A Checklist for Global Managers

In his book, The Checklist Manifesto, Dr. Atul Gawande writes about what Wal-Mart did in the wake of Hurricane Katrina.  As you may recall, this was a major disaster in New Orleans, where 80 percent of the city was flooded and 20,000 refugees were stranded at the New Orleans Superdome.  Another 20,000 were at the Convention Center. There was no power in the city hospitals. Wal-Mart closed its 126 stores, but within 48 hours, more than half of them were up and running again.  Wal-Mart employees and managers somehow mobilized, with the use of simple checklists:

“They set up temporary mobile pharmacies in the city and adopted a plan to provide medications for free at all of their stores … They set up free check cashing for payroll and other checks in disaster-area stores.  They opened temporary clinics to provide emergency personnel with inoculations … within two days of Katrina’s landfall, the company’s logistics teams managed to contrive ways to get tractor trailers with food, water, and emergency equipment past roadblocks and into the dying city.  They were able to supply water and food to refugees and even to the National Guard a day before the government appeared on the scene.” (pp. 77-78)

Gawande’s point is not to praise Wal-Mart, nor to point to the superiority of the private sector over the public sector (i.e., FEMA).  This situation is where he started to understand the power of having a checklist.

As another example, Gawande writes about the Chairman of Surgery at the University of Toronto, who has been using a 21-item surgery checklist to catch potential errors in surgical care.  What is interesting is that the checklist also includes a team briefing. “The team members were supposed to stop and take a moment simply to talk with one another before proceeding – about how long the surgeon expected the operation to take, how much blood loss everyone should be prepared for, whether the patient had any risks or concerns the team should know about.”  (pp. 100-101)

In surgery, according to Gawande, you can have checklists for three of the four big killers:  infection, bleeding, and unsafe anesthesia. The fourth killer in surgery is the unexpected. So how do you prevent this?  The value of having a checklist is that it facilitates a dialogue, and people have to stop and talk through the case together before surgery. Unfortunately, according to Gawande, this kind of teamwork is not common in surgical teams.  Some research that he cites shows that team members that regularly used checklists showed great improvements in their ratings of their own teamwork.

According to Gawande, “ … under conditions of complexity, not only are checklists a help, they are required for success.  There must always be room for judgment, but judgment aided – and even enhanced – by procedure.” (p. 79)

What kinds of management situations might a checklist be used for?  Actually, Professor Michael Useem has come up with his own checklist for leaders, consisting of 15 principles.  Like Gawande, he argues that “ … when uncertainty becomes the norm and turbulence more commonplace … a Leader’s Checklist becomes more consequential.”  (p. 41)

Many of the items in Useem’s leader checklist can apply to managers leading globally.  They include articulating a vision, communicating persuasively, and building leadership in others.  However, as many of you know, global leaders face different circumstances and need to take into consideration other cultural variables.  

So I have come up a checklist for global managers.  The “targets” referred to in this checklist are those individuals, groups, or organizations from another culture that you will be interacting with.

  1. Understand your cultural assumptions.  
    • Are you aware which of your management style preferences and behaviors are influenced by your culture?
    • Are there aspects of your management style or behavior that works in your culture that might not work in other cultures?
  2. Map your targets’ cultural values.
    • What are the most important cultural values of the people or group you will be dealing with?
    • How do these values show up in how they do business with others?
  3. Establish cultural baseline behaviors with your targets.
    • Are there specific behaviors that you should be avoiding when dealing with them?
    • Are there specific behaviors that you should be sure to demonstrate when dealing with them?
  4. Clarify your managerial goals and your core values.
    • What do you hope to accomplish – not so much in terms of the task or work, but in terms of your management of your targets?
    • What are the most important values you hold, especially around management?
  5. Identify culturally appropriate options to achieving these goals.
    • Are there alternative ways to achieve your goals that might be more culturally appropriate?
    • Which of these may require your getting out of your comfort zone?
  6. Seek feedback and mentoring from others.
    • Are there people from the cultures you are dealing with, that you can approach to ask questions and get feedback?
    • Do you have a plan on building relationships with these individuals so you can gain their trust?
  7. Adjust, experiment and continuously improve.
    • Are you reflecting on what you are learning about others’ reactions to you and the feedback you are getting?
    • How are you applying what you have learned to improve yourself in your cultural interactions?
  8. Preserve your character and integrity.
    • Are people clear – not so much by your words but by your actions – on what you stand for?
    • Are you clear on what you stand for?

 

Gawande, A.  (2011). The Checklist Manifesto.  New York:  Picador.
Useem, M.  (2011). The Leader’s Checklist.  Philadelphia:  Wharton Digital Press.

Fostering a Global Mindset Culture in Your Organization

A recent “Idea Watch” article in Harvard Business Review reported on some new research that Carol Dweck and her colleagues are conducting.  As some of you are aware, Dweck popularized the concept of “growth mindset” (versus a fixed mindset). People with a growth mindset, according to her early research, enjoy challenges, strive to learn and consistently, and see potential to develop new skills.  

Now she has been exploring the idea whether organizations can have growth or fixed mindsets. So far, her research seems promising.  She and her team have developed a survey that has been implemented among employees at seven Fortune 1000 companies. Employees rate the extent to which they agree with a series of statements, such as “When it comes to being successful, this company seems to believe that people have a certain amount of talent, and they really can’t do much to change it.”

Dweck concludes that there is a great deal of consensus about what the prevailing mindset is in these employees’ organizations with regard to growth.  Her research shows that employees in growth mindset companies are:

  • 47% likelier to say that their colleagues are trustworthy
  • 34% likelier to feel a strong sense of ownership and commitment to the company
  • 65% likelier to say that the company supports risk taking
  • 49% likelier to say that the company fosters innovation.

Similarly, I believe that organizations can be assessed on whether it has a global mindset culture, above and beyond the presence of employees who have the traits or qualities of an individual global mindset.  Of course, hiring and developing such individuals in your company is helpful, but can be inefficient since it may take companies a long time to reach the critical mass needed. Another approach therefore is to develop an overall strategy to build or improve the organization’s global mindset culture.  The first step in developing this strategy is to diagnose your company’s current state with regard to its global mindset culture. So here are eleven key indicators that will help you assess your company’s current global mindset culture.

  1. Top management commitment to building a global mindset culture.  How regularly do the senior executives in your company reinforce the importance of thinking globally and recognizing the importance of markets other than the home market?  How often do executives travel overseas to learn about the importance of these markets – especially from their overseas subsidiaries? How frequently do managers and executives from overseas subsidiaries come to headquarters to participate in meetings?  Are key executives from overseas represented in important task forces and corporate initiatives?
  2. Structures and processes for global alignment and coordination.  What formal and informal mechanisms has your company put in place to facilitate efficient and effective coordination across countries where your company does business?  How well defined are your company’s formal structures, such as matrix relationships, global and regional roles, and roles and responsibilities of headquarters and subsidiaries?  When global teams are created, how well represented are subsidiaries from relevant countries?
  3. Infrastructures for global communication.  Has your company invested in the necessary technologies to enable efficient communication across countries?  And how much training and support is being provided so employees can take advantage of these new tools?
  4. Assessment of global mindset potential.  How important does your company consider global mindset in selecting internal or external candidates for positions that will require cross-cultural interactions?  Is cultural fit one of the criteria used before assigning individuals to global roles?
  5. Use of development assignments to build global mindset.  When setting development plans for individuals who may have high potential, what opportunities are provided for them to learn and acquire experiences in working across different markets and cultures?
  6. Reducing the headquarters ‘center of gravity.’  Has your company considered relocating some key functions out of headquarters into one of its key markets overseas?  Are at least some of your company’s centers of excellence or expertise located overseas? Are regional heads and their staffs still based in headquarters or have they moved out to the regions?
  7. Cross-cultural awareness and sensitivity as a key element in the company’s learning strategy.  How available and accessible are resources for employees to improve their cross-cultural awareness (e.g., on-line courses on doing business in different cultures, reimbursement for language training, etc.)?
  8. A global talent pool.  How inclusive is your company’s global talent management process?  For example, when considering internal candidates for key positions, does the slate of candidates include highly qualified employees from different locations?
  9. Recognition and rewards for those with global mindsets.  How valued are those individuals who have proven themselves in overseas assignments, not just in improving business results but also in being recognized as someone who has worked effectively with different cultures?  When these individuals complete their assignments, to what extent does your company leverage their experience? Does your company’s competency model and performance evaluation system include global mindset behaviors as a key element?

In a recent study by Price Waterhouse Coopers (Wang, 2014). 4,108 return migrants from 81 countries of origin who had spent between three months and two years in the U.S. at some point during the years between 1997 and 2011 under a category of the J-1 visa designated for professional training completed a survey.   These respondents all had bachelor’s or master’s degrees, and had work experience in many industries with companies such as Google and JPMorgan Chase, as well as thousands of small startups and midsized companies.

What did they find?  While almost all of the respondents reported having learned about practices overseas that they could implement in their home countries, only 67 percent reported having shared any of this knowledge upon their return. And only 48 percent reported having shared knowledge and then having seen this knowledge implemented.   The study concludes: This means that on average, for every two workers with international experience hired by a given firm, only one will successfully share knowledge from overseas at some point during his or her tenure.

Interestingly, countries like China, India and Brazil are creating incentives to entice their foreign-trained nationals to return.  A recent Wall Street Journal article described the emergence of these “sea turtles,” the term used for a Chinese native who is returning home after several assignments in the West.  The article mentions several such Chinese businessmen who, after working for multinationals like Coca-Cola and Nike in the U.S., have decided to return to China, often in much larger roles and with much greater compensation than they had in their former companies’ headquarters.  Aside from these considerations, there is the perception that the opportunities with a Chinese company are greater, as are the psychic benefits. For example, Guo Xin, a sea turtle who joined a Chinese recruiting firm, said, “You’re making global decisions rather than having these decisions made for you” by Western headquarters.  

  1. Support for individuals on overseas assignments.  Does your company provide ongoing support for individuals on overseas assignments – before, during and after the assignment is over?  In Ernst & Young’s Global Mobility Effectiveness Survey (2013), they found that on average, 16% of assignees left the company within the first two years after repatriation, and a further 41% returned to their pre-assignment position.  Does your company require some form of cultural training for the individuals and their families prior to an overseas assignment. For example, BASF works with an outside vendor that helps international assignees adjust to their new surroundings.  The vendor also provides “cultural attaches” who will help BASF employees with the day-to-day logistics of settling in a new country, e.g., finding apartments, completing mandatory state registrations, setting up bank accounts, etc.

In another company, I helped develop an expatriate mentorship program whereby international assignees were assigned to senior executives as mentors, with the condition that these senior executives had to be outside these individuals’ functions.  For example, the CIO volunteered to mentor two individuals in Marketing and two managers in Finance who were all in overseas locations. He kept in contact with them throughout their assignments, and helped facilitate their transition back to their next assignments.

  1. Formal and informal processes for sharing best practices globally.  When he was CEO of GE, Jack Welch was relentless in promoting knowledge management, and he held people accountable to make sure that they were proactive in communicating and sharing best practices.  How much sharing of information and best practices goes on internally in your company, and are there formal and informal mechanisms for facilitating the dissemination of these best practices? Somewhat belatedly, for example, GM has just begun to implement this.  In an interview with the Wall Street Journal (November 2, 2014), President Dan Ammann described what the company has started to do:

“A couple months ago we brought about 25 of the top sales leaders from around the world together in Charlotte, N.C.  We conducted workshops where each discussed the tactics they are using in their home markets to drive sales, work with dealers and interact with customers.  This is the first time anyone can remember that happening.”

Perhaps next time they should meet in Beijing, Sao Paolo, or Mexico City.

Once you’ve done your assessment, then you’ll have a better understanding of where the gaps are, and your organization can begin to prioritize actions to narrow these gaps, taking into account the organization’s overall strategic goals and where the best payoffs are.  For example, if the organization is planning a major expansion into China over the next three to five years, then assessing cultural fit among high potential employees (#5) and establishing an office in one of its cities (#6) should be high on the list of actions.

 

Bennett, J.  (2014). GM’s Ammann Drives for Change.  Wall Street Journal, November 12.

Chu, K. and Lublin, J.  (2014). Chinese firms bring more natives home.  Wall Street Journal, September 3.

Gupta, A. and Govindarajan, V.  (2002). Cultivating a Global Mindset.  Academy of Management Executive, 16(1), pp. 116-126.

Idea Watch.  (2014). How Companies Can Profit from a Growth Mindset.  Harvard Business Review, November, pp. 28-29.  

Wang, D. (2014).   The Untapped Value of Overseas Experience.  Strategy + Business: http://www.strategy-business.com/article/00283?pg=all.

Global Leaders’ Moments of Truth

Many years ago, while consulting with the Customer Service unit of a consumer products company, I came across a book by Jan Carlzon, then president of Scandinavian Airlines System (SAS), called “Moments of Truth.”  This phrase, which has now entered the business vocabulary, described the contact between a customer and a company representative that can profoundly impact the customer’s impression of the product and/or the company.  In the book, this is how Carlzon described it:

“Last year, each of our 10 million customers came in contact with approximately five SAS employees, and this contact lasted an average of 15 seconds at a time.  Thus, SAS is ‘created’ 50 million times a year, 15 seconds at a time. These 15 million ‘moments of truth’ are the moments that ultimately determine whether SAS will succeed or fail as a company.  They are the moments when we must prove to our customers that SAS is their best alternative.”

Those of us working globally have many interactions with different stakeholders coming from different cultures.  They include customers, vendors, subordinates, bosses, and colleagues in the various places where we do business.  Some of these interactions could certainly be described as “moments of truth,” when the outcomes of these interactions can lead to a more positive path and ultimately a productive and effective relationship – or its opposite.

I’ve identified nine such sets of interactions or “hot spots” where your cultural intelligence will be put to the test. Your ability to handle these interactions effectively will help you to survive and thrive as a global leader.

Here’s the list.  These are not sequential, although clearly the first two can make or break a potential relationship you are trying to establish.  Some of these interactions are one-on-one, others are with a group. The specific tactics you use will also depend on the characteristics of the person or group you are interacting with; for example, greeting a male senior executive in Japan will be different than greeting a young female professional.

  1. Greeting someone
  2. Establishing rapport
  3. Leading a team
  4. Conducting a meeting/participating in a meeting
  5. Providing instructions or guidance; coaching and teaching
  6. Resolving disagreements and conflicts
  7. Negotiating
  8. Motivating others
  9. Giving and receiving feedback

For example, Lucy Kellaway, the acerbic columnist of the Financial Times, wrote a column recently about the challenges of greeting people from different cultures.  She was giving a talk primarily to Asian women at a conference in Singapore and she was at a loss as to how to greet the various attendees at the conference:

“In the old days, the principle was when-in-Rome. So when actually in Rome you kissed on both cheeks anyone you knew reasonably well. In Holland, it was three cheeks. In Russia you might expect a crushing bear hug, in Japan a nod and in India hands clasped and a namaste. In the US and Germany you could look forward to a bonecrusher of a handshake, in the Middle East something more like a limp fish.”

“Global business has made matters more complicated. We no longer know whose culture trumps whose. Is it the host country’s? Is it the majority in the room? As no one seems to know, what tends to happen is a general confusing, embarrassing free-for-all. We live in a permanent state of hello hell.”

She then adds:

“Now an even more unwelcome form of greeting has arrived: the hug. This is how young Anglo-Saxons routinely greet each other outside work, but now they have started doing it in the office too. The hug represents far too much touching for my liking, but is also devilishly hard to get right: there is the full hug, the side hug, and the hug accompanied by a slap on the back.”

“In my other job as a non-executive director, hello hell has got so bad that I find myself dreading the start of every meeting. Diversity might be a good thing on a board, but diversity of greeting is deplorable. My European colleagues are confident and enthusiastic kissers, as is one of the British women non-execs, while various of my male colleagues seem to dislike it as much as I do. Which means I often end up kissing some of the directors but not others – which seems very wrong indeed.”

Rather tongue-in-cheek (I think), she proposes a Global Greetings Protocol, where the only permissible greeting in a business setting would be a handshake.  If it were only that simple.

Given the research on our subconscious biases and first impressions, thinking through your approach to greeting people from other cultures is, I believe, enormously important, and deserves a great deal of thought on your part on how to approach and greet someone from another culture.

Greeting someone, of course, is just one of the key interaction hot spots (see above) that can make or break your effectiveness as a global leader.  I have three pieces of advice on how you can benefit from these interactions. First, understand what your “default mode” is in each of these situations.  Most of us have a preferred way of approaching certain interpersonal situations based on our experiences and our own natural inclinations. Keep in mind that your preferred way may also be influenced by cultural assumptions and norms.  For example, Americans and Germans like to resolve conflicts by being very direct and raising issues in a straightforward way – to “cut to the chase,” as the expression goes. So what’s your typical modus operandi when you’re trying to resolve a conflict or disagreement? You might be thinking, it depends on who the person is.  Yes, of course, and that is a reasonable response; nonetheless, you are likely to have a preferred approach, one that you use other things being equal.

Second, consider the cultural background of the person or group you will interact with.  As mentioned above, most of us will recognize that we will need to adjust our approach depending on the specific characteristics of the person or group we are interacting with (e.g., their age, gender, position in the organization, educational level).  What I am suggesting is that you include culture as another dimension to consider. For example, Hannah is a manager of a global IT consulting company who was recently appointed to lead a team of Indian consultants in Bangalore. Hannah has a reputation as a good leader who likes to empower and delegate.  But aware of the cultural expectations of her Indian staff, Hannah has had to adjust her style to make sure that she is more directive and explicit about her communication, at least initially.

Third, adjust your approach so that it is culturally appropriate for that person or group.  What this means is that you will have to develop a repertoire of approaches, and not always rely on your default mode, difficult as that may be at times.  We naturally gravitate to behaviors that either come naturally to us or that we have been used to because we have been doing it for a long time. The challenge for many global leaders is not only to stop and think about other cultures, but also to go into manual mode and use those behaviors that are most appropriate for that culture.  For example, this may mean that you don’t always look a person directly in the eye in a culture where doing this with very senior executives may not be considered appropriate.

This also means that you may have to practice some new behaviors and, as Molinsky so eloquently describes in his book Global Dexterity, expand your personal comfort zone.  It’s not always easy to do this, but you can make a conscious effort by practicing some new behaviors incrementally.

For example, Feng was a Chinese student in my class who was not used to speaking up in the classroom.  In China, students are not expected to raise hands, nor are class discussions encouraged. As a result, when she signed up for her MBA classes, she felt overwhelmed and intimidated.  In advising her, we worked out a goal of being a more active participant in the class. She started out by writing down a question beforehand that she would ask the professor. So when, towards the end of a lecture, the professor would ask if there were any questions, she would raise her hand and ask a question.  Eventually, as she became more comfortable in asking questions, she then wrote down a couple of points she wanted to make about whatever was being discussed that day, and raised her hand to offer her opinion when her professor asked for comments. By the end of the semester, she was a more active participant although she still cannot just “jump in” to a discussion – at least not yet.

 

Carlzon, J.  (1989). Moments of Truth.  New York:  HarperBusiness.

Kellaway, L.  Do we hug?  Kiss? Shake hands?  Bow?  Financial Times, September 22, 2013.

Molinsky, A.  (2013). Global Dexterity.  Boston:  Harvard Business Review Press.

Slicing the Culture Pie

In her book “Overwhelmed” (on the pressures of work-life balance, among other topics), Brigit Schulte describes her trip to Denmark and her interviews with working couples there.  Here’s what she writes about work life in that country:

“Danes don’t live to work.  Danes work hard … but they work in a very focused way.  Lunch is usually no more than half an hour … Most Danes work the standard thirty-seven hours a week.  Long hours are outlawed for most workers under the European Union’s Working Time Directive … no European is allowed to work more than forty-eight hours a week … Workplaces tend to be flat, without a lot of layers of management … Most Danes don’t feel obligated to check their smartphones and e-mail after hours … people who put in long hours and constantly check e-mail after hours are seen not as ideal worker warriors, as in America, but as inefficient … “

And yet, Schulte points out,

“The Danish economy is one of the most competitive in the world, just a few rungs below the United States.  And it’s one of the most productive, ranking just behind the United States … Denmark has a low unemployment rate and one of the highest standards of living in the world.  It has one of the smallest gaps between rich and poor of any country on earth … and only 6 percent of Danes find it difficult or very difficult to live on their current income, compared to 21 percent of Americans …”.

Those of us who have worked in several countries are fully aware of the differences in workplace cultures from country to country.  And scholars from Hofstede to Trompenaars have constructed outstanding frameworks to help us understand and explain variations in these cultures.  In applying some of these frameworks over the years, I have found them helpful to some extent. It is important to have a common vocabulary to be able to compare different cultural values, especially those relevant to the workplace.  In personality research, there is general agreement on a few selected taxonomies like the Big Five (McCrae and Costa) that most mainstream psychologists use to describe people’s personalities.

I don’t believe we are at a similar point with regard to describing different workplace cultures across countries.  There has been outstanding research in this area, pioneered by Hofstede; his dimensions have scores by which we can compare different countries.  Although his methodology has been criticized, his analysis seems to make a lot of sense to many managers and students. There has also been considerable research on organizational cultures (Cameron and Quinn, Denison and Mishra), with a few of these dimensions (e.g., adaptability, hierarchy) overlapping with those of Hofstede et al.  

In my experience and interviews with managers globally over the years, I have drawn from these past scholars, as well as the more recent work by Lane et al. to offer a framework that is still a work in progress, but I believe is useful to managers working globally. It can be easily remembered with the acronym FASTAIDE, which stands for the first letters of each of the eight dimensions of workplace culture.  The idea here is that there is a set of dimensions by which to compare different countries’ cultures as they relate to workplace behaviors.

  1. Formality – How formal should I be? At the one extreme are cultures where people are very informal, not only in terms of their interactions with one another but also in terms of how decisions get made, their appearance and the physical environment.  In the workplace, people refer to each other, and even senior executives, by their first names. Dress is typically casual, and there are not a lot of rituals involved in meetings and business discussions. At the other extreme are cultures that are quite formal, from attire to the way people address each other to the way meetings are conducted.  Titles are important, and offices are designed to reflect this. In general, countries like Australia and the Netherlands tend to have informal cultures, while countries like France and Russia tend to have more formal workplace cultures.
  2. Authoritarianism – How directive should I be?  Some cultures such as France and Mexico expect bosses to give orders and run a command-and-control type of organization, while other cultures such as Israel expect their bosses to be more participative, asking for input from others and valuing a more bottom-up approach.  
  3. Structure – How much detail should I provide; how explicit should I be?  In some cultures such as Greece and Uruguay, employees prefer to have things spelled out in order to reduce any ambiguity.  For example, job descriptions are essential, and employees have handbooks that describe the company’s procedures in detail. In other cultures such as Sweden, employees have a higher tolerance for ambiguity.  Hofstede refers to this as uncertainty avoidance.
  4. Time Orientation – How concerned should I be about time commitments?  Some cultures such as Switzerland and Germany are very strict on time, whether it’s when meetings start and end, or on deadlines for projects.  Hall describes this as linear or monochromic time. Other cultures such as Central and South American countries are more fluid and flexible about time.  Promptness and following a schedule are not as important as focusing on relationships. So schedules are not adhered to strictly and interruptions are welcome.  Hall refers to this as flexible or polychromic time.
  5. Aggressive – How aggressively should I behave?  There is a lot of evidence of differences in aggressiveness across cultures.  And some would vigorously defend promoting aggressiveness in the workplace, suggesting that doing so improves productivity and profitability.  In countries like South Korea, it is not uncommon to have shouting matches among co-workers. There is a tendency towards pushiness, an in-your-face mindset.  In other cultures like Canada, workers can still be competitive but will not be as confrontational.
  6. Individualism – How much should I focus on individual needs and goals versus group needs and goals?  In some cultures, such as the U.S.A. and Australia, the emphasis is on “I” and self-reliance. These cultures value individual over group identity, and individual rights are very important.  Managers hold individuals personally accountable. In other cultures, such as China and some Latin American countries, the emphasis is on a larger entity, such as the group, organization or tribe.  The good of the group often trumps the individual rights of individuals.
  7. Directness – How straightforward should I be?  Some cultures such as Australia and the U.S. encourage managers to get straight to the point.  In other cultures such as some East African countries, the message is more subtle and indirect. What is implied is more important than what is actually stated.  People in these cultures place a lot of emphasis on nonverbal communication. This is similar to Hall’s concept of high and low context cultures.
  8. Expressiveness – How much should I show my emotions and be transparent?  In countries like South Korea, this is well accepted in the work place, while in countries like Russia and Hungary, you almost have to wear a poker face, or at least not reveal what they are really feeling.

I want to make three points about this framework.  First, each of these is on a continuum and while countries can be arrayed along this continuum, it is important to consider the relative standing of countries on each dimension rather than their absolute position.  Second, like Hofstede, these dimensions tend to be relatively independent of each other, although there may be clusters. For example, informal cultures also tend to be non-authoritarian cultures. Third, these are average or central tendencies.  It does not mean that everyone in that culture behaves in accordance with these dimensions. For example, you may meet a Chinese executive in Beijing who might be expected to behave a certain way based on your categorization of Chinese work place culture.  Yet you may discover that this Chinese executive actually went to college in America, worked for a Swiss company in Lucerne, and got his MBA at Insead. She would not be expected to fit the typical profile.

 

Cameron, K. and Quinn, T.  (1999). Diagnosing and Changing Organizational Culture.  Reading, MA:  Addison-Wesley.

Denison, D., and Mishra, A.  (1995). Toward a Theory of Organizational Culture and Effectiveness.  Organization Science, 6, 2, 204-223.

Hofstede, G.  Culture’s Consequences (second edition).  (2001). Thousand Oaks, CA:  Sage Publications.

Lane, H. et al.  International Management Behavior (sixth edition).  (2009). United Kingdom:  Wiley.

McCrae, R. and Costa, P.  (1987). Validation of the five-factor model of personality across instrument and observers.  Journal of Personality and Social Psychology, 52, 81-90.

Schulte, B.  Overwhelmed.  (2014).  New York:  Farrar, Straus and Giroux.

Trompenaars, H.  Riding the Waves of Culture:  Understanding Cultural Diversity.  (1993).  London: Economist Books.

 

Coming to Grips with Corporate Culture

“Culture” has been in the business news again lately, from General Motors’ failure to recall its faulty ignition switches to the replacement of an outsider for Target’s new CEO.  Those of us who have worked for more than one company, and/or have friends and acquaintances who work for different companies, know how powerful corporate culture can be. 

We all know that companies, like all social groupings, tend to form cultures that influence the way its employees think, feel and perceive what is going on.  When I worked for Citibank many years ago, I would compare notes with a colleague who worked for what was then called the Chase Manhattan Bank on how different our respective company cultures were.  Citibank was then brash, and its employees were expected to be aggressive, and even rude.  Chase Manhattan was more polite, and employees were expected to behave more gently.  As we know, cultural fit is important to corporate survival.  Many companies assess cultural fit before hiring managers, and many executives de-rail not because they lack technical expertise but because they lack this cultural fit.

Executives in successful companies, recognizing the importance of culture, try to shape their company’s culture to be aligned with the company’s strategy.  For example, Wal-Mart instills an almost obsessive regard for expense management that is in keeping with its strategy to be the low-cost provider and remain profitable through its “everyday low pricing” business model. 

As Lane et al. point out, culture is important because it serves two functions.  One, it helps efficiency.  Everyone in the company is expected to know that there is a way of doing things (companies even label these, such as “The Wal-Mart Way” and “The Toyota Way”) and once employees learn this, the company can operate more efficiently.  What is interesting is that many of these so-called norms are not necessarily written down or documented.  But once we learn the cultural code, many things don’t have to be spelled out.  We know that is the way things are done and violating this cultural code can have consequences.  I remember a company I was involved with where decisions had to be made by consensus.  An executive hired from the outside felt that this was not good for a company that was trying to be more agile and so he started to make decisions without going through the usual channels.  There was so much resistance to his attempts that he only lasted a year with the company.

The second function of culture, according to Lane et al., is that is provides an important source of social identity for its members.  Culture serves as a kind of psychological “glue”; the stronger the culture, the stickier the glue.  Belonging to a group not only provides some security; it also increases our identification and commitment with the group (or company).  Creating a strong culture is especially important for global organizations with subsidiaries in dozens of different countries.  Expatriates from these organizations who go overseas not only provide technical expertise but also serve as cultural ambassadors.  I have seldom seen expatriates being sent overseas who have either just joined their company or are not able to “represent” the company in a positive way.  Strong identification with the company also reduces turnover, and enhances the feeling of pride an employee has in working for the company.

Changing a culture as powerful as GM’s will be an uphill battle but it can be done.  There have been successful attempts at cultural change in companies like GE, Ford, IBM, Nissan and many other companies.  I have been involved with a few companies where the culture changed successfully although in all cases, it took time – as much as five years. 

In brief, what does it take?  Corporate culture, in my opinion, is shaped by three sets of forces, and so understanding these forces and using them to help drive change is a good first step.  In my opinion, these three forces are self-reinforcing and interdependent; implementing changes in one without taking into account the others will not work.  The first force is leader behavior.  Nothing speaks louder to employees than how leaders behave (not what they say should be done).  When Carlos Ghosn of Renault went to Japan to head Nissan, he made it a point to walk around the plant floors and introduced himself to shocked groups of employees.  When CEO John Reed championed Six Sigma at Citibank, he himself went through the training and taught some of the training workshops to employees.

The second set of forces involves the company’s processes and systems.  This is where the rubber hits the road, in the day-to-day activities that shape employees’ behaviors.  In my experience, the most important of these include decision-making processes, how conflicts are resolved, and how employees are recognized and rewarded.  Changing these processes and systems will begin to create changes in the culture. 

The third involves the company’s structure.  Microsoft recently restructured its organization to break down silos.  Many companies such as Cisco, P&G and IBM have moved to a more matrix-type structure.  Unfortunately, many companies start and stop with structure.  For example, GM has recently announced that it would have a head of Global Compliance.  If people still perceive that they will be punished for speaking up, then having an executive accountable for compliance practice alone is not likely to change the culture.

Given all this, here are three takeaways on corporate culture for managers and leaders.  First, unless you are near the top of the company’s hierarchical food chain, it will be impossible for you to change corporate culture.  In fact, even executives at higher levels sometimes find it difficult to change culture by themselves.  Think about living in another country with different cultural values and norms than your own; you have to adjust your behavior to the country’s cultural code.  Similarly, you have to adapt your behavior so it somehow fits in with the culture of the company you are working for.  Of course, you can deviate a bit but too much deviance and you will be rejected.

Second, by understanding the company’s cultural code, you can use culture to your advantage especially when trying to lead and influence.  For example, one of the companies I used to work for had a strong bias for being data-driven.  That is to say, recommendations or decisions had to be based on arguments based on analyses and good data.  In this organization, arguing by appealing to emotion would not get you very far.  Knowing this, those who were effective in this company made sure that they persuaded their key managers by always having solid data to back up their arguments. 

Third, you can create your own “mini-culture” within the larger corporate culture, as long as this is not too deviant.  Countries have national cultures, but they also have regional and even local cultures.  The southern United States can feel quite different than the eastern United States.  Let’s say that you are a manager of a customer service team in your company.  You have strong beliefs about how customers should be treated that may not be as much of a priority to the larger organization.  Within your sphere of influence, you can build a strong sense of customer service.  How?  Start by getting your manager’s buy-in and support.  Have a compelling vision that you can communicate to him or her, as well as to your team.  Then get your team involved and excited to make sure that they share and internalize the vision – it becomes not just your vision but everyone’s.  Then walk the talk.  Recognize team members who exemplify great customer service.  Spend time with customers yourself, and act on their suggestions and complaints.   You need not be merely a victim or product of the corporate culture.

 

Lane, H. et al.  (2009).  International Management Behavior (Sixth Edition).  United Kingdom:  Wiley.

OB Practices: Are They FEDUP?

Free food!  Subsidies for buying hybrid cars!  No lay-off policies! Paternity leaves!  Employee sabbaticals! No more performance appraisals!  The list of perks, benefits and organizational practices is almost endless, and as many managers know, simply benchmarking or imitating practices or benefits what some of the “great places to work” employers offer is no guarantee that these practices will work for your company.  And by what will work, I mean whether or not they will lead to outcomes that will improve organizational and business performance.

In my OB class recently, one of my students brought up the potential benefits of salary transparency, a practice used by a handful of companies but is certainly not widespread.  There are a few good arguments that can be made for this practice. After all, publicly traded companies issue annual reports showing the compensation of their most highly paid executives.  You can easily access the average salaries of different professional groups (including professors) in public universities. In sports, we can quickly find out what the salary is of every professional player, and what their bonuses are.  And, some would argue, taking the mystery and black box out of salaries might help employee morale.

In my view, here are five questions to answer before one should consider implementing a particular organizational practice in an organization.  You can easily remember these questions using the acronym FEDUP.

First is Fit.  How does the practice align with the organization’s strategy and culture?  Zappo’s and Southwest are two companies known for having a “fun” culture. Tony Hseih, Zappos’s founder, and Herb Kelleher, former Southwest Airlines CEO, deliberately try to create an informal, almost wacky, atmosphere in their companies.   One of Zappo’s core values is “to create fun and a little weirdness.” Herb Kelleher used to dress outlandishly and encouraged his employees to do the same. Now imagine implementing these “fun” practices in companies where the culture emphasizes seriousness and even frugality.  Several years ago, a global company that had instituted “casual” Fridays, where employees could dress more informally one day of the week, decided to implement the practice globally. I was in Tokyo when the employees of its subsidiary received the e-mail memo. “Salary men” in Japan dress very conservatively, often in dark suits and white shirts.  This is part of their identity and they take pride in being recognized as such. Dressing informally made no sense to them at all.

Second is Evidence.  What is the evidence that this practice has worked?  Is there a solid theory or framework behind it? Is it likely to work in different industries?  Is it likely to work in different cultures? Fads are common in business, and imitating what your competitors are doing is not unusual.  This is no reason to adopt the same practice in your organization. Even when there is solid research behind a practice (for example, Collins’ concept of Level 5 leadership in his book Good to Great), it does not mean that this should be applied indiscriminately.  

Third is Difficulty of Implementation.  What are the barriers to implementing such a practice?  How difficult (and/or costly) will it be to implement? Is the timing right for your company?  In Pfeffer’s classic article “Seven Practices of Successful Organizations,” he identifies one such practice as self-managed teams and decentralization of decision making as basic principles of organizational design.  According to him, “organizing people into self-managed teams is a critical component of virtually all high-performance management systems.” However, the examples he gives include companies that have implemented true self-managed teams (e.g., Whole Foods) as well as companies that have implemented only certain aspects of the self-managed team concept (e.g., Ritz-Carlton).  In fact, there are very few companies that have implemented true self-managed teams, while virtually all corporations today actually have some form of team concept. Why are self-managed teams not more pervasive in the work place? For one, it requires a level of maturity and autonomy among team members that may not be there. Google at one point tried to increase spans of control and remove managerial levels but decided that their work force needed managers – not so much to supervise and oversee but also to coach employees, many of whom are very technical but relatively inexperienced.  Second, when a company goes through a major crisis, as Siemens did a few years ago with its bribery scandal, its new CEO implemented policies and compliance procedures that required employees to adhere to strict ethical policies. The timing for self-managed teams would not have been appropriate for this company.

Fourth are Unintended Consequences.  Are there things that could go wrong with the practice that you may not have anticipated?  Many years ago, Stephen Kerr wrote an article called “On The Folly of Rewarding A, While Hoping for B.”  The fundamental concepts of that article are still relevant today. Creating practices that focus primarily on extrinsic rewards (e.g., bonuses, stock options, status in the organization) will tend to attract people who are extrinsically motivated.  These individuals, while they may performing well in the short term to get their rewards, will not likely develop strong loyalty to their organization and will not perform good organizational citizenship behaviors. They are likely not going to be interested in behaviors that do not lead directly to these extrinsic rewards.  Is this the kind of organization that you want to build?

Fifth is Purpose.  Are you clear on what you are trying to achieve with this practice?  And is the outcome linked to business performance? A few years ago, I was advising a company on whether it should implement Six Sigma.  Senior executives had heard about its success in GE and other companies, and they believed that it might have some benefit for the organization, which had been experiencing some challenges with customer service.  They were not sure that Six Sigma would work, so they decided to “pilot” it in one department. Supervisors went through training in statistical quality control, and applied some of the Six Sigma tools. There was some improvement but it did not last.  For practices like Six Sigma to work, it has to start at the top, and the “philosophy” has to be embraced by senior management. By viewing Six Sigma as simply a collection of techniques that could be implemented in pieces, this practice never gained traction and was ultimately abandoned.

So should a company consider implementing salary transparency?  Let’s apply the five FEDUP. First on Fit. If your company has a culture of openness, where status differences are minimized, and where gaps in salary levels are not outrageously skewed, then this might work.  But I doubt that there are many companies who fit this criterion. Second on Evidence. There is surprisingly very little research that has been conducted on the impact of salary transparency, although we can certainly come up with many arguments on both the pros and cons of this.  So let’s pass on the Evidence test since we just don’t have a lot of information either way. Third on Difficulty. Implementing this practice would require a tremendous investment in time on the part of executives, and extensive communication throughout the organization. Is the company prepared to do this?  Is the timing right, especially when there might be some inequities that might have to be explained, or at least corrected, before taking this step. Fourth on Unintended Consequences. Will revelations of everyone’s salaries create feelings of inequity and unfairness, and is the company prepared to deal with these consequences?  Fifth on Purpose. So why exactly would a company want to implement this practice? What does it hope it will accomplish? Will revealing everyone’s salaries indeed lead to higher morale and productivity? Given all this, I would submit that salary transparency is not a practice that should be implemented by many corporations today without a lot of careful thought.

 

Kerr, S.  On the folly of rewarding A, while hoping for B.  (1995). The Academy of Management Executive, 9(1), 7-14.

Pfeffer, J.  Seven practices of successful organizations (1998).  California Management Review, 40(2), 96-124.

The Failure of Success When Internationalizing

Wal-Mart in Korea … Best Buy in China … Tesco in the U.S. …  The list of companies that have tried to expand internationally and have failed is long indeed, as my students learn in my classes in International Business.  Of course, there are companies that have also been successful as they internationalized, such as IBM, BMW, Toyota, Mastercard, and UPS, to name just a few.

My students are initially very surprised that companies that have been so successful in their home markets could stumble when expanding overseas.  When I ask them why these companies have failed, the two most common reasons they give are that they did not do sufficient market research, and that they failed to adapt to the needs of consumers in the market.

But I push them to dig deeper, to look at some of the root causes.  I challenge them on why they would assume that these companies did not do any market research.  And was the failure to adapt simply a blindness to differences, or a willing choice they made?  After all, these companies have relatively deep pockets, and would want to be sure that their investments would pay off.  Wouldn’t they want to do their homework and due diligence before plunging into a new market?

In interviews with executives, various discussions with students (many of whom work for global companies, some at fairly senior levels), and from research on the topic, I believe that the reasons for failure come down to four underlying causes.

Number one is a “readiness” factor.  Cavusgil et al. (2012) have explained this very clearly when they write that management needs to “… determine the degree to which they have the motivation, resources, and skills necessary to successfully engage in international business.”  For many companies, considering the possibility of expanding into an international market and increasing revenues is reason enough for them.  Unfortunately, these companies get ahead of themselves and forge ahead without laying the proper groundwork.  Part of this groundwork includes the four questions that Cavusgil et al. suggest firms should ask themselves:

  1. What do we hope to gain from international business?
  2. Is international expansion consistent with other firm goals, now or in the future?
  3. What demands will internalization place on firm resources?
  4. What is the basis of the firm’s competitive advantage?

For example, Target is a successful company that has only recently started to expand internationally.  It did this by acquiring the Canadian retail chain Zellers.  Target seems to be very cautious in its approach.  Even though many Canadians are familiar with Target and its logo, Target will continue to use the Zellers name as it learns how to operate their business model in a different country.  Contrast this with Best Buy, which opened its largest-ever store in China and then quickly added eight more stores.  Then, in 2011, it pulled the plug on all nine stores, realizing that its business model did not work in the Chinese market. 

Cavusgil’s questions will not only help companies to determine if internalization is right for them at this time, but also help them to develop a game plan, with specific actions and timelines, to improve their readiness.  For example, a company might want to hire an executive who has had extensive experience in the industry and in that country, and who is familiar with that country’s regulatory requirements.  It helps if that executive has some established relationships with government officials, since such relationship-building is very important in certain markets. 

Number two is a failure to consider criteria other than ROI in the decision on whether, where, when and how to internalization.  A company’s financial analysts may crunch the numbers and come up with very favorable returns.  Companies can get giddy with dreams of tremendous returns that they sometimes fail to probe and question the assumptions on which these numbers are based. 

For example, have country, political, and cultural risks been considered seriously?  If intellectual property rights are not strongly adhered to in the country, what is the risk for the company and what risk mitigation strategies should be put in place?  What is the competitive environment like in the country?  Are there strong local competitors as well as global competitors already in the marketplace?  Companies face many short-term pressures, and the allure of expanding into new markets can be compelling.  But ROI and other financial indicators alone should not be the sole criteria for entering a market.  In the M&A research, for example, data clearly show that the majority of mergers and acquisitions fail to meet targeted returns on investment.

Number three is not effectively addressing the right balance between standardization and localization.   In the global companies I have worked for, this tension plays out in many different ways.  In one consumer products company, for example, some general managers in different subsidiary operations insisted on having the final say in such decisions as the color on the packages, the suppliers to use for their printing needs, and even the logo of the company for their countries. 

When Allan Mullaly became CEO of Ford, he was surprised to learn that Ford cars had 27 different car platforms.  Was every one of them necessary?  Ford now has reduced the number of platforms to 14, with nine of them accounting for 87% of Ford’s global sales (Detroit Free Press, February 20, 2013).  The more that a company customizes and localizes its value chain and its product offerings, the higher the costs – although others would argue that the profits will also increase because the products will appeal better to local consumers.  Nonetheless, there are trade-offs here that need to be considered, and companies need to be clear on their strategic priorities. 

Companies need to set clear boundaries on those aspects of their value chain, products and brand image that are “core” to their strategy.  They need to make sure that these boundaries are clearly communicated internally, and that these aspects are standardized globally with some centralized control.  For Ford, these would include their global platforms.  For Nike, it would include their brand image.

And number four is a company mindset that past success should predict future success, especially past success with the company’s business model.  In his terrific book, “What Got You Here Won’t Get You There,” Marshall Goldsmith describes many of his executive clients who refuse to change their behavior since their style, dysfunctional as it may be at present, is what made them successful to begin with.  I believe a parallel may be found with companies that have become so successful that they believe that replicating their business model will work everywhere.  There are companies of course that have succeeded with such replication, and arguably there are certain industries (e.g., consumer electronics) where replication is a safe approach to globalizing.  But for many companies and industries, it always pays to question the validity of a replication strategy.

Based on the above, here are four additional questions that companies should answer before internationalizing:

  1.  Is your company “ready” to go global?
  2. Does your definition of success include factors other than just ROI?
  3. Have you defined what aspects of your value chain, products and brand are core and what can be adapted?
  4. Is your company sure that a replication strategy will work?

 

Cavusgil, S. et al.  International Business.  (2012).  Upper Saddle River, New Jersey: Prentice Hall.

Goldsmith, M.  What Got You Here Won’t Get You There.  (2007).  New York:  Hyperion.

 

Stephen Covey and Global Management Principles Versus Practices

When I was a young manager working for a Fortune 500 company, I signed up for a workshop that Stephen Covey was conducting at a conference center outside New York City.  I had just read his book, “The Seven Habits of Highly Effective People,” and wanted to learn more by listening to him live. He was a bit what I expected an author of such a book to be – sincere, straightforward, passionate about his beliefs.

When I learned that Mr. Covey passed away recently, I went back to this book that had such a profound influence on my professional life to see whether there were other insights I may have missed the first time around.  Over the years, I have always remembered to “begin with the end in mind” and to focus on the “important, and not necessarily the urgent” (although I have not always successfully followed this advice).

But something else struck me as I skimmed through the book.  In my classes in OB, I have interesting discussions with my students on what good OB practices are, and whether they can be applied to different companies in different industries.  One of the best articles on the subject is Professor Pfeffer’s “Putting People First for Organizational Success.” Here, he lays out seven OB practices that he claims have been proven to result in productivity and high performance.  They include selective hiring, employment security and self-managed teams. We have good debates in my classes as to whether these practices can apply to all organizations regardless of their situation, or to organizations in different parts of the world.

The “a-ha” for me was Covey’s insight that “Principles are not practices.   A practice is a specific activity or action. A practice that works in one circumstance will not necessarily work in another … While practices are situationally specific, principles are deep, fundamental truths that have universal application.”

There are many so-called “best” OB practices today that seem to work well for certain companies at certain times.  All you have to do is read the practices that Fortune describes in its annual Best Places to Work survey. Who does not know about Google’s free food, W. L. Gore’s self-managing teams, and GE’s Work-Out Programs, to name a few?

But Covey is right. Practices, including OB practices, are situationally specific.  Depending on the company’s strategy, its organizational goals, its cultural context, and its industry (among other things), these practices may or may not work.

But are there OB principles with universal application that lead to high performance and high commitment?  Based on my experience having worked for several different corporations, consulted with many others, having learned from some great minds in the field of OB, and having worked in many different countries, I would say there are at least five that I believe are universal.  First is to treat employees fairly and with respect. Whether it is a state-owned Chinese firm or a private enterprise in Brazil, organizations that uphold this principle will produce a higher level of commitment from employees than those that do not. The specific practices on how this principle is implemented will vary by culture.  In Western cultures, treating employees with respect might mean listening to their ideas. In Asian cultures, treating employees with respect might mean paying great attention to making sure employees do not lose face.

Second is to create a positive, motivating environment.  In Western cultures, this might mean such things as managers providing encouragement to employees, having an open-door policy, and conducting meetings where employees can express their opinions.  In Asian cultures, this might mean joining employees after work for karaoke, making sure they understand the history of the company, or even providing uniforms so employees can identify better with their company.

Third is to build self-confidence in employees.  Berating employees may instill fear and compliance but more than likely will build resentment and mere compliance, if at that.  We know from research that there is strong evidence of an “expectation effect” between teachers and students, as well as between managers and subordinates.  Sports trainers and coaches spend considerable amounts of time working on the mental aspects of the sport with their pupils, even with world-class athletes. In Western cultures, building self-confidence might mean giving some autonomy to employees or providing them with a challenging assignment.   In Asian cultures, this might mean offering them special titles or giving a team special recognition.

Fourth is to set high standards and expectations.   There is strong evidence from the research on goal setting that setting moderately difficult goals can be motivating.  GE popularized the practice of “stretch” goals. In Western cultures, setting high standards might involve meeting with subordinates to discuss goals and pointing to the alignment of these goals with department and company objectives.    In Asian cultures, this might involve having a senior leader of the company speaking to employees about the importance of meeting stretch goals for the good of the team and for the good of the company.

Fifth is to build collaboration and teamwork.  While talented individuals will continue to come up with inventions and innovations, breakthroughs today are more often than not the product of teams of individuals working together.  The image of the lone inventor or scientist toiling in isolation is somewhat exaggerated anyway; even Thomas Edison had a small team who worked with him to invent the light bulb. In Western cultures, building collaboration and teamwork might mean focusing on the right incentives and rewards to reinforce the right behaviors.  In Asian cultures, this might mean focusing on team-building to create a strong sense of group and company identity for employees, or on redesigning the work to build interdependence.

These are five principles that I believe represent good OB, are backed by years of research and that are universal.  However, let us also keep in mind, as Covey has wisely said, that principles are not practices. How these principles are applied and implemented will certainly vary and in this global world, Covey’s advice is worth heeding.

Leading Global Virtual Teams

When I ask the students in my MBA classes how many of them belong to cross-functional teams, between half to three quarters typically raise their hands.  And when I ask them if they also belong to global teams (where members are from different cultures and are in different geographic locations), most of them keep their hands raised.  

Many of you working with global companies today know that these global virtual teams are becoming more and more common.  The reasons for the increasing frequency of these teams are not surprising. First of all, many organizations have recognized for some time that their talent pool is not restricted to their headquarters location, and so using the best and the brightest, no matter where they are located, makes sense.  Second, many organizational solutions require cross-functional as well as cross-border collaboration, and restricting team membership to only one function or to those coming from only a single country (typically where its headquarters office is located) is not a smart strategy.

What do we know about the effectiveness of these teams?  Unfortunately, there is not a lot of research on this subject.  We can start with what I consider to be three of the best references on the subject of teams – Lencioni’s The Five Dysfunctions of a Team, Hackman’s Leading Teams, and Katzenbach and Smith’s The Discipline of Teams.  At the risk of oversimplification, here are four key success factors that they and others say about what makes a team work effectively:  the team has to have a compelling vision or goal, members need to trust one another, their skills (whether these are technical or social skills) need to be complementary, and a great deal of attention needs to be paid to team processes.

In my opinion, these same key success factors can be applied to global virtual teams, although how to make these factors work effectively becomes more complex and more challenging with these types of teams.  Some of the challenges are obvious: differences in geography, time, language, diversity, culture, size and technology. Others, such as gaining the participation and commitment of team members, are subtler. To add to the challenges, many global team leaders are managing teams whose members do not report directly to them.  Therefore, these team leaders have to learn to exercise “influence without authority.”

According to research conducted by Govindarajan and Gupta (2001), 82% of global teams they surveyed said that they fell short of their intended goals – they were not successful as teams.  Govindarajan and Gupta identified five challenges of global virtual teams:

  1. Cultivating trust
  2. Overcoming communication barriers
  3. Aligning goals of individual team members
  4. Ensuring that the team possesses necessary knowledge and skills
  5. Obtaining clarity regarding team objectives

How can the four success factors I mentioned earlier help you as a global team leader address each of these challenges?

Cultivating trust.  In many parts of the world, building relationships takes precedence over immediately working on the task requirements.  Therefore, it is important for a team leader to make sure that at the very least global team members know one another on a personal level.  Introduce team-building activities early on to make sure that members are comfortable working with each other and that they understand each other’s background, experience and what they bring to the table.  It is simply not enough to assume that because you all work for the same company, you have common interests or shared goals. Although it may be difficult to have face-to-face meetings due to time or resource constraints, this is a worthwhile investment.  Pay attention to group processes; for example, make sure that you establish protocols on how the team will communicate, how they will interact with each other during meetings, and other “ground rules” on how the team will function (e.g., who is responsible for informing team members who may not be present for a meeting, how disagreements and conflicts will be resolved).

Overcoming communication barriers.  While most of your team members may speak English, their level of confidence with speaking English will vary.  To overcome this, you may need to use translators from time to time. Make sure that agenda items are communicated ahead of time, and minutes of meetings are circulated after the meeting.  Allow some time towards the end of meetings to encourage members to make comments if some have not done so. Develop clear operating procedures for your team meetings (e.g., agendas will be circulated three days in advance, identify the purpose for bringing up a topic – for discussion, recommendation, or making a decision).  And follow up individually with team members who do not seem to be participating as actively in team meetings and probe carefully for possible reasons.

Aligning goals of individual team members.  Do not assume that team members are all committed to the team goal.  Make sure you understand the work priorities and performance goals of each of your team members.  Watch for symptoms of non-alignment, e.g., members not showing up for meetings, not volunteering for tasks, not delivering on their commitments.  Work to make sure that you link team goals with members’ performance objectives. This may mean having discussions with team members’ bosses to make sure that they are aware of the commitments required by global team membership and that they are fully supportive of their subordinates’ participation.  This also means that you have to engage and excite the team with a compelling vision. This does not have to be some lofty abstract ideal, but has to be something that challenges and inspires, that taps into a business issue that members all agree is important for the organization to address. Have you linked the business impact of your team’s goals to the organization’s success?

Ensuring that the team possesses necessary knowledge and skills.  While team members may have the necessary technical skills, does the team have the right balance of cognitive and interpersonal styles?  In my experience with global teams, the better ones not only make sure skills are complementary, but that all members have opportunities to build their knowledge and skill base, not only in business and technical aspects, but also in two important areas:  understanding and dealing with cultural differences, and building collaboration skills.

Obtaining clarity regarding team objectives.  Is everyone on the team clear on what success looks like for the team?  Are metrics well defined and are they agreed to by everyone? If you sense a lack of clarity, or lack of agreement, tackle this by bringing in the team sponsor (the person or group that you as team leader are accountable to for the team’s progress) to help clarify goals.  Make sure that you define expectations and deliverables with the sponsor and communicate these to the team. The team sponsor can also be used to give some recognition to the team as it makes progress. Is everyone clear on his or her roles and responsibilities (especially for those who may still have their regular “day job” in addition to being a team member)? Apply a tool called RACI (which stands for Responsible, Accountable, Consulted, and Informed) to help clarify roles and responsibilities especially around decision-making.

Being aware of these challenges and some ways to address them should make the job of a global team leader a bit easier, and ultimately more rewarding and fulfilling for everyone on the team.

 

Govindarajan, V. and Gupta, A (2001).  Building an effective global business team.  MIT Sloan Management Review, 42(4), 65-71.  

Global Mindset Part II

An example:  you are an expatriate manager of a multinational company in a Middle Eastern country  and you have just found out that no women are allowed to even apply for certain jobs in your department.  You say to yourself, “I just don’t get it.”  Another example:  an executive who works with Korean nationals once expressed his frustration to me that Koreans will never tell you what they really think.  “Why can’t they just be candid like Americans?”

I could give many more examples to illustrate reactions to differences in cross-cultural management practices that suggest a gap in global mindset, especially in one aspect:  that of developing empathy, which suggests an ability (and willingness) to understand another person’s or group’s perspective.  Actually, lots of research suggests that this skill differentiates effective negotiators from average ones.  For managers working cross-culturally, I believe that this “perspective-taking” skill is critical.  As two researchers from the University of Chicago (Epley and Caruso, 2008) have stated, “… the ability to accurately adopt someone’s perspective is better than chance but less than perfect.”  They point to three barriers, which I will paraphrase here. 

            

The first barrier is “activating” or switching on in our minds a willingness to do this.  As managers and leaders of global teams, this is sometimes difficult to do when there are so many mental balls that we are juggling.  And if we have not even made the effort to learn about other cultures, or to recognize that our way is not the only way, switching mentally to consider practices from another person’s perspective will be tough.  Our default mode is our own perspective, our own way of viewing things.    

The second barrier is our natural tendency is to react to things from our own perspective.  In one experiment which they cite, participants were asked to send either sincere or sarcastic messages to another participant, either over the telephone or via e-mail.  They were asked to predict, for each of 10 sincere and 10 sarcastic messages, whether the recipient would interpret the message correctly or incorrectly.  Recipients were not significantly better than chance at distinguishing between sarcasm and sincerity over e-mail, but not surprisingly, were significantly more accurate over the telephone.  But the senders did not think there would be any difference in the recipients’ accuracy when communicating over e-mail or the telephone.  “The senders’ intentions to communicate sarcasm or sincerity were so clear that it rendered them unable to appreciate … that the perception of the person on the other end of the computer monitor would be very different from the person on the other end of the telephone.” 

From my experience, I can recall many times when executives say they don’t understand why their messages are not being understood, or are being misinterpreted by employees.  If the executive working with Korean nationals has asked them for their opinions and they don’t give him any, it must be because they prefer not being candid!  The perspective that in some cultures, authority is so respected that voicing an opinion is tantamount to challenging the boss, is not something that would occur right away to this executive.           

Third, if we do recognize that we need to understand another person’s perspective, our ability to do this may depend on whether we believe that person is similar to us or not.  In either case, this may lead to problems.  Let’s say that you are a manager for a global company working with a group of Japanese employees in the Tokyo subsidiary.  You could make the assumption that because these employees belong to the same company as you they should react similarly to you.  Or you could make the assumption that because these employees are Japanese, they will react based on your “stored knowledge” of what Japanese are like – which may or may not be accurate.  Each of these assumptions will not necessarily reflect the Japanese employees’ perspectives.

I was recently in Singapore to teach a class in Global Leadership to a group of intelligent and experienced Asian executives, most of whom have regional roles working in global companies.  One of their challenges is in managing within a matrix environment and convincing senior management that certain global policies and strategies might have to be adapted for different markets.  In discussing their situation, we had a productive dialogue in looking at the situation from the senior managers’ perspective – what could be going on in their minds, what might be driving their behavior?              

Although empathy and perspective-taking are sometimes difficult, developing this skill can be learned through practice and mindfulness.  I have three simple suggestions.  One, get to know the other person or group better, as well as their cultures.  By doing this, you will minimize your tendency to stereotype.  Second, learn to describe first before judging.  We have a quick tendency to evaluate based on first impressions.  But in cross-cultural situations, what you see is often not what you get, because our observations are filtered through our own cultural frame of reference.  And third, try to reflect on what is going on and what might be causing the behavior.    

So for the expatriate manager and the executive working with Korean nationals, learning about the local cultures might give them insight into why these practices exist.  It does not mean accepting these practices, but it may mean developing alternative approaches.  The executive working with Korean nationals, recognizing that he is an authority figure, might put more effort in asking specific questions rather than asking them generally for their opinion.  Ultimately the benefit of developing empathy and of having a global mindset will help you become a more effective global leader.      

 

Epley, N. and Caruso, E.  (2008).  Perspective taking:  misstepping into others’ shoes.  In K. D. Markman et al. (Eds.), Handbook of Imagination and Mental Simulation.  New York:  Psychology Press.