Public Responsibilities and cultural differences

I have remained quiet on this blog for the last couple months, but that has not stopped me to experience cultural issues in collaboration. I was in the US last week when the healthcare debate heated up, and frankly, I was appalled of what I saw. There not being collaboration between rivaling parties, particularly in a by-party situation, should not sound astonishing for anybody, but the quality of the arguments used and the threats made, was extremely low.

As a European, I cannot understand a democratic state allowing 50 million of its people (1/6th of the countries people) no access to healthcare at a reasonable cost. But that’s the US, capitalism at its best (or worst… depends on the viewpoint).

I cannot accept clearly false advertizing on political issues, such as some of the adds run last week on television. Then you have the clearly partisan and aggressive approach to political news by Fox. And now, threatening and violence because a majority passed the law. And this from the country that advocates democracy and pushes it in the middle east and Asia? Sorry, I don’t understand anymore.

Rather than giving clear explanations of what the issues are and what alternative approaches are possible to give all Americans an appropriate healthcare coverage, the politicians and the media have exacerbated the debate, encouraging violence. They are to blame for the current disaster. There is way too much money at stake, and the insurance companies are in no way estranged from what is happening.

In a debate there are facts (that can be proven), prognoses (that are the results of careful analysis), deduction (that result of the analysis of the previous two) and opinions (that are personal). Frankly, I have heard very little from the first three. In an advertisement titled “Washington does not listen”, I heard that providing healthcare coverage to all Americans would increase unemployment (why and how much?) and would raise taxes (maybe, but then how much and for whom?). If I managed to read the last image well, this was sponsored by the association of insurances…. They have no stake in the debate, don’t they?

Being it within an enterprise or in a country, running a democracy and allowing all to voice their opinion is not easy. But frankly what I have seen last week is no democracy in my mind as there is NO respect for the others opinion.

Companies operate for stakeholder’s benefits, but isn’t it shareholders?

Since quite some time I have been thinking about writing this post, and when I found the article on Davos 2010, I realized this was the moment. When I started my professional life, people used to tell me companies had four key stakeholders, shareholders, employees, clients and suppliers. Today, frankly, most CEO’s only focus on the first, the shareholder, and receive insanely large bonuses while leaving employees out of a job, pushing suppliers to bankruptcy and barely looking at customer satisfaction. How have we gotten there?

As long as the world was bifocal (liberalism and communism), the people oriented values were present in our cultures. People were respected, their well being was part of what enterprises and businesses were looking for. Since the collapse of the communism, the egoism has taken over. I think about myself and don’t care about others. That’s the ultra-liberalism that is currently being pushed by businesses. Companies have completely lost their social responsibilities. Oh, don’t understand me well, we have never spoken as much about social and environmental responsibilities, but it’s all related to avoiding that the supplier uses child or slave labor. The basic thinking around the employee for example has completely been lost.

I already hear you. The writer of this entry is a dangerous communist or socialist. Actually that can’t be further of the truth, but I strongly believe in a social liberalism where a company takes its responsibilities towards all four stakeholders.

The current trend results in employees no longer finding any bonds with their company, ready to jump from one to another as soon as a good proposal comes along. Loyalty is quickly disappearing, and with it the knowledge that makes the company unique. While in the short term, the large profits obtained by firing employees and squeezing suppliers, will benefit the shareholder, in the long run, many companies will collapse as they have lost their essence.

Sure a shareholder should be rewarded for the money he/she invests in the enterprise, the employee should be rewarded for his/her time, creativity, initiatives, energy and enthusiasm he devotes to the company, and the supplier should be allowed to make a reasonable profit.

The CEO’s that have driven this future catastrophe will no longer be there when the disaster strokes. In the mean time they will have made hundreds of million on the back of employees and suppliers. What a strange world we are in, where people are no longer responsible for their acts.

Culture and Collaboration, an explosive mix

Saying that Italians, French, German and Dutch people react differently is an understatement. We all have our stories of culture clashes. Our colleagues in different countries do not behave exactly like us. Although we probably share the same organizational culture, our cultural background makes us approach events and situations differently. This often make our colleagues blink, as they do not understand our reactions. Particularly in large global organizations, collaboration is hindered by these elements, without being taken care of.

When I started working with Indian colleagues, I quickly got completely confused. Not only did they shake their heads strangely, they also told me they would do something and did not do it. Actually, my statement is NOT correct. I should say I understood they were going to do something because they answered “yes” to my question. My assumption became my reality within the frame of my own cultural value system. Much later I understood, India had a different value system. As one of my Indian friends one day told me, “there are 40 ways to say yes in Hindi, there is no way to say no”. They had responded candidly to my question, with what in their eyes meant something like “yes, I hear what you say”. They were sincerely astonished when, one week later, I expected a deliverable.

This example demonstrates the misunderstandings happening daily in large enterprises. The more globalization moves to the east, the more we encounter such issues. Employees are not prepared for such challenges. I found the image hereby, based on work performed by Huntington an interesting starting point, although I believe in differences between ethnic groups within the areas.

When working in an international environment it is impossible to understand all cultures we are confronted to, However, building cultural awareness is important to avoid clashes and misunderstanding in the first place. Cultural sensitive people will be less astonished about unusual responses and try to understand what is happening rather than reacting negatively. Achieving this is already great progress for collaboration as it allows the people to openly discuss their differences and explain why each  member behaves the way he/she does. Let me finish this note with a small example. When I started working globally, I received the name of a contact in Japan. I called him up, as a good European, telling him I wanted to ask him a couple questions. He responded “please send your questions in writing”. This drove me nuts. Who did he think he was? Was I not good enough to be allowed to talk to him? I actually was so angry I talked about it with my boss. He explained that the Japanese person was far from excellent in English. As he did not want to loose face by giving me a wrong answer, he asked me to send my questions in writing. This would allow him to use his translation tools to ensure he understood exactly what I needed and provided the best answer. This was a lesson I never forgot. Lets not look at the reaction from the other through our own lenses, but rather try to understand what the reaction actually mean. Much later, when I had build a relationship with him, I had the opportunity to discuss this “near incident” with him. We had a real good discussion, it helped us to understand each-other better and to become friends. If the reaction of one of your foreign colleagues drives you creasy, it may be time to try to understand rather than judge.

Compensation & Recognition

Many things can be said about how people behave, but recognition and compensation make many people do the right thing. So, the fundamental question is how we distill the right collaborative behaviors through the use of compensation and recognition. In the area of compensation, we obviously refer to variable financial compensation in one way form or shape. This is often called bonuses, and frankly these days that word does not have a very good press. Measuring people on collaboration, as referred to in the previous entry, and combine the achievement of appropriate goals with rewards help distill behaviors. However, there are a couple elements to keep in mind:

• First the objective needs to be achievable and the person needs to have the feeling he/she can influence the objective
• Second, the reward needs to be significant enough it gives the person the impression he/she is valued. Never forget that in many countries reward is taxed, resulting in the beneficiary absolutely not receiving what you pay.

Most people are in great need of recognition. According to Maslow’s Hierarchy of Needs, once people have addressed their physiological and safety needs, they are looking for a belonging and esteem. Recognition helps them feel part of a group and being respected. In today’s environment where most people in business have their physiological and safety needs covered, belonging to a group, being respected and growing their self-esteem covers their needs, and prepares them to unleash their creativity, their problem solving capabilities and all those other elements that maximizes their value for the business.

Recognizing somebody is often easy. But I am so astonished it is regularly overlooked by managers. Saying to somebody “Job well done”, pointing out the value he/she added, congratulating her/him in front of people should be a natural to management. It is a major aspect of leadership, one that helps getting the best out of people and increases their loyalty to the company and to management.

Compensation complements this as it is a more tangible way to recognize. It complements recognition, and should, in my mind, be kept for great achievements. It should not become a given. In my mind, the current bonus discussion demonstrates that compensation needs to be managed very carefully, or things are getting out of hand. The team and collaboration aspects should always be included. I remember my frustration when selling projects that the sales person received a lot of recognition and a big bonus, while myself, the project manager, and my team, who really had established the credibility in front of the customer, barely received a thank you.  That does not foster collaboration.

So, in a nutshell my rules are simple, recognize and say thank you, reward when truly remarkable, but always look at the core team as one, not a bunch of competing individuals.

Collaboration and Measurement, the best enemies

We started this journey on collaboration in large enterprises discussing how organizational structures can stand in the way as far as collaboration is concerned. Today I would like to focus on a second aspect and this is measurement. To make it simple and to quote Dave Packard, a great west coast entrepreneur, “Tell me how you are measured and I will tell you how you behave”. And he is so right.

Indeed, people are willing to work together, naturally they have a helpful attitude. But in the end, the “what’s in it for me” question comes up. And frankly, if the measurement do not line up, bad luck. When times are good and the measures easy to achieve, there is not too much of an issue, but in the current environment, where the recession (officially ended though) is making achieving numbers difficult, it often is lonely out there.

I have seen companies giving sales people numbers by product lines, resulting in those numbers being achieved at the detriment of what is right for the customer. In particular, when the business units are strong, when they are the profit centers, developing an integrated approach to customers may be difficult. Top management should spend valuable time engineering a simple, but at the same time compelling measurement system to ensure they achieve the behaviors they want their company to portray. And it is that behavior that will foster collaboration.

Calculating bonuses on the success of the company (e.g. achieving objectives, profitability) may be seen as a way to foster this integrated approach, but it is important to think about how the individual contributor can influence the numbers he is measured on. If he is one of 300.000 employees to take a number, can he really influence the objective he is given? And so, will he act to improve this measure?

For sales people in particular, it is key to balance the measures that are part of the variable pay and the ones that provide bonuses. variable pay ones have the tendency to be the first ones to focus on, while the bonus ones are nice to have.

In a nutshell, developing a measurement framework fostering collaboration is feasible. However it requires a good dose of sound judgment and engineering at top management level, which ids often unfortunately forgotten.