Patience and cultural sensitivity are key to working in international markets successfully.
As foreign businesses look beyond national borders for expertise, U.S. retailers, developers, and architects have landed opportunities that include storefronts on the Champs-Elysees, outlet centers in Italy, and retail/entertainment venues in Japan, China, the U.K., and Mexico.
Why are foreign companies setting their gazes on the United States?
"They see the integration of retail and entertainment as the retail of the future," observes William Taylor, director of design for the Los Angeles office of Morris Architects. "They feel less expert in creating that synergy among retail, dining, and entertainment and its planning, programming, and design."
While international projects can be gratifying to the ego and pocketbook, cultural idiosyncrasies, burdensome tax systems, Byzantine bureaucracies, and different work ethics make international expansion a proposition only for those with strong stomachs, infinite patience, and deep pockets.
When in Rome ... Although the extra hoops through which U.S. companies jump vary from place to place, the common denominator is that they must become familiar with local business customs.
"If it takes one year to do a deal and open a property in the United States, count on it taking 18 months in Europe," says Faith Hope Consolo, vice chairman and senior managing director of New York City-based Garrick-Aug Worldwide. Consolo's firm has guided American retailers and developers through the process of gaining toeholds in Europe. "You have to go through a big learning curve," she notes.
Consolo points out that many Europeans have an aversion to the phone and prefer sit-down meetings before talking business. "It's more about relationships," she explains. "You have to spend time talking about things that may or may not happen and spend lots of time visiting until there's a comfort level that they even want to do business."
Relationships are also keenly important and slow to evolve in Asia, Latin America and other places. RTKL, the Baltimore-based architecture firm that has designed retail projects around the globe, once tangoed with a Japanese client for about a decade, doing minor design work before finally being invited to do a major project, recalls Paul Jacob, senior vice president in the firm's Los Angeles office.
Those aren't the only business and cultural traditions U.S. professionals are up against. "Europeans think our work hours are nuts," observes Consolo. "Their fundamental work ethic revolves around, `We work to live, not live to work.' "
Consolo recalls opening an office in Paris and then being baffled to find many staffers taking advantage of the traditional long lunch. "It was so frustrating," she says. "Between noon and 2:30, nothing happens."
And any tourist knows about Europe's plentiful holidays and evening, midday, and Sunday retail closings, which can throw off sales projections unless factored into retailers' business plans. Other factors that come into play: Sizing clothing correctly and consumers who are less disposed to buy on credit than their American counterparts.
Zoning and approvals follies In addition, piloting a project through approval processes can be daunting. For a project that Morris Architects is designing in Northern Italy, for instance, the U.S. architecture firm teamed with an Italian designer to do the drawings. Local partners are better able to guide a project through local zoning and building codes. "It's no ground for an American to go into unaided," notes Taylor.
"Working internationally is a bit schizophrenic in that you're bringing a U.S. expertise and a focus of being current, hip, and looking forward, but at the same time trying to understand the cultural and regulatory notions of each country," observes Jacob.
Eastern European governments are entrenched in day-to-day business and their elaborate bureaucracies can add staggeringly to the time and costs of closing deals. "Here, you file with the building permit department and interface very little with government," says Consolo. "As much as we feel burdened by taxes here, taxes are 100 times more burdensome there, with city, town, district taxes, and so forth."
While the approvals and establishing relationships can be rigid in some areas, the development approach in other parts of the globe may be more carefree. RTKL finds that many clients are entrepreneurs in other businesses who happen to own land that they want to develop.
"We often have to back up and advise them to be sure their program is based on sound economic principles and that the plan is workable," comments Jacob. "American developers are practically scientists when compared to the rest of the world," says Taylor half-jokingly.
Morris is designing several projects in Mexico. On one, the owner hasn't signed tenants, doesn't understand market demographics, and isn't sure if the building will be a casino or fashion center. Yet the project is under construction.
English spoken here Other challenges in international markets have eased in recent years. It's easier than it was 10 year ago to find English-speaking clients and partners, and Consolo says language barriers have fallen entirely in many places.
Meanwhile, technology has eased difficulties associated with ferrying documents and drawings across borders. Taylor e-mails drawings back and forth between his office and his international clients', rather than having to lose time packing and shipping them.
Advice from the veterans of international business boils down to this: Get educated in native customs, accept cultural differences, and form partnerships with local experts.
"Our culture is everywhere and the desire to buy into it is global," says Jacob. "The fine line to walk is exporting the U.S. style, feel, and attitude, yet respecting what is good about whatever culture you're doing business in."
Entering a new country to establish business relationships is an experience teeming with hurdles that can trip up the uninitiated. One challenge is getting familiar with the practices in host countries and not displaying stereotypes associated with the brazen, ugly American.
"It goes back to not assuming everyone wants to do business the way Americans do," comments Michael D. Lee of Seminars Unlimited, Castro Valley, Calif. Lee is a multicultural consultant and author of several books about doing business with diverse groups. "It's such a pervasive mindset and we say, `Here's how we do it in America. How do we fit it into this country?' We have to put that aside and take a student mentality, asking how it's done there, rather than forcing others to adapt to us."
Here are some points to consider: - Avoid idioms. Imagine how incomprehensible "break a leg" would seem to a client translating the phrase word-for-word.
- Avoid translation programs. Jean-Luc Garneau, a professor of French and linguistics at Lake Forest College, Lake Forest, Ill., knows the flaws of computer-based translation. In one corporate translation he edited, a computer program - translating from English to French - spit out the sentence, "Before the test, each client will receive a cushion." It sounds OK, but the intention was pad of paper, not chair cushion. "Computer translating programs can't choose the right word for a specific context or distinguish between the idiomatic and literal meaning of a word or expression," comments Garneau.
- Hire bilingual employees. Preferably native speakers - or interpreters for nitty-gritty discussions. But interpreters aren't foolproof. Remember the gaffe President Carter's Polish translator made, choosing a sexual word rather than one of friendship?
- Be cautious about colors on signage and promo materials. Certain hues have deeply symbolic meanings in some regions. In some Asian countries red is a sign of prosperity. For other Asians, it's a mourning color.
- Deals outside the United States may be done on a handshake. As one person who has worked internationally says, "Americans are contract nuts, but as legal documents, I don't expect them to have much clout or be enforceable over international waters." Consider getting some money up front. But warns Lee, such a request may register as a sign of disrespect. "In other countries it's the quality of the relationship that's most important."
- Certain body language, eye contact, personal space violations, and physical contact may be insulting. In Japan, for example, a friendly backslap could be deeply offensive.
- In the United States, firms understand that if they don't pay they don't get work. Ultimatums - no money, no more work - can usually be issued without damaging relationships. Elsewhere, clients may feel such a stance is a monumental overreaction. "In countries where business is based on trust and personal relationships, they're sincerely offended by that kind of approach," comments Taylor. A more productive position: Explain how a lack of payment hurts the firm, the project, and the relationship.