Riding the Waves of Culture Understanding Cultural Diversity in Business Fons Trompenaars Valencia 10th April 2008

The old MBA paradigm

Lets now do it with one line. We know this right? Lets now do it with one line.

The new MBA paradigm: with ONE line

The new MBA paradigm

The new MBA paradigm

But you have to fold the paper

Core Proposition “Successful leaders have the propensity and competence to help organizations and its teams reconcile dilemmas for better sustainable business performance”

This approach leads to concrete and measurable actions… Realize and Root Implement Reconciling Actions Impact Reconcile Resolve Cultural Differences Respect Appreciate Cultural Differences Recognize Increase Awareness Time

Approaching Dilemmas: Navigating Strategic Tensions To Create Wealth is to Combine Values that are not easily joined… Therefore scarce... Therefore profitable….

Some hard evidence…

Our research reveals that propensity to reconcile dilemmas correlates with bottom line business performance Correlation (Spearman’s coefficient of rank correlation) Correlation between reconciliation and 360o feedback by peers and subordinates 0.71 Correlation between reconciliation and bottom line business performance in profit centre/budget stream 0.69 Source: 21 Leaders for the 21st Century p429

What is Culture? Please define culture

A model of Culture Explicit Culture Implicit Culture

About Culture Is a dynamic process of solving human problems/dilemmas in the areas of… - Human Relationships - Time - Nature

What happens to your friend? 01/ The Car Accident What happens to your friend?

01/ What Right has Your Friend? A. My friend has a definite right as a friend to expect me to testify to the lower figure. B. He has some right as a friend to expect me to testify to the lower figure. C. He has no right as a friend to expect me to testify to the lower figure.

01/ Dilemma: INTEGRITY The top 2 of your corporate values are: We respect the cultures of others Please discuss in the context of these values what your answer would be…

Universalism versus Particularism Individualism versus Communitarianism Neutral versus Affective Specific versus Diffuse Achievement versus Ascription Sequential versus Synchronic Internal versus External Control 01 02 03 04 05 06 07

01/ Universalism vs Particularism Consistency Systems, standards & rules Uniform procedures Demand clarity Flexibility Pragmatic Make exceptions “It depends” At ease with ambiguity 1

Friend has no/some right and would not help 01/ Universalism Friend has no/some right and would not help 1

Universalism versus Particularism average score

Globalism and Localism 01/ Dilemma: Globalism and Localism Global Standards (Critical Mass) Cultural Diversity (Differing solutions)

01/ Globalize and Localism Global Standards (Critical Mass) “Be like US” Transnational Centers of Excellence X (10,10) Small Nations Multi-Localism Cultural Diversity (Differing solutions)

01/ Main Challenges 1. Mass-Customization 2. Co-Opetition 3. It is Cool to be Emotional 4. Moments of Truth 5. Servant Leader 6. Just In Time Synchronizing Sequences 7. Pushing through the Pull

Universalism versus Particularism Individualism versus Communitarianism Neutral versus Affective Specific versus Diffuse Achievement versus Ascription Sequential versus Synchronic Internal versus External Control 01 02 03 04 05 06 07

02/ Individualism versus Communitarianism a) One said: ‘It is obvious that if one has as much freedom as possible and the maximum opportunity to develop oneself, the quality of one’s life would improve as a result.’ b) Another said: ‘If the individual is continuously taking care of his or her fellows then the quality of life for us all will improve, even if it obstructs individual freedom and individual development.’

Percentage opting for Individual Freedom 02/ Individualism Percentage opting for Individual Freedom 1

02/ Dilemma Reconciliation The Individual and the Team Reward Individual Performance Stimulate Team Co-operation

02/ Dilemma Reconciliation The Individual and the Team Individual Motivation (1,10) Me, Myself and Withholding Information Team Motivation

02/ Dilemma Reconciliation The Individual and the Team Individual Motivation Team Mediocrity Team Motivation

02/ Dilemma Reconciliation The Individual and the Team Individual Motivation (5,5) Go for the Small team Team Motivation

02/ Dilemma Reconciliation The Individual and the Team (10,10) Individual Motivation Reward Teams for Individual Creativity AND Reward Individuals for Team Work Team Motivation

02/ Main Challenges 1. Mass-Customization 2. Co-Opetition 3. It is Cool to be Emotional 4. Moments of Truth 5. Servant Leader 6. Just In Time Synchronizing Sequences 7. Pushing through the Pull

Universalism versus Particularism Individualism versus Communitarianism Neutral versus Affective Specific versus Diffuse Achievement versus Ascription Sequential versus Synchronic Internal versus External Control 01 02 03 04 05 06 07

03/ Neutral versus Affective In my society, it is considered unprofessional to express emotions overtly. Please select your position on the statement above: a) Strongly agree b) Agree c) Be undecided d) Disagree e) Strongly disagree

03/ Neutral versus Affective Percentage not expressing emotions overtly 1

03/ Neutral versus Affective Myers Briggs Type Indicator (MBTI) DILEMMA How to select the Right Person? Myers Briggs Type Indicator (MBTI)

03/ Neutral versus Affective Emotions in Control

03/ Neutral versus Affective Emotions in Control

03/ Neutral versus Affective Emotions in Control Head in Control Analysis, Paralysis (1,10) Heart in Passion

(10,1) 03/ Neutral Emotions in Control Head in Control Loving Neurotic Heart in Passion

03/ Neutral (10,10) Emotions in Control Head in Control Continually checking what your heart communicates (10,10) Heart in Passion

03/ Main Challenges 1. Mass-Customization 2. Co-Opetition 3. It is Cool to be Emotional 4. Moments of Truth 5. Servant Leader 6. Just In Time Synchronizing Sequences 7. Pushing through the Pull

Universalism versus Particularism Individualism versus Communitarianism Neutral versus Affective Specific versus Diffuse Achievement versus Ascription Sequential versus Synchronic Internal versus External Control 01 02 03 04 05 06 07

04/ Specific versus Diffuse PUBLIC PRIVATE

04/ Specific versus Diffuse PUBLIC PUBLIC Specific Relationship

04/ Specific versus Diffuse PUBLIC PRIVATE

04/ Specific versus Diffuse No Relationship

04/ Specific versus Diffuse PRIVATE PRIVATE Diffuse Relationship

04/ Encounter Specific and Diffuse PUBLIC PRIVATE PRIVATE Danger Zone

A boss asking to paint his house 04/ Specificity A boss asking to paint his house The colleague argues: You don’t have to paint the house if you don’t feel like it. He is your boss in the company. Outside the company, he has little authority The subordinate argues: Despite the fact that I don’t feel like it, I will paint the house anyway. He is my boss and you cannot ignore it outside your work either. 1

Would not paint the house 04/ Specificity Would not paint the house 1

Specific Financial Performance Diffuse Development of People From the Balanced to the Integrated Score Card Specific Financial Performance Diffuse Development of People

From the Balanced to the Integrated Score Card Integrated growth: Train for Cost Cutting Cost cutting yourself Specific financial performance Subsidised seminar Interests in future innovating and learning

04/ Main Challenges 1. Mass-Customization 2. Co-Opetition 3. It is Cool to be Emotional 4. Moments of Truth 5. Servant Leader 6. Just In Time Synchronizing Sequences 7. Pushing through the Pull

Universalism versus Particularism Individualism versus Communitarianism Neutral versus Affective Specific versus Diffuse Achievement versus Ascription Sequential versus Synchronic Internal versus External Control 01 02 03 04 05 06 07

05/ Achievement versus Ascription What You Do Who You Are STATUS ?

05/ Achievement versus Ascription Family Age Gender Education

05/ Achievement versus Ascription ‘The most important thing in life is to act as really suits you, even if you don’t get things done’

05/ Achievement versus Ascription Percentage not agreeing with acting as really suits you 1

05/ Achievement versus Ascription Performance Status The Servant Leader Lost democratic leadership Follow the Leader Attributed status by seniority or role

05/ Main Challenges 1. Mass-Customization 2. Co-Opetition 3. It is Cool to be Emotional 4. Moments of Truth 5. Servant Leader 6. Just In Time Synchronizing Sequences 7. Pushing through the Pull

Universalism versus Particularism Individualism versus Communitarianism Neutral versus Affective Specific versus Diffuse Achievement versus Ascription Sequential versus Synchronic Internal versus External Control 01 02 03 04 05 06 07

06/ Time Orientation Think of the past, present and future as being in the shape of circles. Please draw three circles representing past, present and future. Arrange these circles in any way you want that best shows how you feel about the relationship of the past, present and the future. You may use different size circles.

Past, Present and Future 06/ Time Orientation Past, Present and Future FRA USA SPA JPN UK GER 1

Sequential versus Synchronic 06/ Time Orientation Sequential versus Synchronic 1.45 Sequential 3.00 Synchronic 1.45 - 2.00 3.00 - 3.15 1

Sequential versus Synchronic 06/ Time Orientation Sequential versus Synchronic JUST IN TIME 1

06/ Main Challenges 1. Mass-Customization 2. Co-Opetition 3. It is Cool to be Emotional 4. Moments of Truth 5. Servant Leader 6. Just In Time Synchronizing Sequences 7. Pushing through the Pull

Universalism versus Particularism Individualism versus Communitarianism Neutral versus Affective Specific versus Diffuse Achievement versus Ascription Sequential versus Synchronic Internal versus External Control 01 02 03 04 05 06 07

07/ Internal versus External Control Internal Control Nature as a mechanism Dominance over nature External Control Nature as an organism Subjugation to nature

07/ Internal versus External Control A. What happens to me is my own doing. B. Sometimes I feel that I do not have enough control over the direction my life is taking.

07/ Internal versus External Control What happens to me is my own doing 1

From the Balanced to the Integrated Score Card Balanced Score Card Dilemma…

From the Balanced to the Integrated Score Card Outer directed increase in customer satisfaction Inner Directed Improvements in Business Processes

Pushing through the Pull Integrated growth: Pushing through the Pull Lean but mean Inner directed improvements Customer’s creature Outer directed increase in customer satisfaction

07/ Main Challenges 1. Mass-Customization 2. Co-Opetition 3. It is Cool to be Emotional 4. Moments of Truth 5. Servant Leader 6. Just In Time Synchronizing Sequences 7. Pushing through the Pull

Dilemma Theory Resolving Strategic Issues (from the Greek meaning) TWO-PROPOSITIONS IN (APPARENT) CONFLICT

Either - Or

And - And

Through - Through

Integrate central with decentral

Vicious and Virtuous Circles

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