Praise for

Culture Clash 2: Managing the Global High-Performance Team

“When it comes to cultural differences, most of us don’t even know what we don’t even know. Culture Clash not only reminds us of our blindness, but also offers a cure. Pick it up, read it, and see what we’re missing!”

—Scott A. Snook

Professor, Harvard Business School

“A great read—and you end up smarter as a result of it. Absolutely required reading for leaders who manage across cultures.”

—Ali Velshi

Chief Business Correspondent, CNN

“Culture Clash 2 is worth real money for global companies. The productivity of large corporations is directly linked to culture—the more senior you are, the more you have got to pay attention to cross-cultural roadblocks. If you want to build or manage a global high-performance team, read this book and give it to everyone around you.”

—Steve Baird

Senior Management Advisor, UBS

“Culture Clash 2 is a masterfully written and thoughtful book, of chief importance to both private and public managers. To marshal leadership across cultures, to exploit international opportunities and to build global citizenship are among the great challenges prevailing; this book provides an indispensable tutorial for confronting these challenges, including research insights, pragmatic tools and insightful as well as entertaining stories of authentic examples. “

—Dr. Sascha Spoun

President, Leuphana Universität Lüneburg

“I wish I had had access to Zweifel’s tools 35 years ago when I was starting out.”

—Werner Brandmayr

Former President and Managing Director,

ConocoPhillips Continental Holding GmbH

“… great reading for our M&A clients. If you follow these prescriptions, you have an instant leg up on the competition.”

—John Adams

President, Adams & Royer, Inc.

“You come away from the book with a rare combination of outcomes: a new perspective on American culture, a strong motivation to lead your team in any culture, and real tools for removing your own cultural blinders.”

—Dr. William J. Ball

Director, Leadership in Public Affairs Program,

The College of New Jersey

“I am a big-time believer in building global competency, and have personally been through a wide range of problems you face in a cross-cultural environment. Global competency requires the careful selection and preparation of talent, but also constant learning since the environment changes all the time. Culture Clash 2 is a great introduction for global executives to the many dimensions you need to play successfully in the global arena.”

—Hal Burlingame

Former Executive Vice President, AT&T,

Currently Senior Executive Advisor, AT&T Wireless

“As an expert in international negotiation, I see all too often that corporate leaders don’t know how to see the world from the perspective of the other side. Culture Clash 2 is an essential book for all those who must negotiate across borders. Through anecdotes and well-documented cases, the author shows us clearly the pitfalls and false assumptions we hold about our fellow humans. Leonardo da Vinci summed up this magisterial book when he said, ” To know how to listen is to possess, beyond one’s own, the brain of others.” Congratulations on this humanistic masterpiece.

—Guy Cabana

Consultant and Speaker, Société Danec Consultant Inc.

“I just wish Culture Clash 2 had been available at the start of my personal globalization, it would have saved me a lot of time and pain. I would recommend this book as essential reading for any international manager.”

—Dr. Martin Cross

Former CEO, Novartis-Australia

“The lessons, labs, and the ‘dos and taboos’ give good input for daily exercise as long as the reader has the will to improve his or her communication abilities.”

—Dr. Gerhard Goerres

Chefarzt Radiologie, Bürgerspital Solothurn

“This is very much a message that boards of directors must understand if they are to lead their successful domestic business to become truly multinational organizations. Today, you need to build truly global governance—global teams committed to the organization’s overarching objectives, but at the same time adaptive to local conditions and challenges. Tools like the Spidergraph will help you do that.”

—John Hall

Chief Executive Officer, Australian Institute of Company Directors

“As Japan’s former chief diplomat, I have seen time and time again how small cross-cultural misunderstandings can spin out of control. We live in dangerous and turbulent times in international affairs, and we must do everything in our power to bridge cultural differences. Thomas Zweifel’s book helps us do exactly that. It is an important and timely book, and it should be read by all those who are working not only to prevent culture clash, but for our common future as humanity.”

—Hon. Koji Kakizawa

Member, House of Representatives, Japan;

former Foreign Minister, Japan

“We use Culture Clash 2 in our advanced leadership course. It is a great tool in building the skills the Army needs in the 21st century.”

—Col. Joseph LeBoeuf

Academy Professor, Director, Organizational Studies and Leadership,

Fuqua School of Business, Duke University

“As an ambassador and career diplomat, I observe and experience every day that one never quite achieves global citizenship—but one has to keep approaching it, keep bridging the cultures and find the common denominators of all civilizations and human beings. You have to “love” your negotiating partner and search for common ground, for common values, for what unites you, and take it as a basis to build a win-win situation. Thomas Zweifel’s book gives you both the philosophy and the instruments. I commend Culture Clash 2 to all those who must master the art of cross-cultural management. If you read it, you will get superior results in your negotiations.”

—Ambassador Raymond Loretan

Former Consul General of Switzerland to NewYork

“As CEO of a multinational company, I know that you have to understand another culture within the local cultural context. Culture Clash 2 gave me new tools, a lot of food for thought and a real awareness for cultural issues in an easy-to-understand manner. Refreshing and great fun to read.”

—Doris Marty-Albysser

CEO, CLS Corporate Language Services AG

“I have worked for decades in the international finance community—Europe, North and Latin America, and Asia. Your advice, admonitions and secrets are priceless.”

—Richard Murray

Vice Chairman, LaProv Corporation

“Zweifel has distilled a wealth of intercultural theory, real-life case studies, and personal experience drawn from academia, the military, not-for-profits and the corporate world to produce a unique and fascinating read and an invaluable primer for both the neophyte and experienced international managers alike. As a crosscultural practitioner, I can highly recommend this refreshing approach to understanding and managing the complexities of doing business across cultures.”

—Georgina Teague

Cross-cultural consultant, Australia

“… should be required reading for anyone who travels, or just for dealing with people of different cultures on our own home turf.”

—Roseanne Schnoll, PhD, RD, CDN

Associate Professor, Department of Health and Nutrition Sciences,

Brooklyn College of CUNY

“Culture Clash 2: Managing the Global High-Performance Team is a fascinating and clearly written book that will greatly empower the managers of any global corporation or team. Thomas Zweifel’s many years of experience working effectively in cultures all over the world has given him an uncanny and insightful access to the real and profound keys to success working cross-culturally, where a minefield of mistakes are often waiting to happen. His book is clear, concise and gets right down to the best nuggets available on this topic and he shares his insight with both wit and wisdom. A brilliant piece of work and highly relevant to today’s global culture.”

—Lynne Twist

President of The Turning Tide Coalition and

author of The Soul of Money

“Culture Clash 2 is the perfect book for policymakers who have to integrate different cultures to fulfill their mandates. I recommend this book and its delightful stories and useful exercises to everyone in government, which is after all about harmonizing conflict and building consensus. This book really deserves support and success.”

—Liszt Vieira

President of the Botanic Garden of Rio de Janeiro;

Former Minister of Environment in the State of Rio de Janeiro

“… an inspiring read about getting it right. I’ve just finished reading another, similar book of over 300 pages and I think I got just as much good information from your 85 pages as the longer one. Well done.”

—Deborah Wilson

Journalist, CBC Radio

“An excellent book … introducing you to the main issues of culture clash in the transnational business world. Most illustrative is Zweifel’s “Global Leader Pyramid” showing you in one diagram the essence of culture and potential areas of conflict between Americans, Germans, Japanese, Indians, and Chinese, just to name a few of the most important nations. Every page is worth reading in this no-nonsense, no-bla-bla-bla book. Refreshingly concise and informative, contrasting many 600 page books.”

—Dr. Peter Oertli

OEC Oertli Consulting

Copyright © 2013 by Thomas D. Zweifel

All rights reserved. Published in the United States of America.

No part of this book may be reproduced or transmitted in any form or by

any means, graphic, electronic, or mechanical, including photocopying,

recording, taping or by any information storage or retrieval system,

without the permission in writing from the publisher.

This edition published by SelectBooks, Inc.

For information address SelectBooks, Inc., NewYork, NewYork.

Second Edition

ISBN 978-1-59079-961-1

ISBN: 9781590791295

Library of Congress Cataloging-in-Publication Data

Zweifel, Thomas D., 1962-

[Culture clash]

Culture clash 2.0 : leading the global high-performance team / Thomas

D. Zweifel, Ph.D. — Second edition.

pages cm

Includes bibliographical references and index.

Summary: “Consultant for an international management consulting firm with thirty years of experience working on four continents with senior executives at Fortune 500 companies and in governments, UN agencies, and the military, presents a methodology of practical techniques for bridging cultural differences to successfully manage business ventures in the clash of cultures across the globe”—Provided by publisher.

ISBN 978-1-59079-961-1 (pbk. : alk. paper)

1. International business enterprises—Management. 2. Leadership—

Cross-cultural studies. 3. Intercultural communication. 4. Globalization.

I. Title.

HD62.4.Z85 2013

658'.049—dc23

2013002689

Manufactured in the United States of America

10  9  8  7  6  5  4  3  2  1

To Gabrielle, Tina, and Hannah,

global citizens and travelers

who teach me tolerance

Contents

Acknowledgments

Foreword by Shideh S. Bina, Nathan Rosenberg, and Michael Waldman

Preface

Chapter 1 War Stories: The Ten Most Costly Sins When Cultures Collide

Your War Stories?

The Ten Most Costly Sins When Cultures Clash

Your Culture Clash

Chapter 2 The New Leadership Landscape: Global Is In, National Is Out

BRICS and Emerging Markets

Communication, Transportation, Migration, Virtual Teams

Americanization, Media, Social Media

Multinational Organizations, International Organizations

Chapter 3 Leading through Language: What Do You Speak?

The Power if Cultural Mindsets

Chapter 4 Global Citizenship: A Core Competence

A Global Citizen’s Mini-Briefing

What’s Your Cross-Cultural IQ?

Chapter 5 How to Avoid Cultural Clashes

Tool 1: Do’s and Taboos of Global Citizenship

Tool 2: Lawrence of Arabia—Quintessential Global Citizen

Chapter 6 Tools for Decoding Any Culture (Not Least Your Own)

Tool 3: Decoding Culture: From the Obvious to the Hidden

Tool 4: The Global Integrator™: Eight Dimensions of Culture™

An Example: United States vs India

Chapter 7 Global Citizenship: Leading across Cultures

Tool 5: The Global Leader Pyramid™

Relationship

Vision

Strategy

Action

Lab: Sweeping Generalizations on Doing Business in Europe

Chapter 8 Cross-Cultural Strategy as an Asset for Innovation

From Multinational to Metanational: Searching for Innovation Globally

Coke in China: What Went Wrong (and Right)?

Pepsi: Repairing a Poisoned Reputation in India

Best Practice: Building One Global Brand

Chapter 9 The Acid Test: Alliances and M&As

The GE Capital Model of Integration

Chapter 10 Making Global Meetings Work

Traditional vs. Virtual Meetings

Before: Co-Creating the Agenda

During: Keeping Things on Track

After: Leveraging the Momentum

Case: $40 Million Value-Add from Cross-Cultural Strategy and Leadership

The Bottom Line …

Appendix

Notes

Readings and Resources

About the Author

More Books by Thomas D. Zweifel

Acknowledgments

This book is in large part a product of failures. Ever since my birth, I had the chance (or challenge, depending on how you see it) of living in many different cultures. I was born in Paris, moved to Switzerland at the tender age of five weeks with my parents in the back of their Simca convertible; grew up in Basel, which is in the triangle of France, Germany and Switzerland, learning that my culture and way of doing things was not the only one; moved to Berlin, then to Munich; moved to Bombay (now Mumbai), then NewYork, then San Francisco; then to London, then Tokyo, then back to New York; again to San Francisco, again to NewYork and finally (I hope) to Zurich. I have made so many mistakes in all these cultures—and this book is full of my confessions and war stories—that I can now consult clients on avoiding those mistakes and work effectively across borders and cultures. May I be forgiven for turning my own shortcomings into a lucrative business.

The other component of this book are the global strategies and best practices I was able to pick up from CEOs like Carlos Ghosn of Renault, Indra Nooyi of Pepsico or Jeffrey Immelt of GE, from leaders like Nelson Mandela and diplomats like former UN secretary general Javier Perez de Cuellar who I had the honor to work with in the 1990s, but also from road warriors and expats at all levels who face the global market, customers, suppliers, or alliance partners in far-flung regions. Since 2003, when the first edition of Culture Clash first saw the light of day, globalization has only grown and organizations of all stripes have recognized the need for effective cross-cultural management—not just as a HR skill, not merely as a nice-to-have or an afterthought, but as a strategic competence that can make or break a product and even a company. In the years since, countless practitioners have helped me refine and clarify the material; naming them all would take an entire book—and I mean that. Here are a few outstanding examples:

My readers, who use the knowledge and tools in my previous books to produce results across borders and who gave me many insightful war stories, constructive comments, and corrections.

Insigniam’s partners and colleagues in the Americas, Europe and Asia, who assist clients in revealing and unhooking cultural blind-spots in the service of inventing new possibilities and implementing breakthrough performance. Swiss Consulting Group’s and Manres’ consultants, who stand for unleashing the human spirit. My leadership students at Columbia University, St. Gallen University, and Haute Ecole de Gestion Fribourg, who have challenged my thinking, help me keep up-to-date as a life-long learner, and make me wonder often why I get paid for teaching and why they have to pay tuition, when it should be the other way around.

Anne Nelson, my Columbia journalism teacher who first encouraged me to publish my writing despite my doubts (after all, Zweifel is German for “doubt”) whether anyone would want to read my stuff. Shideh Bina, who enriched the book with her original thinking as well as priceless vignettes. Christine Flouton, Guillaume Pajeot, Ashley Tappan and other Insigniam consultants, who provided illustrative war stories of meanings lost in translation. Peter Guarco and GregTrueblood, who factchecked the book with a sharp eye for inaccuracies or dated material, and provided vital research. Nancy Sugihara and Molly Stern, whose first-class line-editing job made this a better book and in the process taught me new dimensions of the English language. Christian Dittus, my tireless agent at Paul & Peter Fritz Literary Agency, who continues to believe in my ideas and makes sure they find an audience.

Dr. Eva and the late Dr. HeinzWicki-Schönberg, my parents and first role models in intercultural savvy (when I was born in Paris, it was customary to feed babies wine along with milk—how is that for cross-cultural training?) who braved their own culture clash when they moved from Basel to Sydney after my father’s retirement; and above all my wife Gabrielle, who as a former flight attendant has been in more countries than I will ever visit and who is my teacher in Swiss-style diplomacy; andTina and Hannah, mes rayons de soleil and emerging global citizens. Without hesitation they have embraced my quest as a writer, teacher and consultant amidst all the demands of family life, even when that quest took me away from home and to far-flung places. I am forever grateful for their love and support. Gabrielle in particular is the person that gives me the strength that underpins all that I do, and listens patiently to my peculiar ideas, weeding out the ones that are too wild and nurturing the others so they can see the light of day.

Of course none of these persons are responsible for my mistakes or exaggerations.

T.D.Z.

Zurich

March, 2013

Foreword

by Shideh S. Bina, Nathan O. Rosenberg, and Michael Waldman

Founding Partners, Insigniam

This exchange between an English-speaking traveller and a member of the hotel staff in a Far East hotel was recorded in the Far-East Economic Review about five years ago.¹

Let’s face it. Understanding other cultures, let alone dealing with them, can be hard work—for both sides (and remember that the room service at least speaks broken English while the hotel guest speaks no Chinese at all). The tongue-in-cheek example above is only the tip of the iceberg. Even when people do you the favor of speaking your language relatively accentfree, you still have to read between the lines, listen for meanings in disguise, and make out where your interlocutor is coming from—in short, be a cross-cultural leader.

Our latest search on Amazon.com for “global leadership” yielded 9,664 books. You’ll see that this book is different because it is a synthesis of several powerful methodologies. Twenty-five years ago Insigniam began a journey of catalyzing breakthrough results in the largest companies around the world. Our journey was born of one question: is it possible to take an already successful business and elevate its performance to new, discontinuous levels?

Our proprietary methodology has guided our clients, including 22 percent of the Global 1000, to accomplishments not given by circumstances. In order to see new perspectives and uncover new possibilities, the first step was (and is) to reveal the existing but usually invisible worldview that determines what people think, how they act and interact, and what they see as possible. Another word for this is culture. Every organization is governed by invisible working assumptions and traditional ways of doing business that hinder the identification and pursuit of new growth opportunities. Adopting an “open” mindset is critical for cross-cultural strategy, since innovations and best practices often come not from the headquarters but from the periphery (see Chapter 8 on metanationals).

Did you know that only 7 percent of all communication is verbal while the other 93 percent is nonverbal—facial or body language, hidden in the subtext or the context of the conversation?² The potential for misunderstandings is significant and only gets compounded when dealing across cultures and value systems. And companies pay a significant price: to take just one example, a full 40 percent of all expatriates sent to other countries return early because of culture shock. Whenever that happens, the sunk costs of failed assignments include the preview trip (typically with the spouse and the children), the salary, the legal and administrative fees for visa and immigration, the costs of relocation for the employee (again with his or her family), shipping costs for the move, housing costs, schooling costs, taxes and insurance in the target culture; and at the back end, costs of repatriation and reintegration, plus—if things go wrong—the opportunity costs of losing the employee to the competition. If you add it all up, a company stands to lose one million dollars for each expat who fails. And even if expats stay with the company upon their return, most organizations fail to reintegrate them effectively, with unknown costs for missing out on best practices, learning, and strategic intelligence.

But those are peanuts compared to another, much larger cost. Culture clashes have tremendous impact far beyond how you manage your global workforce. They exert a dynamic on strategic collaborations and exacts significant costs when joint ventures go awry. Statistics tell us that more than half of attempted mergers and acquisitions fail, that only one-quarter of large-scale mergers succeed, and that a full 83 percent fail to improve shareholder value.³This goes even more for M&A that are cross-border. The failed joint venture of AT&T and Olivetti in the mid-1980s, the ill-conceived merger of BMW with Rover, the famous fiasco of DaimlerChrysler, and the failure of Saab, which General Motors acquired together with Investor AB in 1989, are only the most prominent examples (see Chapter 9 below). The bottom line: culture clash is one of the root causes, and perhaps the root cause, of failed M&A. In one survey, 75 percent of companies believed that alliance failure was caused by incompatibility of country or corporate cultures.⁴ The costs (both of the sunk and the opportunity kind) can amount to billions of dollars.

This is not to speak of the hidden costs of missed market entry, as Microsoft learned when it lost to Linux in China (see Chapter 1). The global competitive landscape has never been more challenging for a company wanting to achieve growth; turbulence and uncertainty have become the new steady state. In its “Global Risks 2011” survey, the World Economic Forum identified six interconnected risks that were all seen as highly likely and of high impact: fiscal crises, climate change, geopolitical conflict, extreme energy price volatility, economic disparity, and global governance failures. The linchpin connecting all these mega-issues is globalization. This book shows how companies can turn world markets to their advantage. One of the most important books written on managing global leadership in the last ten years, Culture Clash provides a methodology for any organization to compete successfully in a new transnational landscape—while minimizing, or better preventing, the unintended but costly consequences of culture clashes.

This book teaches the multicultural skills leaders need to succeed in any culture. It offers both serious and hilarious examples of what can go wrong when we blind ourselves to cultural differences. Through tips, exercises, and lists of do’s and don’ts, you and your company can become adept at making things happen across cultures and nations. And by the way, you need not compromise on your goals when you respect local cultures. Virtual leaders take the appropriate cultural pathways while holding fast to their strategic intent.

Proposition: building the global competencies of your enterprise requires a relatively small, high-leverage investment. Leaders who make that investment reap rich benefits in performance while those who fail to invest early on pay an enormous price.

The book comes in ten chapters. Chapter 1 brings together the war stories of our clients and colleagues and distills the ten most costly sins when cultures clash. These situations can be hilarious, but at times dead serious—especially when the costs run into the billions, as the cases of Coca-Cola, DaimlerChrysler, and other multinationals show. Chapter 2 discusses the new global landscape in which leaders must operate and the result of several fundamental changes in the last generation. Chapter 3 explores the impact of language on culture, which allows us to go below the symptom level to the cultural DNA of why people tick a certain way.

Chapter 4 moves on to your own global citizenship and helps you test your cross-cultural IQ. Chapter 5 covers do’s and don’ts in dealing with people from any culture, including guidelines written by the legendary Lawrence of Arabia for his fellow British officers in Arab lands, guidelines as relevant now as they were in Sir Lawrence’s day. Going beyond best practices, Chapters 6 and 7 offer systematic tools for avoiding intercultural fiascos and building your enterprise’s “global capital.”

Chapter 8 shows you a best-practice model: how so-called “metanationals” have turned their company’s global savvy into strategic intelligence and innovation assets. Chapter 9 covers cross-border alliances as the acid test of global leadership and gives case studies of successful mergers and acquisitions, for example GE Capital’s integration model that the company learned in action by integrating over a hundred acquisitions. Finally, Chapter 10 is about the nuts and bolts of preparing and leading global meetings successfully.

With this methodology, the leaders in our client organizations—which now include 22 percent of Fortune 500 companies—have catalyzed their people to think newly, act differently, and ultimately deliver breakthrough results (over nine billion dollars and counting) across cultures and mindsets—over and over again. We at Insigniam are proud to provide you with the tools you need in your own quest for global leadership.

Preface

Management and national boundaries are no longer congruent.

The scope of management can no longer be politically defined.

National boundaries will continue to be important, but as restraints on

the practice of management, not in defining the practice.⁵

—Peter Drucker

It was a flawless day in September 2001, an Indian-summer morning when the sky was deep blue. I sat on the Brooklyn Promenade—alone except for a few runners and dog walkers. Moments later, at 8:46 am, a plane hit the World Trade Center. Smoke and countless tiny metallic particles were in the air; a light wind swept them toward me. The glitters turned out to be millions of papers flying across the East River. One document I picked up was a page from a civil law book, blackened on all four edges. Another was a FedEx envelope with a contract someone had presumably signed just a few minutes earlier.

About a half-hour later another plane flew in from Staten Island, right over the Statue of Liberty. It flew low and accelerated head-on toward us. It banked like a fighter plane, its dark underbelly visible—a terrifying sight you usually see only in warzones. My reflex was to run for cover. The plane suddenly ducked behind a skyscraper and a moment later disappeared into the South Tower. By this time we were about a dozen people watching, speechless and transfixed. I called as many people as I could on my mobile, but got through only to my parents’ answering machine in Sydney before the signal went dead. I saw one tower collapse, then the other. I staggered to a bench, sat down, and wept. It was hard to breathe.

That day of terrible calamity epitomized a clash of cultures, of value systems. And key agencies of the U.S. government were caught off guard by 9/11. Why? Because Americans had lulled themselves into believing that the United States was invulnerable, invincible. They had missed vital intelligence, become lax in their security procedures, and become isolated from much of the world. The material and human costs have been spectacular. In the aftermath of the attacks, the U.S. government was forced to learn a whole new way of gathering intelligence on transnational terrorism. “This is the toughest of all intelligence targets,” said Lee Hamilton, the longtime chairman of House committees on intelligence and international relations and a member of the U.S. Commission on National Security. “You have to penetrate their language, their culture.”

This is easier said than done. According to the Internet, whose veracity we should of course never question (how’s that for Swiss-style sarcasm), here is an actual radio conversation of a U.S. naval ship with Canadian authorities off the coast of Newfoundland. Released by the chief of naval operations, October 10, 1995.⁶

Whether true or not, stories like these have led to an image of Americans as ignorant bulls in the china shop, which a CNN broadcast in the weeks after the 9/11 terrorist attacks only exacerbated. What was wrong with the picture? It showed Switzerland sandwiched between Germany to the West and Poland to the East (http://www.riehle.org/humorous-takes/funphotos/ch-according-to-cnn.html). According to CNN, Switzerland had invaded the Czech Republic.

But how can Americans know what is going on in the world if they don’t get the information? In the years since the end of the Cold War, U.S. television networks all cut back on foreign bureaus—“a measure of world peace as well as of rich-world insularity,” as The Economist put it. Network television’s world coverage shrank from 45 percent of the news total in the 1970s to 13.5 percent in 1995, a 1997 study by Harvard University found. By 2001 it was down to 6 percent.7 Already in 1998, a study by the University of California at San Diego found that only 2 percent of total newspaper coverage focused on world news, down from 10 percent in 1983. Between 2002 and 2006, the number of foreign-based newspaper correspondents (excluding the Wall Street Journal, which publishes Asian and European editions) shrank from 188 to 141. Only 4 U.S. papers—the Wall Street Journal, the Los Angeles Times, the New York Times and the Washington PostThe Baltimore Sun,Newsday⁸