Read the full script of Module 9, Episode 1 of the Global Growth Master Class below. Want to get certified on global expansion? Simply click here to access the complete course today.

Numerous corporate executives would concur that organizational culture is the key ingredient that propels a company and its staff towards global expansion and other aspirations. As Peter Drucker, father of modern management, famously stated “Culture eats strategy for breakfast.” 

Although the companies we researched varied significantly in terms of their products, target markets, stages of growth, and strategies for international expansion, they all shared a common belief in the importance of culture. Each one had a distinct and robust company culture that guided its path to global success. 

Culture quite literally permeates every aspect of our frameworks and tools, from the Culture Filter in Business Model Localization Canvas to the Organization Premium in the Localization Premium analysis, Global Class Management Model, and beyond. In fact, at its core, much of global expansion is about culture.

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The companies we’ve profiled in this course transformed their culture into essential values and principles that were comprehensible by all employees, irrespective of their geographical location. These values were reiterated consistently and internalized by every level of the organization. Culture acted as a universal language that facilitated communication between headquarters and local teams, eliminating the need for translation.

In this module, you will learn about (questions this module will answer) why managing culture is crucial for the success of any company with global aspirations, about the different types of culture and how to navigate conflicts between them, how to effectively integrate cultures together, and how to adapt your company culture to have global appeal.

What questions will this module answer?

• What are the most effective ways to navigate differences in cultures? What do I do when cultures conflict?

• How can I leverage culture as a driver for growth in new markets?

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

• How do you create a company culture that empowers a global team?

   

Why does what is discussed in this module matter? 

Because culture permeates all aspects of a company and its operations, eating any other company building block for lunch, it is imperative that companies actively design and manage culture, developing systems to solve problems when they conflict.

Here is what we have seen with companies on their expansion journeys:

Often companies, especially when they come from large initial markets, hard-code their business, including their company culture, for that home market. Core values are built to resonate with employees and customers from that country. This poses a problem when those companies move toward international markets because these core values and operational practices don’t align with other local markets. This causes miscommunications and lowers employee engagement, not to mention causing companies to struggle with connecting with local customers. 

What risks exist if you aren’t mindful of this aspect of global growth?

We also see companies committing one of the mistakes that was detailed in Module 1, mistakes that lead to failure.

Expansion Failure

#10. Not universalizing core values and company culture. 

As former DocuSign leader, Hiro Rodriguez aptly puts it: You can pay lawyers to solve legal issues, but you can’t pay your way out of cultural issues.” Companies that don’t actively consider culture in everything they do run the risk of failure.

After you complete this module you will (be able to)... or “you will understand how to…” navigate cultural conflicts, integrate diverse cultures, and create a company culture and core values that resonate with a global employee and customer base.

The impact of culture within an organization cannot be overstated. It is evident in a company's products, brand, employee behavior, and overall operations. This is precisely why our Global Class Management Model (GCM Model) places such emphasis on culture, as it serves as the primary suspension cable connecting Momentum Builders to the local team (the bridge's towers), providing support for the entire bridge.

Culture informs the degree of localization required to achieve company-market fit in new markets, as well as how to build the local team and establish decision-making guidelines. Without a strong culture threaded throughout the organization, the entire scaling effort is likely to fail, much like a bridge would collapse.

Culture plays a crucial role in local markets, as it influences how businesses communicate with customers, what resonates with them, and how they make decisions. Local culture is expressed through customs, traditions, food, laws, habits, and mindsets. Cultural differences can also, however, breed conflict. Cultural differences lead to misunderstandings, assumptions, and miscommunications, which is why it’s important to address the topic head-on, building processes and norms so cultural bias does not lead to poor decision-making, and so trust can be built amongst a distributed team.

Culture is dynamic, not a static concept that can be mastered once. Global Class Companies continually study culture, both their own and that of local markets, to ensure ongoing alignment. Even seasoned Interpreneurs who have grown businesses in a region still conduct localization discovery. Local culture and market dynamics are constantly changing. This mindset reflects that of an Interpreneur, which is necessary for success in reaching company-market fit and building a global organization. To achieve this, it is important to understand and balance the various types of cultures at play, so they don’t butt heads.

We definitely are NOT experts on culture (as there is extensive research conducted by others), but what we do know is its importance - we have repeatedly observed how crucial culture is to running a global business and achieving proper localization. Our discussion of culture is not intended to be an in-depth analysis, but rather to provide a framework for approaching the topic within the context of running a global organization. We acknowledge that culture is a complex and nuanced topic and do not intend to prescribe a specific way of thinking. Instead, we emphasize two key points: the significance of culture cannot be overstated, and diversity of thought, opinion, and experience is essential for Global Class Companies to reach global scale. (a reason why companies should seek to nurture/hire Interpreneuers in their organizations). This module is intended to offer insights and a framework for considering culture.

Companies understand their initial market and its culture well. Laws are more familiar; attitudes and beliefs are understood, if not aligned. This makes the leap to achieving company-market fit much more straightforward, if not easier.

As your company scales in international markets, you may encounter unfamiliar layers that require a different reference point, making it necessary to discard previous assumptions. Culture becomes increasingly important, especially during the market growth stage, when the organization expands in local markets, shifts from product-market fit to company-market fit, and must establish structures to support a multi-country operation at scale.

We have found that there are three layers of culture that companies need to be conscious of when expanding to new markets.

When growing globally, the three layers of culture that should both coexist and balance each other are:

1. Local Market Culture—the shared beliefs, behaviors, and norms of the local population in a specific target country or region

2. Local Business Culture—the shared beliefs, behaviors, and norms of a specific country or region that affect how business is conducted and how the local team operates in a professional environment. Local business culture is one of a number of subsets within local market culture

3. Company Culture—the shared beliefs, behaviors, and norms of an organization that guide how employees communicate, make decisions and create and implement strategy

In this module, we will discuss all three, as well as a fourth later on that has recently emerged. The goal is to balance all three of these culture types and find a way to make your company’s culture fit within the local market context.

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 2 of the Global Growth Master Class.