As successful companies extend their reach internationally, they’ve learned the importance of heightening their cultural sensitivities. Embracing the local culture is not only the foundation for success of any branch office, but it should also be a fun and interesting journey.
The pitfalls of stretching a corporate culture across the globe were the subject of a study published in the Harvard Business Review. Professor Erin Meyer wrote: “[A] company’s culture is often a key driver of its success. Let’s look at L’Oréal. Confrontation and open disagreement are a strong part of its corporate culture. As one manager put it, ‘At L’Oréal we believe the more we debate openly and the more strongly we disagree in meetings, the closer we get to excellence, the more we generate creativity, and the more we reduce risk.’
“Yet in many important growth areas for L’Oréal, including Southeast Asia and Latin America, that attitude is in direct opposition to a cultural preference for group harmony. A Mexican employee explained, ‘In Mexican culture, open disagreement is considered rude, disrespectful, and too aggressive.’ An Indonesian employee said, ‘To an Indonesian person, confrontation in a group setting is extremely negative, because it makes the other person lose face. So it’s something that we try strongly to avoid in any open manner.’”
In Japan, elaborate rules of corporate gift-giving govern interactions among top executives. In Germany, a sunny disposition can be an unexpected drag on retail success. When Walmart’s foray into the German market failed, the American retail giant belatedly discovered that there was one core aspect of company operations that really irritated local consumers: cheerfulness. Viewed through a Continental lens, the stores’ programmed friendliness seemed out of place.
Often the cultural divides are closer to home. Anson Funds, a leading Canadian hedge fund, has long maintained offices in both Toronto and Dallas, which was a savvy business decision. Eastern Texas is home to a wide range of dynamic startups. A culture of innovation is fed by academic excellence, as represented by the University of Texas and other institutions of higher education, and sustained by cash liquidity from the state’s oil-rich financial institutions.
Anson Funds is not alone in its choice. The list of Canadian companies operating in Texas includes Bombardier, Carestream Health, Celestica, Columbia Pipeline Group, Cott Beverages, Dynamex, Enbridge Energy Partners, GSE Environmental, GuestLogix, Gulf Stream Marine, Mitel Networks, Omega Protein, Saputo Dairy Foods, Shawcor Energy Services, TD Securities, Tucker Energy Services, Village Farms, Waste Connections, West Fraser — and more.
Texas moves to the beat of an entrepreneurial cadence. There’s no shortage of startups with big dreams, or — in the case of new resident Elon Musk — dreamers looking for a comfortable home. That creates exciting opportunities, along with some cultural challenges.
In general, the northern neighbor is more politically correct than the southern state, and divergent views on many social and political issues are to be expected. But that doesn’t mean that companies need to adopt a “walking on eggshells” approach to synchronizing disparate cultures.
Instead, the key is to be open to learning. Meyer advises managers to strive to understand each “relevant dimension along which [the] cultures vary.” For example: “Are decisions made by consensus, or does the boss decide? Are timeliness and structure foremost in everyone’s mind, or is flexibility at the heart of the company’s success? Only after you’ve figured out where the pressure points are can you make plans for dealing with them.”
Companies like Anson Funds succeed not by playing the part of fish out of water, but rather by enthusiastically diving in. They make it a point to accentuate what different locations and cultures have in common. In the case of Ontario and Texas, both feature relatively low corporate taxes. The USMCA trade agreement facilitates deal-making. Intellectual property protections and fidelity to the rule of law are strong in both markets. Plus, everyone loves a good Texas barbecue.
In addition, employees from both places, whether they are bilingual French or Spanish speakers, share a command of English — in much the same way George Bernard Shaw once described Britain and America as “two countries separated by a common language.”
