Mental Models of Cultural Adaptation

Kanji Nagano was a Japanese manager for a global financial services company in Tokyo.  Although well educated, having gone to one of Japan’s exclusive universities, he had never been out of the country and had always worked for Japanese companies.  He showed strong leadership qualities even when he was in school, where he was elected to many leadership positions.  In his fifteen years with different Japanese companies, his superiors recognized his leadership abilities by promoting him to bigger and bigger jobs. 

When he joined a German-based financial services company in Tokyo, Nagano-san inherited a team of 15 direct reports.  He quickly established rapport with his team by holding frequent group meetings, and built strong interpersonal relationships with his team members.  When he learned that he was being sent to Germany for a six-month assignment, Nagano-san was a bit apprehensive at first.  He knew that the German team he was to lead would have different expectations.  Yet he was not quite sure whether to change, or how to change, his leadership style.  Nagano-san’s leadership in Germany was not a success.  The German team members who reported to him felt that he wasted too much time trying to get consensus.  They felt frustrated at the way he ran meetings, where he expected everyone to agree to his decisions. 

By contrast, Jack Ellis was a marketing manager for a global consumer products company who was sent to the Philippines for a two-year assignment.  Jack was born and raised in the East coast, and graduated from an Ivy League school, where he spent his junior year in Thailand.  Jack relished the opportunity to work overseas, and he quickly embraced the Philippine work culture.  Recognizing the more authoritarian style of leadership in the Philippines, Jack decided that he needed to adapt his leadership style so that he could become more effective in managing his team of Filipino subordinates.  At times, Jack felt uncomfortable at how directive he was becoming, but he felt that this was the price he had to pay in order to become an effective leader in this setting.  Jack started taking language lessons so he could understand and speak to his staff in their native language.  He even learned how to curse in Filipino, and some of his team members commented that he was more Filipino than some of the local bosses.  Jack felt at times that he was compromising his values (especially when he was confronted with situations where bribery was involved), but he rationalized it all by remembering that “when in Rome …”.

In my experience, many managers in in cross-cultural settings use one of these two mental models in leading people from different cultures.  The first mental model is based on the assumption that to change your style is to be inauthentic, to not be true to yourself.  This then leads many managers to insist that they should not change, regardless of whether or not their style is appropriate for a given culture. In some cases, such as Nagano-san’s, the leader may believe that he may have to change, but does not know how.  In either case, leaders tend to use the same leadership style they used in their home culture when they lead people in other cultures.

The second mental model is based on the assumption that leaders have to be “cultural chameleons.”  When in a different culture, some managers believe the most effective strategy is to adjust your behavior and your style to what is expected and appropriate in that culture.  In Jack’s case, he decided early on that he would do whatever it took to fit into the local culture, even if by doing so he may be going against some of his deeply held beliefs and values.

Neither mental model is effective for managers leading across cultures.  However, I have found that you can be yourself and be an effective cross-cultural leader at the same time.  Here are three pieces of advice for how you might reconcile these seemingly contradictory positions:

1.     Separate your values from your behavior.

2.     Learn and/or practice different behaviors through practice and coaching.

3.     Integrate cultural differences by considering different aspects of yourself.

Let’s take as a third example Emile, who was a fast rising star for a global pharmaceutical company that had a subsidiary in Canada.  He had an aptitude for science, and had a warm, appealing way of establishing rapport with people.  Starting as a sales rep in Montreal, where he delivered outstanding results year after year, he was eventually promoted to become the head of sales for the subsidiary.  Recognizing his potential, senior management recommended him for a position in the U.S. headquarters of the company to head a marketing team.  Once again, he shone in his role.  Emile showed many of the qualities of leadership admired within the company.  He not only believed passionately in the mission of the company, he also had outstanding communication skills (even though as a French-Canadian, he did not learn to speak English until he was in his teens) and consistently exceeded objectives.  He had a reputation for building high-performing teams, and his 360-degree feedback results showed that Emile was a leader who involved and empowered his team, was a good listener, treated others with respect, maintained high standards, and had integrity.

For his next assignment Emile was sent to Mexico to head the company’s subsidiary there.  Even though Emile did not speak any Spanish, senior management felt that Emile was a good choice since the subsidiary needed an effective leader who would be able to build on the subsidiary’s success and introduce some needed changes.  It was an organizational situation that Michael Watkins describes as “realignment,” where a previously successful organization is now faced with some new challenges.  The Mexican subsidiary was certainly not a start-up, nor was it a turnaround situation.

Having established success using his participative, empowering style, Emile went down to Mexico excited at building his new management team, all of whom were Mexicans who had been with the company for many years.  Although he had done his homework on the business issues facing the subsidiary, Emile had not really put it much thought to how he would do things differently in Mexico.  After all, he had been successful in Canada and in the U.S. with a particular leadership style that he believed in strongly.  Why should he change?  Although he did not have an MBA, Emile was an avid reader and learner, and he realized that the command-and-control style of management was an antiquated way of leading people.

Emile’s first month in his new role was a near disaster.  As he told me years later, the Mexicans in his team were used to being ordered by their “jefe.”  They expected him to tell them what to do and to follow orders.  After all, he was the “hot shot” from headquarters who was selected to make the subsidiary successful.  Where were his ideas?  Why was he asking them what they thought?  Didn’t he have the answers already?  To the Mexicans, Emile seemed indecisive and unsure.

Fortunately, Emile had the emotional intelligence to recover quickly.  He realized that Mexican work culture favors strong leaders who appear authoritarian.  Yet he also believed strongly in his leadership values.  So how did he reconcile these conflicting practices?  Emile knew he could not make changes overnight. 

Using the three suggestions above, here’s what Emile did.  First, he learned how to behave differently while still believing in the value of participation and empowerment.  During team meetings, he made sure he was in control of the agenda at all times and ran a very tight ship.  He started off the meeting by reviewing the decisions from the last session and by providing his team with information and updates from corporate.  This was his way of conveying that he was in charge and that he had access to senior management.  He ran the meeting but he also made it a point to make sure he invited participation.  While this may have been a subtle shift, it made an impression on his Mexican team.  In short, he changed some of his behaviors while still maintaining his values.

Second, Emile began to learn and practice some different and/or rarely used behaviors.  For example, rather than going to his subordinates’ offices to visit and discuss issues with them, he had them go to his office.  While this may seem like a small gesture, it was symbolic and conveyed to his subordinates that he was indeed the boss.  He began to seek advice from an American executive he met at a business forum in Mexico City.  The American had been in Mexico for over twenty years, and helped Emile gain a different perspective on managing in that culture.

Third, Emile surfaced aspects of himself and his behavior that tapped into his more authoritarian self.  For example, in previous assignments in Canada and the U.S. where he had to push his team against tight deadlines, he had to adopt a very tough, no-nonsense approach so the project could be complete on time and on schedule.  So he drew on these parts of himself when managing his Mexico team.  These were behaviors that were already part of his repertoire but seldom used.

Over time, as the Mexican team began to develop trust and respect for Emile as the boss, he began to shift his leadership towards a more participative and empowering style.  He asked for their input before implementing new initiatives from corporate.  He encouraged them to take initiative on some of their key responsibilities.  Emile became an effective leader in the subsidiary who also gained the admiration of the locals.  After a successful four years, Emile was promoted to head the Latin American region for his company.

Watkins, M.  (2009).  Picking the right transition strategy.  Harvard Business Review (January), pp. 47-53.

Coming to Grips with Corporate Culture

“Culture” has been in the business news again lately, from General Motors’ failure to recall its faulty ignition switches to the replacement of an outsider for Target’s new CEO.  Those of us who have worked for more than one company, and/or have friends and acquaintances who work for different companies, know how powerful corporate culture can be. 

We all know that companies, like all social groupings, tend to form cultures that influence the way its employees think, feel and perceive what is going on.  When I worked for Citibank many years ago, I would compare notes with a colleague who worked for what was then called the Chase Manhattan Bank on how different our respective company cultures were.  Citibank was then brash, and its employees were expected to be aggressive, and even rude.  Chase Manhattan was more polite, and employees were expected to behave more gently.  As we know, cultural fit is important to corporate survival.  Many companies assess cultural fit before hiring managers, and many executives de-rail not because they lack technical expertise but because they lack this cultural fit.

Executives in successful companies, recognizing the importance of culture, try to shape their company’s culture to be aligned with the company’s strategy.  For example, Wal-Mart instills an almost obsessive regard for expense management that is in keeping with its strategy to be the low-cost provider and remain profitable through its “everyday low pricing” business model. 

As Lane et al. point out, culture is important because it serves two functions.  One, it helps efficiency.  Everyone in the company is expected to know that there is a way of doing things (companies even label these, such as “The Wal-Mart Way” and “The Toyota Way”) and once employees learn this, the company can operate more efficiently.  What is interesting is that many of these so-called norms are not necessarily written down or documented.  But once we learn the cultural code, many things don’t have to be spelled out.  We know that is the way things are done and violating this cultural code can have consequences.  I remember a company I was involved with where decisions had to be made by consensus.  An executive hired from the outside felt that this was not good for a company that was trying to be more agile and so he started to make decisions without going through the usual channels.  There was so much resistance to his attempts that he only lasted a year with the company.

The second function of culture, according to Lane et al., is that is provides an important source of social identity for its members.  Culture serves as a kind of psychological “glue”; the stronger the culture, the stickier the glue.  Belonging to a group not only provides some security; it also increases our identification and commitment with the group (or company).  Creating a strong culture is especially important for global organizations with subsidiaries in dozens of different countries.  Expatriates from these organizations who go overseas not only provide technical expertise but also serve as cultural ambassadors.  I have seldom seen expatriates being sent overseas who have either just joined their company or are not able to “represent” the company in a positive way.  Strong identification with the company also reduces turnover, and enhances the feeling of pride an employee has in working for the company.

Changing a culture as powerful as GM’s will be an uphill battle but it can be done.  There have been successful attempts at cultural change in companies like GE, Ford, IBM, Nissan and many other companies.  I have been involved with a few companies where the culture changed successfully although in all cases, it took time – as much as five years. 

In brief, what does it take?  Corporate culture, in my opinion, is shaped by three sets of forces, and so understanding these forces and using them to help drive change is a good first step.  In my opinion, these three forces are self-reinforcing and interdependent; implementing changes in one without taking into account the others will not work.  The first force is leader behavior.  Nothing speaks louder to employees than how leaders behave (not what they say should be done).  When Carlos Ghosn of Renault went to Japan to head Nissan, he made it a point to walk around the plant floors and introduced himself to shocked groups of employees.  When CEO John Reed championed Six Sigma at Citibank, he himself went through the training and taught some of the training workshops to employees.

The second set of forces involves the company’s processes and systems.  This is where the rubber hits the road, in the day-to-day activities that shape employees’ behaviors.  In my experience, the most important of these include decision-making processes, how conflicts are resolved, and how employees are recognized and rewarded.  Changing these processes and systems will begin to create changes in the culture. 

The third involves the company’s structure.  Microsoft recently restructured its organization to break down silos.  Many companies such as Cisco, P&G and IBM have moved to a more matrix-type structure.  Unfortunately, many companies start and stop with structure.  For example, GM has recently announced that it would have a head of Global Compliance.  If people still perceive that they will be punished for speaking up, then having an executive accountable for compliance practice alone is not likely to change the culture.

Given all this, here are three takeaways on corporate culture for managers and leaers.  First, unless you are near the top of the company’s hierarchical food chain, it will be impossible for you to change corporate culture.  In fact, even executives at higher levels sometimes find it difficult to change culture by themselves.  Think about living in another country with different cultural values and norms than your own; you have to adjust your behavior to the country’s cultural code.  Similarly, you have to adapt your behavior so it somehow fits in with the culture of the company you are working for.  Of course, you can deviate a bit but too much deviance and you will be rejected.

Second, by understanding the company’s cultural code, you can use culture to your advantage especially when trying to lead and influence.  For example, one of the companies I used to work for had a strong bias for being data-driven.  That is to say, recommendations or decisions had to be based on arguments based on analyses and good data.  In this organization, arguing by appealing to emotion would not get you very far.  Knowing this, those who were effective in this company made sure that they persuaded their key managers by always having solid data to back up their arguments. 

Third, you can create your own “mini-culture” within the larger corporate culture, as long as this is not too deviant.  Countries have national cultures, but they also have regional and even local cultures.  The southern United States can feel quite different than the eastern United States.  Let’s say that you are a manager of a customer service team in your company.  You have strong beliefs about how customers should be treated that may not be as much of a priority to the larger organization.  Within your sphere of influence, you can build a strong sense of customer service.  How?  Start by getting your manager’s buy-in and support.  Have a compelling vision that you can communicate to him or her, as well as to your team.  Then get your team involved and excited to make sure that they share and internalize the vision – it becomes not just your vision but everyone’s.  Then walk the talk.  Recognize team members who exemplify great customer service.  Spend time with customers yourself, and act on their suggestions and complaints.   You need not be merely a victim or product of the corporate culture.

Lane, H. et al.  (2009).  International Management Behavior (Sixth Edition).  United Kingdom:  Wiley.

Organizational Behavior and Global Management: OB Practices: Are They FEDUP?Freefood! Subsidie...

Organizational Behavior and Global Management: OB Practices:  Are They FEDUP?

OB Practices:  Are They FEDUP?

Free food!  Subsidies for buying hybrid cars!  No lay-off policies!  Paternity leaves!  Employee sabbaticals!  No more performance appraisals!  The list of perks, benefits and organizational practices is almost endless, and as many managers know, simply benchmarking or imitating practices or benefits what some of the “great places to work” employers offer is no guarantee that these practices will work for your company.  And by what will work, I mean whether or not they will lead to outcomes that will improve organizational and business performance.

In my OB class recently, one of my students brought up the potential benefits of salary transparency, a practice used by a handful of companies but is certainly not widespread.  There are a few good arguments that can be made for this practice.  After all, publicly traded companies issue annual reports showing the compensation of their most highly paid executives.  You can easily access the average salaries of different professional groups (including professors) in public universities.  In sports, we can quickly find out what the salary is of every professional player, and what their bonuses are.  And, some would argue, taking the mystery and black box out of salaries might help employee morale.

In my view, here are five questions to answer before one should consider implementing a particular organizational practice in an organization.  You can easily remember these questions using the acronym FEDUP.

First is Fit.  How does the practice align with the organization’s strategy and culture?  Zappo’s and Southwest are two companies known for having a “fun” culture.  Tony Hseih, Zappos’s founder, and Herb Kelleher, former Southwest Airlines CEO, deliberately try to create an informal, almost wacky, atmosphere in their companies.   One of Zappo’s core values is “to create fun and a little weirdness.”  Herb Kelleher used to dress outlandishly and encouraged his employees to do the same.  Now imagine implementing these “fun” practices in companies where the culture emphasizes seriousness and even frugality.  Several years ago, a global company that had instituted “casual” Fridays, where employees could dress more informally one day of the week, decided to implement the practice globally.  I was in Tokyo when the employees of its subsidiary received the e-mail memo.  “Salary men” in Japan dress very conservatively, often in dark suits and white shirts.  This is part of their identity and they take pride in being recognized as such.  Dressing informally made no sense to them at all.

Second is Evidence.  What is the evidence that this practice has worked?  Is there a solid theory or framework behind it?  Is it likely to work in different industries?  Is it likely to work in different cultures?  Fads are common in business, and imitating what your competitors are doing is not unusual.  This is no reason to adopt the same practice in your organization.  Even when there is solid research behind a practice (for example, Collins’ concept of Level 5 leadership in his book Good to Great), it does not mean that this should be applied indiscriminately. 

Third is Difficulty of Implementation.  What are the barriers to implementing such a practice?  How difficult (and/or costly) will it be to implement?  Is the timing right for your company?  In Pfeffer’s classic article “Seven Practices of Successful Organizations,” he identifies one such practice as self-managed teams and decentralization of decision making as basic principles of organizational design.  According to him, “organizing people into self-managed teams is a critical component of virtually all high-performance management systems.”   However, the examples he gives include companies that have implemented true self-managed teams (e.g., Whole Foods) as well as companies that have implemented only certain aspects of the self-managed team concept (e.g., Ritz-Carlton).  In fact, there are very few companies that have implemented true self-managed teams, while virtually all corporations today actually have some form of team concept.  Why are self-managed teams not more pervasive in the work place?  For one, it requires a level of maturity and autonomy among team members that may not be there.  Google at one point tried to increase spans of control and remove managerial levels but decided that their work force needed managers – not so much to supervise and oversee but also to coach employees, many of whom are very technical but relatively inexperienced.  Second, when a company goes through a major crisis, as Siemens did a few years ago with its bribery scandal, its new CEO implemented policies and compliance procedures that required employees to adhere to strict ethical policies.  The timing for self-managed teams would not have been appropriate for this company.

Fourth are Unintended Consequences.  Are there things that could go wrong with the practice that you may not have anticipated?  Many years ago, Stephen Kerr wrote an article called “On The Folly of Rewarding A, While Hoping for B.”  The fundamental concepts of that article are still relevant today.  Creating practices that focus primarily on extrinsic rewards (e.g., bonuses, stock options, status in the organization) will tend to attract people who are extrinsically motivated.  These individuals, while they may performing well in the short term to get their rewards, will not likely develop strong loyalty to their organization and will not perform good organizational citizenship behaviors.  They are likely not going to be interested in behaviors that do not lead directly to these extrinsic rewards.  Is this the kind of organization that you want to build?

Fifth is Purpose.  Are you clear on what you are trying to achieve with this practice?  And is the outcome linked to business performance?  A few years ago, I was advising a company on whether it should implement Six Sigma.  Senior executives had heard about its success in GE and other companies, and they believed that it might have some benefit for the organization, which had been experiencing some challenges with customer service.  They were not sure that Six Sigma would work, so they decided to “pilot” it in one department.  Supervisors went through training in statistical quality control, and applied some of the Six Sigma tools.   There was some improvement but it did not last.  For practices like Six Sigma to work, it has to start at the top, and the “philosophy” has to be embraced by senior management.  By viewing Six Sigma as simply a collection of techniques that could be implemented in pieces, this practice never gained traction and was ultimately abandoned.

So should a company consider implementing salary transparency?  Let’s apply the five FEDUP.  First on Fit.  If your company has a culture of openness, where status differences are minimized, and where gaps in salary levels are not outrageously skewed, then this might work.  But I doubt that there are many companies who fit this criterion.  Second on Evidence.  There is surprisingly very little research that has been conducted on the impact of salary transparency, although we can certainly come up with many arguments on both the pros and cons of this.  So let’s pass on the Evidence test since we just don’t have a lot of information either way.  Third on Difficulty. Implementing this practice would require a tremendous investment in time on the part of executives, and extensive communication throughout the organization.  Is the company prepared to do this?  Is the timing right, especially when there might be some inequities that might have to be explained, or at least corrected, before taking this step.  Fourth on Unintended Consequences.  Will revelations of everyone’s salaries create feelings of inequity and unfairness, and is the company prepared to deal with these consequences?  Fifth on Purpose.   So why exactly would a company want to implement this practice?  What does it hope it will accomplish?  Will revealing everyone’s salaries indeed lead to higher morale and productivity?  Given all this, I would submit that salary transparency is not a practice that should be implemented by many corporations today without a lot of careful thought.

Kerr, S.  On the folly of rewarding A, while hoping for B.  (1995).  The Academy of Management Executive, 9(1), 7-14.

Pfeffer, J.  Seven practices of successful organizations (1998).  California Management Review, 40(2), 96-124.