The Setting.

“How can we get them to take initiative?” The question came separately from two of the four table groups. Their task was to identify the challenges they were encountering in working remotely with their Chinese colleagues in a power tool design and manufacturing project. This was early in a daylong cultural training program I was leading on Working with the Chinese (accompanied by a Chinese-American business resource with years of on-the-ground experience in China). The other two groups were trying to determine what the challenges looked like for the Chinese. Both sides named the obvious challenges of physical separation, time zones, and the language problem, but the U.S. challenges group had both identified their most frustrating problem—lack of independent initiative.

This U.S.-based tool division of a European-headquartered company had outsourced the manufacture of a line of power tools to China, and the U.S. team responsible for the tools was preparing for a weeklong visit to the plant. The group of 20 included design and quality engineers, marketing, procurement, and human resources, a third of whom had visited the plant at least once over the past year. What prompted this group visit was their realization that none of the Chinese engineers, mostly hired directly from local university engineering programs, had ever held or even seen a power tool. And now they were responsible for designing and testing them! The American team was going to the Chinese plant to spend a week building tables, chairs, and other common items with the Chinese team in order to engender some familiarity with the product as well as create stronger inter-team relationships.

The young Chinese engineers’ lack of familiarity with the product was not the only problem. They were also reluctant (in the predominantly email and teleconference environment) to make decisions or even to voice their opinions. They seemed to lack confidence, to need direction in everything and to be entirely too willing to take advice from afar. This was scary, as the economics of the decision to outsource this work to China depended on the Chinese engineers taking on primary responsibility for the project.

In intercultural business programs like this one I typically spend considerable time introducing and illustrating the concept of intercultural competence. We examine the impact of cultural differences through the analysis of “critical incidents” using familiar cultural dimensions such as individualistic vs. group orientation, preference for hierarchy, degree of risk tolerance, and performance vs. relationship focus, as well as issues of direct vs. indirect communication, etc. I am used to groups of engineers and technicians who are bright, quick, analytical, concerned with “real” problems, and very suspicious of the “soft” stuff like culture. However this group was unusually impatient with “theory,” focused as they were on the imminent trip and their frustration with the Chinese team. They had no time for abstractions in their need to understand why the Chinese wouldn’t “take initiative.” I didn’t know how to proceed, because without a new framework for analysis we would be trapped inside the box of their familiar perspective.

Figuring out who we are!

In that moment of desperation I was struck with a flash of inspiration—what if we started with exploring who we are as Americans? That would feel more concrete, and from our self-analysis, we could then ask, What’s different about the Chinese, and how can we bridge the differences? Closing my PowerPoint presentation, I put two sets of questions on the white board. Two of the groups had to discuss the first set of questions:

1. What values* did your parents and teachers try to instill in you, and what values are you trying to teach your children?
2. How did you, and how will your children, learn these?

The other two groups were to come up with a set of expectations for new engineering hires (appropriate educational qualifications were assumed):

1. What did they expect in terms of skills, knowledge, experience, and attitude?
2. Where did their candidates acquire those?

In 15 minutes each group was to begin writing its conclusions on flip charts.

There was remarkable consistency among the groups in their answers. Summarizing the results, the first two groups came up with these:

• Independence and self-reliance
• Being positive, optimistic, and confident
• Taking initiative and personal responsibility
• Cooperating with others toward shared goals
• Defining goals and working hard to attain them

The groups focusing on hiring expectations created a very similar list:

• Confidence and enthusiasm, as displayed in talking positively about experience, abilities, accomplishments, and desire for the job
• Ability to work independently and to collaborate in project teams
• Willingness to make decisions, implement, and take responsibility
• Willingness to do whatever is necessary to get the job done satisfactorily
• Prior related work experience

As you can see, there is a strong overlap in the two lists; the second is just an extension of the first, and it is a concise description of American corporate culture. It is not, however, typical of the work culture in developing nations where resources are scarce, people depend on each other for survival, and staying on good terms with the group is primary. Children in developing nations are not raised listening to The Little Engine that Could. In my training room, however, everyone (except for two who were not born in the U.S.A.) was familiar with this story, which has been in continuous publication in the U.S.A. for 100 years! It is a tale of desire, of determination, and of trying over and over, with continued encouragement, until finally succeeding. The U.S.A. is perhaps the only country in which most (mainstream) children grow up with stories that teach them that anything is possible!

So, our opening line, “How can we get them to take initiative?” could be rephrased as “How can we get them to behave like we do? The American engineers had expectations for the behavior of their Chinese counterparts, and the success of the project depended largely on their expectations about Chinese engineers being met. These expectations were based on the projection of American work culture into the Chinese work environment. In fact, their assumptions about the Chinese were wrong. Let’s try to understand why.

The U.S. mainstream experience.

We learn our successive cultures of family, gender, ethnicity, school, play, etc. through modeling—through loops of observation, imitation, and feedback within our groups. For people to behave similarly, they require similar experience. In answering their second questions, my groups identified the typical American experiences that engender and reinforce the attitudes and behaviors on the above lists. Here are the main aspects of shared experience that the group came up with:

Individual choice. In the U.S. environment of material abundance and personal freedom there is always choice and the need to take responsibility for choosing and living with the consequences. Years of practice in considering options, making choices, and assessing results create confident, experienced decision makers:

Positive feedback and encouragement. When the young would-be baseball player swings wildly at the pitch and misses, the coach or parent, instead of criticizing, yells, “Nice swing! You’ll get it next time.” Continuous positive support creates optimism: anything is possible!

Intense competition. Whether between individuals, between groups, or among individuals within groups, uninhibited competition is encouraged from childhood. Successful groups, athletic, academic, artistic, or corporate, require star performers, and competition for individual and group rewards can be fierce. This produces driven, competitive performance-oriented people.

Frequent physical relocation. Americans join and leave social, scholastic, and work groups from early childhood. We enjoy casual, simultaneous, and often-temporary membership in loose groups whose members are quick to trust.

Experience with tools, equipment, machines, electronic devices. U.S. Americans grow up, regardless of gender or social class, assembling, repairing, adjusting, and operating all kinds of apparatus. We own a lot of stuff, and we are a nation of do-it-yourselfers who enjoy getting our hands dirty.

Early failure, dedication to improvement, and eventual success. Years of this sequence produces determined, hard-working risk takers who are quick to act.

Not everyone in the U.S.A. is raised in this environment, of course. But many of those who are, and who survive the rigors of a challenging process, bring to the workplace a unique set of attitudes, skills, experience, and expectations.

• Work experience since late childhood
• Experience in living and acting independently
• Experience in planning and in managing time and money
• Skill in negotiating task, time, and budget (with parents, teachers, and employers)
• Rudimentary management or leadership experience (summer camps, college project teams, sports, etc.)
• Willingness to make decisions, initiate action, and take personal responsibility
• Willingness to admit problems and seek assistance as necessary
• Comfort in working with strangers, basing trust on perceived knowledge and skill (and presumed shared values)
• Expectation of hard work, risk, and substantial reward for success

Such a labor pool is a recent and rare development in the world, and it’s predominantly U.S. American. It’s perhaps worth noting what values do not appear on those lists. We do not see respect, duty, loyalty, patience, or personal relationship; these are not what get the work done. For better or worse, in our relentless pursuit of better performance and a bigger bottom line, we have evolved beyond the values of our fathers’ businesses. And the rest of the world is struggling to catch up.

What about everybody else?

There is growing evidence that cultural values evolve in a rather predictable direction according to the culture’s success in exploiting its material environment and distributing the wealth so created. Different levels of well being correspond to different value sets. (http://www.worldvaluessurvey.org/). The evolution toward individual free expression, trust, tolerance, and life satisfaction is highly dependent on material well being, and it is not surprising, therefore, that healthy and wealthy nations collaborate easily because of similar experience and values.

It should also not be surprising that less materially successful nations have a more traditional value set, based more on surviving than thriving and very dependent on the strength of the primary group. Collectivist cultures are typically:

• Hierarchical and formal
• Relationship focused
• Indirect in communication
• Risk averse and conflict avoiding,

with suppression of in-group competition and little trust or tolerance for those outside the group. Loyalty, not performance, is the primary value. In the U.S. we might consider The Sopranos as a somewhat exaggerated illustration of such cultures. Beyond our borders we can look to South America, Eastern Europe, much of Africa and the Mediterranean countries, most of the Middle East, as well as South, Southeast, and East Asia (and that doesn’t exhaust the possibilities). U.S. corporations often find it frustrating to do business in these steady-state relationship-based environments.

Let’s get to the point.

From the business perspective, global operations with locations in both developed and developing countries entail an unavoidable problem. The philosophies and practices of contemporary and traditional management are incompatible. This contrast in values and in the behaviors that reflect them should give corporations pause in their consideration of outsourcing as an easy strategy to reduce production costs. If what they seek is cheaper labor for traditional manufacturing, then, indeed, it is possible in many regions of the world to find that. Such production line work requires the traditional values and behaviors of:

• Respect for authority
• Strict obedience
• Deference to the group
• Keeping one’s opinions to oneself
• Never embarrassing one’s superior

The manager’s job is essentially that of foreman or army sergeant: tell employees what to do, how to do it, when to start and stop, and oversee their work. Hiring such a labor force is not difficult, nor is hiring traditional managers.

If, on the other hand, the corporation decides to replace traditional manufacturing with state-of-the-art facilities and to outsource product design, quality control, procurement, plant management, etc, staffing requirements will be very different. Now the business, especially at the management level, will require self-directed, independent and creative problem solvers who can work comfortably and effectively in flattened, flexible, matrix structures that enable quick internal adjustments to external market changes. The local labor force cannot supply these.

You might counter, What about all those young, eager, bright, polite, disciplined Chinese graduates (substitute the recent graduates of any developing nation) from excellent and competitive local institutions? Surely they can perform to global business standards!

Well, it’s not likely—not anytime soon, at least. Yes, of course, they are eager — working for a global corporation offers rewards they could never obtain from local firms. And, yes, they are technically competent. Their educational programs are designed and conducted to Western standards with excellent and sometimes Western faculty. The problem is their culture, that soft abstraction that we would like to ignore.

These young people come from families with the collectivist values described above. Although they may appear to hold the values of their foreign employer, they haven’t had the experience to internalize them, nor sufficient practice to master the requisite behaviors. Contrast their typical experience to the American one described above. In their patriarchal homes they have likely never made a serious decision for themselves. They haven’t bought their own clothes, driven a car, traveled alone, or defended a personal opinion outside their peer group. Their schooling (with the possible exception of the university) has been a traditional rote system with teachers as supreme authorities. They may still be living in deferential respect with their parents. They have no prior work experience.

To put it succinctly, these young graduates, despite their enthusiasm and good intentions, will find it very difficult to take individual initiative in the workplace. Even if independent behavior is encouraged, under stress they will quickly revert to the face-saving risk-averse behaviors modeled by their family and community.

So what are the options?

Can these young people learn the attitudes and behaviors required for successful operation of a global business? Well, here are the challenges:

• If all hiring is local, who will be their models?
• How will they be mentored in the shift from a control-based to an empowerment- based environment?
• Who will train them, give them constructive feedback and encouragement, and replace their fear of punishment for failure with a trust in error-based learning?
• How much time will be required for them to become effective? (How long does it take us to master these behaviors?)
• How much training has been factored into the budget?

Clearly, to operate to global standards in a developing business environment, most of the management staffing will have to be Western-trained or to have significant experience in the global business environment. Such people can, of course be found locally, but they will be in short supply and expensive, especially if a company is late to the game. Another option is expatriate managers. However, expats are very expensive and they generally don’t know the local language. (Local hires will be required to speak English, but their fluency will vary dramatically.) Selected local hires can be brought to the headquarters for familiarization and training, but that is also time-consuming and expensive. Finally, a company can try to manage and mentor from a distance, with frequent remote communication and occasional extended visits by team members to the foreign site.

In summary.

The latter was the strategy my training participants were struggling with, and these were the considerations they were discussing as they left the program that day. And these are the questions that the financial strategists, upper management, and senior HR personnel of many corporations should be asking as they consider outsourcing their non-competitive operations.

The culture of U.S. American corporations has become the standard for global corporations (although the importance of personal relationships is generally more important outside the U.S.). Prospective employees must normally demonstrate these values to be hired, and certainly to be promoted. They are the sine qua non of MBA programs. In the U.S.A., these values are fostered in (mainstream) homes, schools, colleges, and early work experiences. There are only a few other places in the world where they can be learned before joining the workforce. The list does not yet include China or India.

As corporations struggle to stay competitive through outsourcing to reduce their labor costs, they need to take account in their budgeting of what skills they can and cannot hire in the destination market. Cultural incompatibility can be very expensive.