To win in international business, you need to think globally

In the new knowledge-based economy, having a global mindset means everything. Executives of Western-based companies must get up to speed on business practices throughout the world. Here's how to become globally literate.

If you conducted an informal poll, you’d probably find that many U.S. CIOs and other IT executives have little knowledge of business practices in Asian countries. For instance, would they know that at corporations in China, students rarely ask questions of the instructor, or that in Japan, communication is as much nonverbal as it is verbal?

Executives of Western-based countries must get up to speed on business practices throughout the globe, particularly those of Asian countries. Read on to learn more about learning the global mindset.

What is global literacy?
Culture determines everything about a business professional, from leadership and management skills, to problem-solving abilities, to learning methods.

So says Dr. Robert Rosen, CEO and chair of Washington-based Healthy Companies, an executive consulting firm that specializes in helping companies achieve global high performance.

He is author of Global Literacies: Lessons on Business Leadership and National Cultures, a book purporting the results of a landmark survey of CEOs from 28 countries around the world, including Toyota, Canon, Singapore Air, Deustche Bank, Ericsson, Motorola, Boeing, and Coca-Cola.

One of the key premises in Global Literacies is that, in the borderless global marketplace, culture actually matters more, not less.

“All business is global business, all customers are local customers, and competition comes from everywhere,” Rosen said. “The question is, how do you survive in this new multicultural marketplace? The CEOs told us you really have to understand the importance of culture to make that happen. And that the world has changed, but the software inside of our heads for how to lead and conduct business hasn’t really changed.”

 Along with cultural understanding, the book reports that there are new “business literacies” that managers and executives must learn in order to do business in the global marketplace. They are:
  • ·        Personal literacy: understanding and valuing yourself. “This is about self-awareness, self-renewal, and having strong values, but being flexible enough to know that people from other cultures have different values and ethics,” Rosen said. “It also means being able to make fast decisions but balance that with thoughtful consideration. Asians are probably best at personal literacy. They’re able to live and work in contradiction and ambiguity, holding paradoxes and opposing forces in their heads at the same time.”
  • ·        Social literacy: engaging and challenging other people. “We learn from the Japanese about this because…so much of what gets said is nonverbal, and they learn to read environments, contexts, and circumstances very well. We in the United States are big talkers.”
  • ·        Business literacy: focusing and mobilizing your business. Rosen notes that North American businesses, particularly those in the U.S., have perfected this skill. “We’re the world’s problem solvers,” he said. “The business of America is business. We’re a fast-paced, action-oriented society. We love building new things and tearing them down when they don’t work. We’re good at navigating through chaos and leading people through change.”
  • ·        Cultural literacy: valuing and leveraging cultural differences. European business professionals possess this skill in abundance, Rosen explained. “These are people who understand their own cultural heritage, but they also recognize their own strengths and shortcomings,” he said. “They’re inquisitive internationalists, and they really try to build bridges across cultures.”

What can you learn from Asian companies?
Rosen said Western companies have much to learn from their Asian counterparts. Perhaps the central teaching is that they should strive to embrace other cultures as much as Asian businesses have. The second largest private insurance company in China, for instance, displays busts of both Confucius and Sir Isaac Newton in its main entrance. “It represents how this Chinese company believes that their competitive advantage will come from learning the best thinking and practices from around the world,” Rosen said. “I think that represents a new kind of leadership."

At the same time, business executives in the Western world are accustomed to operating under standard practices for nearly every situation. Rosen said they can follow the example of professionals in Asian countries and learn to adapt behavior to individual situations.

“Japan is known as a high-context culture,” he said. “Your behavior is influenced by the situation, the context you’re in. Americans come from a low-context culture, meaning we’re basically the same person regardless of the situation. That’s a strength in that we have strong principles that we stand by, but it’s a liability in that we’re not as sensitive as we need to be when we’re doing business across cultures.”

When technology comes into play, Western and Asian countries have much work to do before they can interact seamlessly and effectively. While the U.S. is currently leading the world in information technology, China, Japan, and the rest of Asia, as well as Europe, are catching up quickly. “Computers may link us quickly, but it doesn’t mean we communicate any better,” Rosen said.

But because technology companies are, by definition, “fast, and flat, and flexible,” he added, “they have the organizational structure that makes it very easy for them to interact with Asian society.”

The Western-based companies that will establish successful relationships with Asian partners are those that practice personal literacy, a strength among companies based in the Orient. American companies such as Kodak and Boeing have a great deal of global experience, particularly in Asia, and, as a result, have become more sensitive to cross-cultural issues and more team-oriented, Rosen noted.

Why should you learn global literacy?
Teo Chee Hean, Singapore’s Minister of Education, pointed out the difficulties all countries face under the new knowledge-based economy at the East Asia Economic Summit Plenary Session in October 1999. He noted that culture cannot be dismissed in the face of technology.

“One dilemma that all countries have to grapple with in the knowledge-based economy is the need to maintain a sense of national identity and cohesion in the face of globalization,” Hean said. “This is not an easy task…Everyone can aspire to be a globalist, literate in English and IT-savvy, yet be rooted in his heritage and share a common vision for the future.”

The test for many executives of Western-based companies will be to learn global literacy, because a company’s investment in cross-cultural leadership development often determines its success.

“When we asked [CEOs] how important multicultural experience is, Americans ranked second to last of 18 countries,” Rosen said. “We just don’t value it or feel the need to improve it at a time when it’s critical to be successful in global business. It’s really our Achilles’ heel. We’re going through a period of intense prosperity in the U.S., and we often don’t think we need to learn from other countries. We go in and think our way is the best way. I would give American businesses low marks on cultural literacy, mainly because the market has been so big and there hasn’t been a real incentive for us to learn to do business this way. But it’s critical for success.”

Where to learn the global mindset
Firms such as Healthy Companies offer executive training in global literacy, including CEO coaching, senior team building, organizational change, and leadership development. Meridian Resources, a San Francisco-based firm that helps companies enhance the effectiveness of their global business transactions, offers workshops for groups of executives, managers, and technical personnel who are involved in the knowledge and technology transfer with or between operations.
Tell us what you think about becoming globally literate. Do you feel that the U.S. is behind the times in terms of the global mindset? Post a comment below or drop us a note.

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