Cultural awareness facilitates growth

In a previous article, I mentioned that expanding sales by bringing existing products to new market is a good vector for growth, but it requires a lot of work and attention. It is an exercise in getting out of your comfort zone and exposing yourself to rejection. Acquiring clients in new marketplaces takes time, effort and commitment. It is also expensive. It is a challenge that takes our attention away from day-to-day business by demanding time for corporate self-reflection. It forces you to profoundly understand your business so as to better identify and exploit its uniqueness. This self-analysis this is not given to all and the results can be unexpected.

Once you decide to develop sales outside of your traditional market, you next must consider on where best to go. There are a multitude of factors to take into account before taking such a leap of faith. Proximity weighs heavily in the balance. Why go halfway across the world when there is an untapped market next door? No matter where you choose to go, however, a rigorous analysis of the target market must be done in order to formulate a good understanding of its sales potential. All markets have their own particularities and it is imperative to know not only the competition that serve it but also the other players, which hold sway. In developing new markets there are many traps and pitfalls along the way. It is important to develop a strategy that mitigates these risks, which includes getting a feel for the marketplace by physically visiting it.

In Quebec, we are lucky because businesses are well supported by an ecosystem that promotes foreign expansion. We have easy access to government and para-governmental institutions whose mandates are to facilitate the export of our products and services. Market studies are readily available for most industries and tailored analyses can be frequently commissioned at subsidized rates. We have access to Canadian Embassies and Quebec Delegations, whose network of Trade Commissioners and Economic Attachés are invaluable in facilitating trade.  They are great sources of information and their insights are critical when doing the due diligence required in deciding whether to enter a market in general or doing business with clients in particular. They are frequently supported by native staff, hailing from the local market, who helps promote trust and highlight the differences in culture. This network is not only important in far away places, but also quite useful when doing business with neighbours right across the border.

Trust is essential to business. It is the grease that lubricates the gears. Without it, all the parts may be in place, but the motor will just not turn over. In the absence of trust, so much time can be wasted protecting our interests that the opportunity for business often passes. Regular and sustained growth cannot be fostered without it. In foreign markets, building that trust is a primary and foundational endeavour. As in all human interactions, trust only comes with familiarity and a mutual recognition of shared values, which can only be nourished by a profound respect for culture.

Most Quebec companies’ first foray into transborder sales starts with a trip south of the border. As Canadians we are so bombarded with American media that we do not realise the time and effort we have invested in learning their culture. So much of it has taken-in by osmosis that we cannot properly account for time associated with this exposure. Yet, as most of us know, the United States does not have a single homogeneous culture. How often does a sales approach that works well in one part of the country fail miserably when tried in another? This is where the detailed study of culture benefits business development. In the United States, a country we know so well, we see that there are various cultural forces at play. Developing business in the New England is not same as doing so in the Deep South or on the Left Coast. Without knowing these distinctions and the history which produced them, building trust in those markets can be a difficult and frustrating process (With regards to understanding the different cultural realities of the United States I highly recommend Colin Woodward’s American Nations).

My methodology for understanding the culture of a given marketplace is a varied and multifaceted endeavour. It usually starts after having a beachhead client that justifies the expense of a visit in person. There is nothing better to understanding a marketplace than by spending some time within it. By letting curiosity reign, you can identify cultural differences and try to understand the reasons behind them. I also find it important to tap into my international networks, such as YPO (Young President’s Organisation), for insights into the culture and possible introductions to potential business partners.

Fear of the unknown and fear of foreigners are, sadly, universal human traits. Generally, we only trust people we know and those who have made an effort to get to know us. It is also universally human to be proud of our home and to want to share the beauty of our unique local culture.  By making an effort to understand and appreciate another’s culture, you demonstrate the respect necessary for fostering trust. When you come to a new market, you cannot act like a conquistador and focus only on your plans for extraction. Cultural insensitivity puts people off and will only lead to frustration. To build sustainable growth in new markets you must not only be aware of the indigenous culture but also be prepared to draw parallels with your own.

In my past efforts to do business in Mexico, for example, I spent a considerable amount of time studying its language, history and culture. Personal and business trips included some time visiting historical landmarks, museums and churches. Exposure to Mexico’s regional cuisines gave me a taste of the people’s resilience and their ingenious ability to thrive on limited resources.  My efforts included disciplined readings on Mexico’s history (such as Bown’s 1494), literature (such as Esquivel’s Como aqua para chocolate and Fuentes’ La region mas transparante) and political philosophy (such as Paz’s El laberinto de la soledad), which allowed me to draw parallels with my own Québécois culture. I learned that we share many historical experiences such as colonialism, religion and the particularities of having a Latin culture. These realizations allowed me to better understand my interlocutors and to foster a deeper sense mutual understanding. This served to build a foundation of trust that not only helped to drive sales but also helped to quickly establish a joint venture.

There often comes a time in a company’s growth where the saturation of its home market makes increasing sales exponentially difficult. It is here that management must decide whether to stagnate or pursue growth through sales in foreign markets. Like leaving an incubator, the decision to pursue sales in other locales exposes the company to an unfamiliar environment. To thrive and succeed in such circumstances, a company must plan thoroughly in order to mitigate risk. Developing sales in new markets is never only about the unique benefits of your product offering. It is also about creating sufficient trust for new clients to comfortably give your products and services a chance. The ability to rapidly connect with potential clients in a deep and meaningful way helps creates trust. Cultural awareness and mutual understanding are accelerators to trust that help mitigate the risks involved in international business development.