Tag Archives: cultural differences

Why Fit In When You Were Born To Stand Out? : The Case for Workplace Diversity and Inclusion

There’s no question that diversity and inclusion is good for business. But, Tom Verghese explains why a new approach is needed. 

As part of the Bravo campaign, Procurious will be hearing from a number of high profile procurement leaders on the topics of diversity, equality and women in procurement.

Diversity in our workplaces is important. It’s widely acknowledged that diversity in our leadership teams matters. It’s imperative for any organisation that wants to achieve and remain competitive. Diversity helps to generate new ideas, drive creativity, and meet market needs; it also reflects our own communities. While the benefits are many and varied I want to draw your attention to a recent body of research ‘Diversity Matters’ conducted by McKinsey & Company.

Diversity Matters Study

One of the key findings from this study is that companies in the top quartile of gender diversity were 15 per cent more likely to have financial returns above their national industry median.

The authors contend, based on other studies and the correlation in this study between diversity and performance, that the more diverse an organisation is the more successful they are at winning top talent, customer orientation, employee satisfaction and effective decision-making.

While this research paper found that no organisation performed well in all areas of diversity (it is a very select few who do) it highlights the ongoing demand for diversity training programs.

Diversity policies and approaches tend to be country specific. However, traditionally the common approach in countries such as the UK, U.S and Australia has been to adopt a single diversity program that covers all areas from gender and age, to race, ethnicity, sex, religion and disability.

I contend that one of the problems with this approach is that some more visible areas of diversity such as gender, have received more focus than others, namely race and ethnicity.

A new approach to diversity is needed

A new mindset and approach to diversity needs to occur. The overall current characterisation and management of diversity is too broad, it commands greater depth.  In other words, a more individualised, tailored approach is required, it needs to be ‘unbundled’.

At the same time, I would go one step further and posit that diversity in any organisation or workplace cannot be fully realised without an equal and complementary focus on inclusion.

The challenge of inclusion is not in producing a diverse workplace; diversity is rather the natural outcome of inclusion. If we define diversity as all the ways we are different – that which is the human condition, then inclusion is our ability to value, recognise and appreciate these differences.

It is possible for organisations to hire a diverse workforce, however, without the necessary corresponding inclusion policies.

We see ‘in’ and ‘out’ groups start to form and those in the ‘out’ groups (typically those people who find themselves in a demographic minority) less likely to stay in their roles.

Attraction and retention are equally important partners in any organisation’s D&I journey; they must therefore be given equal effort and intent. If we focus back on our gender example, inclusion on a basic level means making women feel welcome and valued in the workplace. This can be reflected in policies such as: flexible work arrangements for men and women, allowance for career breaks, available role models, mentoring opportunities, and affinity groups.

It is worth noting that these types of policies will differ across different societies or cultures. Organisations that work across borders must consequently be aware and knowledgeable of these implications.

Managing a diverse organisation

Diversity and Inclusion is not an easy undertaking. Managing a diverse organisation is far more difficult than managing a homogenous one, and it requires a completely different skillset.

Leaders must step up to the challenge and in many cases push past the latent philosophy of maintaining status quo – the ‘why change something if it is not broken’ attitude we all too often still see represented in the homogenous recruitment policies of organisations.

Specific programmes that develop, monitor and promote ongoing continuous improvement need to be implemented.

Some examples are unconscious bias training, cultural intelligence training, mentoring, or executive coaching. These programs provide greater rigour, understanding and appreciation that make real headway into changing attitudes, behaviours and outcomes.

Why, What and How?

In conclusion, I would like to put forward three questions organisations can ask in order to pursue an integrated approach to Diversity and Inclusion (D&I):

  • WHY – Organisations must establish the reasons why D&I is important for them
  • WHAT – Organisations must educate their leaders on D&I, bias and its impact on decision-making
  • HOW – Organisations must examine the policies, procedures and processes that systematically re-enforce the current state

Further to improving diversity and inclusion, organisations and their leaders must visibly demonstrate that they believe in the value of D&I and assert why it is a priority in a manner that influences, promotes and inspires others to also commit.

As the authors of ‘Diversity Matters’ point out we “must do more to take full advantage of the opportunity that diverse leadership teams represent… we live in a global world that has become deeply interconnected.” This research serves as an ongoing reminder of the headway that we have made to date in countries such as the U.S and U.K in diversity. But it also highlights the benefits to be gained and that there is still much work to be done.

Join the women in procurement conversation in the Procurious Bravo group. 

Work-life, work-death and the right to disconnect

It’s a tale of two cities when it comes to work-life balance. Tokyo continues to struggle with a dangerous culture of self-sacrifice through “overwork”, while in Paris, lawmakers have recently enshrined French workers’ “right to disconnect”.

It’s 10.00pm. The kids are asleep, you’ve tidied the kitchen and you’re considering whether to fire up Netflix or turn in for a relatively early night. Your phone gives a soft “ding” and you reach for it, wondering which of your colleagues is emailing you at this hour.

Put. The Phone. Down.

2017 may be the year that we see the turning point in the fight against the “always-on” work culture, which has rapidly eroded the border between work and private lives. Unpaid overtime has surged as businesses increasingly judge employees by their availability, while employees themselves fall into the trap of “just checking one more email” in the evenings. Hyper-connectivity has led to increased levels of stress, sleeplessness, relationship problems, and, in places where the culture has reached an extreme level – death.

Karoshi

Yes, death. If you’re concerned about where the always-on work culture might be heading, there’s no need to imagine a dystopian future where employees work until they drop dead from exhaustion. The situation already exists in Japan, where the notoriously gruelling work culture has given rise to a phenomenon called karoshi, or “work-death”. As much as 21% of the workforce puts in more than 49 hours a week, while compensation claims from families whose loved ones have literally worked themselves to death peaked at over 2300 cases last year.

You won’t find 12-hour work-days on any contract of employment or job description, yet the culture of unpaid overtime (or “service” overtime) is so firmly entrenched in Japan that it may as well be a part of scheduled working hours. Overtime is unforced, yet workers feel it’s compulsory due to managerial and peer pressure. The results are devastating, and it’s not just elderly members of the workforce who are dying. Alarmingly, employees in their 20s suffering from heart attacks, strokes, and suicide triggered by karoshi.

Overwork culture exists in every profession, from manual labour to office work. Joey Tocnang, a 27-year old trainee from the Philippines employed as a steel-cutter in a Japanese factory, was working between 78 and 122 hours of overtime a month before he died of heart failure at his firm’s dormitory in 2014. Matsuri Takahashi, a 24-year-old employee of the advertising giant Dentsu, was driven to commit suicide in 2015 due to stress brought on by long working hours. She regularly worked over 100 hours of overtime per month in the firm’s internet advertising division, and had even posted calls for help such as ‘I want to die” on social media.

According to a government whitepaper, 22.7% of Japanese companies polled between December 2015 and January 2016 said some of their employees logged more than 80 hours of overtime each month – the official threshold at which the prospect of death from work becomes serious. Karoshi has its roots in Japan’s massive rebuilding efforts after the devastation of WWII, and gained traction in the economic booms of the 1970s and 80s.

There is hope of change, though. Posters are going up on the walls of workplaces all over Japan as part of the government’s efforts to reign in the culture of self-sacrifice. A new generation of professionals called “Freeters” are breaking the cycle by demanding to be paid casual rates (by the hour only) rather than salaries. But the real solution may lie in France. 

The right to disconnect

From January this year, French companies with over 50 workers are required to guarantee the right of their employees to ignore their smartphones after hours. The laws were passed after increasing pressure from France’s trade unions compelled the Labour Ministry to defend the country’s highly protected workplace laws and 35-hour working week.

The law applies to the company, not the individual, which means that compulsive email-checkers can work all hours if they’d like to, but cannot be pressured by their organisations into doing so. Businesses now need to enter into negotiations with their employees to define their rights around switching off, and must publish a charter that explicitly sets out the demands on employees out-of-hours.

Some French companies, including French insurer Axa, have taken proactive measures to limit out-of-hours communication and reduce burnout among works, including cutting email messaging in the evening and weekends, and even destroying emails that are sent to employees while they are on holiday.

The comparison between Paris and Tokyo is not strictly equal, as you cannot fairly compare someone checking emails in their pyjamas with a steel-worker putting in dangerous amounts of overtime in a factory, but it is useful to highlight extreme examples, such as Japan, to help combat the creeping culture of unpaid overtime.

Smartphones are, of course, a double-edged sword in that they can potentially offer enormous work-life balance benefits. A working parent, for example, could leave the office two hours early to pick their kids up, making up the time later that evening. But flexibility arrangements usually still come within the paid work-day and do not pressure employees to “gift” unpaid overtime to their businesses.

What can I do?

  • Recognise that “just checking one more email” on your smartphone is working overtime.
  • Talk to your manager about the right to disconnect, and make sure you bring up any instances when you feel you’re being pressured to work unpaid overtime.
  • Speak up whenever you see “overwork culture” advocated in your workplace or on social media.

In other news this week in procurement:

Procter & Gamble calls for an improved media supply chain

  • P&G, a global advertiser with a marketing and advertising spend of $2.8 billion per annum, has called for a “transparent, clean and productive media supply chain” at a digital advertising leadership conference in Florida this weekend.
  • Chief Marketing Officer Marc Pritchard called media supply chains “murky at best, and fraudulent at worst”, advocating viewability standards including improved compliance and measurement.
  • Common frauds include “bot views”, where advertisers report millions of digital hits that are actually views by bots, rather than humans.

Read more on CNBC.

British Standards Institution releases Slavery Index

  • BSI has published its annual Human Trafficking and Supply Chain Slavery Index, revealing an increased risk of modern-day slavery entering European countries.
  • Russia, Slovakia, India and Pakistan are identified in the Index as “severe risk source countries” that may export modern-day slaves to the UK.
  • Italy is also identified as a high risk nation – partly due to the conflict in Syria, while Greece and Turkey are additionally categorised as high risk countries.

Read more on the BSI website.

The Art of Cross-Cultural Negotiation

Negotiations can be tricky. A cross-cultural negotiation presents an entirely different challenge, one with countless pitfalls and potential faux-pas.

Cross-Cultural Negotiation Roundtable

Negotiations in a business setting can be difficult at the best of times. Throw cross-cultural diversity into the mix, and the difficulty level rises again.

The way you speak, behave, control your body language, and operate can change hugely from culture to culture. This increases the chance of making a mistake, or accidentally offending the other party.

Some people may also make the mistake of assuming that when we talk about culture, we are limiting this to a purely geographical standpoint.

When referring to a cross-cultural negotiation we often talk about different nationalities as a primary characterisation. But this is not the only element that affects culture.

Culture is the unique characteristics of a social group, and the values and norms shared by its members. This social group may be a country, a corporation, a religion, gender, an organisational function, or one of many others.

Dealing with Cross-Cultural Negotiation

How can you prepare for a cross-cultural negotiation? What do you need to know? What do you need to prepare in advance? And how should you approach negotiating with different cultures? This is where expert advice can help.

Procurious were lucky enough to be invited to listen in on a cross-cultural negotiation roundtable, organised by Giuseppe Conti, Founder of Conti Advanced Business Learning. Participants came from a range of businesses and diverse backgrounds, and comprised 8 different nationalities. The discussion was fascinating, and provided some great insights into a complex subject.

In this series of articles, we will examine key factors to be taken into consideration during cross-cultural negotiations, and see some real-world examples straight from the experts.

Power Dynamics and Balance

Giuseppe kicked off the discussion by asking the participants to talk about their own experiences of cross-cultural negotiations.

Jonathan Hatfield, Director of Purchasing, EMEA at PPG Industries, talked about his first trip to Russia to purchase chemicals.

Supplier power played a large part in the negotiations. Jonathan visited factories in Siberia, where no-one spoke any English. In line with the strong hierarchical culture of the country, he was also dealt with several junior product managers before he could access more senior people.

While Jonathan’s aim was to create a relationship with the supplier, the supplier cut straight to the point. They only wanted to know what he wanted to buy, where it was going, and what the price would be.

Jonathan left Russia not even knowing if he had managed to secure any materials (happily he did!). It taught him about power balance, and also to make sure that he had approvals lined up in advance.

Language Barriers and Coffee

Two other participants gave examples highlighting the difficulties of language barriers and body language.

Thierry Blomet, Senior Vice President at Kemira, took part in a negotiation with an Indian customer, who appeared to be shaking their head from side to side at every argument that was presented. This left Thierry feeling that none of his ideas had been accepted.

When he questioned this with his local representative however, he was told that he was doing fine. The shake of the head was actually a sign of agreement with what he was saying.

Matthias Manegold, Head of Procurement and Supply Chain Practice at Kinetic Consulting, talked about a situation where language barriers played a major role.

He was negotiating with an Asian business to bring new technology to Europe. Each statement in the negotiation was met with a “Hai” (Japanese for yes), but it wasn’t until later on that Matthias was told that this actually meant, “Yes, we hear you, but we don’t necessarily agree”.

Jean-Noel Puissant
Jean-Noel Puissant

One final example came from Jean-Noël Puissant, Head of Procurement EMEA at Monsanto International. Jean-Noël highlighted the difference in how negotiations start in different cultures.

In one negotiation in the South of Italy, the owner of the supplier arrived with his wife, listened to the agenda being laid out, then suggested everyone get a coffee.

It was his way of starting the negotiation by getting to know the other party better with some conversation before the business discussions kicked off.

Company Cultures

The participants also reflected on company cultures, and how current or former employers’ cultures had shaped their own negotiation approaches.

Stephane Guelat, Senior Director – Supply Chain at Pentair Valves and Controls, spoke about one of the key factors for procurement and supply chain – ethics.

Stephane said that, while many organisations will put employees through ethics training, the ethical standards may be different across cultures. For instance, the exchange of services or gifts may be perceived as completely unethical in Western Europe, while fully normal in India.

Xin-jian Carlier Fu, Strategic Sourcing Commodity Manager at Honeywell, argued that there are likely to be many different cultures within the same organisation.

This was confirmed by Jonathan Hatfield, who said that this is ever more the case as organisations from different cultures and countries merge. He added that it was something buyers needed to be cognisant of when dealing with companies which had been taken over.

Finally, Giuseppe highlighted how his first job with a large multinational with a very competitive culture shaped his initial approach to negotiation.

When working later in his career with a smaller, family-owned organisation, he learned to adapt and broaden his approach to negotiation. According to Jean-Noël, we cannot assume one-size-fits-all. We need to understand the specific culture of each large or small organisation.

There’s much more to come on this topic, including tips on negotiating with different nationalities, and applications of cross-cultural research in negotiations. Come back next week for more.

This roundtable was organised by Conti Advanced Business Learning (www.cabl.ch), a Swiss training company that specialises in Negotiation & Influencing training. Giuseppe Conti, has over 20 years of Procurement experience and 10 years of negotiation teaching experience at leading Business Schools (including Oxford, HEC Paris, IMD and ESADE).

Manufacturing in China? Here’s What You Need to Know

Manufacturing in China might be a cost-effective solution, but it can bring with it inherent risks to global brands.

Manufacturing in China

For procurement professionals, that means trying to understand the cultural nuances that dictate how to do business in China.

Stories of issues have appeared in the media, including now-defunct Australian boot manufacturer Bennett’s Boots blamed a Chinese factory for trying to reduce its margins for the collapse of the entire business. While early orders were perfect and business grew, subsequent orders were cheap imitations, with 80 per cent of the container load of boats un-sellable.

Company founder Amanda Bennett told BRW magazine that: “Success to the Chinese is trying to do things behind your back and get away with it. I don’t mean that in a derogatory way, it’s a cultural thing.”

Navigating the Cultural Landscape

But there are companies that specialise in helping foreign companies wanting to manufacture in China navigate the cultural landscape.

Chris O’Halloran is the founder of Striking Group, a project management consultancy, and has been to China dozens of times to build the bridge between China and Australian companies since launching in 2008.

O’Halloran admits that the Chinese do business by going in cheap and then trying to recover the margins by cutting corners, hoping no-one notices.

When manufacturing in China, the biggest trap Australian companies fall into is sending a drawing to China, and asking for 10,000 products to be manufactured without enough instruction, he says.

“To the Chinese, if it looks the same to them, then it is the same. They’re not trying to be nasty, it’s just the way they do business.

“Having said that, I’ve been to factories in China completely automated where you can eat off the factory floor that are far beyond anything we’ve got here.”

New Wave of Challenges

China has emerged as a manufacturing powerhouse, with immaculate robotic factories and far greater capability to manufacture luxurious goods rather than just mass produce cheap items.

However, the country faces new challenges. According to this report by McKinsey & Company, these include increasing wages, more complex value chains, and consumers growing more sophisticated and demanding.

Australian companies trying to do business with China also often fall down by thinking they’re dealing direct with the manufacturer, when in fact there’s two or even three middle men shielding the manufacturing operator, O’Halloran explains.

“The Chinese like to keep their cards close to their chest, so often you don’t really know if you’re dealing with the manufacturing facility or not. This is very common in Australia, and not the best way to do business.

“However, no-one can build to scale as well in Australia. They are light years ahead of many major manufacturing hubs around the world, and often Australian companies don’t realise how big these Chinese companies are.”

Fostering Relationships

O’Halloran shortlists a number of factories for his clients and helps them foster a relationship with the business owner and arranges guided factory tours. He also conducts spot checks for clients.

“We’re looking for things like, do they have a quality control process in place, and how do they buy their goods, and whether Fair Trade Agreements are in place. We always try to establish if they’re managing the entire manufacturing process in-house, because sometimes they’ll outsource some of the work to a sweat factory down the road without telling you.”

He also says that the Chinese are not great at design, but they’re amazing at copying and reproducing something, and mass producing it. Smaller scale runs are also increasingly cost-effective. Australian companies also need to understand cultural nuances, such as the importance of hierarchy to the Chinese, he adds.

The Chinese are also very superstitious, and their lucky number is eight, he says.

“The Chinese will go out of their way to find the number eight in their business dealings. They even design buildings with eight floors or eight windows in a room, and other things based around feng shui,” O’Halloran concludes.

Top Tips for Manufacturing in China

  • Don’t try and navigate the Chinese manufacturing industry alone, hire an expert.
  • Explain what you want in as few words as possible. Don’t leave anything open to interpretation.
  • Always start slow, on a small scale.
  • Understand cultural nuances and the importance of hierarchy.
  • As a sign of respect, when you accept a business card with two hands, and look at it carefully. Put the card on the table in front of you, never in your pocket.

 Source: Chris O’Halloran, Striking Group.