The most common mistake in international business

Are you a good driver? Do you do a decent job at the sport you like to play? Can you determine whether a joke is a good joke? Of course, it is all relative, because even if you think that you’re not particularly good at these things, surely it has crossed your mind that you at least do a slightly better job than average, right? Well, as it turns out, if you are in fact better than average, you likely wouldn’t realize it. How does that apply to the title: The Most Common Mistake in International Business?

The Wisest One

In one of my favorite books The Wisest One in The Room, this phenomenon is referred to as the ‘better-than-average effect,’ also known as ‘Dunning-Kruger effect.’ Leaving the nuances aside, these studies have shown that people of all nationalities, of all social classes, of all ages, and yes, men and women rate themselves above average on almost anything.

These studies revealed a couple of interesting observations: The people who score themselves as better-than-average on a certain skill and who in fact were worse-than-average, couldn’t recognize their underperformance precisely because they weren’t very good at the skill, to begin with. Only after repetitive experiments with the same result, the underperformers started to realize over time they were not that good at which point they were ‘trainable’.

Lastly, what about the ones who are better than average? Well, as said, they likely don’t realize it and won’t rate themselves that high precisely because they are good at a certain skill and assume that others must be good at it too.

Culture and The Most Common Mistakes in International Business

What is the point of bringing this up, let’s say for the sake of this article, ‘superiority complex?’ After living and working in nine countries and being exposed to multiple nationalities, I had my fair share of the ‘better-than-average effect’ or the ‘they-don’t-get-it-effect.’ The Americans think the French are too bureaucratic and the French think the Americans shoot from the hip. The Mexicans think the Dutch are too direct and the Dutch think the Mexicans are not transparent enough.

Indeed, on a national level, people also believe that their culture is better and their language clearer than other cultures and languages. This clearly relates to the better-than-average effect or maybe even, in extreme cases, to a superiority complex. To me, this is the most common mistake in international business. A funny and lighthearted example, not directly business-related yet very telling, came from my time in Hungary. My Hungarian friends insisted that Hungary was the only country where Hungarian-dubbed Hollywood movies became better than the original Hollywood movie in American English.

Back to The Wisest One

Naïve Realism is a central theme in The Wisest One in The Room. It is the human tendency to believe that we see the world around us objectively and that people who disagree with us must be uninformed, irrational, or biased. Maybe even lazy, stupid, or crazy, because facts are facts, right? Wrong. Naïve Realism very much applies to nationalities and cultures. Our culture is embedded in us, so we take our own ways of living for granted. Like the ‘better-than-average effect,’ we tend to have a favorable view of our individual abilities and see our culture, which we collectively inherited, as ‘normal.’ As a result, if in an international environment a deal falls through, a negotiation breaks down or a conflict arises, we have a pretty good idea of the drivers: ‘They were very rude.’ Or: ‘They weren’t honest and transparent.’ Or: ‘They were slow and bureaucratic.’ Or: ‘They tried to rush this through.’

Open The Trash Can and Avoid The Most Common Mistake in International Business

To succeed across borders and especially in international business, it is helpful to realize that we are all subject to the same biases and delusions. That is also why some well-known phrases need to be thrown into the international trash can to avoid the most common mistake in international business. ‘When in Rome, do as the Romans do?’ Maybe we should be ourselves and understand our national culture so that we understand our differences from others. What about: ‘Treat others as you want to be treated?’ No! That might be the worse advice because a Mexican doesn’t want to be treated like a Dutchman! Successful people in international business already know this and probably don’t even consider themselves as being better than average. One thing is for sure, a phrase they never use is ‘They don’t get it!’

As an exercise, let’s see if Naïsee how Naïve Realism and better-than-average relate:

• I can see things as they really are and the available information represents facts. I can leave my emotions and beliefs aside.
• Others will share my observations or opinions if they have access to the exact same information and if they also processed the information in a reasonable fashion and with an open mind
• If those reasonable and open-minded people do not agree with me or reach a different conclusion, they probably had different information. By sharing each other’s information, we will reach the same observation, conclusion, or opinion
• If others do not agree with me, even after they clearly had access to the exact same information, then they were apparently not able to process it well. They might be lazy, stupid, or actually crazy
• If others do not agree with me, even after they clearly had access to the same information and they didn’t appear to be lazy or crazy, they must have had a hidden agenda based on self-interest or ideology.

Sound familiar? It may very well be the most common mistake in international business.

Want to apply this in real life? Read this article (about France), this article (China), this article (India), this article (Germany)

An example of a retail business can be found here.

An article about “assumptions in international business” can be found here.

Trust is important in international business, read more about trust here.

Read an article about the Euregio here (Belgium, the Netherlands, and Germany).

The article “9 signs you’re not getting it; it’s culture stupid” can be found here.

An article on international management expectations can be found here.

Read this article about 3 things to consider when working internationally.