Leaders will thrive by applying local understanding to global vision

26/05/2015

Global Business Leadership

Global Business Leadership

A while ago I had the opportunity to lead a seminar about Navigating Global Leadership with my fellow coach Lene Beck Roervig at the Danish American Chamber of Commerce in New York City.

We opened the seminar by describing the following scenarios, and asking the participants to discuss the differences between the two.

Think about a fish in a bowl. Swimming around in the safe and well known waters, perhaps with one or two other fish, fish it knows very well because they have shared this specific fishbowl for quite a while now.  Life is a predictable swim in protective waters.

Now contrast the image with fish in the ocean. What are the differences?

Size is one.  The vast, open ocean compared to the closed-in fishbowl. The diversity of fish and other creatures of the sea, and the opportunity to explore new environments and places as you swim are other big differences.

Swimming in the global ocean

What does this scenario have to do with global leadership? Leading a business in the local market is like swimming in a fishbowl. You know the local culture, your fellow fish (competitors and collaborators), and customers well. You have a shared history and a shared set of core values.

Operating a business in the global    marketplace is comparable to swimming in the ocean. You need a different knowledge base and skill set to navigate this vast new market. What you learned while swimming in the bowl is not enough.

Similarly, global business leadership requires more than simply knowing different languages and having international experience.

A leader with a truly global vision understands how the global economy and climate impacts organizations and societies.

A leader also embodies the cross-cultural awareness and skills that come from knowing oneself, while seeking to understand others’ perspectives and moving towards integrating them.

To have a vision is defined as “the ability to think about or plan the future with imagination or wisdom” and as “the act or power of anticipating that which will or may come to be.”

How can we best anticipate what the future will look like? First we need to understand the past, the current, and our place in the world.

You have to act local to go global

As a local leader, you rely on your shared cultural context, including expectations, assumptions, values, norms, and history, to guide your actions as you manage and motivate your staff.

For example, if you operate a business in a more individualistic culture, you know that to motivate and give feedback to your staff, you need to reward the individual effort and give feedback in private.

Leading people in a culture that accentuates collectivistic values means promoting the accomplishments of the team, and rewarding the team as a whole without singling out individuals, particularly in public.

Research indicates that the reason some companies fail to become global successes is their lack of local understanding and their managers’ inability to adjust and acculturate to local or regional culture.

The way business is conducted in a certain country is influenced by the local culture, so you can’t simply transplant one business model directly into another country.

The ways in which we form and maintain interpersonal relationships, and communicate with each other differ across countries and regions.

Thus, you can’t expect to create new business relationships using the model that worked “back home.”

The curious case of Nokia

This argument is convincingly laid out in the book Fish Can’t See Water – How National Culture can Make or Break Your Corporate Strategy by Kai Hammerich & Richard D. Lewis (2013).

As a Finn, I found the chapter on Nokia’s rise to and fall from global dominance in the mobile phone industry fascinating.

The authors explain how Finnish cultural traits such as hard work, honesty, SISU (determination to overcome adversity) and a reliance on facts, in lieu of emotions and relationships, helped the company develop an agile, yet humble “we-can-do-it-culture” that served the company well as it outgrew its competitors.

However, as the company became global it needed to be open to different points of view, and willing to adjust to the various needs and perspectives of partners and customers in different countries and cultures.

Instead Nokia developed an arrogant “we-are-the-best” corporate culture. The authors suggest that this might have been fueled by another set of local Finnish cultural traits such as emotional distance, a doubting view of outsiders and national pride.

This inability to adjust to local cultural differences and needs around the world, combined with the global recession in 2008-2009 and the rise of the iPhone and other competitors resulted in Nokia losing its global dominance.

Practical lessons in global business leadership

Having a realistic global vision that translates into a successful global business model requires local understanding. Knowing how to communicate with a diverse and multicultural workforce is the backbone of effective management.

Similarly, the ability to manage cultural differences in negotiation, relationship building, decision-making and marketing is vital for global business success.

I once coached an American manager working for a Swedish manufacturing company in the U.S.

He was preparing to relocate to their HQ in Sweden to implement change initiatives and needed to enhance his cross-cultural managerial and leadership skills. We began by exploring such Swedish core values as egalitarianism, work-life balance, conflict-avoidance and modesty.

Swedish corporate structure is traditionally rather flat, while the decision making process is consensus driven and rather slow, from an American perspective. It’s also important to understand the role of trade unions in Swedish society.

Americans value meritocracy, individualism, competitiveness, and tend to prefer to make decisions quickly with an action and results orientation.

Once we had defined the differences, we further explored similarities and his individual preferences. We then developed ways for him to modify his own behavior and communication style when working in Sweden, while staying true to himself. This allowed him to create trusting and collaborative work relationships across cultures, the platform for successful change management and leadership.

It’s a small world – and a big world – after all

You need to understand your own local and culturally specific values, norms, beliefs and biases and how they influence your business strategy and how you lead.  Only then can you move towards a global vision with an understanding of how to integrate local preferences.

Going global can be illustrated with placing a fishbowl in an ocean, according to one of the seminar participants.

Your business is immersed in a new environment with different local and global competitors – different fishbowls, if you will.  With a broader perspective, new skills, and communication styles (learn new swim techniques), you increase your chances to survive and stay competitive.

What leadership skills help you achieve your vision for success? Which new communication styles have you added to your repertoire in the past five years?

 Disclaimer: The opinions expressed in this article are those of the contributing author, and do not necessarily reflect those of the Forum for International Trade Training.

About the author

Katarina Holm-Didio

Author: Katarina Holm-Didio

Katarina has extensive experience in global HR, cross-cultural training, expatriate spouse support and career consulting and advising. Her areas of expertise are cross-cultural competence, global teams, working and living in the U.S. and the Scandinavian countries; managing transitions and change, job search and career management. Her website is www.khdinternational.com.

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