Engaging AsiaBridging the East-West Divide

Felix Wong GAICD

“Engaging the Asian Economies” ConferenceSupreme Court of Victoria October 2010

My story Best start: multicultural Malaysia Educated through 3 systems (M’sia, UK, US)

22 years with US and Asian multinationals Lived in 4 continents Worked across 16 countries/cultures Western companies dealing in Asia Asian companies dealing in the “West”

Current role: JVs & Bus Dev for Salim Group in Australasia Bringing together Asian & Western JV partners Facilitating & growing productive working relationships at Board level

Here to share “distilled” experience and provide some insight Corroborated by Wilson Learning, Richard Gesteland Caveats: no right or wrong, sweeping generalisation

Bridging the East-West Divide

“Like a chicken and a duck talking”(Cantonese saying)

The Great Divide

“Deal-Focus” Task-oriented

Open to doing biz with strangers

Cold calling, emails are acceptable (no prior connection necessary)

Working Relationships and Deals can be done relatively quickly

“Relationship-Focus” People-oriented

Prefer to deal with family, friends, connected people (“guanxi”)

Uncomfortable doing biz with strangers, esp foreigners

Relationships take longer to develop

Most of the world is RF

Deal-FocusedNordic/Germanic Europe

UKNorth AmericaAustralia, NZSouth Africa

Moderately DFLatin Europe

Eastern EuropeMediterranean

HongkongSingapore

Relationship-FocusedArab world

Latin AmericaMost of AsiaMost of Africa

“Rest of the World”

Less RF More RF

S’pore HK India M’sia Thai Indo Taiwan China Japan

The Asian Continuum

Implications on business relationships

Tension

Time

Relationship Tension (-ve) Task Tension (+ve)

DF

“Tipping point”

• Productive relationships take longer with RF cultures (but more sustainable?)• Rapport building & Networking essential in the front-end (company, personal level)• You can recognise “tipping point” when talk shifts to task/deal

Getting to “Tipping Point”Establishing Trust and Intentions

PayoffProcessPurpose

EmpathyCredibility

Commonality

Communicating across the Great Divide – different values &

expectationsDF Values Direct, Frank, Straight

Forward language

Goal is “Clarity”

Low Context (i.e. words and meaning are explicit)

OK to express negative emotions (frustration, anger) as it demonstrates sincerity

RF Prefers indirect, subtle, roundabout

style

Goal is “Harmony” - avoid embarrassing or offending

Hi Context – meaning in the context surrounding the words (saying No without saying No)

Hides negative emotions (considered immature and arrogant – only children say exactly what they mean!)

Role of Contracts

DF Deal-making is a formal

process (e.g. LOI, MOU, S&P)

Lawyers sometimes part of front-end negotiations

One party drafts contract – sometimes joint review clause by clause

Rely on explicit contract terms to resolve issues

RF Decision-makers agree on key

points, completion is delegated

Lawyers not involved at front-end, so contracts are sometimes weak (“necessary evil”)

Rely on strength of relationship to prevent difficulties & solve problems

Disagreements are handled in private, and floated up the command chain only when necessary

Informal vs Formal Business Cultures

InformalUSA

Australia

Moderately informalCanada

NZDenmarkNorway

FormalMost of EuropeMediterranean

Arab World Latin AmerciaMost of Asia

Value Equality “Rest of the World”Value Hierarchies and Status differencesStatus: age, position, education, customer!

Formal ways of addressing people (important)

Global Business Protocols Each Culture has differences in:

Attitude to Time Expressive or Reserved Cultures Para-verbal behaviour

Vocal volume & inflection, Meaning of Silence, Conversation Turntaking vs Overlapping

Non-verbal behaviour Interpersonal distance, Touch, Eye contact, Gestures

“Mirroring” as a shortcut (NLP) Faux pas: “Benefit of doubt” if relationship is grounded Understanding Personal Social Style of counterpart is also very

useful Amiable, Analytical, Driver, Expressive (Wilson Learning)

Last, but not least….

Two iron-clad rules of International Business

The Seller is Expected to Adapt to the Buyer The Visitor is Expected to Observe Local Customs

But if the relationship is important:“Seize the Day”

Equip with knowledgeManage it well