The Globalization Gap

A recent Boston Consulting Group report highlighted the capability gap international companies are faced with when trying to achieve their global ambitions. The work Global Business Culture has done over the past 15 years or so with companies going through this globalisation process would fully support the findings of this report which highlights a number of key deficiencies. Our assertion would be that one of the core knowledge gaps (if not the key knowledge gap) companies struggle with is a lack of understanding of the profound effect local cultural business approaches can have on the delivery of any global strategy.

When going through this globalisation process I'm afraid you just have to face two unassailable realities:

In a global environment, you just don't know what you don't know.

and......

Every time you drop a pebble into the global pond the ripples will go to places you have just never thought of - and maybe didn't even know existed.

The BCG report highlights three key areas of concern:

  • Go-to-market capabilities: How can you successfully penetrate a market when you just don't know what makes the people in that market tick? How can you sell when you don't know what the 'hot buttons' are? This is completely cultural.
  • Supply chain and logistics: These areas are massively impacted by culturally differing approaches to such issues as attitudes to contracts, time scales, supplier selection difficulties and communication problems.
  • Spreading best practice: This is often done in a colonial way - 'this is the way we do it back home' tends to go down really badly in countries who might feel their 'normal' way of doing things is far superior to this newly imposed dictat. This lack of accommodation of local sensitivities often leads to international merger and acquisitions failing badly with key people leaving quickly after the merger and taking key contacts and clients with them.

I have seen all of these problems happening time after time, year after year with monotonous regularity. Globalisation is a mindset not a word. Understand your own view of the world, your counter-parties' view of the world and where the similarities and differences are. The similarities are the points of contact where you can build bridges and forge efficient common practices; the differences need to be acknowledged and worked on.

Deep cultural understanding is a must, not a nice to have.


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