Last time we examined two fatal mistakes cross-cultural entrepreneurs often make. We looked at the importance of having a strong startup team with you, and how the failure to place the right people around you is a doomsday call for your business.

We also looked at the importance of having outside help, too, from seasoned mentors or coaches who have an unbiased, third party perspective and experience that you don’t have. Without this help, your team may be entirely blind to issues that could have been prevented but instead derail the entire business.

Now we come to the third mistake cross-cultural entrepreneurs make: the failure to prepare for the cross-cultural factor of their endeavor!

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Cross-Cultural Entrepreneurship Mistake #3:  Failure to be Cross-Culturally Prepared

Two Contrasting Examples of Cross-Cultural Preparation

A successful executive left the manufacturing industry in the Midwest, assembled a team of highly qualified business guys and set off for a west-African country desperately in need of his product. He had invented and designed an all-terrain vehicle and had proven it to be cost effective in the transport of goods and services in the deteriorating transportation infrastructure of the country.

Each of the four men was married and each had children, all of whom planned to move to Africa.  They came to us ask for consulting expertise, not so much for business start up and planning issues, but for issues of culture, family transition and lifestyle.  We designed a learning package for the 8 adults and children.

It soon became evident that the entrepreneurial leader of the group had little time for such “soft skills”.  He decided not to buy the section of the proposed training that had to do with learning to live in a foreign culture and learning to transition families, providing schooling, people group interaction and language competency.   Upon hearing this news, three of the wives came to me lamenting this decision and asking for help in putting pressure on the leader.  The leader still refused the training.

In short, the group of eight and their children all moved to Africa and set up living. The entrepreneurs started to set up their factory.  They had raised the capital and they knew their product.

But the lack of cultural preparation was the business’s undoing.  Africa was not home and the differences in living, shopping, finding friends, going to church and much more were overwhelming. The effect on the families took its toll on the men and then the business.  They liquidated the business and left the country less than a year after arriving –at a cost of more than one million dollars.

Contrast this story to Fran and Leanne who started a business in a large south Asian country.  They studied cross-cultural living in college, lived in an Indian community in Philadelphia for over a year, and visited the country several times.  By the time they moved to Asia, they had grown to love the people, the food and the culture. They spoke the national language already.  They understood cultural norms and were aware of its idiosyncrasies. They were prepared for a very different life ahead and business success.


The Need for Cross-Cultural Training and Experience

Cross-cultural understanding and experience is a highly important preparation factor.  Cross-cultural social entrepreneurs often fail to consider the nuances of culture and how this affects business interactions, personal well-being, and the thriving of their families and employees.

Power distance, relationships vs. transaction, time perspective, individualism vs. collectivism, and uncertainty avoidance 1 are a few of the issues which, if not considered, will doom a business in another culture.  Perhaps even more fundamental is the ability to listen and learn in the context of difference.  Some call this “cultural intelligence”.2 Cultural intelligence can be learned but the learner must want to do so, since it does not come naturally.


Be Culturally Prepared!

If you are itching to start a cross-cultural business endeavor, don’t underestimate the impact culture plays in the successful of your business. Don’t make the mistake of not considering culture. Instead, pursue cultural intelligence training specific to the country you are going to. Get language training, ask questions, learn cultural norms, and do as much as you can to understand—and grow to appreciate—the culture you will be entering.

Next time we’ll examine the final two mistakes cross-cultural entrepreneurs make. In the meantime, any guesses on what they will be?


1 Hofstede, Geert. Cultures and Organizations: Software of the Mind.  2005
2 Livermore, David A. The Cultural Intelligence Difference. 2011