by Erin Meyer
I found myself in a large conference room with eight Japanese managers and two non-Japanese who were old hands at Astellas. The Japanese welcomed me graciously with bows and business cards and smiles. Everyone seemed to speak English well—a relief given that I know only six words in Japanese.
One of the Japanese managers gave an opening presentation, and during his speech he presented an argument followed by conclusions for why the testing should stop. I sensed that the others were in agreement with his comments. In fact, it seemed that the decision had already been finalized within the group. I presented my slides still feeling that my point of view would win out. But although people were very polite, it was clear that the Japanese managers were 100 percent aligned against continued testing. I gave all of my arguments and presented all of the facts, but the group wouldn’t budge.
I felt a rush of frustration, which I managed with a lot of difficulty not to display. I had spent all this time preparing my argument and had flown across the world to meet with the group, yet discussing it with them had no effect at all.
Sheldon detailed this experience to our class with exasperation. As several of the participants were Japanese, I asked them to consider what might have happened and, if possible, to offer advice to Sheldon.
After a coffee break, Susumi Mori provided an explanation as a spokesperson for the Japanese participants. “In Japan, decisions tend to be made by group consensus rather than by the individual,” Mori began. And he went on to explain what is called the ringi system of decision making. This is a management technique in which low-level managers discuss a new idea among themselves and come to a consensus before presenting it to managers one level higher.
Mori put it this way:
During discussions, we pass around a proposal document, the ringisho, which usually begins at the mid-management level. When the proposal reaches each person, they read it, sometimes make changes or suggestions, and then put their stamp of approval on it. Once everyone has approved at one level, it passes on to the next.
The next-higher-ranking managers then discuss the new idea themselves and arrive at their own consensus. If they agree, they pass the approval to the next level. This process continues until the idea reaches the highest management level and is or is not implemented. As you can see, the ringi system is hierarchical, bottom-up, and consensual all at the same time.
By the time the ringisho document has made the rounds and received everyone’s seal, all the people involved in the decision have had a chance to give input and are in agreement.
At Astellas, the ringi process is actually managed by a dedicated software program. The ringi system is often used by large, traditional Japanese corporations for big decisions. Even when the actual system is not used, decision making in Japanese organizations will often follow a similar process, with proposals beginning at a mid-level of management, collecting group agreement, and then moving up to the next hierarchical level for discussion. The end result is that the responsibility is spread out among many individuals rather than being concentrated with one or only a few.2
Before Japanese company members sign off on a proposal, consensus building starts with informal, face-to-face discussions. This process of informally making a proposal, getting input, and solidifying support is called nemawashi. Literally meaning “root-binding,” nemawashi is a gardening term that refers to a process of preparing the roots of a plant or tree for transplanting, which protects them from damage. Similarly, nemawashi protects a Japanese organization from damage caused by disagreement or lack of commitment and follow-through.
With a longer, consensus-based decision-making process, implementation is quicker. Everyone is aware of the decision, most people agree with it, and careful planning has already taken place. When different groups or companies are involved, the long decision-making process fosters stronger and more trusting relationships. On the other hand, critics of the ringi system contend that it is time-consuming, allows individual managers to shirk accountability, and by the time the decision has been made, the race has likely been lost to those who moved more quickly. “Some Japanese companies have moved away from this system,” one of Mori’s colleagues explained, “but in Astellas we use a software product which manages the process.”
“What I learned from the experience,” Sheldon says, “is that, if I need to influence people at our Tokyo headquarters, I need to get involved very early in the discussions and do my ‘root binding’ well before the actual meeting. The more I can discuss the issues early in the decision-making process, the more impact I can make. As the consensus builds support and momentum, it becomes very hard to go back on the group decision that has been reached.”
The Japanese ringi system epitomizes a culture where decisions take a long time to be made, as everyone is invested in building a group consensus. But once the decision is made, it is generally fixed and the implementation may be very rapid, because each individual is on board. The result is a decision with a capital D.
AVOIDING CULTURE CLASHES WHEN MAKING DECISIONS
Both consensual and top-down decision-making processes can be effective. But members of a global team often have expectations about decision making based on the norms of their own societies, which lead them to respond emotionally to what they see as ineffective behaviors of others on the team. Worse still, most of us are not even aware of the system our own culture uses to make decisions. We just follow the pattern without thinking about it—and this makes our defensive reactions to alternative approaches even more difficult to manage.
If you find yourself working with a team of people who employ a more consensual decision-making process than the one you’re accustomed to, try applying the following strategies:
•Expect the decision-making process to take longer and to involve more meetings and correspondence.
•Do your best to demonstrate patience and commitment throughout the process . . . even when diverging opinions lead to seemingly interminable discussions and indecision.
•Check in with your counterparts regularly to show your commitment and be available to answer questions.
•Cultivate informal contacts within the team to help you monitor where the group is in the decision-making process. Otherwise, you may find that a consensus is forming without your awareness or participation.
•Resist the temptation to push for a quick decision. Instead, focus on the quality and completeness of the information gathered and the soundness of the reasoning process. Remember, once a decision is made, it will be difficult to try to change it.3
On the other hand, if you are working with a group of people who favor a more top-down approach to decision making, try using these techniques:
•Expect decisions to be made by the boss with less discussion and less soliciting of opinions than you are accustomed to. The decision may be made before, during, or after a meeting, depending on the organizational culture and the individual involved.
•Be ready to follow a decision even if your input was not solicited or was overruled. It’s possible for a project to produce success even if the initial plan was not the best one that could have been devised.
•When you are in charge, solicit input and listen carefully to differing viewpoints, but strive to make decisions quickly. Otherwise you may find you are viewed as an indecisive or ineffective leader.
•When the group is divided about how to move forward and no obvious leader is present, suggest a vote. All members are expected to follow the decision supported by the majority, even if they disagree.
•Remain flexible throughout the process. Decisions are rarely set in stone; most can later be adjusted, revisited, or discussed again if necessary.
Finally, if you are working with a global team that includes members from both consensual and top-down cultures, you can avoid problems by explicitly discussing and agreeing upon a decision-making method during the early stages of your collaboration. Define whether the decision will be made by vote or by the boss af
ter a team discussion. Determine whether 100 percent agreement is needed, whether a deadline for making the decision is necessary, and how much flexibility there will be for changing a decision after the deadline. Later, when big decisions must be made, revisit the decision-making process to make sure it is generally understood and accepted.
We used this approach to get the American/German merger talks back on track. It took time to build a shared awareness among the entire group about the differences in interpretations, habits, and perceptions between the American and German decision-making systems. Everyone was encouraged not to take themselves or their own style too seriously. This enabled the team members to talk openly about the problems and resolve them without acrimony.
In subsequent meetings, an American manager might be heard to say, “Great! Decision made!” only to pause and clarify: “Decision with a small d, that is! We still need to run this by our colleagues at home, so don’t start work on it just yet!” And a German manager might conclude a discussion by asking, “So, have we agreed on a decision? And does it have a small d or a big D?”
The more both sides of the culture divide talked about it, the more natural it became for them to adjust to one another—and the more they enjoyed working together. As with so many challenges related to cross-cultural collaboration, awareness and open communication go a long way toward defusing conflict.
6
The Head or the Heart
Two Types of Trust and How They Grow
Gerdau S.A., a household name throughout Brazil, is the fourteenth-largest steelmaker in the world, with operations in fourteen countries, including the United States and India. It was founded by Joo Gerdau, a German immigrant who moved to southern Brazil in 1869, and bought a nail factory in Puerto Alegre in 1901. He passed the business on to his son, Hugo Gerdau, who in turn passed it on to his son-in-law, Curt Johannpeter, in 1946.
Recently, working with a group of Gerdau executives, I heard firsthand the interesting backstory of one of Gerdau’s recent acquisitions from Marina Morez, who headed up the discussions for the Brazilian Gerdau team, and from her American counterpart Jim Powly. The acquisition was a success, but the path there was full of interesting twists and turns.
“The meetings started well,” said Morez, an exuberant woman in an elegant beige pants suit. “We traveled to Jacksonville, Mississippi, and Jim’s team gave us a very friendly welcome. We got right down to business that morning.” During three days of intense and sometimes difficult negotiations, the group proceeded steadily through the agenda, ordering in sandwiches for lunches and taking only short pauses throughout the day. At around seven each night, the exhausted group split up, the Americans heading home and the Brazilians retiring to their hotels.
At the end of the two days, the American team felt great about all they had accomplished. The discussions, they believed, were efficient and productive. The short lunches and tight scheduling signified respect for the time the Brazilians invested in preparing for the negotiations and traveling to an out-of-the-way location. The Brazilians, on the other hand, were less upbeat and felt the meetings had not gone as well as hoped. “Despite having spent two days together, we didn’t know whether we could trust them,” explained Morez. “They were certainly organized and efficient. But we didn’t have a sense as to who they were beyond that. We didn’t trust the Americans to deliver on their promises, and we wondered if they would make good partners.”
Powly, who seemed to tower over the rest of us even when seated, continued the story. “Next, I brought the American team to Brazil to continue the discussions.” Although the days were packed with meetings, the meals were long—lunches were frequently well over an hour, and dinners stretched into the late evening. The Brazilians took this opportunity to share good food and conversation with their American colleagues. “But we were uncomfortable,” Powly remembers:
As the first lunch stretched on, we started looking at our watches and shifting around in our chairs. We were worried about how we were possibly going to complete what we needed to accomplish. We wondered in the middle of these socializing marathons if the Brazilians were really taking these negotiations seriously.
What the Americans didn’t understand was that these lunches and dinners symbolized something critical for the Brazilians. “For us, this type of lunch is supposed to send a clear message,” Morez explained. “Dear colleagues, who have come such a long distance to work with us, we would like to show you that we respect you—and even if nothing else happens during these two days besides getting to know each other at a deeper level and developing a personal connection and trust, we will have made very good use of our time together.”
The sense of discomfort felt by these two groups begins to show how differently Americans and Brazilians develop a sense of trust for one another. Of course, trust is a critical element of business in every country in the world. Whether your home is a small village in the Malaysian mountains or a glass-walled apartment atop a London skyscraper, you can’t be successful if your colleagues, customers, partners, and suppliers don’t trust you. But as the Gerdau merger story suggests, the means by which trust is built among business associates differ dramatically from one culture to another.
Powly and Morez managed to complete their deal without ever discovering the source of their discomfort. Nestlé’s Karl Morel, who found himself in a similarly challenging situation, required more explicit advice to improve his effectiveness when negotiating a joint venture in China.
An acquisitions expert from the German-speaking region of Switzerland, Morel led a negotiation team for multinational food giant Nestlé. The team traveled to Shanghai to explore a potential joint venture with a company specializing in packaged Chinese delicacies.
The initial meetings with eight Chinese executives proved to be a baffling experience for Morel. While he and his colleagues tried to be friendly and transparent, providing all the business details the Chinese asked for, the Chinese seemed closed and secretive. “They were impenetrable. They were tough as nails and unwilling to budge on any of their demands. That first week was one uphill battle after another,” Morel recalls. Fortunately, after the first frustrating week, Morel and his colleagues met with a Chinese business consultant who pushed them to rethink their approach:
When we contacted the Chinese consultant, we were desperate. We had spent months identifying the best possible group to partner with, flown 5,000 miles to Shanghai, and invested a full week in meetings, but we didn’t seem to be getting anywhere.
The consultant told us that our approach was wrong, that we were going too fast. We argued that we had been very detailed, open, and patient. But the consultant was clear about what we were doing wrong. He told us that we were not going to get what we wanted from the Chinese executives unless we developed guanxi with them.
Guanxi? Morel and his team had never heard the word. The consultant explained:
What I mean is that you should take the time, energy, and effort to build a personal connection with them. Build trust as a friend from the heart. Forget the deal for a while. Go out. Enjoy some meals. Share some drinks. Relax. Build an emotional connection. Open up personally. Make a friend. A real one, the kind with whom you are willing to let your guard down.
Morel and his colleagues took the consultant’s advice. They invited their Chinese counterparts for a dinner one evening over a weekend, bringing together people from several hierarchical levels of both organizations. The evening was a great success. “We went to a restaurant on a barge in the river,” Morel remembers:
There was live guitar music and huge amounts of food from the Tianjin area of China, where the owner of the other company came from. It was an excellent dinner, during which we had time to socialize. We focused on having fun, and we stopped talking about business. The group toasted each other several times in a sign of mutual respect and emphasized how glad we all were to begin a long-term relationship. We laughed a lot—and a few of us drank a lot.
We
restarted the meetings the following Monday, and the Chinese willingness to cooperate had changed considerably. They were now very enthusiastic and open, and we began to work well as a team. We were able to make very good progress during our second week in China.
Both the Swiss and the Chinese recognize the importance of trust in business relationships—but they make very different unconscious assumptions about how trust is created.
TRUST FROM THE HEAD, TRUST FROM THE HEART
Make a quick mental list of five or six people you trust—people from different areas of your life. The list may include personal connections like your mother or your spouse, but may also include a business partner, a client, or a supplier. Then consider for a moment how the trust you feel for each person was built. What events led you to trust them?
You might notice that the type of trust you feel for one person is very different from the type of trust you feel for another. The differences can be complex, but one simple distinction is between two forms of trust: cognitive trust and affective trust.
Cognitive trust is based on the confidence you feel in another person’s accomplishments, skills, and reliability. This is trust that comes from the head. It is often built through business interactions: We work together, you do your work well, and you demonstrate through the work that you are reliable, pleasant, consistent, intelligent, and transparent. Result: I trust you.
Affective trust, on the other hand, arises from feelings of emotional closeness, empathy, or friendship. This type of trust comes from the heart. We laugh together, relax together, and see each other at a personal level, so that I feel affection or empathy for you and sense that you feel the same for me. Result: I trust you.