On Friday, November 21st, at the close of a dismal week on the NY Stock Exchange, the Market suddenly took a sharp turn upward. By the time it closed an hour later, it had shot up nearly 500 points! What happened to cause such a euphoric bounce?

It was leaked that President-elect Barack Obama was going to appoint Timothy Geithner as the incoming Treasury Secretary. Who is this man who created such a stir on the NYSE? We quickly learned that in addition to having been president of the Federal Reserve Bank of New York for the last five years, Geithner has a background in Asian studies, international economics, has studied Japanese and Chinese, and lived in East Africa, India, Thailand, China and Japan! He credited these global experiences as critical components of his background and skill base. Surprisingly, the media barely reported on Geithner’s global exposure.

Since little reference to these facts was made, we felt it was important to reinforce the crucial nature of global competencies and how they will continue to become leadership criteria in the 21st century. This lack of coverage is unfortunate, as Geithner’s experience fits in completely with what we’ve been discovering about the skills and background required for global leadership today, both in business and in government. Previously, we’ve commented about how Barack Obama’s multi-cultural background and experiences living abroad have added to his credentials and potential as a world leader. This also fits with a study RW³ conducted with ORC Worldwide, “The Importance of Cultural Skills for Global Business Leadership,” which confirms the importance of global experience in leadership.

Whether it is the banking or financial industry, the auto industry or government, we’re reminded everyday how a new kind of leadership is needed. In order to find that leadership we have to embrace diversity and recognize that skills for the 21st century will regard cultural plurality and will consider the ramifications of its ignorance.

The NYSE celebrated in that moment on November 21st because it is understood our economy is globally interdependent, which means that those who lead must have a global mindset. Unless you’re aware that people around the world think differently, are motivated differently and have values and beliefs that are unique, vital information will be overlooked and opportunities will be passed unknowingly. If one can’t see these clues, one can’t react to them. It seems that Geithner embodies these capacities and has attained the vision and perspective to spearhead the economic misfortune of our time. Learn more about him here.

Mike

rw-3.com

We’re very excited to share the cover art for our upcoming book, Managing Across Cultures: The Seven Keys to Doing Business with a Global Mindset.

It will be released by McGraw-Hill on May 22, 2009. Let us know what you think!

See it on their website here. Pre-order the book on Amazon, Barnes & Noble or Borders.

Mike and Charlene
RW-3.com

In South Korea, what university a student attends in their 20′s can determine their position and salary in their 50s. The life of a South Korean student, from kindergarten to high school, is culturally shaped largely by the quest of doing well on the standardized examinations that determine placement at a prestigious university. Over 50 boarding ‘cram schools’ are popping up for students who did not get into the university of their choice and are cramming again to retake the exam the next year. Read more in this International Herald Tribune article.

RW3

Every time I hear or read about a potential business acquisition or merger–especially international ones–I wonder how the smart people who run those organizations can overlook the vital element of cultural integration challenges. The proposed acquisition-merger of Anheuser–Busch (an American company) with InBev (a Belgian-Brazilian company) is another example.

As the WSJ article points out, AB has a hugely popular external-facing focus. Indeed, these are the folks who brought you the Bud Bowl, Spud–the dog, and the Clydesdale commercials. These have been elevated to American icons, with mythologies around them.

In contrast, InBev has a much lower-key profile. In our cultural parlance, this is the proverbial “tip of the iceberg” and the invisible cultural differences will play a major role in how well these companies can succeed through integration. The history of previous deals should make it clear that just as you do a financial and facility due diligence in responsibly examining the impact of a big business deal, so too should businesses examine the cultural challenges they’ll encounter.

Mike
RW3

As the increase in new low-cost airlines across Europe have surged, the opportunity for Russians to travel is especially esteemed. Russian tourists are flocking to the Mediterranean, particularly Turkey, to experience what the public was prevented from doing for so long under the Soviet rule. Now, those in the Turkish tourism industry are returning to language school to keep up with the demand for Russian speaking workers. With this freedom to travel comes pleasure and positivity back at home, as the writer and commentator Viktor Yerofeyev states, “the more Russians travel, the more they tend to lose some of the coarseness that at times characterized Soviet society”. Read more in the New York Times.

The Oreo has long been a top-selling cookie in the U.S., but Kraft has had to reinvent and redesign the Oreo to sell to the world’s different cultural markets, ‘hitting and missing’ along the way. Chinese consumers originally found the cookie too sweet, so the company developed 20 prototypes of reduced-sugar Oreos. The final product is a four layered crispy wafer filled with vanilla and chocolate cream, coated in chocolate; a huge success.

Kraft has tailored other products to entice different cultures. For the Germans, they introduced dark chocolate under its Milka brand. Research showed that Russian consumers enjoy premium instant coffee, so Kraft’s Carte Noire freeze-dried coffee is positioned as upscale, offered at film festivals, fashion shows and operas.

However, Kraft and it’s Oreo have not caught on in Britain. Their advertising campaign, blue-and-white posters on the sides of the iconic red buses, instructs consumers to “Twist Lick Dunk”. In a culture with a long history of tea and biscuits, Britons don’t like the idea of being told how to eat one. Dunking in milk, instead of tea, doesn’t sit well either.

Kraft’s cultural challenges highlight yet another example of how cultural attitudes and expectations are revealed so strikingly the more personal the product or activity is. This is important to consider not just in brand-building and marketing, but also in personal interactions — social etiquette, meeting protocol or use of verbal and non-verbal language, to name just a few examples.

Amanda
RW3

How people communicate is a vital part of understanding a culture. It’s crucial to recognize an indirect communication culture because the words someone uses are only a small part of the message being conveyed.

Cultures such as India, Thailand, and Japan are quite indirect in their style. This means that individuals often speak in a roundabout way by adapting the language to be somewhat non-specific and extremely tactful. Nonverbal communication, such as facial expression, tone of voice and posture, take on a very important role as clues about the full message. While the goal of the communication is the information, at the same time the person looks to maintain harmony, avoid confrontation and allow all parties to save face.

If you recognize that you’re working with indirect communication styles in your business activities, be very careful to pay close attention to all of these signals.

- taken from RW3′s CultureWizard™

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The carbon-free electric driving machine has made a splash in the Norwegian countryside and is just one of the latest top ‘Green’ cars. Read more in this CNN article.

A new study from the Berlin Institute of Gender in Medicine in Germany reveals that doctors are dissatisfied with the treatment they provide to their non-native patients, and cite cultural differences and language barriers as the key factors. Read more in this EurekAlert article.

Some basic cultural knowledge will be helpful when doing business with Swedes:

* The concept of “lagom” – “just enough” or “everything in moderation” – affects Swedish attitudes and beliefs.
* People expect to be treated with an equal amount of respect and will express their opinions based upon their ability to contribute.
* Since many people view status symbols as pretentious, you cannot evaluate an individual’s rank or importance based on external cues.
* Swedes see themselves as being egalitarian and direct and are comfortable addressing everyone in a concise mode of expression.
* It is considered disrespectful to be late for business meetings or social occasions.
* Sweden is a relatively low risk and low change tolerant culture; societal change is difficult to bring about and not received with enthusiasm.
* Swedes can be quite exacting about punctuality, agendas, and timetables.
* Swedes use silence to think before speaking and to avoid confrontation. Do not continue speaking simply because the other party is silent.

- taken from RW3′s CultureWizard™

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Workers raised in an age of economic optimism want it all, and they want it now. Read more…

The American system of higher education is becoming an important export as more universities take their programs overseas. Read more…

Motor scooters are an acceptable means of transportation for Parisian business people. How are Americans working in France adapting to the two-wheeled vehicle? Read more in this Wall Street Journal article.

Japanese consumers have a penchant for French luxury brands. This article in the Japan Times speaks with a French luxury industry specialist on Japan’s brand fixation and how French luxury brands are giving back to Japan.

Africa is undergoing an economic renaissance with economic growth recorded in Nigeria, Ethiopia, Algeria, Ghana and many other markets which are unfamiliar to some HR professionals.

Companies are adapting compensation and reward packages for local, national staff and benefits such as cell phones, personal loans and transportation are common. Health care clinics, recreation programs, and subsidized meals are also the norm among leading employers.

Learn about the challenges of conducting business in Africa at Africa Forum 2008: “Understanding Labour Market Dynamics in Africa”, sponsored by Birches Group LLC and the African Development Bank (AfDB), 6/10-6/12/08 in Accra, Ghana. For more information please email AfricaForum@birchesgroup.com