THIS WEEK'S TOPIC

Cultural differences mean that a different approach is essential for businesses seeking to clinch overseas deals. What interesting experiences have you had while trying to negotiate deals abroad, and what tips would you provide to fellow SMEs to smoothen the process?

Richard Stuart
Managing Director
IPS Securex Pte Ltd

TWENTY years ago I started travelling to Japan. I quickly discovered that my premature grey hair (and baldness) was an advantage as people thought I was much older than I really was. The Japanese have respect for older people and so I was given much greater access and respect than I probably merited at the time. Personally, I benefited from many hotel upgrades (much to the chagrin of my older, but younger looking boss) and also won many business deals because I came across as a more convincing personality. This whole experience opened my eyes to the reality that whatever sales techniques that are successful in one country will have to be adjusted for another country to take into account the different cultures. It is definitely worth taking the time to explore the culture of a new country to understand how to be most effective when dealing with the people.

Henry Tan
Managing Director
Nexia TS

CULTURAL differences are very important and need to be considered. When we first did business with China businesses in 1998, we were not well prepared for the differences. It took us quite a few years to really understand that while we are all Chinese, we are not from the same country. Many things we do may appear harmless at first, but could put us in an embarrassing situation subsequently. Let me share an example. A Nanjing enterprise visited us and was keen to appoint us as the advisors for their IPO listing in Singapore. In their first evening here, we took them to an expensive Japanese restaurant thinking that it would impress them. During the course of the dinner, the guests started talking about the Nanjing massacre by the Japanese. It was then that I realised I made a big blunder to bring them to a Japanese restaurant on our first meeting.

Another situation arose during a joint project with our German counterparts. We were supposed to assist their clients in Asia in their tax and payroll requirements. After about six months of discussion, we realised that all that they needed was a simple calculation of the tax payable for their client, rather than the whole suite of payroll services. This stemmed from the difference in understanding what constitutes a normal scope of work, and assuming that what we do in our country is what is done in another country.

Cheryl Tong
Managing Director
Pursuit Pte Ltd

ALMOST everybody knows that doing business overseas requires an understanding of the cultural nuances and business practices of the local markets. However, attending courses and having theoretical knowledge are not sufficient. One must actually have experience doing business in the overseas market in order to acquire that understanding and knowledge.

I have learnt more about doing business in one Asian country during my recent experience negotiating a deal with a company in that country than all the seminars and workshops that I have attended.

First, they are never direct and straightforward. It is hard to tell when they mean what they say and when they imply the opposite of what they say. Learning to see beyond their spoken words and interpret their body language is not something one can learn in the classroom. We have to learn by experience and try to minimise our mistakes and missteps.

I learned to my chagrin when negotiating a deal, relationship is more important than the price or quality of the product. They will do a deal with you if they trust you. However, establishing a good relationship with the partner takes a lot of patience, time, energy and a strong stomach. Closing a deal may take 10 minutes, but getting to the closing stage may take hours and days of wining, dining and song and dance.

These businessmen are very patriotic. Although they may whine about conditions in their country, we should never fall into the trap of supporting the criticism. We are guests in their country and should never interfere with their internal affairs.

Mikell Koh
Managing Director
Milne International Pte Ltd

CULTURAL difference is the first entry into any market. Understanding one's culture is the first bridge to a relationship. Business is all about relationship. Through this understanding, anyone can have a good business strategy or the synergy to discuss further business.

I consider business relationship and people-to-people relationship to be the same, it takes time.

Take language for example, it will take time to master a new language. Not to mention the enthusiasm, time and effort to practice. You could either hire a translator, a permanent local staff, or take on a local partner when pursuing a new market, it all takes time.

We live in a small, fast-paced and efficient community, which drives us to be impatient. We must remember that we are not the first in any market and many have failed before us. If you are able to understand where they have failed and why they failed, your battle is half won.

Sonya Madeira Stamp
Managing Partner
Rice Communications

CROSS cultural awareness is a must for companies seeking to close business deals or market their products and services overseas. In fact, it has become so crucial that there should be an effort to imbibe this understanding and respect for cultural differences across an organisation, and for each member of the team to be able to respond constructively to cultural nuances.

I would highly recommend nurturing cultural diversity in the workplace. Having a multicultural work environment gives us a huge advantage when we bid for projects that extend outside Singapore.

Our consultants have lived or worked for many years in countries such as Australia, Hong Kong/China, India, Malaysia, and the Philippines. They contribute their in-market knowledge, experience, local language skills, as well as key business or influencer contacts whenever needed, and this significantly bolsters our credentials and business pitch.

For example, with four Indian consultants under one roof, our Indian clients or foreign investors doing business in India or those planning to enter the market for the first time, are ever confident partnering us on very strategic levels. Meanwhile, corporations headquartered in the US or the UK leverage on our support when they do in-country road shows in the Asian region.

Cultural diversity also supports creative brainstorming. Differences in opinions, world views, and even food and style preferences bring idea generation for prospective projects abroad to a new dimension, making SMEs stronger and more competitive 'inside and out'.

Donna Lim Head,
Overseas Property Investments
HSR Property Group

CULTURAL intelligence is a vital and integral factor for operating in any overseas market and for that matter, in any local market segment that is culturally unfamiliar to you.

The key starting point is to avoid adopting an ethnocentric mindset, believing that your objectives, perspective, and way of doing business are better than others. It includes making judgments about other's behaviour based on your own concepts and past experience. What works for your business locally may not succeed overseas, because of societal and cultural differences. A great executive in a new setting may not even be a good one.

It is important to stay culturally open. You need to have a healthy tolerance for and sensitivity to cross-cultural differences. When you commit yourself to learn about and adapt to other cultures, it can not only enrich your life, but also help you develop appropriate bridges to capitalise on markets abroad.

To be culturally empathetic - and not be culturally-blinded - it is important to conduct vigorous research, especially about relevant cross-cultural differences and study how to leverage on them for business purposes. You need to be humble to enquire about and learn how to operate according to new cultural cues, expectations and behaviours. If need be, go 'back to basics' and hire an employee who understands the local culture or retain the right coach to help you work with foreign customers and in new markets.

As a company that probably markets more property investments from all over the world to Asians, it has been an honour and sheer joy to learn how to appreciate different cultures and work towards win-win relationships that are based on love, trust and mutual respect.

This article was first published in The Business Times.