Published : Sept. 25, 2013 - 20:27
Ken Erickson
When the global financial crisis hit in 2008, it caught the business world off-guard, to the extent that five years on we’re still recovering from it. However, there was one professional group which was perhaps not entirely surprised by the fiasco. It wasn’t mathematicians, financial analysts or industry watchdogs as you might expect, but anthropologists.
In fact, some of the earliest warnings about the financial crisis came from Gillian Tett ― a writer for the Financial Times with a Ph.D. in anthropology ― who, in 2005, wrote regular articles on the subject. Tett warned that the culture of investment banking was likely to lead to a major financial catastrophe in the near future. Her warnings, despite being aired on a very public forum, were largely overlooked ― could this be because she is an anthropologist and not a fund manager?
Though anthropology has a long history in business, when compared with other more quantitative disciplines such as finance or marketing, it has been consistently undervalued. This is a mistake that ― as can be seen from the lingering effects of the financial crisis ― has cost the business world dearly, and one which needs to be rectified.
The new international MBA at the Darla Moore School of Business is aiming to create professionals who are not only smart in traditional business skills, but possess the ability to learn from the world around them.
This MBA is a program that requires students to learn an extra language and to engage in a 10-month overseas learning experience in a country of their choice. Four months will be spent learning the local language, and another six months will be spent working on a company project there ― engaging and working with local people in a local business ― all the while learning how to link the best practices globally to those tricky local realities that too often are stumbling blocks to a company’s international success.
Cross-border business is a very different world to what it was 10 years ago. Once-emerging economies, like Korea, have fast become big players in global business and have brought with them their own ways of doing things. There are now ever-growing numbers of emergent economies that will provide the established powers with the growth markets of the future, and in order to operate in these markets effectively, tomorrow’s business people, whether from the U.S., Europe or Asia, will need a greater cultural awareness than ever before. Those who cannot understand the local meanings within global business will be left behind. Language ability is crucial to this as without local language skills, one cannot truly understand a culture.
As the world gets smaller and globalization continues on its current path, the ability to speak a language and understand the culture of a market in which you are trying to do business will only increase in importance. Though English is widely accepted by many as the global language of international business, with more emerging economies entering the scene and the West losing dominance over the rest of the business world, this is something that is rapidly changing. In this new multicultural business environment those MBAs and international businesspeople who can operate at a local level will find themselves at a distinct advantage.
Aside from the confidence to work in an unfamiliar business culture, successful business leaders must possess modesty to recognize that there is always more to learn, that local conditions are always changing, and that today’s solution sets the stage for tomorrow’s challenge. The key is that learning to learn is the most important step. Students have to disregard what they think they know and understand that in order to succeed, they must stop, listen and observe. They must ask questions, they must not be afraid to feel uncomfortable in their new environment and, most importantly, they must not be afraid to make mistakes. Adapting to a new reality takes time ― hence why we give our MBA students 10 months “on the ground” in their chosen market in order to fully establish themselves in it, and to learn the real value in doing so. If done once successfully, it will be easier to do so again.
Examples of businesses that have had lofty ambitions to conquer the world, but had their efforts fail due to a lack of “contextual intelligence,” have abounded for decades. In the 1980s, General Motors tried to market its “Nova” car in Spain. Unfortunately “nova” translates literally in Spanish as “it won’t go.” Not a great image for a car.
And even now, the biggest, most profitable companies are still making the same mistakes ― from the recent failure of U.K. supermarket chain Tesco, which recently put the final nail in the coffin of their U.S. “Fresh and Easy” stores (they failed to appreciate how important it is for California consumers to talk to the worker at the check-out line rather than use an automated machine), Wal-Mart has failed in Germany, and Marks & Spencer (another British retailer) is struggling to come to terms with the French market. Not only have these mistakes prevented companies from successfully expanding into new markets, they’ve also incurred significant losses.
The younger generation has the advantage of being born into a world where international business is the norm and global companies rule the waves. However, there is still much to be done in conveying to them the importance of local knowledge in a global environment. And for our MBA students, that means learning to learn ― about culture and about language. We aim to produce professionals who can come to grips not only with how business is conducted in international markets ― but understanding why international business is done differently around the world.
By Ken Erickson
Ken Erickson is a professor at the Darla Moore School of Business at the University of South Carolina. ― Ed.