Written by Mona Pearl

Arrogance or Ignorance? You Decide.

The Chicago Olympics Bid:  A case study in the Do’s and Don’ts of Global Business Development & Sales

Experience is the key word, as well as a global network of relationships that were developed and nurtured throughout the years. In order to be a successful player in the global arena, one has to develop relationships across borders. Cultural differences can make or break a deal. As a global business expansion expert, I will take some of the principles of successful global business practices and take the Olympic bid to analyze them. This will demonstrate how discounting cross-cultural sensitivities can leave you dead in the water. The US missed the boat in Copenhagen on so many levels. Was it arrogance or ignorance? You decide.

Let me set the record straight. Let me start with expressing my passion and love for the City of Chicago. Chicago is my town, and as much as I have traveled around the world, it is a fabulous city to live and conduct business in. Mayor Daley is my hero and there is nothing I wouldn’t do to get the Olympics to Chicago. But Chicago and the US have a lot to learn about the rest of the world.

The US is the best country in the world. Sometimes I think people don’t appreciate how good we have it here compared to each and every other place on the planet.  Since international business is my business, I would take the initiative and provide some constructive criticism to our leadership.

In my book I list the 10 biggest mistakes companies make when going global. I will mention the two that seem to be a perfect fit this case study:

When KPMG’s Global Enterprise Institute surveyed U.S. middle market companies in late 2007, it found that 58 percent of all businesses surveyed planned to increase their global presence over the next five years, and one-third planned to maintain their current global presence. Interestingly, in the same survey, fewer than half of all respondents said their expansion efforts over the past two years had been successful; therefore, 50 percent were unsuccessful! With failure rates like these, it’s time to ask “What are we doing wrong?” More importantly, what must be done differently to improve chances for future success in the global marketplace?

Mistake # 7: Forgetting the Fundamental Importance of Cultural Differences. There is no one best way of doing business, and the American way is definitely not the only way. When venturing globally, one has to be sensitive to nuances in order to get the deal done. Many business transactions were halted or terminated due to cultural misunderstandings, or to be a bit blunt, cultural ignorance. Managers in an international business environment must not only be sensitive to cultural and language differences, but they must also adopt the appropriate policies and strategies for coping with them. \r\n

Mistake #9: Being Overconfident in Your Global Expansion Skills. Seek professional advice to navigate the unknown and use other people’s experience to help you succeed and follow a smooth road. A little humility goes a long way in combating the overconfidence error. Remember that what got you to be successful in the US, in most cases won’t get you there. At the most fundamental level, the differences arise from the simple fact that countries are different. Countries differ in their cultures, political systems, economic systems, legal systems, and levels of economic development. Many of these differences are very profound and enduring.

The first among five most commonly mentioned areas of difficulty for US companies are Cultural issues (39 percent). And this came to light on October 2nd in Copenhagen.

International success requires tremendous finesse in terms of cross-cultural skills. The fact is, not paying attention and ignoring mindset and perception can make or break even the most carefully executed global efforts. We are not talking about the technical issues. Chicago’s bid was up to par. We lost support due to a few don’ts that should have been considered beforehand:

President Obama. It starts with Obama saying publicly he will not go to Copenhagen but he will be sending his wife. President Obama, yes, Michelle is the first lady, however, she is no replacement to a head of state, the Unites States of America. In other cultures this is considered as a faux pas (a bad step in French), and is perceived as: “it is not important enough for me to be bothered”.

The next move was that just a couple of days before the Oct. 2nd, when you stated that you will be joining your wife, made it even worse. So now, you do have the time? And then you show up for a few hours, not even considering that your presence is building trust and rapport.

The flip flop didn’t fly very well in the international community. Then you decide to show up for 5 hours, on a touch and go trip. So American – down to business and no regards to relationships. And to top that off, the speech was so much focused on “I”. Yes, the US is considered a very individualistic society (based on Geert Hofstede’s Index), which has been great for business, but hasn’t built too many friendships around the world. We don’t have the luxury of choosing who we want to do business with anymore. It is time we listen, learn, observe and accept that there is a world outside of the US. A world that wants to collaborate with us. A world that has tremendous respect to our achievements.

Where is the commitment, the staying power? Here is how most Nations perceive the US way of doing business:

Direct and open communication. The Japanese, German and many other cultures do not appreciate the approach of ‘tell it like it is’, or, ‘what’s the bottom line?” This may arise uncomfortable and embarrassing feelings, while giving the impression of being too pushy, or even hostile.

You proved them right, Mr. President: you came to make your speech and that’s it. Bottom line. Touch and go.

Impatience. ‘Get it done yesterday’, is an acceptable way of operating in the fast pace business environment in the US. The phrase ‘lead, follow, or get out of the way’ often seems to be how Americans go about business. In a global context, this may reflect that the American is rushing through the negotiation, and has no interest what so ever, to get to know the other side. It puts a strong emphasis on content over the relationship involved.

You just stopped by for a few hours, a “touch and go” approach.

Emphasis on short-term. US corporations tend to look short-term, especially in comparison to the Eastern cultures. There is a tendency to think in terms of the immediate deal rather than of developing a business relationship that will bear long term benefits. It appears to the other side as the person is out simply to ‘make a fast buck’ for the company.

The King of Spain made it a priority. Yes, the King. I know we are a very informal society in the US, but we need to learn to respect. Respecting other countries, their heritage and culture. Yes, a Spaniard discovered America and their history starts way before we became the United States of America. And let’s not forget all the other dignitaries from other States.

President Obama, it is not about being a star, it is about connecting with the world. Building relationships, listening, observing, learning, and collaborating. One of the complaints about President Bush was that he was a cowboy from Texas. Well, he is. He felt comfortable with that identity and was proud of it. Global stardom requires a global approach, and the IOC wasn’t swayed by your influence. Maybe your clout stopped at the Pacific and the Atlantic? (Said Wood, who said the early elimination reflects poorly on the president).

With the IOC’s members sitting silently you explained how your family moved around a lot when you were a kid and “I never really had roots.” President Obama, it is a faux pas in such high level circles to share this type of information. One just doesn’t talk about it. Again, it is common in the US, but your audience was global. A rule in sales: go to where your customers are and speak to them in a way they understand. It is not about you, it is about the benefits to them.

Yes We Can does not translate very well into most other languages. On the contrary, if not emphasized right, it means that the focus is on the US again, leaving out the rest of the world.

Mayor Daley, my role model and hero. What you have done for Chicago in the past 20 years is amazing. Thank you from the bottom of my heart. And when I travel overseas on business, I am always proud to say that I live in a world class city, Chicago! But when it comes to the international community and the Olympics, it was not about pitching to a corporation or wooing another Boeing to move its HQ there. It is about a compelling story, about passion, about talking a person to another person.

“It’s not about the words,” Daley said. “It\’s about the heart and the soul.” Dear Mayor, it is about the words, since this is how people build a connection. And the words have to be chosen carefully. The video was made by Americans for Americans. It doesn’t appeal to the heart and soul of other nations. They also have beautiful beaches, high rises… It does have to do with words, compelling and passionate words that reach the hearts and souls.

It took a charismatic Luis Inacio Lula da Silva in his presentation full of passion, which demonstrates that even though he was fearful that they were going to lose to the star power of the OBAMAS.

And your mention of the two African-American sprinters made quite a few people feel uncomfortable. What was the message? That there is no race discrimination in the US? We all know we have a long way to go before we accomplish that. It was not appropriate, didn’t send the message. Race is something we should work on in our country. Did you realize there are delegates that may be offended? It is a faux pas.

Doug Arnot, what can I say? Je ne comprends pas. The US is known to be language deficient, where people speak the English language only. Mr. Arnot tried to show that we are different. You should have known better not to do it in French. Doug, you butchered the French language, and you should know how much pride the French take in their language. And not only the French, but the Francophones in general.

Not to mention that I didn’t see any headphones or was aware of any interpreters on site, so in addition to almost insulting the Francophones, the rest of the dignitaries, who do not speak the French language could not even understand what you said, and they were left out. What was the idea behind this? It couldn’t have been a sales tactic, or at least not a thoroughly planned one. What was that all about? Was that supposed to make us appear as a multi-lingual nation and present us in a different light? Je crois pas, monsieur Arnot.

“So many members have never been to Chicago and expect it to be a city of smoke stacks,” said Doug Arnot, Chicago 2016\’s operations chief. “They come here and see this picture and it has quite an impact. This is a real photograph. It exists today. It\’s not what might happen.”

Let’s not put the down the rest of the world. They are well read and know that Chicago is not a smoke stack anymore, especially since Obama’s Presidency. People outside of the US are much more in-tune with US history, politics and culture. They study it at school, they are worldly and educated.

Another aspect as to how the US is viewed by the rest of the world:

US-Centric. There is a joke that has been around for many years: How do you call a person who speaks several languages? Polyglot. How do you call a person who speaks two languages? Bi-lingual. How do you call a person who speaks one language? American.

Americans have limited experience with other cultures due to the enormous market size and opportunities within the 51 States. The perception by the other side is that Americans are culturally myopic and arrogant about their nationality, and refuse to learn a foreign language, understand local customs, or accept another country’s approaches to business or personal life.

Michelle Obama, our First Lady. You get my full respect and admiration. However, in international high society circles one doesn’t reveal such overly detailed personal information. It is not considered good manners. I am aware you had a very close relationship with your father, and this is a great memory for you. I know that in the US we talk just about anything, but your audience was not Americans, so it would have been great to match the message to the audience, stick to the objectives. When going global, know your market. Know your audience.

Michelle Obama was sharing how her father “taught me how to throw a ball and a mean right hook.” It is not very lady like.

What was our message besides we want it and we deserve it?

Rio de Janeiro has delivered a passionate appeal for South America to be awarded the Olympics for the first time.

“Tokyo is indeed well positioned to serve as a future model for public safety and environmental sustainability,” Hatoyama said. “In hosting the 2016 Games, Tokyo will show the world how a major metropolis shall flourish without detriment to the environment.”

An uncomfortable moment for Chicago came when an IOC member from Pakistan, Syed Shahid Ali, noted that going through U.S. customs can be harrowing for foreigners. Obama responded that he wanted a Chicago Games to offer “a reminder that America at its best is open to the world.” How did this answer address the question?

It’s a project that has my wholehearted support,” Juan Carlos told IOC members. It also reiterated that 77 percent of its venues are ready or under construction.

So why do foreign companies excel in the global marketplace and in many cases beat U.S. corporations to the punch?

Many U.S. corporations have been so successful for so long that it seems now they are too slow to react to changes in global markets due to a lack of being able to see a different point of view. Successful global expansion depends on leaders who think proactively, sense and foresee emerging trends, and are not afraid to act upon them. To accomplish that, U.S. corporate leaders have to possess a global mindset and be open to new opportunities in new countries, involving different cultures.

Many foreign companies that are now direct competition to the U.S. have been more exposed to global business. These leaders have learned to deal in a less structured, bureaucratic, and regulated reality. They are more comfortable with ambiguity and have developed an efficient decision-making and execution process, and this basically enables agility and the tracking of issues in parallel and real time.

Fortunately, with a large dose of commitment, mindset can be corrected and this challenge can be overcome. How quickly depends on how serious American companies are about joining the global marketplace. As proven in previous decades, with past challenges, if American companies get serious, look out world!