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INTERNATIONAL BUSINESS
Dangerous Assumptions

December 28, 2002
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When doing business in a foreign country and a foreign culture—particularly a non-Western culture—assume nothing. Because cultures really are different, and those differences can have a major impact on the business environment and management challenges you will face in another country.

I’ll never forget the time I walked into a restaurant in China, ordered some meatball soup, and was served the largest bowl of bovine testicles you’ve ever seen. (Or, if you’re like me, the only bowl of bovine testicles you’ve ever seen.) The Chinese menu listed “beef ball soup.” I figured they meant meatball soup. It had never occurred to me that “ball” would be the internationally recognized term for “testicle.” I had to learn the hard way that, unlike in America, when the Chinese say “beef balls” they really mean “beef balls.”

What is the moral to this quaint little tale? Simply this: When doing business in a foreign country and a foreign culture—particularly a non-Western culture—assume nothing. Take nothing for granted. Turn every stone. Ask every question. Dig into every detail. Because cultures really are different, and those differences can have a major impact on the business environment and management challenges you will face in another country.

I’ve seen many companies pay the price for erroneous assumptions. Of course, business always carries risk and we all make mistakes. The problem is, the risks are greater and the mistakes are bigger when you’re operating in unfamiliar territory. The last thing you want to do in such a situation is to assume that things are just like back home, when in fact they might be very different.

Avoiding Mistakes

Three attributes will help you avoid the mistakes that come from assuming too much: patience, thoroughness and clarity. You must have the patience to educate yourself about the foreign business environment, the thoroughness to investigate that environment completely, and the clarity of communication to prevent misunderstandings and problems. The following ideas can help you apply these three principles to avoid the mistakes that result from assuming too much.

Profit from the experience of others. Customers, suppliers and even competitors might be willing to share their experiences with you. It makes sense to network with those who have been where you are going, even those in unrelated industries. If you can find someone who has picked a partner, made an investment, hired an employee or done any of the other things you will be doing overseas, try to pick that person’s brain.

Walk before you run. A good start is more important than a quick start. If you can trade before you invest, do it. If you can hire an agent before opening an office, do it. If you can invest small before you invest big, do it. It is definitely better to be the tortoise than the hare when doing business in a new, unfamiliar market.

Commit the resources. It takes time, money and effort to educate and prepare your company to succeed in a foreign market. You will have to travel, hire new people, manage those people and perhaps rely on outside service providers. If you don’t have room in your budget or on your calendar for these things, it might better to stay focused on the markets you know.

Beware the gatekeeper. It is important not only to get information but to get good information. That can be difficult if you rely exclusively on one information source. Many companies fall into this trap. They hire one key employee or engage one agent, and everything they learn about the new market comes through that person. Remember that differing perspectives almost always improve the educational process. If nothing else, each perspective serves as a reality check for the other.

Establish goals, procedures and business practices. Be forthright, detailed and crystal clear regarding your goals, procedures and the way you do business. For example, if you hire an agent, discuss in detail what marketing efforts he or she will make. If you hire managers, clearly document their responsibilities and how they will be evaluated. If you take on a partner, clearly delineate responsibilities and acceptable business practices. There are two advantages to this. First, should there be problems down the road, you will have something to fall back on to explain your position. Second, your forthrightness will force others to react, which will help you understand them.

While it is impossible to anticipate each and every challenge you will face overseas, I am confident the above suggestions will help you acquire the understanding of the foreign business environment that you will need to face those challenges successfully. Without that understanding, your chances for success overseas will be severely hampered. Or, to put it another way, if you don’t know the difference between beef balls and meatballs, you probably shouldn’t be ordering soup in China.

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