Ice breaking in a boardroom happens with side banter, a reference to a shared restaurant, or a common interest in the community, like sports or university. Informal commonalities can colour a conversation quickly into a warm rapport – while an absence of connection can turn into an unbridgeable gap. It’s a shared culture that creates moments of synergy. When signing a contract, clients want to know you will be there for them as much as they want to know what ROI your enterprise tech provides. Attention to detail quietly communicates thoroughness and commitment, especially to clients of an international market expansion. Lack of such awareness has cost global conglomerates millions of dollars.
This article is the fourth in a six-part series on the unfortunate mistakes that can plague international market entry without the careful utilisation of market-specific research. Here, we’ll explore real-world examples of what happens when organizations neglect prioritizing cultural intelligence before expanding to an international market. Paired with these lessons in action are insights into how Kettering International helps clients turn potential obstacles into wins.
Why is Cultural Intelligence Important in Business?
Let’s approach this question through an example first. McDonald’s dominates the global market for fast food, bringing the golden arches everywhere and serving millions of customers – but not in China. There, underdog competitor Kentucky Fried Chicken localised their menu, expanding into rice-based meals and black and rose buns for burgers — flavors that are not found in the U.S., but are beloved in the Chinese market. KFC now outperforms the behemoth McDonald’s because they leveraged cultural intelligence to localise their product for international expansion.
Some tech firms approach international expansion without considering the differences in communication and collaboration styles between their home and target markets. Everything from how you show up to meetings to the syntax and nomenclature of your messaging demonstrates a presence – or lack – of cultural intelligence. Consumers and stakeholders are very perceptive and frequently decide whether to engage with products or services based on whether they feel spoken to and heard.
For example, an Australian insurance company was attempting to appeal to U.S. customers, but had a difficult time opening up in the U.S. market. Why? Because the company did not understand that insurance regulations and nuances are determined state by state. They are not universal across the country, so a pitch that wows New Yorkers does not necessarily translate to Houston or San Francisco. Missing this detail about the nature of American insurance practices stopped the Australian firm’s international expansion cold: Clients quickly realized if they couldn’t trust the company to grasp this basic construct, they couldn’t trust them with the even greater intricacies of medical reporting in the U.S.
There is a common etiquette when traveling to absorb and respect as much of the culture as you can. A bit of the “when in Rome” mentality goes a long way in opening up communication and even opportunities while exploring other cultures. This core courtesy is even more vital in a boardroom with a contract and capital on the line. Taking the time to learn the culture, and also investigating and finding experts with the answers to questions you do not know to ask, is essential. That’s more than a Google search can deliver, but Kettering International excels in serving our clients on this highly nuanced level.
Investing in International Expansion with Cultural Intelligence
There is a common etiquette when traveling to absorb and respect as much of the culture as you can. A bit of the “when in Rome” mentality goes a long way in opening up communication and even opportunities while exploring other cultures. This core courtesy is even more vital in a boardroom with a contract and capital on the line. Taking the time to learn the culture, and also investigating and finding experts with the answers to questions you do not know to ask, is essential. That’s more than a Google search can deliver, but Kettering International excels in serving our clients on this highly nuanced level.
Global conglomerate Mattel learned this the hard way with a costly lesson in the importance of cultural intelligence. In 2009, Mattel built a 36,000 square foot Barbie store with six floors in the midst of Shanghai to bedazzle children and reap ROI. What happened? As Touchpoint shares, in a culture that reveres education, the beloved Barbie was seen as a distraction, and the store closed within two years with a $1.8 billion loss. The colossal failure proves that even global brands need to pay attention to the culture of their target market.
Cultural intelligence, however, can be hard to grasp without an established authority to act as a guiding resource. Kettering advises CEOs and entire teams on how to approach each meeting and campaign, to the point of making suggestions for which staff members should spearhead each meeting based on how well their personalities mesh with the topic at hand.
It is this level of detail that makes the Kettering difference. The warmth of purposely-cultivated relationships can lay very lucrative foundations for prosperous client interactions that will grow and expand in their own right and in referrals, which is key to true international market expansion. There are so many ways to turn applied cultural intelligence into a pivotal opportunity — if you see it that way.
Get the Kettering Advantage Today
Ready to learn how cultural intelligence can solidify your international market expansion plan? Contact Kettering International for more information. And keep an eye out for our next article, where we will highlight organizations that missed the opportunity to develop a U.S.- specific brand because they didn’t leverage cultural intelligence and localisation for their benefit.