The Importance of Cultural Competence in Global Commerce
Sometimes as a blog comes together, memories sneak from the back of the mind to the front, and they prompt a quick Google search. Sometimes that search brings bad news. Nobody likes to see an obituary at the top of the results.
When I was twenty-two years old, fresh out of college, I snagged a job as a U.S. Senate staffer working in a remote field office in Iowa. Soon after I came on board, the organization’s Latino outreach coordinator took me to lunch. Rick had been quite active in local politics, and although the rest of the staff didn’t regard him as very productive (all of the in-state people handled constituent advocacy issues, and his case load was a short stack), he made some good connections with the growing Mexican community in Des Moines. I liked him immediately.
He wasn’t around for long after I came on board, so I had little chance to get to know him, but our lunch conversation that day had a profound impact on me. Although I had studied international affairs and fancied myself an astute observer of all things foreign, I had not connected the dots of cultural competence. I knew what it meant to be bilingual (I was fairly bilingual myself), but I had never heard the term bicultural.
Even in the midwest, at a time when a white/Anglo-Saxon/protestant ethos was still dominant, the minority population was growing rapidly. And I didn’t see it coming until that afternoon. Rick had grown up in two worlds: the WASP environment of central Iowa, and the Mexican immigrant community that clung tightly to its old traditions. He was bilingual and bicultural, comfortable navigating in both worlds, and in tune to how things worked in both.
Rick told me a story—whether true or not is immaterial—about a fellow who traveled to Mexico in the hope of landing a contract with a big company. He was invited to the home of the company president, who offered him a drink and a comfortable chair on the veranda. The president inquired about the American’s life story and family back home, but the Yankee was more focused on the art of the deal than on what he viewed as trivial small talk. Missing the cue, he tossed out a terse response about his parents, and immediately launched into his pitch. You should select my company as your U.S. partner, he told the president. I have several reasons why…
They hadn’t even sat down to dinner yet.
Of course, he didn’t get the contract. Even by American standards, his approach was too ham-fisted, too abrupt, too inappropriate. But even if he had been more gentle, the purpose of the dinner was not business—it was the establishment of a trusting relationship.
The first mistake in all of this was on the U.S. company’s part. They sent someone with literally no understanding of simple conversation, much less the folkways & traditions of Mexican business. The second mistake was the guy’s unwillingness to be anything but a highly-focused businessman.
In American business, it is often frowned upon to discuss family or personal history. Such conversation has no place in commerce, so the thinking goes. Prospective business partners really don’t care about your kid’s little league batting average and they don’t care about your mom’s flower garden (this, I think, is much to our detriment).
For Mexicans, however, family is at the center of everything.
Rick told me that, in the Mexican culture, business deals are concluded only after the parties get to know one another. Once they know about each other’s motivations, once they make an effort to understand where their counterparts came from. They aim first for trust.
And had the U.S. company sent a bicultural representative, or at least a culturally competent one, they might well have landed a multi-million dollar deal.
The takeaway is very simple. Last spring, I posted a list of Five Essential Things All Business Owners (and Their Lawyers!) Should Know Before Signing Global Contracts (five more things are coming, so stay tuned!). Missing from that list, and more important than any of those elements of skilled contract drafting, is a simple connection with the human beings on the other side of the deal. Cultural competence is critical in an expanding global economy.
“There are many things that companies that come from the same or similar cultures take for granted in a negotiation that simply cannot be assumed when negotiating across cultures. Between 60 percent and 80 percent of crossborder deals fail to meet financial expectations. The main culprit: cultural disconnects.” — Doris Nagel, June 10, 2016 (Global Trade Magazine)
It is critical to seek understanding of the culture in the society you seek to do business with (not just of the country, but the society). Skilled contract drafting is only part of the puzzle. That and solid cultural understanding can work together to prevent failed relationships altogether.
To finish the story… I hadn’t thought about Rick in ages. But when I started gathering my thoughts for this blog, our conversation kept popping up in my head. Google told me this morning that he’d passed away nearly two years ago. I wish I could thank him for that early lesson.
Photo: President Obama and Mexican President (then President-Elect) Peña Nieto. Official White House photo. And you’d better believe they talked about their kids.