CHAPTER 20
Discussing Strategy Across Cultures
by Leonard M. Fuld
I can’t stand it when someone writes “obviously” at the beginning of a sentence. Nothing is obvious to everyone, especially when it comes to appreciating the impact a person’s culture has on interpreting—or preventing the acceptance of—information.
A case in point: I facilitated an important global marketing meeting in Beijing not long ago with a U.S.-based multinational food company, which had just purchased a specialty food product line from one of its rivals. The newly adopted subsidiary had recently become a market leader under its old ownership, based mostly on very good market research that was informed and driven by a deep cultural understanding of the habits and behavioral preferences of the average urban Chinese.
The new owners sent their U.S. team to participate in a strategy session, a discussion of where this Chinese subsidiary believed its market was heading and how it must respond to new and mounting competitive threats. The U.S. team set about asking questions as they would do in any meeting in the United States. They tried to be sensitive to their hosts and believed they were treading lightly. To their surprise, the Chinese nationals reacted defensively to even the smallest and seemingly most innocent questions. “Who were these ‘outsiders’ telling us about our market?” In essence, perhaps without recognizing it, the Americans slighted them without even knowing how or why.
It turned out that their Chinese hosts relied on close customer proximity in developing the company’s packaging and marketing practices. So when the Americans suggested that perhaps their new Chinese colleagues may have overlooked new competitive threats from other multinationals as well as from home-grown rivals, the local executives viewed it as a challenge to their research and felt insulted. Interestingly, also attending were a handful of Hong Kong Chinese who were not at all upset by the Americans’ questions. It turned out that many of them were educated abroad, including in the United States, and appreciated the purpose and directness of the questions posed by the U.S. execs. No harm, no foul, they felt.
At the end of the first day of meetings, the overall group accomplished little. The room felt like a boxing arena with each contingent remaining in its own corner. The Americans remained concerned over ominous signs that the company’s Chinese market was about to change. Looming new government regulations would likely curb nutritional claims and impose stricter enforcement on violators. New rivals were poised to enter the market. Nevertheless, the local PRC nationals (not the Hong Kong group) remained stalwart, unconvinced that they might have to alter their existing plans. There was data to validate the Americans’ concerns. Unfortunately, their very presence interfered with discussion of the issues.
On the second day, the meeting’s facilitators deliberately blended the groups, and a thaw occurred in the room. The Hong Kong participants assumed the role of cultural translators and explained to their colleagues from the United States as well as the China mainlanders that each had a legitimate perspective, grounded in different methods of validation. The Chinese preferred to test their view deductively. By starting with an understanding of the cultural habits and behaviors of their customers, the Chinese team believed they could explain past, present, and future outcomes. The Westerners preferred to validate their view inductively, discovering the facts and then developing an explanatory storyline.
While the various groups still reserved their right to disagree, the session ended with something of a consensus. The local Chinese group remained determined to focus on its rigorous marketing plans, still largely driven by a series of cultural insights they had identified. At the same time, the group did concede that perhaps it needed to examine the new competition more closely and more directly. It also acknowledged a need to monitor rumors of government regulatory changes in its market.
There is nothing new about the tensions and difficulties that emerge from an intermingling of cross-cultural, cross-functional groups. While the business world is certainly far more interconnected today than it was when I started working, it nonetheless remains fraught with many land mines. Companies that have partners overseas are confronted with such talent challenges on a regular basis. Often, players from across the globe have become participants in the same enterprise, shuffled together like a deck of playing cards. But unlike perfectly uniform playing cards, people can’t be so easily blended with each other.
The very richness that global yet diversified talent brings to a company can also impede its progress all because of cultural misperceptions or unintended affronts. Absorbing the strategic insights and the intelligence that drive any business decision or strategy requires awareness and the need for discussions prior to a formal meeting; the use of intermediaries such as cultural interpreters may prove useful if only to bring to the surface deeply held beliefs and assumptions.
Could we have headed off the initial locking of horns between the Americans and the mainland Chinese? Perhaps, though we were not given any warning of the prevailing temperament of both sides. More to the point, even in a world of globalization there remains an ever-present need for executives to anticipate and appreciate this frequently hidden culture factor and early on to place it on both the written and unwritten agenda of every similar meeting in the days ahead. If not, decision makers may overlook basic data—and miss major strategic opportunities.
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Leonard M. Fuld is founder and principal of The Intelligent Nonprofit, a consultancy that helps nonprofits improve their strategies through its workshops and advisory services. His most recent book is The Secret Language of Competitive Intelligence.
Adapted from “Cross-Cultural Communication Takes More Than Manners” on hbr.org, August 1, 2012 (product #H0096J).