Chief Legal Counsel let out a deep sigh when the subject of China came up in conversation. We were seated together in a board meeting for a local university international business think tank. I knew his company had invested heavily in manufacturing operations in southern China and was asking about how things were going. Apparently… not well.
“George” told me that it had started to fail right from the start. The contract had been carefully negotiated, but was ignored almost immediately by the Chinese partners. When quality assurance tests on factory outputs failed, no one in the management meeting wanted to talk about what was wrong. It was a nightmare. Finally the American manufacturer gave up and took their operations elsewhere.
In international business we know this is a common tale. There are many who pull out of a country based a lack of local cooperation and understanding of our business goals.
But before the Nativists chime in with their chorus of “See! I Told You So!”, let’s talk about how to identify the cultural issues so that we can decide how to move forward productively and profitably.
Always Do Your Cultural Homework
If George had done a little more research, he would have understood that contracts are viewed very differently in China. George and other company leaders might have invested more time and energy gaining the trust of their Chinese team as a strong foundation of business in Chinese culture. George would have discovered that Chinese managers will never point out embarrassing issues or mistakes in front of the group because it involves losing face – a form of career suicide. Instead George and the other executives might have talked privately with managers with whom they had developed a closer relationship to find out what was really going on.
Sources of cultural information include online articles (from reputable sources), cultural business coaches, government export agencies and in-country trusted partners. The main point is to come prepared so that the simple cultural clashes between team members and partners can be easily avoided.
Analyze the Early Points of Friction Between Team Members
I recently ran into a business culture clash of my own. Tension built over the course of three weeks. There were symptoms: stress, aggravation over seemingly simple interactions, and that feeling that we weren’t speaking the same business language. Like many of us, I tried to ignore these symptoms. But culture plays a greater role than we often realize.
In the end, it came down to a culture where process was valued over results. While I think that most of us find a balance between a focus on business processes and producing the expected results, this was a culture where process trumped all talk of results. In fact, it was made clear that I shouldn’t push so hard for results. As a consultant, that’s not a typical expectation. It sounds easy to say this now, but it took quite a bit of analysis to figure out the cultural dissonance. Sometimes it even takes an outside perspective to find the problem. Again, a cultural consultant can help.
Never Underestimate the Power of One-On-One Conversations
The first barrier is often distance. When it’s possible, travel to the source of the cultural conflict. If the factory has issues in Guangdong, then fly there to find out first hand what you can learn. If you are in a country and culture where people meet socially, this can help to bridge the divide and find the source of misunderstanding. Another option is to use a trusted intermediary. This is common in places like Brazil. The intermediary meets with both sides and helps to undercover the issues so that both sides can address it and move on together.