Local dialects and languages, different expected modes to access service information, different ways of expressing emotion
  • Finance – Exchange rate fluctuations, repatriating profits, access to financial capital and banking services
  • Human Resources– Staffing for language coverage and other international business skills, updating company employee policies to ensure that they apply to international situations, training needs
  • Information Technology– Planning information systems to reach new geographic locations (extension of existing systems), evaluate the need for greater integration for efficiencies in serving more markets
  • Legal – Understand legal implications of doing business in new countries/locations including intellectual property rights, employment law, commercial registrations & other regulations governing foreign companies
  • Logistics/Shipping – International shipping forms & regulations, hiring a good freight forwarder, managing shipping costs & ensuring that those costs are built into pricing
  • Marketing– Country laws governing marketing activities, different customer preferences, different communication preferences, different style preferences, translation/localization of materials
  • Product Design/R&D– Manufacturing input requirements (materials AND country of origin), metric vs. English measurement, different packaging requirements
  • Production– Increased unit production for additional demand, any alterations to products that stop production before product batch can run, inventory storage
  • Supply Chain Management – Sourcing any newly required materials, and hopefully discovering better quality or less expensive supplies/materials available in the new geographic markets!

 

Managing Company Culture and Expectations

Cr0ss-cultural leadership is the area most overlooked and also most likely to derail an international expansion from within the company. All it takes is for one key employee to view serving international customers as a burden and product orders are delayed, shipping costs are inefficient, or marketing copy is left unchecked for localization. Just like any big change in the company, the change must be managed internally with staff. This means communication from leadership about international markets’ role in the company’s plans. It means training for any staff interacting with the new foreign customers. And it means incorporating international success into employees’ performance objectives and expectations.

When I am working with a company client that has this as a risk, I normally recommend inspiring employees with their expanded international role in the company’s success. Change is uncomfortable for most of us, but when we understand the reasons for international expansion and its importance most employees normally play a positive part. Cross-cultural training can be a wise company investment. It also doesn’t hurt to highlight fun parts of the new country’s culture: celebrate holidays like Cinco de Mayo, display country travel posters in common areas, etc.

 

For more information or ideas about international expansion planning, please contact Becky Park, The International Entrepreneur. Becky works with B2B technology and professional services companies to help them become more competitive in global markets.

The International Entrepreneur – Chinese Business? Interview with Ding Zhengli and Tan Xiaoran

Ding Zhengli

Ding Zhengli

Today I have the privilege of interviewing Chinese business consultants, Ding Zhengli and Tan Xiaoran, who both studied in the United States and now add a cultural bridge to companies looking to expand business in China. Mr. Ding and Mr. Tan are a Principles of Global Progressive Solutions, a firm focused on global business strategy with particular concentration on entering and succeeding in the Chinese market.

The International Entrepreneur (TIE): Zhengli and Xiaoran, you have spent time in both American and Chinese business cultures. Do you have any recommendations for American and British professionals looking to better understand the Chinese market?

Zhengli: For this question, I’d say make some Chinese friends. I think this is the easiest way to get a fast access to know Chinese culture. Knowing Chinese in the real world will bring direct feelings and experience to American and British professionals. But in the real business, it won’t be enough time to find a good Chinese friend. I think western professionals should have a mentor for their Chinese market. The mentor should have deep understanding of both western culture and Chinese culture. And always be aware of your Chinese partners, employees and customers. As a collective culture like China, group harmony is a great deal for projects, assignments, companies and business. Treating people like family and friends would build the relationship faster and longer.

Tan Xiaoran

Tan Xiaoran

Xiaoran: I think doing business in China is not only about business. A deal is not just a deal. There are many social activities will be involved in all processes, such as tourist visits, dinners, night events and leisure activities. Chinese believe they are doing business with people who have their own personality. Such social activities can help Chinese learn about the people’s personality they’re dealing with. Participating in social activities can help build strong relationship and gain trust from each other. So be prepared for long conversations about family, sports, political topics or any other non-business things.

TIE: What are some fundamental ways that marketing a B2B product in China would differ from how we would approach this process in the UK or US?

Zhengli: I think this depends on the type of products. If it’s a manufactured product, online clients like Alibaba would be a good choice. These kinds of clients have built a great brand image as having all kind of products online. It’s easy to find selected products on those websites. But one thing should be aware of is bargaining. Even if a product is listed on the website, a customer could possibly bargain about the price if they think their bottom line is reasonable. Negotiation skills are really important here. If a foreign company is selling something, the customer will be satisfied if they can bargain the price lower.

If the product less tangible (ex. software), create a detailed “white book” in Chinese. But the real deal should always have personal contacts such as phone calls or visits even the customer has already paid. Those personal contacts can give customers a feeling that they are really important and they are dealing with humans, not companies.

Also, in B2B marketing and sales, be aware of titles. Always do a title match before meetings and calls. You don’t want your middle level managers talking to a company’s CEO, at least a match with a top guy from a related department. And say sorry for your boss to the other party if he cannot attend, so they do not lose face.

TIE: Many companies are trying to save costs and effort by directly translating their company website to simplified Chinese. From your perspective, what kind of potential (if any) is lost by not localizing?

Xiaoran: I think it still depends on what kind of business. Industries selling products such like equipment, pharmaceuticals or other real existing goods, directly translating their company website would not be a bad idea. Customers who need these kinds of products make their decision based more on products’ quality and price. Those companies could also use B2B websites such as Alibaba to reduce their risks of a bad translation. They only need to be careful about their product’s name in Chinese: it might have a different meaning.

For companies with low brand recognition in China, directly translating the website would not help their business in China at all. Chinese customers prefer to know someone in the company or know the company first, and then they take detailed look at websites when they are looking for services. Certificates and prizes would help companies on attracting customers, but most U.S or UK companies don’t highlight those on the website. Most Chinese, especially middle-age people don’t treat online searching as a way to look for partners or business opportunities in service industries. Chinese are more willing to talk with you face to face or on-line, rather than just sending messages or emails. This is the way Chinese building trust with their partners or customers. So the website needs to support building trust through more direct channels. And for sure, you need a localized website for your service in Chinese and has every detail about your service, your company’s professional experience/rewards, and your special deals! Remember, Chinese love a great deal.

 

About Ding Zhengli and Tan Xiaoran

Born and raised in Hubei, China, Ding Zhengli is Chinese national with a highly diverse background. Zhengli attended Huazhong University of Science and Technology in Wuhan, receiving a Bachelor’s degree in Electrical Engineering. After graduating from Huazhong University, Zhengli came to the United States to earn his Master of Science in International Business at the University of Colorado Denver. After living in the United States for more than 3 years, Zhengli became one of the founding partners of Global Progressive Solutions (GPS). He is a skilled consultant concerning U.S. companies wanting to operate in China.

Tan Xiaoran was born and raised in Changchun, Jilin Province of China. He has a Bachelor’s Degree in Accounting. Xiaoran has been living in USA for more than 3 years, and received his Master’s Degree of Economics from The University of Colorado Denver. Due to his extensive experience in Chinese banking and politics, Xiaoran has developed deep knowledge of building relationships and dealing with businessmen in China. He also has strong connections in northeast region of China.

Contact Ding Zhengli and Tan Xiaoran: [email protected]globalprogressivesolutions.net

 

The International Entrepreneur – Tips for Working with an In-Country Business Agent

BrazilAnyone can go to a country like Brazil and try to set up business operations and sales channels, but to truly make the most out of Brazilian business opportunities, it is best to hire the services of a “Despachante”. Despachante is a word derived from efficient in the Portuguese language, but it normally translates to business or customs agent. This person has many industry and government connections. Without this person’s help all business tasks can slow down to a glacial pace. This role may have different names in various countries and languages, but in Africa, Latin America, Asia and parts of Europe, a local business agent can help make your business interactions with government agencies and other vital business transactions run more smoothly.

Before Americans go running for the hills in fear of being arrested for corruption under the U.S. Foreign Corrupt Practices Act, much of what a business agent does is legal. They know how business is done, which lines to stand in, what permits are needed, which lawyers are honest, etc. Here are tips for working with an in-country business agent:

Hire Only Intermediary Agents that Come Recommended from Trusted Sources

This is important. Be wary of business agents approaching your company at trade shows and through direct mailing/calling campaigns. While there may be reputable agents in the mix, you can just as easily put your trust in the wrong agent who could actually be working directly against your interests.

Instead, contact your country’s consulate for referrals for that market or else the local chamber of commerce. Check more than one source to validate the reputation of a particular business agent BEFORE starting to work with them in the new market.

Keep Clear Accounting Records for Transparency

In countries like Brazil and China, the business agent may operate in a “gray” set of business practices where government officials and key business contacts expect to be bribed for expediting your company’s paperwork, bank transaction, etc. If you are American or any other nationality that has strict anti-corruption laws, your company cannot directly OR indirectly bribe officials in any country. The best way to make sure that your in-country business agent does not act in a way that could leave you vulnerable to criminal or civil indictments is to require full transparency of how your fees are spent. It may be difficult to get this information from your business agent, but you will sleep easier at night.

Keep in Regular Contact

While working with a business agent, it helps to keep regular contact. Some companies make the mistake of signing an agreement and then rarely reaching out to follow up on tasks that the business agent should accomplish. Regular contact helps keep a business agent focused on moving your business interests forward and brings process and information bottlenecks to your attention sooner for resolution.

Provide Enough Product and Company Information to Understand Your Business

A business agent might not have extensive industry experience and so may not be well-versed in what you sell. Be sure to provide product and company information, preferably in the agent’s language, in order to avoid misunderstandings. This information should include how your product works, who it is normally sold to, company history and key company policies (ex. Anti-corruption). Do not be surprised if this material is not initially read, but refer back to it as a resource for your business agent if you hear discrepancies between what the agent has said compared with the written information.

If you would like more information about setting up and managing business agents abroad, please contact me. I wish you the best of success in all of your international business dealings!

The International Entrepreneur: Think you know American values?

American culture values doing business internationalLike most of my readers, my business focus is on the world. As an American doing business internationally, I see my fellow countrymen sometimes make assumptions about other business cultures and fall flat in business relationships. The American cultural traits listed below all have implications for Americans doing business abroad.

The world keeps changing, but I think it is important to note that cultural values tend to remain steadfast over time. The United States does not have a long cultural history compared with cultures like in China or India. But its cultural characteristics have been present since before the American Revolution. These traits may be applied in new ways to work within our changing environment, but understanding them gives key insights into how Americans approach business.

Caveat: These are culture generalizations and all traits to not necessarily apply to all Americans in all situations. They may be more or less pronounced in specific regions of the country.

Mainstream American Cultural Traits

1. A high value on “Material well-being”.Anyone traveling through one of the American suburbs can see this cultural trait in action. In its more extreme form, it is materialism. While some cultures share this trait, there are many cultures that rank this as a lower priority. Americans are often willing to sacrifice leisure time for work time, meanwhile all of France goes on vacation in August.

2. 2-fold judgment based on principle. Americans often look for the simple answer to complicated questions. This may be a reason why American businesspeople conduct business so quickly. We don’t always spend the time to understand the fuller context of a situation. Most international situations are nuanced and complex because of culture, business environment and customer preferences. We jump in based on a quick decision we’ve made about a potential partner or an opportunity. It is much more difficult getting out of sticky situations when we are wrong. This cultural trait explains a lot about American politics too. But that is a whole different subject.

3. Tendency of moralizing.In the American culture, we often judge based what is perceived as morally right or wrong without first understanding the context of a situation. For those wishing to do business with Americans, it may help to explain a situation when Americans throw down their opinion prematurely. For Americans, this means ask questions about a situation to understand context & don’t verbalize your conclusions.

4. Distinction between “work” and “play”. Americans do not usually socialize with colleagues and clients as much as in countries like Japan. In Latin America this distinction is blurred too. As Americans doing business abroad, you may be expected to be on call after work if the local culture expects it. For those doing business in the U.S., while there may be occasional dining together, do not expect that your American hosts will always see to your schedule outside of normal work hours. Also, do not necessarily expect to meet an American colleague’s family or friends.

5. Special attitude towards time. Americans focus on “Time Management” the ability to carefully plan our time in order to produce the right outcomes. A common expression in American business is: “Time is money.” The emphasis is on completing the task, the sales transaction, the hiring of new staff, etc. as quickly as possible. For Americans, please understand that the rest of the world knows about this trait and frequently uses it against us. That long, drawn-out negotiation in Thailand may actually be stretched out to encourage Americans to give more concessions. Americans, don’t share your actual timeline with international contacts. For those doing business with Americans, understand that when you feel Americans getting impatient with your long story, it may be time to make your point and move on to the next task or topic.

6. High value on Individual Efforts and Optimism. The American culture is supposed to be a meritocracy people’s fortunes rising and falling based on their individual efforts. This fuels the famous “American Dream” where anyone is supposed to be able to succeed with enough hard work. Americans want to be judged on their efforts, instead on the basis of their family name, socio-economic class, race, age, or gender. At work, we want to be compensated based on their efforts and results relative to their peers.

7. High value on Individualism and Individual Freedom. As Americans, we often focus on the “I” before the “we”. Others may see us sometimes as selfish and disconnected from the group dynamic. We need to be mindful of group context in order to be most effective internationally. When doing business with Americans, it is helpful to know that when the American decides to leave the group early to go do something they prefer, it is not necessarily considered rude in our culture.

8. When it’s man vs. nature, man wins. As Americans, we feel that we should have control over our physical environment. We can design structures to withstand most natural disasters. With medical procedures, we hope to avoid death. This trait also plays a role in some American’s view of Global Warming and our desire to find technologies that allow us to continue current energy usage with less environmental consequence.

9. Avoid uncertainty through legal process (courts, contracts, etc.) and goal setting. For Americans, a legal system should protect individual and business rights. Once someone signs a contract, they are legally obligated to follow its provisions. The contract serves as the foundation of most business relationships. In contrast, for many cultures a contract is not legally enforceable. The business is based on the relationship forged with individuals or enforceable by having friends in power. While such a foundation is much more flexible over time, it is difficult for many American businesspeople to adjust to relationships being more important than contracts.

10. Egalitarianism and Fairness. This value is part of the work environment as access to opportunity. While Americans have a wide range of socio-economic status, we at least try to give equal access for those with talent and drive to success in business. Women now get most of the same opportunities as men. Young people can lead older colleagues if they have the right skills. As a culture, Americans don’t like what they perceive as being unfair. Other cultures may feel that there is no way to be completely egalitarian, so there is little point in trying.

11. Importance of “belonging” – membership. While I believe that more “group-oriented” cultures stress “belonging” more than Americans do, I think Americans associate with others based on shared values. This could be by religious affiliation, hobby or interest, shared education, a passion for a cause, etc. Examples include: Methodists, Harley bikers and those raising funds for cancer research. The important aspect is that Americans decide for themselves what groups with whom they affiliate.

12. Humanitarianism and generosity. Americans are not the only culture to emphasize individual generosity and humanitarian traits. But we do expect that people and companies take social responsibility for issues around them. As an American, realize that not every culture expects similar actions. As someone doing business with Americans, consider contributing to or at least acknowledging a cause championed by the American company.

13. Nationalistic and patriotic. Again, Americans are not the only culture with this characteristic. But Americans need to be mindful that with our country’s relative size and might. Overt nationalism needs to be toned down in the international business environment or be perceived as arrogant and ignorant. And anyone still convinced of America’s exceptionalism should do their homework (education, healthcare, economic opportunities, best countries to do business, etc.) and join the 21st Century.

14.Religiosity (very religious). Religion does play a significant role in many Americans’ lives. It can provide structure for “belonging” to a same-values group. A religious organization often provides ways for its members to donate money and time to help others. Generally, it is wise for those doing business in the U.S. to avoid the topic of religion all together.

(Source of the original cultural trait list: Cross-Cultural Management by Dr. Kang-Rae Cho at the University of Colorado Denver)

I hope you found this article helpful as a perspective on doing business culturally as an American or as someone wishing to do business in the United States.Best of success to you in all of your international business dealings,

Onwards and Upwards,

Becky Park

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