The MAIN Reason Why Global Companies Are Struggling In Vietnam...And Everywhere Else
There are diverse reasons why global companies are struggling in Vietnam and elsewhere in the world but one is above them ALL.
That reason is invisible, intangible but is everywhere at the same time and it is the one that impacts global companies the MOST.
The worse is that most of the global companies are not aware of it. So they are keeping on making the same mistakes resulting in costly consequences and not tackling the roots of the problem, allowing it to hit them again and again.
So what is this reason?
2 questions to help you answer this question:
My First question is: "What is the greatest barrier to global business success?"
Your answer might be...Language? Communication?
Quite good answer! But it is only a part of the answer and incomplete...
The right and complete answer is:
“The greatest barrier to business success is the one erected by Culture.”
This sentence is a quote from Edward T. Hall, an American anthropologist and researcher in the cross cultural field.
My second question is: "What is the most valuable skill for the 21st century GLOBAL Manager?"
The right answer is:
“The number one most valuable skill for the 21st century manager is the ability to successfully work across cultures.”
This sentence is extracted from an article from the Harvard Business Review.
The MAIN REASON why global companies are struggling around the globe is CULTURE and by consequence the lack of CROSS CULTURAL SKILLS of their expats.
Living and working in another Culture is challenging.
For example, Vietnamese working Culture is so challenging that seasoned Western expats (knowing Asia), Asian expats, overseas Vietnamese (Viet Kieu) and even Vietnamese who spent few years working or studying abroad have difficulties working in Vietnam.
So imagine for a Western expat on his first assignment...
If you do not know the local Culture, if you do not master it, it will impact you big time! And the worse is that you will not even be aware of it, so you will not be able to identify the causes and design and implement the right solutions.
The problem of Culture is that the most important part of it is invisible, intangible (values, beliefs, assumptions, the mindset, the roots of the Culture) but it is there and impacting you at every interaction with the locals.
Being a successful company or a great Leader in your own Culture does not guarantee that you will be one in the new culture you are working with or transferring to.
Are you aware of it?
Yes? So it means that theoretically you are aware of ALL the 8 consequences for your company and expats and that you have taken the ADEQUATE measures to solve the problems inherent to the impact of Culture.
No? So keep on reading.
The consequences for Global companies for not being aware of the impact of Culture on their business.
If your answers to the 8 following questions are NO or WRONG your company is in trouble.
1/ Do your expats have a high CQ?
A high what? A high CQ!
You know about the IQ right? intelligence quotient.
The EQ too right? emotional quotient.
The PQ? No? that is normal, I have not write a book about it yet. It is the psychological quotient. A Leader should master people's psychology, know exactly how people will react and think before he will say or do anything.
Now if your Leader is working in his own Culture these 4 high Qs are enough to make him successful. But if he wants to be a successful Leader in another Culture he needs a 5th Q.
The CQ: Cross cultural quotient, skills or Cultural Intelligence.
Let's start with the start.
You want to send expats to the 4 corners of the world. Good.
2/ First question: on which criteria have you selected your expats?
Criteria you would use usually to select a candidate for the same position in your country? Good but far from being enough.
You should also look for other criteria.
Did you use tools like the OAI (Overseas Assignment Inventory)?
A questionnaire which allows to map and measure the profile of an ideal expat who possesses qualities like openness, flexibility, adaptiveness, curiousness, willingness to change, to learn, patience, communication skills, etc...
Yes? Good for you.
No? Then you should have.
After you selected them with the right criteria for the oversea assignment.
3/ Second question: Did you give them a cross cultural training within 2 months after their arrival?
Yes? Good for you and for your expats.
No? So you have not understood that your expats' business challenges are intrinsically intertwined with their cultural challenges. There is no way they can win the first without winning the second.
Come on! I see global companies sending expats for their first overseas assignment in Vietnam which is the most challenging Culture in Asia without giving them any cross cultural training.
4/ How long are you sending your expats? 2 years mostly. No! seriously?
So let's summarise:
• You are not selecting your expats to see if they have cross cultural skills before sending them
• You do not prepare them to the local Culture challenges with a cross cultural training or coaching 2 months after arrival
• And you send them there for only 2 years?
And now you expect them to have business results while:
• They might not have the cross cultural skills required to adapt to the local Culture
• They have no clues about the local Culture
• They have only 2 years to learn a bit of the language and master the local Culture without being in anyway prepared for it while being pressured to reach their business objectives which are intimately connected to the mastery of the local Culture?
Wow. Good luck to you and first of all to them then.
My advice: after giving all the support described above and the ones described later in this article, give them at least 4 years to succeed. If not the risk is to have tourists instead of expats.
5/ And now you want to do what? To localize, "Vietnamize" your company and its Leadership?
Ok, well, so allow me another question again: And who is gonna do that? and how?
All the global companies I meet in Vietnam want to do that but strangely only a handful succeed. The result is that they keep on sending expats. Desperately.
Vietnamese Leadership style is hierarchical and Vietnamese are hierarchical while Western Leadership style is egalitarian which means for most it is flat Management. So who will help your Vietnamese Leaders to shift their Leadership style and your Vietnamese staff to be egalitarian?
What? nobody? “they will do it by themselves”?!
Believe me, it will not happen and is not happening because there are 5 Vietnamese cultural values interacting with each other’s and stopping them from doing it:
Hierarchy, face-saving behaviour, harmony, respect of the elders and relationship.
Far too many expats in Vietnam are seating in their chair, asking their local Leaders to shift by themselves their Leadership style, asking their staff to be egalitarian and waiting for it to happen. And they are still waiting until the day they leave the country.
6/ And now that you failed with the local top Leaders, what about your local middle Management?
If your expats did what I described earlier, you failed to help your local top Leaders to shift toward the Western working Culture and Leadership style which means that you failed to prepare the succession of your expats which means that you are still keeping on sending expats and that the "Vietnamization" or "localisation" of your company failed.
But the consequences of your failure are not limited to that level of leadership and are cascading down the organisation with a mechanical and merciless logic in a downward spiral, vicious circle.
As you did not help your local top Leadership team to shift toward the Western working Culture, they are unable to do the same with the Middle Management level which is in turn unable to transmit down the Western Culture to the lower level of employees.
The result is that you are a Western company with a Western Corporate Culture where your expats are working Western but where all your local employees at different levels are working following the local working Culture.
I let you imagine all the consequences for your company in terms of productivity, engagement, motivation and of course business results.
A lot of effort, time and resources spent for little results.
7/ Did you create a local Corporate Culture?
No? Then do not wait and do it right now.
When you are coming from different Cultures and you have to work together, everyone has to make an effort to adapt to the other one because there is no Culture which is better than another, there is only Cultures which are different.
Let's say you are a foreign company operating in Vietnam. Your expats have to adapt to the local Culture and your local employees have to adapt to your corporate Culture. Everyone has to shift from one's cultural position and meet in the middle because your expats cannot become completely Vietnamese and reversely your Vietnamese employees cannot become completely Western. Everyone has values that one cannot lose.
So the result, the success is when everyone meets in the middle. We keep what is good and cannot be removed in each Culture and create a cultural mix.
Too many global companies are still making that costly mistake of imposing worldwide a unique Corporate Culture created at the head office following the cultural values of their country of origin which have nothing to do with the local country's Culture and even worse are sometimes in opposition to them.
Add to that disastrous environment, expats Leaders who:
• Have no clue about the local Culture
• Not aware that they have to change and adapt
• Not willing to do so
• Aware that they have to change but not knowing how to do it or not knowing about the local Culture
• Are applying stubbornly their corporate Culture even if it goes against the local cultural values
• Not actively helping their local staff to culturally shift toward the Corporate Culture
Until now I took the example of Western companies because the gaps between Western and Asian Cultures are big but the problem is the same whatever Culture your company has even if it is Asian. Asian Cultures are similar but they have differences.
For example, Japanese and Korean’s working Cultures are very different from the Vietnamese one. It results in Vietnamese employees being very unhappy working for them with all the consequences attached to it.
8/ What about your Leaders working at the head office? (CEO, VPs, Regional Directors etc.)
What is their level of?
• Knowledge about the local Cultures of the countries they are managing?
• Cross cultural skills?
• Cultural intelligence?
• Knowledge of the specificities of the local working conditions and local challenges of the countries they are managing?
Because if their levels are low, the result is that they are disconnected with the reality and unfit to do their job efficiently.
What I typically see in Vietnam is expats who are given business objectives by their head office superiors located thousands of kilometres away which are unrealistic, non S.M.A.R.T., in regard to the local conditions and environment. Why? simply because those objectives are given by people who are not aware of the local challenges their local expats are facing (cultural and others). And worse they are not giving them the resources to face and win them even when they know those challenges.
Another typical situation is head office Leaders visiting their Vietnam office and saying and doing things which are not acceptable in the local Culture impacting the work and relationships their local expats have spent months to build up.
Conclusion: What are the solutions to these problems?
• Select your expats with the right profile and cross cultural skills
• Systematically train, mentor, coach your expats and any executives working with another country to develop their cross cultural skills and knowledge of the local Culture
• Send your local Managers for 6 months to 2 years abroad to help them shift Culture
• Train, mentor, coach them in cross cultural in their own country to help them be familiar with the Culture of their foreign company
• Create a local corporate Culture which is a mix of your Head office Corporate Culture and the local one
• Create working conditions in your local offices which are respecting the local working Culture, values and practices
“Living in a foreign culture is like playing a game you’ve never played before and for which the rules haven’t been explained very well. The challenge is to enjoy the game without missing too many plays, learning the rules and developing skills as you go along. “
— Robert Kohls
The cultural challenge is that you have to play the game without knowing the rules. You have to learn by yourself while playing but you cannot ask the local players to explain them to you because themselves are not aware of the them…
Always ask the right question to have the right answer. This game, this world and this life are about change and fast change.
Change is growth.
So the question is not: are you willing to change or not? The question is not even: can you change.
But the right question is: how fast can you change to adapt?
Because if you cannot, you are out of the game…
So enjoy the game and good luck while playing to win it.
Christian Routin is a Transformational Speaker, Consultant, Trainer and Coach in Cross Cultural, Soft Skills and Happiness. He is specialised in Vietnamese and Asian working Culture. He has a double Culture, Vietnamese and French and is partnering with 15 world leading cross cultural training companies.
He helps 70 leading global companies operating in Vietnam to:
• Train their top expats to understand and leverage on Vietnamese working Culture
• Train their expats and Vietnamese staff to understand and leverage on each other’s Culture
• Global companies’ multicultural Leadership teams to develop their cross cultural capabilities and to become an effcient team
• Global companies to create a local Corporate Culture and working environment that increases productivity, loyalty, motivation, attracts local talents and retain them
To contact him:
Linkedin : Christian Routin