business – Page 2 – understand-culture

Germans consult. Americans serve.

A big source of misunderstanding between Americans and Germans, rarely made explicit, is about whether business should inherently be customer-centric, supplier-centric, or somehow balanced, as our fourth column in this series explains.

Germans and Americans alike will of course say they care about their customers. But they associated different meanings with that notion. And that often leads to misunderstandings and frustration. American providers of business services proudly offer exactly that: a service. By contrast, German providers view their proposition less as a service and more as a consultation. The difference is subtle, but consequential.

Between honesty and politeness

There’s a fine line between honesty and politeness and Germans are known abroad for not beating around the bush. Kate Müser and Waslat Hasrat-Nazimi at Deutsche Welle in Bonn explore the rather direct questions they’ve had to answer in Germany.

Note 1: Towards the end Kate states that it is impolite to discuss politics in the German context. This is not correct. In fact, it is just the opposite. Many comments below the video on YouTube are by Germans stating this clearly.

Note 2: Another German commented, and rightfully so, that the opposite of direct is not polite, but instead indirect. The commenter goes on to state that Kate’s ironic winking about how German directness can be impolite is an unfair judgement of the German people.

“Cut off at the branch’s roots”

Consumer products giant Procter and Gamble sold its hair products business and its fragrances division, including the struggling German brand Wella.

But some criticism of Wella had been going in the other direction, namely that innovations happen too impatiently, and that Procter and Gamble thinks in the same fast terms as in the drugstore-based consumer products business.

Hairdressers in Germany, however, want to use the products they know over the long term, providing that they have had positive experiences with these products. Too many new things annoy them.

When it acquired Wella, Procter and Gamble bought its way into an unfamiliar field, namely the hair salon business, said a manager with a competitor. Then the company cut off the brand’s roots by closing Wella’s headquarters in Darmstadt, Germany, thereby losing institutional knowledge and the confidence of its vast network of hairdressers.

According to the manager, a former strength of Wella, namely their sales reps’ good relationship with hairdressers, was lost.

Source: Handelsblatt Global Edition. June 10, 2015. “The Great Brand Sell-off.” By Christoph Kapalschiniski.

Listening to Customers

Many companies implement customer suggestions when those suggestions challenge the company’s core principles. In response to customer suggestions for a less cluttered store, Walmart cut its total inventory by 15% and renovated stores to feel less cluttered. The changes resulted in immediate decreases in sales that totaled $1.85 billion dollars before Walmart reverted to its previous model of a much wider selection of products at low cost.

A leading manufacturer of bathroom fixtures is perhaps the most traditional example of a company that must collaborate with and understand the needs of its customers. It must constantly innovate and improve its products with its current and prospective customers in mind.

To this end, the company says: “To the customer, it can seem like each faucet was made with them in mind. We listen closely to what consumers want and need, invest in extensive research and design, and apply smart technological solutions that really do make our customers’ lives easier.” In other words, the how of their innovation process is largely defined by their customers.

In a major US-based international construction company, each of its projects is unique and requires a high degree of collaboration and dialogue with the customer. According to the company’s website, “We work with our clients as a team. Mutual respect provides the foundation for our success.”

Customers expect companies to listen to their input about how a project should look or be completed and create a plan in line with those expectations. The construction company’s website summarizes this idea by emphasizing the importance of finding solutions to their customers’ demands: “We are proactive in finding solutions for our clients that best achieve their goals.“

Do it Yourself

Often German managers would rather complete a certain task themselves instead of passing it on to a team member. Many do repairs in their house, fix their cars, and some sit in their office at home until late into the night.

For those with limited financial resources, doing things yourself might be a question of economics. For others, there is a German reason: they often have a clear picture in their mind of how the final product should look. That they don‘t hand it off to a team member is not a sign of mistrust or lack of confidence.

Instead, Germans are skeptical that the other person will fully understand what is expected. By the time they have explained the task and how the final outcome should look, they most likely will have completed half of the work.

For the team member will create her own picture of the final product. Two pictures of what the work should look like. A dilemma for every customer-supplier relationship.

Clear Picture

When a German customer contacts a potential supplier, he has a clear picture of his needs. And he has informed himself about those suppliers capable of meeting them. The German customer expects the supplier to meet those needs as precisely as possible. The German customer has clarity not only about the what, but also to some extent about the how.

Germans are considered to be rather bureaucratic. Despite all of the laws and regulations, governmental organizations can move quickly, provided that the citizens requesting their assistance are well prepared and can provide all of the necessary information the bureaucracy needs.

What regulations apply? Which requirements need to be met? The ideal citizen is well informed and is clear about what he or she needs, including what rights and obligations he or she has. Governmental bodies typically have a reception area set up whose sole purpose is to assist those citizens who have not done the minimal amount of preparation.

For it is considered impolite, selfish and unprofessional to demand the time of anyone without having first done one’s homework. Opportunity costs are thereby lost. During that time other, well prepared citizens could have been helped. Citizens in Germany can inform themselves of just about everything via the Internet and printed information.

Not a consumer’s job

Harvard Business Review. October 31, 2001. Tom Davenport, Business Professor at Babson College: Was Steve Jobs a Good Decision Maker?

„He (Jobs) also didn’t believe in analytical decisions based on extensive market research.“ Quoting The New York Times’ obituary:

„Mr. Jobs’s own research and intuition, not focus groups, were his guide. When asked what market research went into the iPad, Mr. Jobs replied: ‘None. It’s not the consumers’ job to know what they want.’”

Steve Jobs was not of German descent. It was known, however, that he had great respect for German design and technology. He and his family, it was reported, had debated for weeks what brand of washer they should choose. His arguments won out. They purchased a Miele.

Consult the customer

Communication with the customer about expectations is a primary role of American business. For example, a senior consultant at a major American strategy consulting firm described collaboration as an attribute that is “built into the very culture of our consulting firm.” New consultants are selected for their ability to understand and respond to the needs of their clients.

The website of a leading strategy consulting firm tells future clients that “custom solutions yield the greatest competitive advantage and value for our clients. We ground each solution in how our client’s organization actually works and in the client’s unique position in the marketplace.”

In order to understand the client’s unique situation and demands, the consultants work side-by-side with the client’s employees and listen to their concerns.

A report from the Center for the Study of Social Policy about customer service describes the complex interplay of factors involved in customer satisfaction. One finding of the report is: “Successful customer service companies listen to, understand, and respond—often in unique and creative ways—to the evolving needs and constantly shifting expectations of their customers.“

Customer Reviews

Customer reviews can make or break a company in the US. Especially now that the internet gives customers a way to instantly compliment or complain about service (and to make sure that their opinion is available for anyone to see) one good or bad review can drastically change the number of customers a company has.

In 2012, after Brandon Cook from New Hampshire posted a Facebook story about a Panera manager named Sue making a special order of clam chowder for his grandmother and giving her a free box of cookies as well. The restaurant became much more popular. Several people who would not otherwise have eaten at this restaurant went there, and commented about it online. Some of the Facebook comments that people made were:

Cyrus Twirpwhirler: “My family is eating at Panera tonight because of this story. Way to go Sue and Panera! Snow Case: That is so cool, I’m a customer already, but I like them even more now. Daniel Julian: That is so cool!!! Have to visit Panera soon.”

United Breaks Guitars

In 2008, United Airlines baggage handlers damaged Dave Carroll’s guitar. After the airline refused to pay to fix the damage to his instrument, he and his band wrote a song called “United Breaks Guitars” and put it on YouTube.

Within two days it had more than 24,000 views (and more than 14 million views by 2015), and it was estimated that the bad press cost United Airlines around $180 million the following year (2009).

This incident also inspired Carroll to co-found Gripevine – a company that helps customers use social media to expose their complaints and convince companies to give better service.