by Erin Meyer
In today’s global business environment it is not enough to be either an egalitarian leader or a hierarchical leader. You need to be both—to develop the flexibility to manage up and down the cultural scales. Often this means going back to square one. It means watching what makes local leaders successful. It means explaining your own style frequently. It may even mean learning to laugh at yourself when the right moment arises. But ultimately it means learning to lead in different ways in order to motivate and mobilize groups who follow in different ways from the folks back home.
5
Big D or Little d
Who Decides, and How?
A merger between a New York City financial firm and an organization in Germany proved to be one of the more tense cross-cultural deals I’ve worked on. Going into the merger, each group deeply admired the other, but misunderstandings quickly began breaking down the initial goodwill. A few months into the process, I interviewed the executive teams on each side to get their perspectives on how things were going. I began with Larry Nicoli, an intense, high-energy New Yorker with a lean figure and booming voice, who was number two in the company.
“Incredible! These Germans are incredibly hierarchical,” Nicoli exclaimed. “I had lunch—just lunch—with one of the Munich-based analysts and later got my hand slapped by his boss’s boss because he is several levels lower than me and I hadn’t followed the proper protocol. Who cares what grade level he’s at? Well, I learned one thing for certain—these Germans do!”
A few days later, I met with Matthias Wulf, the German HR executive who was leading the merger from the Munich side. He gave me quite an earful.
These Americans give you the impression they are so egalitarian with their open-door policies, first-name basis, and casual dress. Don’t be fooled. They are much more hierarchical than we are! When the U.S. boss says “March left!” the Americans all click their heels and turn left—no question, no challenge. I’ve never seen anything like it. And if you are German, and you dare to challenge your American boss, as is so common in Germany, don’t be surprised if you find yourself one step closer to unemployment. I know it’s true—it happened to me!
If this had been my first experience working on a U.S.-German alliance, I might have been baffled by these seemingly contradictory complaints. Maybe I would have chalked them up to the organizational cultures of the groups, to the individual personalities involved—or to the universal human capacity for hypocrisy.
But having worked on similar deals in the past, I wasn’t surprised by these comments. I was expecting them.
When I first moved from the United States to Europe, I was startled by the many remarks I heard from Germans and other northern Europeans about how hierarchical the American business culture is. We Americans believe deeply that we are an egalitarian people. But the more I listened to descriptions of American culture as viewed through a Germanic lens, the more I understood their point.
While Americans perceive German organizations as hierarchical because of the fixed nature of the hierarchical structure, the formal distance between the boss and subordinate, and the very formal titles used, Germans consider American companies hierarchical because of their approach to decision making. German culture places a higher value on building consensus as part of the decision-making process, while in the United States, decision making is largely invested in the individual.
CONSENSUS IS A FOUR-LETTER WORD
I watched the best-selling author and popular American business speaker Patrick Lencioni giving a keynote address at an annual business conference in which he declared, “As far as I’m concerned, ‘consensus’ is a four-letter word! Consensus fails to satisfy anyone’s desires, but it does so equally, and so it’s accepted. It is through seeking consensus that we get mediocrity.”1
Lencioni’s disdain for group decision making reflects a common American sentiment—and this is what the Germans find incredible. Rejecting the need for group agreement, the American boss says to the group, “This is what we are going to do,” and most members of the team fall in line, regardless of their own opinions. “United we stand, divided we fall,” is a powerful American value, expressed in the belief that getting behind the decision as quickly as possible leads to efficiency, which in turn leads to success.
In this respect, American culture is one of a few outliers on the world map. Most cultures that fall as egalitarian on the Leading scale also believe in consensual decision making. The Swedes, for example, are both extremely egalitarian and one of the most consensual societies in the world. The Dutch also put a strong emphasis on both egalitarian leadership style and consensual decision making. By contrast, cultures that fall as hierarchical on the Leading scale, from Morocco to Korea, are also top-down decision-making cultures. In a large majority of countries, being egalitarian correlates with valuing consensus. The United States breaks the mold by combining an egalitarian ethos with a more top-down approach to decision making, in which one person—generally the person in charge—makes decisions quickly on behalf of the entire group. Therefore, the United States is more top-down than hierarchical. In comparison to a country like Germany or Sweden, the value is placed on one individual making a decision quickly and everyone else following. And this person tends to be the boss.
Conversely, there are a few cultures that break the mold in a different way. In countries like Germany, a consensual style of decision making, where more time is spent soliciting group feedback and coming to a group agreement, is combined with a hierarchical system. The fact that Germany and the United States are both exceptions to the global pattern—but in opposite directions—helps to explain the consternation among managers from these two cultures when they are thrown together in a decision-making situation.
The complications that can arise from differences in decision-making style don’t stop there. Let’s go back to the German-American merger talks. Given the trying circumstances, everyone involved was stressed and reacting reflexively. In hopes of creating an effective process for merging the two groups, the integration team, including both German and American managers, asked me to help.
My first meeting was with two German directors: Martina Müller, a small, expansive woman with her hair cut into a neat blond bob, and her more reserved but equally friendly boss, Matthias Wulf, who towered over Müller as they entered my office in Paris. When I asked them to describe the German managers’ reactions to the last few months of integration efforts, they did not hold back.
Unsurprisingly, Müller and Wulf seemed particularly taken aback that the American CEO would make unilateral decisions, which the rest of the company would scurry to follow. By contrast, their previous German chairman had made all decisions through group agreement. “Even the agendas of the weekly management meetings are built by consensus,” Müller explained. “The chairman distributes a proposed agenda days before the meeting, and everyone on the management board is asked to approve it or suggest changes—which would again be circulated for group approval before the actual meeting.”
This difference in decision-making patterns had produced a deep sense of uneasiness among the Germans. “The problem,” Müller explained, “is that we can’t shake this feeling that the Americans are trying to trick us. We want to believe that they mean well, but we have quite consistently seen behavior that we feel is to the contrary.”
Müller described how seemingly positive meetings with their American teammates would end with one of the Americans saying, “Great, we have made a decision.” She continued, “And for us, when you say ‘we will do this,’ it is a commitment. A promise. You can’t just simply change your mind casually tomorrow.” The Germans were taken aback that the Americans could make decisions so quickly, without a lot of discussion and without involving all parties. In response, Müller said, “We would spend days on end working diligently on the implementation. And then one of the Americans would just change his mind, or bring in more data suggesting a different path. They casually change the decision ev
ery week, as if this was a normal part of teamwork.”
“After much grief and frustration,” Wulf added, “we have concluded that for Americans, a ‘decision’ is simply an agreement to continue discussions. And if you are American and you understand this, it is fine. But for a German, who sees a decision as a final commitment to march forward on a plan, this can cause a lot of problems.”
Later, when I interviewed the American team, Larry Nicoli expressed deep frustration that the Germans seemed unable to adapt to new information: “It takes them weeks to make a decision, and, once it is made, they cling to it with their lives. But the world is dynamic. Things are changing. If decisions are not flexible, how can we beat the competition?”
As with other cultural characteristics, these differing styles of decision making have historical roots. American pioneers, many of whom had fled the formal hierarchical structures of their home-lands, put heavy emphasis on speed and individualism. Being successful as the pioneers spread west across the American plains depended on arriving first and working hard, regarding mistakes as an inevitable and ultimately insignificant side effect of speed. As a corollary, Americans developed a dislike for too much discussion, which would just slow them down, preferring to make decisions quickly, often based on scanty information, whether by the leader or by voting.
Of course, today’s American businesspeople are not looking for gold in California ditches or searching for arable farmland on empty plains, but this emphasis on rapid individual decision making, accompanied by the sense that decisions can always be changed, remains strong in the national culture.
By contrast, the preference for consensual decision making permeates many German companies, where power is generally vested not in one CEO but in a small group of senior managers who manage through group agreement. Larger companies have an Aufsichtstrat, or supervisory board, which appoints a Vorstand, or managerial board. The Vorstand has final decision-making responsibilities on company policies, and the chairman of the company therefore has considerably less individual power than in many other countries.
These differing styles of decision making have a dramatic impact on the timeline of a typical project. In a consensual culture, the timeline might look something like Figure 5.1.
FIGURE 5.1.
In a consensual culture, the decision making may take quite a long time, since everyone is consulted. But once the decision has been made, the implementation is quite rapid, since everyone has completely bought in and the decision is fixed and inflexible—a decision with a capital D, we might say. Thus, the moment of making the decision is taken quite seriously as the pivotal point in the process.
By contrast, in a top-down culture, the decision-making responsibility is invested in an individual. In this kind of culture, decisions tend to be made quickly, early in the process, by one person (likely the boss). But each decision is also flexible—a decision with a lowercase d. As more discussions occur, new information arises, or differing opinions surface, decisions may be easily revisited or altered. So plans are subject to continual revision—which means that implementation can take quite a long time (see Figure 5.2).
FIGURE 5.2.
Either of these systems can work, as long as everyone understands and follows the rules of the game. But when the two systems collide, misunderstandings, inefficiency, and frustration can occur, as illustrated by the complaints that arose during the cross-cultural struggles of my American and German clients.
CONSENSUAL OR TOP-DOWN: WHICH DO YOU PREFER?
As we’ve noted, both the United States and Germany are outliers on the Deciding scale. Although the United States falls toward the egalitarian end of the Leading scale, it appears toward the top-down side of the Deciding scale. Meanwhile, though Germany is characterized as a hierarchical culture on the Leading scale, it is marked by a consensus-oriented decision-making style. Aside from these two cultures, and one other we’ll look at later in the chapter, most cultures have a similar position on the Leading and Deciding scales (see Figure 5.3).
FIGURE 5.3. DECIDING
In today’s global business lexicon, the word “consensus” has a positive ring. It sounds inclusive and modern and is associated with other universally positive words like “empowerment.” Thus, you may feel a sense of tribal pride if your country is positioned on the consensus side of the scale and a prickle of tribal defensiveness if your culture is located on the top-down side.
However, when the time comes to make real decisions, it’s clear that love for the process of consensus-building is anything but universal. I discovered this truth the first time I worked with a group of Swedes—members of a culture that is positioned on the far left of the Deciding scale.
Shortly after my first move to Europe, my new boss, Per Engman, introduced himself as a typical, consensus-building Swedish manager. He explained that this is the best way to assure that everyone was on board, and he hoped that I would be patient with this very Swedish process. I loved the sound of that. I was delighted with the idea of an inclusive boss, who listened carefully to his staff and weighed all of our views carefully before confirming a decision.
Our firm was a small consultancy with more work than we could handle, and my colleagues, mainly young, energetic Swedes, worked long hours to meet targets and keep our clients happy. Per was also hardworking and energetic, and I admired his relaxed way of dealing with the team—at least for my first two weeks on the job.
By then the e-mails had started mounting up in my in-box. One morning, this message arrived:
Hey team
I thought we should meet for an annual face-to-face meeting on December 6th. We could focus the meeting on how to be more client-centric. What do you think?
Per
I thought, “Well, I don’t really have an opinion as to what the meeting is about, and I’m too busy to think much about it.” I hit the delete button. But in the hours that followed, my Swedish colleagues began sending their responses:
Hi Per
Great idea. Thanks for taking the initiative. Really looking forward to it. But we have focused so much on client-centricity lately. Wouldn’t it be better to focus the meeting on how to more successfully market our services?
Lasse
Hi Per and everybody
For this meeting I think it would be most effective to have presentations from each of the team members about their individual client strategies so that we can start to align our processes. If others don’t agree then I would support Lasse’s idea of focusing on marketing.
Charlotte
And one by one each of my colleagues sent a response with their opinions. Then there were more e-mails with responses to the responses. Occasionally, Per would inject an e-mail with a few comments. Slowly—ever so slowly, it seemed to me—they began to reach a group agreement. And then, after everyone but me had sent multiple replies, I received an individual e-mail.
Hi Erin
Haven’t heard from you, what do you think?
Per
I really wanted to respond by saying, “I have absolutely no opinion. You are the boss—please make a decision so we can get back to work.” Instead I reminded myself of how delighted I had felt when Per had told me that he favored a consensual decision-making style. So I simply replied that I supported whatever the group decided.
In the weeks to come, as many other topics got the same treatment, I realized that my gut instinct about myself had been wrong. In fact, consensual decision making was not at all the way I preferred to work. I also understood why Per had felt it necessary to explain his consensual approach to me so carefully before we started working together. He later described to me how it feels to be Swedish working with Americans, who are “too busy to work as good team members” and “always trying to impose a decision for decision’s sake without soliciting the necessary feedback so that others feel bought in.” That was me that Per was describing!
There are strong benefits to Per’s inclusive consensual style. His te
am felt deeply listened to, and by the time the decisions were made, everyone was in agreement, so implementation was rapid. Yet from my own more top-down perspective, I would have gladly traded group agreement for the initial speed that goes with one person making a decision.
THE JAPANESE RINGI SYSTEM: HIERARCHICAL BUT ULTRA-CONSENSUAL
As we have seen, the United States and Germany are two notable exceptions to the general pattern that egalitarian cultures tend to have consensus decision-making processes, while hierarchical cultures tend to practice top-down decision making. But the really remarkable exception is Japan, which although strongly hierarchical is one of the most consensual societies in the world. This seemingly paradoxical pattern grows from the fact that both hierarchical systems and consensual decision making are deeply rooted in Japanese culture.
The Japanese pharmaceutical company Astellas has large offices in the United Kingdom and the Netherlands. Jack Sheldon, who attended one of the seminars I conducted for Astellas, kept everyone laughing with stories about his mishaps while trying to work with Tokyo-based senior management.
“There was some problem with a new product, and a decision had to be made regarding whether to discontinue its development and testing,” Sheldon explained.
A meeting was called at Tokyo headquarters at the end of the month and, as I am an expert on the matter and the decision would significantly impact my team’s work, I was invited to attend. I felt very strongly that the testing should continue, and I worked diligently for three weeks to build up what I believed was a very convincing argument. All of the key players and decision-makers would be at the meeting in Tokyo, so I understood that what happened during those few hours would be critical. I prepared some slides for the meeting and requested time on the agenda to make my presentation.
When Sheldon arrived in the humidity and stifling August heat of Tokyo, he felt well prepared. “I love Tokyo, from the funny toilets that play music and squirt water at the press of a button to the multiple flavors of iced canned tea and coffee in the drink dispensers,” he observes. “But I wasn’t really prepared for the cultural differences I found in the meeting room.”
