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3 Major Missteps in International Business

Via LinkedIn : Over the past years of doing business on a global stage, I have noticed three Major Missteps when a US company wants to take its business global. These errors occur because business leaders still view the world through their tiny binoculars and miss the wide angles necessary for international business to flourish.

misteps

Misstep #1: Thinking you don’t need help.

I was involved in a company in the early days of its international expansion. The business leader kept saying, “We just need to get our guy over there to talk to those people!” This leader assumed that he or one of his buddies could enter a non-US market and have immediate success. He thought that international companies would just jump at the chance to do business with him.

That line of thinking may occasionally work in cross-border expansion, if three conditions exist. First, you must be marketing a product or service that is already well-known in the region you are targeting. Second, you must have a truly outstanding “guy over there”, a BD heavy who speaks the language, knows the customs, and can mine pre-existing relationships. And third, the border you are crossing is Canada … the non-French speaking part.

No American business can successfully operate with a strategy that begins and ends with getting their best US salesperson in front of overseas prospects. Every American business must partner to be successful.

successful

The need for partnership holds true especially in Asia. China is famous for its culture of joint ventures. Most American brands succeed there by teaming up with a local player. Eventually, if the business succeeds, US corporations might be able to buy back the business.

Japan is similar. I was intricately involved in a company’s early expansion into Japan. Our leader at the time just wanted to get his guy over there. But I had another idea. I had a contact in Japan, a good friend from college. He was a westerner by blood, a son of American missionaries to Japan. He was raised in Tokyo and was thoroughly Japanese except for his race. After attending college, I watched him veer away from religious work, instead returning to Japan to establish an exceedingly successful business introducing Fortune 50 companies to the Land of the Rising Sun. Together he and I created a plan to bring my company’s business to Japan, at a cost of a few percentage points of future Japanese revenues. I arranged a meeting for my bosses to meet my friend in his office in Akasaka. When my boss returned from that trip, he said, “He’s a nice guy and all, but I don’t see how your friend can help us.” He was right, he didn’t see it. His Japanese launch closed after a few years.

You cannot go global by yourself. Get the right partners to help.

Misstep #2: Underestimating culture.

“It’s about business, not culture. It’s not that complicated.”

I have heard that sentiment articulated in many different nuances by those running American businesses, usually in response to a knowledgeable warning of a cultural inhibition to a business idea. For some business leaders, business is simple: if there’s money to be made, business happens.

That simplistic mindset falls short most places in the world, especially when a lack of information spawns a disrespect for another’s culture. Cultural differences add numerous layers of misunderstanding to any business endeavor, and they add many iterations to the back-and-forth of the business process. Everything is more complicated when the business is international.

One of the companies for which I previously worked was just getting started in France. I was there to offer technical sales support to our company’s business developers in Paris. Together we made a last-minute push for the business of a major French telecom. The only way to get this done was to involve a middle player. The middle player, a contact of my colleague, worked for a subsidiary of the telecom itself. It was the key that got our French BDs in front of the client, and my colleagues performed masterfully. They endured a vendor review unlike anything I had seen: a day-long grilling that more resembled an oral thesis exam than a business meeting. As the only non-Frenchman in the room, I noted how often my colleagues had to explain why our company, though based in the US, did not exhibit typical “Anglo-Saxon character.” We won the deal, but at the cost of having to bring the subsidiary along. Vive la politque! When I returned to the States, our CEO at the time nailed me to the wall as to who this third party was and why we needed them in the contract. The only response was, “It’s how the French do business,” but saying this would not have helped.

Different cultures enter into business relationships for different reasons. Yes, in the end it is about money! But in the USA, it is truly almost always only about money. However, in many cultures I have worked, especially Japan, an essential component in a business relationship is the relationship itself. Japanese will of course ask themselves, “How much money will we make?” But next they will ask themselves, “Do we want to have a business relationship with these people?”

In China, I noticed that the first question asked in client prospects meetings had nothing to do with money, but rather with compliance. Compliance? Yes, they asked if our company was in compliance with MOFCOM, the Chinese Ministry of Commerce Committee regulations. In the US – you know this already – when making a deal, the other side’s question of whether your side complies with US regulations ranks maybe the eighth or ninth down the list, below questions like “How long have you been in business”, and “Do you guys like to go out for sushi?”

Doing business internationally requires understanding and respect of the cultures in which you aim to do business.

Misstep #3: Expecting immediate results.

time

America excels at efficiency. We truly have an amazingly complex yet functional business climate, fostered by proper usage of technology, just-in-time logistics, and world-in-your-palm confidence.

We have come to expect immediate results. But most of the world does not operate in this way. Some regions are approaching American-style efficiency standards. Other regions will never get there, and they don’t really want to.

In my dozen years in international business, I noticed something very curious about American meetings. Many of them, in fact most of them, are scheduled to last one hour. A solid block of 60 minutes, no more, no less. The meeting leaders sometimes publish an agenda to be reviewed prior to the meeting. Most meetings aim to accomplish one or more decision-tasks. And some leaders still take and distribute “take-aways”. Efficiency, par exellence!

In the 24 countries in which I have participated in business meetings over the past twelve years, I have never encountered this blockish manipulation of time. And I myself wore my own efficiency blinders. I learned this the hard way.

I was in Paris and had scheduled a meeting after lunch with a French client. The meeting began at a civilized time, 14:30 CET, which is two-thirty PM Paris time. A day before that meeting, I had received a request to attend an important conference call led from the US on the same day as the Paris meeting. I was told that my participation was vital to the conference call, and so the leader asked me what time he should set the meeting. I took into account the six-hour difference with the States, and I said to myself, fatally, “Surely the afternoon meeting in Paris will be done by five o’clock.” Big mistake.

The after-lunch meeting the next day began on time, which is French custom, and subsequent to some genteel conversation, we got down to business. As with all French meetings, there was a rough agenda, orally communicated. However, a couple hours into the meeting, the client took matters in a totally different direction, and my colleagues followed along without a complaint. I later learned that it is quite acceptable to take French meetings in any direction. “All meetings are open meetings,” my French colleagues say. I sat in horror as it became clear that I would not make my five o’clock conference call in which I was a vital participant, despite having set the time myself. I couldn’t really tell the present group that I had another meeting to attend. Not only would it be rude under the circumstances, but it would show my lack of experience, having scheduled two meetings in one afternoon. Quelle horreur!

I quietly announced to the room that I required “un point technique”, which roughly translated means “a pause for technical reason”, but in French business etiquette it means a “potty break”. I used the break to back out of my second meeting, profusely apologizing. I never made that mistake again.

Very few meeting outside of US business culture can be cleanly and abruptly ended just because “it is time”. Similarly, “Sorry, I have to leave because I have another meeting to attend …” — that really doesn’t work elsewhere.

All this is to say that American efficiency has its limits to effectiveness in international business. Here’s a good Rule of Thumb: If a deal crosses an international border, double the time expected to complete it; if it crosses a language barrier, triple it. Patience is essential in international business.

Whether your company is well underway in the process of going global, or just considering it, keeping these three principles in mind will lay the groundwork for success.

Brian Arnold is founder of Bäenter International Consulting, whose purpose is preparing businesses to take their products and services to global markets. 

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