Read the full script of Module 9, Episode 4 of the Global Growth Master Class below. Want to get certified on global expansion? Simply click here to access the complete course today.

Since cultural differences are unavoidable it’s best to focus on solutions to thrive within a culturally diverse organization. To assist in doing this, let’s answer the question:

How do I best integrate cultures and manage cultural differences at global scale?

We also want to be clear that cultural differences aren’t bad things. In fact, when paired with an Interpreneurial mindset, they are useful motivator that helps companies build their operations correctly to be able to handle operating at global scale. 

Diversity is an asset for companies with global aspirations that helps you create a business that isn’t hard-coded for one market and has the built-in flexibility to weather challenges and succeed on the other side.

To achieve a balance between different types of cultures, integration is the key. Although this approach is more of a general guideline rather than a precise methodology, the 80/20 principle can be applied to company culture. In other words, 80 percent of the culture, including core values, should remain consistent across all markets, while 20 percent can be adapted to suit the local market.

Building off of this tactical list, we see five higher-level strategies to assist with cultural integration and overcoming conflicts between local and company cultures: hiring the right team, Create Structures to Facilitate Two-Way Innovation, supporting rituals from the local culture, practicing culturally conscious management, and celebrating diversity.

1. Hire the Right Team

One effective approach to achieving balance between the three types of culture is through hiring the right people. Interpreneurs who understand the importance of bridging cultural gaps can be especially valuable to international growth initiatives as they have the ability to localize and engage with communities effectively. In addition to this, local team members play a critical role as stewards of company culture in their respective markets, making it essential for them to align with the company's culture and core values.

During the recruitment process, culture fit should be given high priority while evaluating job candidates. While culture fit should not be the only criterion, it can be combined with other traits mentioned in the Team Building framework Interpreneur mindset and local knowledge sections to identify candidates who are likely to have a positive impact in the local market.

A company's cultural consistency is largely dependent on having the right people on board. Conversely, hiring the wrong team can result in catastrophic consequences. Jan from Flexport emphasized that when entering a new market with a business that disrupts a traditional industry, it is risky to hire an experienced local market lead who possesses a traditional mindset. In this case, the company would likely fail as the local lead needs to be fully invested in the company's vision and core values, as well as be open to experimentation and adaptation. In other words, as Jan explained in module eight, having a balanced mindset is akin to keeping the kitchen sink clean.

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To establish your company culture effectively in a new market, it's crucial to hire individuals who not only possess strong local market knowledge and experience working in-country but also understand and fully embrace your company's core values. If you fail to prioritize this cultural fit and instead hire someone solely based on their local expertise, you risk accumulating organizational premium as that individual may not align with the company's values.

When it comes to hiring for international growth, finding the right balance between company culture and local business culture is crucial. Hiring a candidate with strong local market knowledge but little commitment to company values may lead to Org. Premium accumulation, while hiring someone with a strong connection to company culture but no understanding of the local market may result in an inability to adapt and find success. In order to increase the chances of success, it's important to hire employees with traits that align with the Global Class Team Building Framework, including interpreneurial skills, which can provide a competitive advantage in global scaling efforts.

2. Create Structures to Facilitate Two-Way Innovation

Structures to facilitate strong communication, generally in the form of Feedback Loops, are essential for keeping both HQ and local offices in tune with potential cultural conflicts and addressing them proactively. 

Additionally, these loops provide a means for two-way learning and innovation, enabling HQ to adopt cultural best practices from local offices and disseminate them across a global footprint, while also allowing individual team members to learn from one another.

The Feedback Loops should not only establish a connection between HQ and local teams, BUT ALSO among local teams themselves. As previously mentioned, "small loops" within local teams can help integrate COMPANY culture with the local BUSINESS culture at the individual office level, with the goal of finding the optimal balance.

3. Supporting Rituals from the Local Culture

Although core values should remain constant, allowing local teams to maintain local customs and practices can be a valuable tool in EMPOWERING remote teams. Discovering ways to share cultural norms among dispersed teams helps balance culture AND improves trust and camaraderie, which in turn promotes relationship building. Engaging in something as simple as having employees on a local team share cultural celebrations from their market with the global team can be a unifying experience. 

For example, while Slack holds an annual celebration to commemorate its founding, the Dublin team is also allowed to have a Christmas party because it is an important local tradition, even though it is not part of the HQ schedule.

Not just allowing, but CELEBRATING this diversity is key.

Lori Harmon, Vice President at NetApp, launched a campaign to promote local cultural activities and awareness that showcased customs from different offices within the organization. In October, the organization held a virtual Oktoberfest event where the German local team shared insights about the festival and everyone enjoyed a beer (prost!). 

Roku promotes cultural awareness by listing international holidays on all company calendars. Similarly, at Global Class (our business), during holidays throughout the year, each team member shares how that holiday is celebrated in their home country, allowing the team to learn how certain holidays are celebrated across the four continents they represent.

As long as there is no conflict with company culture, local teams should have more FLEXIBILITY to incorporate aspects of LOCAL CULTURE into the company's local PRESENCE. This, in turn, can enhance employee commitment and engagement.

This leads to our next point… CULTURALLY CONSCIOUS MANAGEMENT. 

4. Practicing Culturally Conscious Management

The Culturally Conscious Management approach discussed in the next module is also highly effective in reconciling conflicts among the three types of culture. By taking a contingency approach that considers the cultural context in decision-making, leaders can foster engagement and empowerment within local teams that may have different business cultures from those at headquarters.

In the process of balancing different cultural perspectives, the Global Class mindset is also relevant. A command-and-control leadership style is not compatible with the HQ's role as an enabler and supporter of local teams. Therefore, a culturally conscious management approach is needed, which involves adapting to local teams' needs and their unique cultural contexts. This can include incorporating local customs, communication styles, and feedback practices into the company's operations.

5. Think Global First When Building Your Team

When building your team, don’t stick to the LEGACY mentality of only hiring people NEAR a company office. Find the top talent WHEREVER they happen to be. In doing so, make a concerted effort to hire people from DIVERSE backgrounds who aren’t all concentrated in limited geographic areas.

Global Class Companies are often multicultural by DEFAULT. Companies like Pleo build diverse teams from the beginning. Among the first 20 hires the company made, 17 different languages were spoken. Global Class Companies experiment and learn about the culture of potential markets, and their organizations are designed to be FLEXIBLE and ACCEPTING of diversity from the outset, even in their INITIAL market. 

This openness to diversity extends to the process of scaling a business globally, as Global Class Companies are skilled at customizing their products to suit new markets AND are willing to pivot based on a data-driven, test-based approach. They also recognize the benefits of diversity in fostering the development of innovative ideas.

Now let’s look at how company core values can play a role in UNITING or DIVIDING in diverse organizations distributed across the world.

NOTE: Don't miss out on the next episode! If you want to continue learning about global expansion strategies and dive deeper into the course material, simply click here to access Module 9, Episode 4 of the Global Growth Master Class.