I am sure we have all heard about how Walmart failed so spectacularly in the German market a couple of years ago! No? You don’t know the story? Well, that’s funny! Because everybody should, considering Germany is like the centre of the world, and everybody is interested in international business development these days…especially when it comes to retail stores.
Well, this kind of attitude – I trust you noticed my irony and exaggeration towards Germany as an attractive marketplace for your products and services – might explain perfectly why some companies risk failing when trying to enter a new market. Let us have a closer look at what can go wrong when you neglect the local culture or – more precisely in our case – the German business culture. I will also make some suggestions on what you can do to avoid such problems.
The Bigger they come, the Harder they Fail?
What are the reasons even big companies can fail when entering a new market? Firstly – and I would assume that’s just human – they tend to be overly confident about their own relevance and the need (or desire, maybe?) for their products and services. Secondly, they approach the matter with an ethnocentric view, assuming that things work exactly the way they do in their home markets, or at least similar to other markets that they have already conquered. And I’m not talking just about market structure, price levels, and labour laws. I am talking about cultural differences and the local business culture.
Walmart, for example, failed to understand that valet parking is an alien concept to Germans (entrust my most beloved child to a perfect stranger? Are you kidding me?!) and that we are rather allergic to fake smiles (no need to employ a “Grüß-Otto” or “Hello-Katy”). Most people over here would not want to be summoned at the warehouse or canteen, all dressed-up in silly uniforms, to cheerfully chant the corporate hymn of their respective employer before they start their work day. The German work culture is a bit different, to say the least! Not that Germans don’t like singing or refuse to try identifying with whomever they work for but, with our history (and I will refrain from explaining that part), all notion of enforced conformity makes most people feel sick.
These are just a few examples of everything that Walmart got wrong. While I’m sure that they must have also gotten a whole lot of things perfectly right (they aren’t stupid, are they?), either no one told them about all the no-gos, or they just didn’t pay enough attention to cultural differences. By the time they finally decided to withdraw from the German market, a whole lot of money must have gone down the drain. But then, they are big enough to having gotten over it!
Your Failure Might not make it to the Front Pages – but I Still Care!
Even when things go terribly wrong (though many a time, things might work out just fine), not everyone will crash and burn as spectacularly as Walmart did; or rather, we would most probably not hear much about it. When Hansen & Hansen A/S from Næstved wastes hundreds of thousands of Krones participating in trade shows, on advertisements, and maybe on even a sales guy or two before giving up (sorry guys, in case you really exist), nobody gives two hoots about it. Or when Sunil Sachdev & Sons Solar Systems Pvt. Ltd. from Delhi wear themselves out travelling to Germany and back without getting a rupee from their investment, nobody gives a flying fart there either (same here – sorry for the mention and the trouble and my language)!
Nobody, except for the people who have lost their money; disappointed their bosses, colleagues, and investors; and maybe spoilt their health, relationships, or careers. Of them (what they did wrong or could have done differently, and how they suffered personally), we will rarely read in the newspaper; and it is not very likely that a textbook publisher will turn their failures into a case study that students can learn from either. But, at least they are spared public malice and can lick their wounds in private!
I am painting quite a dark picture here, and I’m sure you are far from the worst-case scenarios I have been describing. But since you are still with me, maybe you are also trying to get a foothold in the German market, but haven’t progressed as quickly as you expected and can’t quite figure out why. Or maybe you’re wondering how you could do things better. Or a friend or colleague recently shared his or her frustrations about how they are struggling and how, on top of everything else, Germans sometimes tend to be “…” [add your favourite stereotype; you may choose from “inflexible,” “slow,” “rude,” and “picky”]. I believe you and your friends deserve better – a couple of answers of why, at least!
If you are Going Through hell, do you just keep Going? Yeah, but Maybe in a Different Direction!
Trying the same things over and over – but harder – might help in some cases, but most often, it does not. When you are feeling stuck, it can help to try looking at things differently, challenging your hypotheses, and maybe coming up with some new approaches.
To do that, it is helpful to spell out what assumptions – maybe even the implicit ones – you have based your strategy on in the first place; and you might want to try identifying critical points (potential deal-breakers) that you have not yet (sufficiently) considered.
… and Maybe I can walk a few Steps with You!
Sounds like a very dry matter you would like to have someone help you with? A sparring partner, maybe?
But you are thinking that you do not need an expensive, top-notch strategic consultancy firm (because things work well overall and you don’t want your shop turned upside down while spending a fortune and creating new problems); nor do you want to hire somebody who talks a whole lot about culture and communication but lacks the business acumen to understand the basics of how you earn your money. Or, worse still, a technical geek to tell you how it is the product you could still improve!
So here I am, offering my services. With an applied science university diploma in Business Administration, along with an M.A. in Intercultural Communications and Cooperation, some 25 years of work experience, and – I almost forgot to mention it! – being a native German, I might just be the perfect fit.
Let me help you Understand the “Hidden Rules” of Doing Business in Germany
I am not promising to perform miracles or saying I will be able to help you come up with super-quick fixes, but a one-day workshop with you and your team (and me too, obviously) can be a very good starting-point for coming up with the right questions to get your fresh perspective.
Plus, if you feel like it, you can let off some steam (swearing is fine for me) to clear your mind, which almost automatically leads us to talking about the “hidden rules” of doing business with Germans. Sometimes, small changes can make a big difference and bring your people and business back on track – or going in the right direction, at the very least!
No matter how busy you and your team are, a one-day workshop in your office can usually always be squeezed in. And if not, we’ll figure something out. And no, if you really are struggling and getting business in Germany is a matter of importance, you really shouldn’t wait any longer! Not until after xyz-fair, or the end of the financial year, or whatever other milestones you and your team have. We are talking small improvements, and maybe you can implement a couple of them in time for the upcoming show or improve your financial results based on some quick wins. Or at least keep your team happy and motivated while demonstrating that you are not working towards a dead end.
So, what comes next? Best send me a short message on LinkedIn or via e-mail (to hello[at]andra-ibf.com) with a bit of information about you and your company, and also stating your availability for a 15–30 minute Teams-call. Based on our conversation, and if we both decide we would like to proceed, I will submit my proposal. Quite straightforward.
I am looking forward to hearing from you!