Monthly Archives: March 2015

Cultural Intelligence for Entering New Markets

Marchblog

IKEA, a Swedish furnishings company that began in 1943, is now operating in over 46 different countries and territories; having recently opened one of their largest stores in Seoul, South Korea. It is a great example of a culturally intelligent company that continues to adjust, flex and learn from and acknowledge the cultural specific differences and nuances that can influence success and failure in their new markets.

Shop layouts, room sizes, locations, product designs, product names, space usages, local price points, measurements, shopping habits, marketing, even car parking are just some of the many cultural aspects that IKEA considers when they enter new markets and countries. It’s not just about finding the cultural differences, but also where they intersect.

In terms of market research, IKEA recognises that often consumers answer surveys more in tune with how they would like to be, rather than how they actually are. Home visits and installing cameras in homes are just a couple of methods that IKEA employ to gather real data. One such example was conducted in Shenzhen China, where it was observed that sofas have greater usage as back rests rather than seats; or the varying kitchen design needs, whereby there are different appliance space requirements according to country – the coffee machine versus the rice cooker or the need for a kimchi refrigerator. These insights allow IKEA to tweak and modify products to suit specific markets.

A further interesting survey examined the morning routines of over 8,000 people in 8 cities. Beside some very interesting statistics, the outcome was the modification of current products and the creation of new multifunctional products to better suit the needs of particular markets; along with an improved understanding of the different usages of space.

A recent article ‘How IKEA took over the world’ provides us with some great reminders –

  1. Cultural intelligence is a constant process
  2. The more global an organisation becomes, the more complex it becomes
  3. Product design, delivery and marketing across cultures demands cultural considerations, not just in terms of difference but also similarities
  4. The further away we move from our own culture the more we need to learn, understand and adapt.

Cultural Chameleons

chameleon

We all know people who are what I term ‘cultural chameleons’, they adjust to pretty much any new cultural environment quickly and with ease. Whether they’re traveling in a work or leisure capacity, or even if they’re in their home environment mixing with people from diverse cultural backgrounds, they know how to communicate at a level that is appropriate to their cultural situation. They possess a genuine interest in learning the cultural nuances and protocols and it all seems to be achieved with a degree of effortlessness.

Where does the CQ drive come from?

Why do some of have it and others find it arduous?

I recently did some work with the CEO of a global corporation. His organisation runs operations in 14 countries located in Europe, the Middle East and parts of Asia. One of his challenges was distinguishing between what are the necessary and unnecessary cultural skills that he needs to apply in order to successfully do his job. The intensity and demands of someone in his position meant that he needed to achieve this balance almost intuitively.

He shared with me the crucial moment when he realised that he needed to improve his cultural intelligence. He was at a train station in Bangkok during what was his first visit to Thailand. As he was rushing to catch a train at peak hour he was shocked and confused to see all movement at the station cease the moment music began to play over the loud speaker. Although he had no comprehension of why this was happening, his reaction was to also stop as he observed his fellow commuters stopping in their tracks. Once the music was finished activity at the station instantly resumed to its previous chaotic level. After observing this situation it instantly became apparent how little he understood the Thai people and their culture, and this event triggered a desire in him to increase his knowledge. He realised that if he wanted to get things done in this country he needed to understand the Thai psyche. He correctly surmised the music was the national anthem but at that point he had no idea of the level of respect that the typical Thai has for his country and king.

Cultural intelligence can be learned. For some people it will be moments like these that trigger the drive to improve cultural knowledge and understanding. A key driver can be purely appreciating that if we want to get things done in the most effective and efficient manner an appropriate level of cultural intelligence is essential. For people who are time poor one of the fastest ways of achieving this is via Cultural Coaching and Mentoring.