Cultural awareness adds a competitive edge


As Australian companies increasingly look to do business overseas, especially in the dynamic Asia-Pacific region, HR professionals can take the lead in helping executives avoid the potential pitfalls of operating in unfamiliar cultures.

Rather than stumble into engagement with their foreign counterparts, Australian businesses need to recognise how familiarity with traditions, behaviours and cultural nuances can give them a competitive advantage.

Susan Babani is chief resources officer at ANZ Bank, which has extensive experience of doing business in the Asia-Pacific. She has witnessed a ‘we know how to do it’ arrogance among executives during her 30-year career working for multinationals in five countries. But, she says, that attitude has slowly given way to executives seeking, valuing and using input from their colleagues with more diverse cultural experience.

“In Asia, long-term relationships always trump positions, and as with all relationships, you need to invest time,” says Babani. While working in China, she found that eating together and sharing food was a fundamental way to establish relationships and build trust.

“We’re keen to look for similarities and not just the differences between people of different cultures,” she says. “For example, we’ve found that the desire for work-life balance isn’t just a western notion, but one of the top three things everyone wants, across cultures. And of course, absolutely everyone wants to do a good job.”

Time and patience

James Chan – who was born in Guangzhou, China and grew up in Hong Kong, but is now based in the United States – has carved out a career as a cultural competency consultant since 1981, when he helped a Fortune 500 company sell its journals in China.

Patience is indeed a virtue he advises. “It takes a long gestation period to succeed. Often five to 15 years is normal.” He cites the example of one of his clients, a Philadelphia machine tool company, which took seven years of engagement in China to get its first order, worth US$330,000.

Organisations must be clear about their motivations and how much time and effort they are going to put into grappling with cultural competency, says Dr Tom Verghese, an executive cultural coach and founder of Cultural Synergies. Not surprisingly, the wider the cultural distance, the more effort it requires. “Australia and New Zealand are culturally close. Australia and China are further apart, so going into Asia requires a long-term view.”

Country-specific training

For Chan, training is the key to any successful cross-cultural interaction. “HR departments need to engage external experts who can prepare their colleagues to do business overseas. I believe individuals require a minimum of 15 hours of country-specific training about a destination. It should be like basic training in the military.”

Many companies still blunder into the area of cultural competency, with decision-makers at high levels not very savvy about other cultures, says Chan.

“It all starts with management. If management doesn’t get it, then an HR person can’t do it. You can’t fight a war if the emperor doesn’t want to.”

Verghese also sees training as crucial, with the resulting knowledge ranging from the expectations around gift-giving and entertainment, to the importance of family in many Asian cultures.

Language matters

It has long been recognised that English is the international language of business, but even that is changing, says Babani. Many business people are now learning Mandarin and other languages.

“Showing that you have made the effort builds trust,” she says.

Verghese agrees and says he always encourages his Australian clients to learn at least a few words in a foreign client’s language. “People absolutely respond to this.”

Recruiting locally

Babani says ANZ’s successes in the Asia-Pacific are due in part to the cultural competency of its existing executives, which stems from a deliberate policy of selection and promotion, to reflect the bank’s customer base and the countries they operate in.

“ANZ always looks to recruit locally and to develop local people to run local operations,” she says. “This helps retain local talent because they can see there’s a future for them at ANZ.”

Anyone wanting to reach senior levels at ANZ needs to gain experience outside their home continent, she says. “We’re quite explicit about this with our top jobs. Cultural capability won’t happen by accident or just because you want it to. You have to work at it, across the whole spectrum. We believe that cultural competency is a core competitive, strategic advantage – if you can get it right.”

Chan agrees. “HR people should find ways to help CEOs and business owners learn that culture competency is a critical soft skill,” he says. “It takes a decision-maker with savoir faire to understand that culture is important.”

This article is an edited version. The full article was first published in the July 2015 issue of HRMonthly magazine as ‘Know thy neighbour’. AHRI members receive HRMonthly 11 times per year as part of their membership. Find out more about AHRI membership here

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Cultural awareness adds a competitive edge


As Australian companies increasingly look to do business overseas, especially in the dynamic Asia-Pacific region, HR professionals can take the lead in helping executives avoid the potential pitfalls of operating in unfamiliar cultures.

Rather than stumble into engagement with their foreign counterparts, Australian businesses need to recognise how familiarity with traditions, behaviours and cultural nuances can give them a competitive advantage.

Susan Babani is chief resources officer at ANZ Bank, which has extensive experience of doing business in the Asia-Pacific. She has witnessed a ‘we know how to do it’ arrogance among executives during her 30-year career working for multinationals in five countries. But, she says, that attitude has slowly given way to executives seeking, valuing and using input from their colleagues with more diverse cultural experience.

“In Asia, long-term relationships always trump positions, and as with all relationships, you need to invest time,” says Babani. While working in China, she found that eating together and sharing food was a fundamental way to establish relationships and build trust.

“We’re keen to look for similarities and not just the differences between people of different cultures,” she says. “For example, we’ve found that the desire for work-life balance isn’t just a western notion, but one of the top three things everyone wants, across cultures. And of course, absolutely everyone wants to do a good job.”

Time and patience

James Chan – who was born in Guangzhou, China and grew up in Hong Kong, but is now based in the United States – has carved out a career as a cultural competency consultant since 1981, when he helped a Fortune 500 company sell its journals in China.

Patience is indeed a virtue he advises. “It takes a long gestation period to succeed. Often five to 15 years is normal.” He cites the example of one of his clients, a Philadelphia machine tool company, which took seven years of engagement in China to get its first order, worth US$330,000.

Organisations must be clear about their motivations and how much time and effort they are going to put into grappling with cultural competency, says Dr Tom Verghese, an executive cultural coach and founder of Cultural Synergies. Not surprisingly, the wider the cultural distance, the more effort it requires. “Australia and New Zealand are culturally close. Australia and China are further apart, so going into Asia requires a long-term view.”

Country-specific training

For Chan, training is the key to any successful cross-cultural interaction. “HR departments need to engage external experts who can prepare their colleagues to do business overseas. I believe individuals require a minimum of 15 hours of country-specific training about a destination. It should be like basic training in the military.”

Many companies still blunder into the area of cultural competency, with decision-makers at high levels not very savvy about other cultures, says Chan.

“It all starts with management. If management doesn’t get it, then an HR person can’t do it. You can’t fight a war if the emperor doesn’t want to.”

Verghese also sees training as crucial, with the resulting knowledge ranging from the expectations around gift-giving and entertainment, to the importance of family in many Asian cultures.

Language matters

It has long been recognised that English is the international language of business, but even that is changing, says Babani. Many business people are now learning Mandarin and other languages.

“Showing that you have made the effort builds trust,” she says.

Verghese agrees and says he always encourages his Australian clients to learn at least a few words in a foreign client’s language. “People absolutely respond to this.”

Recruiting locally

Babani says ANZ’s successes in the Asia-Pacific are due in part to the cultural competency of its existing executives, which stems from a deliberate policy of selection and promotion, to reflect the bank’s customer base and the countries they operate in.

“ANZ always looks to recruit locally and to develop local people to run local operations,” she says. “This helps retain local talent because they can see there’s a future for them at ANZ.”

Anyone wanting to reach senior levels at ANZ needs to gain experience outside their home continent, she says. “We’re quite explicit about this with our top jobs. Cultural capability won’t happen by accident or just because you want it to. You have to work at it, across the whole spectrum. We believe that cultural competency is a core competitive, strategic advantage – if you can get it right.”

Chan agrees. “HR people should find ways to help CEOs and business owners learn that culture competency is a critical soft skill,” he says. “It takes a decision-maker with savoir faire to understand that culture is important.”

This article is an edited version. The full article was first published in the July 2015 issue of HRMonthly magazine as ‘Know thy neighbour’. AHRI members receive HRMonthly 11 times per year as part of their membership. Find out more about AHRI membership here

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