There are many reasons why global companies struggle to succeed in new markets like Vietnam, but one of them rises above the rest. That reason is invisible and intangible, but ever-present and enormously impactful. Unfortunately, most global companies are not even aware of the problem within their workplace. They often repeat the same costly mistakes, failing to get to the root of the problem.
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To adequately address this problem, we need to consider what the greatest challenges are that businesses face, as well as the most important skills required to confront them. According to Edward T. Hall, an American anthropologist and cross cultural researcher, "The greatest barrier to business success is the one erected by culture." With regards to skill sets, the Harvard Business Review recently concluded that...
"...the number one most valuable skill for the 21st century manager is the ability to successfully work across cultures...”
Experts agree that the main reason global companies struggle around the world is due to cultural differences, and a lack of cross-cultural skills in leaders and expats.
Eight Key Concepts for Cross-Cultural Success in Vietnam & Abroad
One important lesson culturally-sensitive leaders have learned is that effective leadership traits in their native culture do not guarantee success in a foreign culture. Aside from generic company values, there are eight key concepts to bear in mind when building a successful team of expats and locals.
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1. First, it is important to consider the CQ (Cross-Cultural Quotient) of expat team members. Most employers are aware of IQ (Intelligence Quotient) and EQ (Emotional Intelligence Quotient). Other important quotients are Psychological (the ability to anticipate people's thoughts and actions) and Relationship (the ability to build fast, long, and lasting relationships). However, CQ has proven to be a critical metric to success in an international, cross-cultural setting.
2. Second, it is important to consider the criteria with which to hire expats. These criteria will differ from those used in their home countries, including OAI (Overseas Assignment Inventory) which measures qualities like openness, flexibility, adaptability, curiosity, willingness to change and learn, patience, empathy, etc.
3. Expats must receive cross-cultural training within 2 months of arrival to their new host country. Failure to implement adequate cross-cultural training program will directly and negatively impact expats’ ability to work in a foreign country. There is no way they can operate successfully in a business setting without first understanding the culture in which they do business.
4. Of course, the longer an expat lives in a foreign culture, the more intimately they will understand it and adjust their attitudes and business practices accordingly. At least 2 years is recommended for an adequate understanding of a foreign culture, including a grasp of the local language.
5.Global companies must work diligently and carefully to integrate local leadership into their corporate structure, or else they will come to rely exclusively on expat leaders. In Vietnamese culture, leadership is hierarchical, while Western leadership tends to be more egalitarian. This requires a shift to the "middle", as well as active structural efforts, because most employees will not simply change themselves. For Vietnamese leaders to adapt to global companies, they should learn to compromise on cultural values such as hierarchy, face-saving behaviour, harmony, respect for elders, and family relationships.
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6. Having culturally sensitive local Vietnamese upper management directly impacts the cultural sensitivity of local Vietnamese middle management. This is critical to avoid a scenario where the staff is divided between expats and Vietnamese employees who each operate under very different cultural workplace values. This, in turn, reduces productivity, engagement, motivation, and finances.
7. Creating a new, local corporate culture is key to a successful cross-cultural corporate environment. Everyone must adapt their own cultural values because no culture is superior to another--each of them brings different strengths and weaknesses to the table. Success can be found only when all team members shift their cultural positions to meet somewhere in the middle to create a cultural mix.
8. Above all, the top leaders working in the corporate head office must be aware of this reality and be intimately familiar with the cultural subtleties and cross-cultural challenges faced by their global companies. They must give expats S.M.A.R.T. (Specific, Measurable, Attainable, Relevant, and Time-based) business objectives adapted to the unique challenges of their cultural environment.
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Conclusion: What Are the Solutions to These Problems Vietnam Businesses Face?
From these points we can conclude that it is crucial to select expats with the right profile and cross-cultural skills. Expats and executives alike must be systematically trained, mentored, and coached to develop these skills and deepen their knowledge of local culture.
Sending local managers abroad for some time can help broaden their cultural sensitivities as well and help them meet their expat counterparts in the middle. Training, mentorship, and coaching is also important for local employees so that they can better understand the culture of their global company. Perhaps most importantly, expat workers must learn to respect and understand the local working culture, values, and practices.
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“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
This "game", the corporate world, and the lives we lead are all subject to fast-paced changes. With this change comes growth, and the most important skill for workers in a cross-cultural environment is to be willing to change and adapt. It is the rate at which global companies adapt that will determine their success further down the road, not only in Vietnam, but in any other foreign culture.