Your IndustryApr 24 2014

Book review: Fish Can’t See Water

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This book looks at an increasingly important and interesting aspect of global business dynamics: the way national/cultural characteristics impact businesses across borders and corporate development cycles.

Businesses are often blind to their own biases and while they often recognise the need for diversity, are unclear as to what sort of diversity is important to them and why.

The book’s academic research reviews the normal corporate life-cycle (embryonic, growth and maturity periods) overlaid with corporate culture. The key insight is how national influencers (“the water people don’t see”) affects a corporation’s approach to changes in the business life-cycle and act as enablers or derailers. The model is based on previously published work by Richard D Lewis, which divides cultures around the three sides of a triangle, the points of which are “linear-active” (essentially Western Anglo Saxon), “Reactive” (Asian/Confucian) and “Multi-Active” (Latin/Arabic and other emerging market natoins).

The wake-up call for Western companies is that the approach that has worked historically will not necessarily work in the future. To exploit the commercial opportunity of six billion consumers living in the rest of the world requires a different strategy to the conventional Western model. In short, put relationship before product. This provides the key to understanding what diversity strategy to pursue and why it is so important. However, it is diversity of thought that really matters.

The rest of the book, which will be of real interest to managers and strategists, is essentially a handbook of behaviours for different cultures, and how corporations need to put culture at the centre of business and governance.

The real challenge this book provides is that cultural change does not happen by chance or desire, but requires real management focus throughout the organisation. The opportunity that awaits those organisations that achieve this is extraordinary and creates long-term sustainable businesses.

For managers less interested in the theory, I would recommend Part III: The Model in Action, and in particular the section: Golden rules for dealing with reactive cultures.

Julian Ide is chief executive of Old Mutual Global Investors