The Difference Between Working With Big Companies in Europe vs. in the U.S.
Many organizations dream of having a global reach -- especially one that entails working with blue chip companies. However, any experienced entrepreneur knows that to scale even slightly can be an uphill battle. But, growing beyond borders? You might as well equate this to climbing Mount Kilimanjaro; thousands do it each year, but it sure is difficult.
Working with global players means paying close attention to cultural details. And trust me, I've learned this from experience; having lived and worked in China, Brazil, Germany, Finland and the United States has taught me that no matter how slight the cultural nuance may seem, not taking it into account can be detrimental to the success of your business overseas.
Here's what I've learned about the difference between working with both American and European blue chip companies.
The linguistic fragmentation in Europe means hiring local teams.
While there are certainly cultural differences between areas in the U.S., in Europe people speak completely different languages. Yes, English is common -- about 40 percent of the population in the EU speaks English as a foreign language. However, after Brexit there are 27 countries in the EU, and only one of them -- Ireland -- boasts English as a mother tongue.
Many U.S. companies attempting to build relationships with big European players might think dealing in English -- or even the country's native language -- is fine. However, based on experience, I've found this isn't enough. To work with region-specific blue chip companies in Europe, it's almost always necessary to hire a local team to suit nationalistic tendencies. This means opening an office in the region, often by acquiring local competitors with an intimate knowledge of the market.
At our own company, for example, we're collaborating with a German drug store chain on a product only for the German market. Therefore, our team is a solely German speaking one. At the same time, however, we're working with a Hong Kong-based retailer on a global project -- and since the project has a worldwide scale, our international team is actually a huge benefit here.
Population size actually makes a difference.
The European Union has about 508 million inhabitants; however, that's spread over 4 million square kilometers. Therefore, unlike the U.S., many European countries are only home to a few million people. In contrast, the Bay Area alone boasts 7 million people, which is the same size as Slovenia, Latvia and Lithuania combined. New York City has a population of 8.5 million -- the same as the entire country of Austria.
Because countries are smaller and less populated in Europe, individuals have a wider set of responsibilities. Their roles also cover a wider area of focus; think being an expert in all-encompassing AI technologies, for example. On the other hand, the U.S. market naturally boasts more jobs, and therefore tends to employ people with a deep understanding of a very specific sector. This might mean that someone is an expert specifically in gesture AI technology.
So, what does this mean for organizations looking to secure international partners? Well, it changes how one talks to potential clients. When working with American companies, we really dig into the details. But, with Europeans, we talk in terms of the larger picture. It's the difference between explaining how a partnership could help a company succeed, and detailing exactly how we're going to do it.
Europe and the U.S. protect citizens differently.
On May 25, the EU's General Data Protection Regulation (GDPR) came into effect, to regulate what companies can do with consumer data. The basic intention of the GDPR is that European citizens now own their data, and can decide what happens with it at any time. By design and default, companies are only allowed to collect and store personal data if the consumer agrees upon doing so.
The U.S., on the other hand, has opted to protect citizens in a different way. While the country is without an all-encompassing data regulation, it does protect citizen data through sector-based laws. The Health Insurance Portability and Accountability Act (HIPAA) protects health information, while the Gramm-Leach-Bliley Act (GLBA) protects consumer information held by financial institutions, for example.
Overall, it's fair to say that with the GDPR, Europe does have more regulation to protect its inhabitants. Thus, when working with companies overseas -- and especially blue chip ones, which cannot afford to breach consumer data rules -- it's prudent for companies to clearly educate themselves on the regulations required. While this might command more patience, being up-to-date on European laws is really the only way blue chip players across the pond will trust their new American partners.
In the U.S., working on a trial-and-error basis is more accepted.
For anyone who has spent time immersed in U.S. startup culture, it's pretty clear from the get-go: Unlike in other places of the world, failure doesn't paralyze entrepreneurs from moving forward with their ideas. U.S. culture is one of agility, and I notice companies often work on a trial-and-error basis to test out their models and platforms before finding one that works just right.
Europe is inherently different, as there is an ever-present fear of failure among companies -- even blue chip ones. It's such a problem that the EU has actually developed a program to help diminish it. FACE (Failure Aversion Change in Europe) works to promote a culture of risk, and show entrepreneurs that failure can in fact make them stronger.
Still, due to this culture, I've found European companies yearn for their projects to be successful right off the bat -- and in this, things are more structured and done step-by-step. Evidently, it generally takes a longer time to get things done when working with European clients. There are more review and approval meetings, a higher amount of stakeholder management from above, and more documentation to fill out. American players, therefore, need to be sensitive to the processes of their European peers -- and instead of running into meetings screaming "agile," work to follow the long-established processes of blue chip partners.
Here's the moral of the story: Organizations looking to expand their reach to work with international blue chip companies need to pay close attention to their normal processes and behaviors, and adjust them accordingly to suit their client's expectations. If you enter a partnership but disregard any cultural differences, you won't be scaling very far.