Keith Warburton, CEO of the Global Business Culture Group and HSBC head of economics Mark Berrisford-Smith spoke at the Solent 250 awards dinner.

Don’t get culturally confused when working internationally

Up to 50% of what is said in international business meetings may be misunderstood claims expert Keith Warburton, CEO of the Global Business Culture Group – and the chief reason is communication confusion caused by cultural differences.

The impact of cultural differences should not be underestimated Warburton adds, particularly with many British companies viewing greater involvement in foreign markets as a key commercial growth objective.

Also, despite having the benefit of English being the business language of choice in many countries, British businesses often don’t communicate as well as many of their foreign rivals, Warburton told guests at the Solent 250 awards evening.

A common British trait is to use too much phatic speech in business meetings, which largely helps to convey a mood of sociability or share feelings, rather than use emphatic speech that directly communicates information or ideas.

Exampling a number of international cultural differences, Warburton mentioned how the British might break up tension in a meeting through humour, while Far Eastern businessmen might do this with silence.   These individual cultural reactions could equally be viewed differently.  “When you work internationally, people do not see you as you see yourself,“ he added.

So, include some typical British ironic humour in a cross-border business meeting, with a dash of understated reserve about your company’s abilities, or colloquially mention that ’Bob’s your uncle’, and the chances of misunderstanding (or lack of a contract) are obvious.

In some international meetings, business individuals involved might be happy just to translate the words being used correctly, let alone their true cultural meaning, suggested Warburton.

National cultures influence and imprint people from birth, he stated.  Cultures vary throughout the world.  “Everybody wears a pair of cultural spectacles with lenses manufactured in their own country.“

Western cultures tended to promote individualism; eastern cultures focused on group involvement.  Some cultures viewed business success with great respect; others viewed great respect as the route to business success.  For this reason, rolling out the same marketing model internationally or using a westernised sales incentive scheme based on individual performance, was not always a successful strategy.

Greater knowledge and understanding of different national cultures, would enable better business relationships and meetings, he claimed, with those attending being able to take off their ’cultural spectacles’ and talk with respect and awareness, eye to eye.

“If you get cultural differences right, it will be good for your business.  If you don’t, I guarantee it will cost you in terms of time, resources and inevitably profitability.“

Reach out to maintain the recovery

The UK economic recovery is continuing and this will be a good year for most businesses, but the future challenge for ’UK plc’ will be to keep growing when few countries elsewhere are doing so, said HSBC head of economics Mark Berrisford-Smith, speaking at the dinner.

While the UK economy was “decently on the mend“ and should record a 3% growth this year, there was still a lot to do, he stated, not least because any countries that did have thriving economies were not necessarily the UK’s traditional trading partners or were not geographically close.

“There are parts of the world that are growing at 1% others much higher at 4,5, 6%, and guess which one we had the fate to be anchored next to – the eurozone at 1%, with an economy that is not likely to get better very quickly,“ said Berrisford-Smith.

“They are facing the risk of deflation, with a central bank angsting over whether to do the sort of quantitative easing that we did five years ago. QE is not a panacea, but it might help.“

The other challenge for businesses seeking international trade is that the emerging nations of the BRICS and MINTS are no longer so easily corralled as vibrant fast-growing economies, when compared to the recovering economies such as the US, Canada, Australia, Scandinavia and the UK.  China and India continued to grow well but Russian and Brazilian economies were faltering, noted Berrisford-Smith.  “There are good and bad eggs in all groups.“

So, it is a tough world for UK’s traditional export markets, but perhaps an opportunity for new trading in fresh territories, particularly with the UK economy needing to shed its reliance on domestic consumer spending.

One bright spot – along with the successful performance of companies within the Solent 250, of course – was the first sign of UK wage growth, said Berrisford-Smith.  Even so, he agreed with Vince Cable’s view that whoever wins the next election will not get the national deficit down by the end of its parliamentary term.

Next year’s headlines would be about politics, he added, with many more political parties having an influence than in previous elections. “It looks highly likely that we will continue in an era of coalition politics.“

Berrisford-Smith expected interest rates to go up during the middle of the year – “not by much, and fairly slowly thereafter“.