Going International - What you Need to Know
Allyson Stewart-Allen's lecture to the Law Society in July 2014 about taking your business international. The importance of understanding culture and localisation. This blog post provides both the video of the lecture and a transcript of the lecture from 25 July 2014.
Law Society Conference - Going International What you Need to Know – Lecture Transcript
Allyson: Great, thank you. Thank you very much for having me this afternoon. As Matt so capably said, part of what I do is help interpret international cultures for the rest of the world. And my home country being the U.S., I spend an awful lot of time explaining Americans to the world too. A job that would keep me busy for the rest of my life, I know. So, what I'm going to do is really spend the next 10 minutes or so describing international business cultures, because the more you understand those, the easier it is to succeed in them, to know how to negotiate, to know the mindset of the people that you're working with. And you'll have some frameworks then for describing the differences that you may have experienced or will experience as you grow abroad. One of the first aspects of international business cultures is relating, the first of three main categories and then I'll cover three aspects of each of the three categories, for a total of nine.
But what do we mean by relating? Well, it's pretty straightforward and obvious. It's about how you get things done with people in different parts of the world, how you communicate, and how you relate to a group. So do you see yourself as part of the group or separate from the group? The second of the three categories is regulating. And really, what we're talking about in this aspect or this dimension is focusing on risk, how different cultures perceive risk. Focusing a little bit about how they perceive time. Should it be controlled, should it be loose or decision making? And finally, reasoning, the third branch. Do people make decisions in a linear way? Are they theoretical in their approach? And how much do they want to know about context? The background, the foreground and a little of both, indeed. So, let's now get into the first of the nine dimensions under relating, which is around tasks and relationships.
So when you're doing business with people in different parts of the world, one of these aspects that describes them is, do they like to get things done?, which is the task approach. So think the U.S., Germany, Northern Europe, generally. Do they want to get things done via relationships? The next one is about relating and the explicit and implicit aspects of communicating. Explicit is WYSIWYG (What You See Is What You Get), what they say is what you get. The implicit is what isn't said, what's omitted from the conversation. In the British approach you could say it's the, I couldn't possibly comment, which means yes. Then we have this next third part of relating, which is the group orientation. In other words, do people want to be recognised for their individual achievements and accomplishments and credit to the group or do they want to be part of the group and not pulled apart and recognised separately? Now regulating, the second of the three main categories, risk taking and risk avoiding.
I hope you like that graphic there or those two pictures, I had to think about that one. Risk taking, of course, are cultures that have a high appetite for investment decisions, that have a high level of risk. Think the U.S. Economies of abundance generally will have a higher risk appetite. Risk avoiding will be other parts of the world, Middle East, Africa, Asia, UK to some extent. Tight and loose around time, so the left-hand side is those cultures that are very time conscious. On the right-hand side those cultures where time is an ambient force. It's in the background, it doesn't drive decision making and what should happen next. Regulating in terms of shared and concentrated power, so on the left-hand side you have cultures that are inclusive, democratic, consultative. On the right-hand side, you have business cultures with very clear, delineated hierarchies, deference, respect the past.
So reasoning, the third of our nine...third of our three categories. So linear and circular, linear are business cultures that go A to B to C, quite sequential. The circular business cultures you can think of Latin America, France, and not necessarily going from one point to the other in a clear, linear way. Facts thinking, so this is empirical versus theoretical. On the left-hand side, the empirical business cultures will be the U.S. and the U.K. The theoretical include Latin Europe, often the Middle East. So knowing how to frame your case is quite important as is your areas of expertise. And then, simple versus complex around reasoning. So the extent to which people have an appetite for knowing the context, the back story or the foreground. So on the left-hand side is the more simple, the lower context. The U.S. for example, the U.K. to some extent and on the right it was high context, which is wanting the back story.
So I thought I'd give you a few examples of how cultures play out and how people do business. Here's Richard Branson, a great example. He's very aware of different cultures. When the Paddington Rail crash happened, you'll remember he was in a jumpsuit, he was on-site, he was there. The bad, unfortunately in this example is Akio Toyoda, who during the recall in the U.S. about a year and a half ago, didn't emote the American way for the U.S. audience. That brought the reputation of the business down and he lost quite a lot of credibility and a lot of face in not doing emotions the American way, so understanding the culture is key. And of course we have the ugly, unfortunately, in the form Tony Hayward, who you may recall wanted his life back to 300 or so million watchers in the United States during the Macondo Well disaster.
Again, it's about reading context and knowing what's appropriate, what isn't. This is an example of good localization and paying attention to culture. Marlboro, on the left-hand side you have a soft pack, a hard pack on the right. Why does this matter? Because in central and eastern Europe, there's a lot of status around the hard pack, which tells people you don't take public transport. So having brands and product or services that are appropriate to the culture is why they succeed. This is an example of what not to do. This is Microsoft with an ad in Poland. You may notice in your spot the difference exercise. There was a black man in the original photo and not a black man in the subsequent one. But his hand was still black in the subsequent fixed Photoshopped image. This is Tesco's Fresh and Easy foray in the U.S., a 1.2 billion pound write-off. An absolute disaster not listening to all the research that they had about the American consumer, pre-packing the groceries, not what Americans want to do.
This is Starbucks, again not...what not to do. The Trenta, 30 ounces, a bottle of wine plus of a drink. Put on British shelves, rejected by you, rightly, thankfully. And they learned, hopefully, a lesson, which is don't just take what works at home and assume it works everywhere. This is unfortunate, another... We learn from mistakes more than we learn from successes, I think. Umbro with their trainer, Zyklon B. For historians in the room, Zyklon B was the gas used in the gas chambers during World War II by the Nazis. So what is the lesson in that super-fast tour of the world? Listen, do your homework, get local knowledge, buy it in, get it yourself, stay in the market, but it's really critical that you avoid the 1.2 billion pound write-offs, and some of these mistakes, which is very easily done by going there and by listening. Thanks very much.