Zhichen documents

John was a senior executive in a major German-based global business – and just a year before had successfully completed a three-year assignment delivering fundamental re-structuring of the business across Asia, an exhausting and hugely important task for the organisation. Now he and his family had re-located back to the UK, where John had been asked to take on the MD role in a new European division.

To his surprise – a new appointment at global board level resulted in John now reporting to the first non-German at that level, a Frenchman, Peter Degard.

The two men did not know each other well at all – and John was a little irritated to be asked to visit Paris overnight for dinner with Peter, right in the middle of budget season, when a ‘phone call or VC would have been enough to get the ball rolling in John’s view.

After the usual niceties and a few of his hilarious jokes to ease the atmosphere,John tried to move the conversation on to urgent business matters - despite the constant interruptions by waiters and Peter’s clear need to discuss every detail of the menu with them. Eventually, John got Peter on to the budget issues that he thought would at least make the trip worthwhile. It didn’t take long however for Peter to broaden the focuson to how he saw John’s role and what he expected of John. One remark really took John’s breath away – ‘In the end…’ Peter said, ‘… your job is to take the blame’. John’s response was delivered in nice clear British English - ‘I don’t think so Pal’ - and the rest of the dinner was not very enjoyable. John was out of there on the first EuroStar, despite an invitation to breakfast delivered to his room later that night.

Very soon – John heard that his reputation at the board table was being questioned, that his Asia re-organisation was being characterised as flawed, and noticed that other businesses in the region were being allowed budget expansion in critical IT areas while his new division was being squeezed.

Cross Cultural Moments 2: When the Price is right

Mr. Takashima had been hired by an Australian company in Japan and was now working for the company in Sydney. Today he was reporting to Mr. Cannon, his manager, on the difficulties he had with a negotiation meeting he recently held with another Australian company in Sydney over a potential contract.

Mr. Takashima noted that Mr. Roberts, who represented the Australian company, seemed tired and frustrated at the end of the meeting. Takashima stated that he didn't understand why, since he had found the meeting very informative. Takashima admitted, however, that he was annoyed at Roberts' insistence for an immediate decision and answers to questions regarding the contract. These were matters Takashima felt would have to be discussed with Mr. Cannon and his department.

‘It was uncomfortable for me to say that I had no answer now to his questions’ Takashima said to Cannon ‘But it was even more difficult for me when Roberts finally said “O.K., I am willing to lower my price by 15%, but only if you would make a decision on this contract right here and now at the table. No more stalling please.” ‘

‘What did you do?’ Cannon asked. ‘I said I would get back to him’ Takashima answered. ‘I couldn't answer all his questions without first clearing the matter back here.’

“I agree that Roberts does seem a bit impatient but we need to close the deal quickly. But I’m surprised you let a 15% price reduction go begging though. Let’s get the team together quickly and see if we can recover the situation” replied Cannon.

Cross Cultural Moments 3: When the Chips are down

A Canadian executive, Mr. Thompson of CompuCan, was sent to South Korea to meet with his company’s partner company there, Seoul Manufacturers. The two companies had formed a joint venture to produce computer chips. There he met the General Manager of Seoul Manufacturers, Mr. Park.

Mr. Thompson introduced himself and after a few days of meeting and greeting other managers, they had a meeting alone. ‘Mr. Park, everyone at CompuCan is impressed with the quality and timeliness of production here. In this respect, we believe that the joint venture is producing excellent results.’ He stopped for a moment. ‘But in one area, we need to be more aggressive.’

Mr. Park nodded. ‘Please proceed.’

‘Our financial results are alright, but our shareholders are expecting a much higher return on investment from this joint venture. And they want results now. We need to cut costs and improve margins so that the next quarterlies are more impressive.’

Mr. Park sat quietly for a moment. ‘Ah, but you understand, we are building our relationship with your company and with our employees for the long term. We need everyone’s support to make this a successful effort. In addition, it is not customary to change quickly in this environment.’

‘Frankly, Mr. Park, if we can’t show results quickly, there may not be a long term’ Mr. Park responded ‘Ah but Mr. Thompson,if we show results too quickly by cutting staff to increase margins, there will also not be a long term. Perhaps we could look at alternative ways to reduce costs gradually as we improve our efficiency in the production line over time.’

Cross Cultural Moments 4: From riches to rags

Joe Colman, the European Marketing Director for a major high-street clothing retailer, was proud of his team’s new product merchandising strategy and wanted to get it out into the stores asap; he was convinced it would impact revenues quickly and positively in a highly competitive market – and better numbers would do no harm to his bonus prospects as the annual board reviews were coming up.

While Joe knew there was a bit of detail that could be more explicit, his view was that they were intelligent people and could work that out in the stores – the general thrust was clear, it was radical, and it was time to make it happen.

A few countries ran with it straight away – notably the UK network and the Skandi’s weren’t far behind – but the ‘Conti’s’ as he called them – the French, Germans, Belgians… seemed slow on the uptake. The new displays were very different from the previous look – but the concept was clear and frankly there wasn’t time to get every detail mocked-up and illustrated in the merchandising manual. One conversation with the Marketing Manager in Frankfurt was typical – ‘How do you expect us to feel confident that we can take down the existing displays when we don’t know what we should put in its place?’ was Hans-Christian’s leading question. ‘Where is the research that says this is a good strategy? We don’t even have display mock-ups for all the key categories, just the examples your local team have arranged in the London stores…’

Joe was in danger of not delivering on his implementation plan – a key commitment to his board. He got his team to do a few more mock-ups in the studio and sent them out – with an instruction to get on with it. Results varied – they ‘got on with it’ in France and Belgium but the displays were to Joe’s mind more guess-work than ‘intelligent interpretation’ while the Germans kept demanding more information and complained that the plan was unrealistic.

His bonus was not as thrilling as he had hoped.

Cross Cultural Moments 5: When ‘hello’ is not enough

Rowan Tindale was the northern Europe project lead for implementing a new global CRM system for a major Pharma company. The team was mostly made up of UK and Swedish nationals, since the Euro HQ was in London and the IT centre was in Stockholm. This team had worked together before, quite successfully, but Rowan was new to the company and was keen to make a quick impact; this was his first opportunity, and he wanted to get on with it.

Since the team had delivered projects together before, and the only new team member was him, Rowan decided he would quickly get a team VC organised and so sent them a skeleton project plan he had already created, for them to review in advance of the meeting. That way, he could start to get to know them as they worked on refining the plan, and would get off to a flying start on this urgent project. His boss had not yet sent out the announcement of his appointment to the team, so Rowan sent them all an invitation email, announcing his appointment as project team leader and attached the skeleton plan with directions that they should all be prepared to discuss it at the VC meeting in a few days.

Rowan received a few responses in the days before the meeting – all just formal thanks for the note and looking forward to the meeting, though one troubled him a bit. It was from a London-based Swedish colleague whom Rowan had met at his induction, Bjorn, who seemed to want to put the brakes on the process. Bjorn said that he thought it premature to be sending out a skeleton plan at this stage and that in his experience the team would appreciate a chance to understand something of Rowan’s background and general approach to team leadership, before driving into the work. Rowan did a quick reply saying there was a lot of urgency and the team needed to be seen to be moving quickly. There was no further response from Bjorn but Rowan thought he may have trouble with him in the meeting.

The day of the VC meeting arrived and Rowan quickly introduced himself, taking a bit more time on it than he had planned, finishing by saying that he ‘didn’t want to bore them with his life story.’ So after five minutes of introductions, he moved on to the project objectives and skeleton plan.

To his disappointment, the meeting seemed to quickly dissolve into two groups – the Brits were mostly happy to get on with it and had clearly read the plan prior to the meeting, while the guys in Stockholm didn’t want to engage, other than asking vague questions about Rowan’s past management of projects like this and what he expected of them as team members. Rowan was conscious that he probably sounded frustrated as the meeting went on, but he couldn’t understand what the problem was. He suspected the Swedish contingent had not read the skeleton plan and were just stalling.

Rowan ended the meeting before the allotted time and said he would get back to them with next steps. Bjorn – who was in the room in London – just avoided looking at him and quickly left the scene.

A day later – Rowan’s boss pulled him aside and said he had heard the meeting hadn’t gone well. ‘It was a pity you couldn’t wait for me to properly announce your assignment’ his boss said. Not a good start.

Cross Cultural Moments 6: Taking the Credit

As the senior executive in charge of customer service for a major US credit card, Bruce Kuppersmith drove the strategy for outsourcing their customer call-centres to India. The move made great sense in business terms; costs were around 25% of US numbers, and the local workforce was highly educated, motivated and eager to work for US-based business. Training would not be an issue, and while there might be some accent and other challenges, customers would soon get used to the differences; the business risks were minimal.

The planning of the move was exemplary; Bruce and his team worked everything out in detail and delivered the transition plan exactly. The local recruitment and training looked good – and was supported by a US-based training needs assessment with local support. It was all going to plan.

The first stage involved initiating simple service support – the India-based agents helping customers to understand how their credit cards worked and resolving their payment, charging and other queries. They worked 24 hours, so the time-zone issue was not a concern. At first, there were some issues with the new Agents being over-reliant on the scripted answers to customer questions – something about ‘need for certainty’ which the US-based consultancy had highlighted early in the process. That was addressed in the training and became less of an issue, once Agents grew their personal confidence.

The second-stage of Agent training worried Bruce a bit more, since it was technically more demanding and involved Agents being more perceptive, articulate and persuasive, rather than just delivering information. They were required to ‘cross-sell’ the products of the Bank – expanding the customer’s use of credit products and services beyond their initial credit arrangement, provided, of course, that the customer had the credit rating to qualify. This was where the Bank made their money – and at 25% of the US operating costs, this is how Bruce would really make his reputation in the Bank. The big bonus was coming.

The training regime was tried and tested; it always succeeded in the US locations. And technically – the early evidence was that the India workforce learned the details just as quickly as the US-based teams they were replacing. Monitored calls with the pilot group of Agents showed that they had grasped the technicalities, were able to link appropriate products, and were disciplined in sticking to the rules when, in effect, selling debt. But there seemed to be low-levels of customer conversion. A lead, or even a clear request from the customer for additional credit or linked products often failed to close; what was evident from the customer reaction was that the Agents were saying the right words, but it didn’t hit home. There was no passion in the selling.

It was obvious to Bruce what was going wrong. The incentives were all screwed up. In the focus on reducing costs, the rewards for up-selling were just not strong enough – even in the India context. With the compensation experts in HR, Bruce set about re-calculating incentives and rewards against margin per product. Together, they came up with a new scheme that would deliver the savings, the market share growth and the operating profits that the outsourcing plan had promised - and would give the Agents the incentive to sell that they needed. Bruce sat back and waited for the impact.

And he waited. His board were becoming concerned that while operating costs were significantly lower, the metrics for product take-up per customer, for revenue growth, and for lending growth were flat-lining. After two fully operational quarters, the evidence was that this big strategic move was in trouble. Bruce could see his bonus going south.

© Kimball Consulting Ltd 2016