Monday 17th December 2007
Big in Japan - doing business overseas
Not so long ago, my company was poised (or so I thought) for a joint venture with a large Japanese company that shall remain nameless. We were punching massively above our weight and were naturally excited, recalls Chris Ingram.
We were invited to Tokyo for a key meeting and in advance I studied the books: when to bow; the types of gifts and their appropriate size for each person’s status; the order in which you should enter the room; and so on.
We spent so much time worrying about this etiquette that we scarcely noticed that the deal we thought we’d agreed was, little by little, moving in their favour.
In fact, we had three “key” meetings and before each one the company’s middle management would tell me how seriously their bosses were taking it, and the significance of all the senior people present. We were looked after with incredible courtesy and there were several “pre-signing” ceremonies; it was all very flattering.
The reality was that our deal was suffering from the death of a thousand cuts, and 18 months later it still hadn’t been signed. I hung on and hung on, but in the end pulled out; they were offended, but the distraction was too great for our small company.
Whether this was a cultural divide or a deliberately drawn-out negotiating technique, I’ll never know. However, after that I decided I would learn enough about another culture to avoid mortally offending people in their own country, while also remaining true to my own habits and customs.
I was reminded of this in July when a Chinese designer took me to lunch in Hong Kong. I usually manage adequately with chopsticks, but on this occasion I was struggling to eat a rice dish, only to look up and see my host shovelling his rice down with a large spoon!
Know your history
When doing business overseas, though it’s a mistake to try to rigidly imitate the social mores of the country you’re aiming to trade with, it’s nevertheless hugely important to know something of its culture and history.
Back in the mid-90s, my team and I at CIA were in a rush to put together a European network of media agencies. One thing I hadn’t remotely studied was the concept of leadership, and how it’s demonstrated – and applied – quite differently in various countries.
The first deal we did outside the UK was in Italy. We marvelled at their courtship process as they entertained us with impeccable style: the opera in Verona; the Hotel Gritti Palace and Harry’s Bar in Venice.
When the deal was done, the day came for the first board meeting of the Italian company. The charismatic boss invited me up to his office beforehand and explained his plans – which included a restructuring – in detail.
As I nodded politely, I was thinking: ‘This is really interesting – I shall enjoy the debate at the board and see where we end up.’
We arrived at the board meeting 15 minutes late. Marco, the boss, told them what he and I had agreed. The directors listened politely and then we moved on to the next item.
At that time, John Mole’s Mind Your Manners had just been published, and I could have saved myself some headaches if I’d known about it. Naturally, I’d assumed everyone knew that my consultative and informal, but professional, style was best.
However, I found that in Italy and most Latin countries the boss was expected to be an autocratic figure. In Italy, you built close relationships first, so personal trust in the leader was the thing of most importance.
The same, but different
Although globalisation has tended to make nations and companies more similar, these underlying differences still exist. For example, those close relationships aren’t nearly so important in the US – particularly in New York, where doing a deal is what it’s all about; everyone knows they are there to make money.
I’ve negotiated with over 50 companies in the States about buying and selling their businesses, and the cliché that “everything is for sale in the US” is absolutely true.
Once I’d realised this, I understood why the US has the greatest density of lawyers on the planet. (Why waste time building up a relationship with someone in advance when, if they prove untrustworthy, you can sue them?) Similarly, it’s not surprising that the more aggressive forms of private equity originated in the US.
I say this with no sense of superiority at all. Being successful when doing business overseas is all about seeing – and understanding – the other side.
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