Expanding Abroad? Avoid Cultural Gaffes
19/01/2010 - The Wall Street Journal
Most small companies seeking to tap overseas markets know they'll have to navigate foreign laws, taxes and regulations. But they also need to figure out how to avoid cultural blunders.
Tom Bonkenburg, director of European operations for St. Onge Company Inc., a small supply-chain consulting firm in York, Pa., headed to Moscow in 2008 to develop a partnership with a large firm there.
But when he met the company's Russian branch director, "I gave my best smile, handshake and friendly joke... only to be met with a dreary and unhappy look," says Mr. Bonkenburg.
Later, however, Mr. Bonkenburg received an email from the Russian, thanking him for a great meeting. Mr. Bonkenburg later learned that Russian culture fosters smiling in private settings and seriousness in business settings.
"He was working as hard to impress me as I was to impress him," Mr. Bonkenburg says.
Small U.S. businesses that look abroad to gain new customers or partners often neglect to learn business etiquette in those countries, says David Livermore, author of "Leading With Cultural Intelligence." "Culture is not at the forefront of the typical person's psyche, given the sheer overwhelming nature of all the other parts of the due diligence process," he says.
According to the U.S. Commercial Service, overseas expansion among small businesses has held steady despite the recession. Many companies are looking to do business in "white-hot" markets such as India and China, says Larry Harding, founder and chief executive of High Street Partners Inc., an Annapolis, Md., firm that advises businesses on expanding globally. He's also seen a new interest in African countries and a pick-up in Brazil.
For small companies looking to do business abroad, "the important thing to remember is that you don't know what you don't know," says Kari Heistad, CEO of Culture Coach International Inc., a Newton, Mass. firm that advises clients on cross-cultural issues. Even subtle cultural insensitivities can have a profound impact, she says.
Last Spring, Dakar Sushi-owner George Ajjan wrote to a Senegalese government official-using the French language but in an American English tone-to request a business license for the restaurant. "I'm direct and I shoot to kill," Mr. Ajjan says of his usual correspondence.
To proofread his French grammar, Mr. Ajjan gave the letter to a Senegal native who noticed that the tone was too jarring. If not rewritten in a more deferential voice, the request would likely get denied, his friend explained. "It wasn't just about translating, but about adapting phrasing to make sure you are in line with what people expect," says Mr. Ajjan.
Similarly, after Ron Gonen expanded his New-York based company, RecycleBank, into England last year, he encountered an unexpected language barrier. The company, which sets up rewards programs for individuals based on the amount they recycle, was offended when the press called the program a "scheme."
"I would try to tell them that it was not a scheme, that it was a service," says Mr. Gonen, the firm's co-founder and CEO.
Because the press coverage was otherwise positive, Mr. Gonen soon pinpointed the miscommunication: The word "scheme" holds no connotation of deceit in Britain, as it does in America.
For those businesses that commit a cultural blunder, fixing the situation can be costly. The price tag hit seven figures at Toronto-based AlertDriving, a firm that provides online driving training courses to companies with vehicle fleets.
Between 2005 and 2007, AlertDriving, incorporated as Sonic e-Learning Inc., expanded into more than 20 countries before realizing that the product had cultural flaws. The dialogue in the lessons had been poorly-translated and the driving instruction failed to address geographic nuances. For example, AlertDriving teaches that the center lane is the safest on a multi-lane highway, but that is untrue in Dubai, where the center lane is used exclusively for passing.
According to Gerry Martin, AlertDriving's chief executive, it took years to realize that the foreign clients were unsatisfied because "in some cultures, like Japan, criticism is considered disrespectful." Once the company got the negative feedback, it "had to redo what already was in the market," says Matthew Latreille, AlertDriving's director of global content development.
The company spent about $1 million revamping its existing product line, honing language dialects and local driving habits.
"Now we are 100% localized because we are immersed in the culture," Mr. Latreille says.
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