Doing Business In: Europe

Doing Business with Europeans

 

 

  • UN GATT
  • Council of Ministers

1957 Treaty of Rome           •  EEC Hdqt. in Brussels, Belgium

1-1-92                                   •  EEC becomes the EC

10-1-94                                •  ECU becomes the EURO currency

11-1-94                                •  EC becomes the EU

1-1-95                                   •  GATT becomes WTO (125 signatory countries)

1-1-99                                   •  Euro (Gold) United States of Europe

 

How Business in Europe differs from Business in the United States

The global economy has really changed the way that business is done. One of those changes is to make the business culture in different countries more similar than in the past. In most cases companies have adopted American business practices. The one place where this has not happened to any great extent is in Europe where they tend to stick to their own way of doing business. The result is that there are some major differences in the way businesses operate in Europe and the way they operate in the US.

 

The biggest difference in doing business between the US and Europe is the huge range of cultures and languages that have to be dealt with in Europe. Europe is of course made up of many different countries and businesses often have to work in several of them at the same time. This has become a much bigger issue now that the European Union has come into existence. This adds a great deal of complexity and cost to many business transactions in Europe. Things are much simpler in the US where everybody lives in the same country.

 

The fact that business in Europe has to be done across several different countries also means that there tends to be a lot more rules that European businesses have to follow. Individually most of the countries don’t have any more rules than you would find in the US but when you have to comply with the rules of more than a dozen countries you will find that things get a lot more difficult. This is one area that the EU is working to address by simplifying the rules and coordinating them between countries however there is still a long way to go. In the US there may be some differences from one state to another in the rules but in most cases these are minor and most of the important rules come from the federal government anyway.

 

Another difference in the way business is done in Europe than in the US is that in Europe companies tend to stick to a more traditional business structure. Business executives who have worked on both continents points out that in the US businesses are tending towards a flatter business structure with fewer steps between senior management and the employees. This has eliminated a great deal of the middle management. In Europe this has not happened to any great extent.

 

Oddly although businesses in the US tend to be more willing to change the structure of their business they also tend to be less innovative than companies in Europe. Certainly there are innovative companies in the US but these tend to be smaller companies. The large corporations go to great lengths to avoid having to innovate. This is not the case in Europe where the big companies tend to be the ones who are leading the change.

 

Opportunity

You are an American businessperson whose company is expanding into European markets. Or your company is acquiring or has been acquired by one. Or you are courting a supplier or venture capitalist from Europe. In any case, you want to make good impression.

 

You have heard the rumors that Americans are thought to be, well, somewhat less than cultivated. And it is true that American businesses often place more stock in talent and skills than they place in polish and style- we have all seen American managers who are brilliant strategist but rudely answer cell-phone calls or type in their PDAs while having discussions with their subordinates. We know a defense attorney who has a stellar record in spite of (or perhaps because of) his unkempt appearance. (Maybe it is disarming to jurists?) And we all know talented computer wizards who earn outrageous salaries going to work in jeans and flip-flops every day.

 

In Europe, dress, manners and demeanor are more important than they are in the States. But as business here becomes more global and as businesses become more competitive, even the most casual Americans are learning that there are benefits to having the more cordial manners of their European counterparts.

 

The Solution

There are some rules and standards of etiquette in Europe that are puzzling to Americans at first. There are also some fairly simple rules of thumb that will spare you some awkward moments and prevent unintentional offenses.

 

 

Dress

For the past few years in the United States, businesses have been tending toward “business casual”- meaning polo shirts and casual slacks for men and women. In the recent few months, most industries are gearing back to a more “dressed up” appearance – blazers and slacks (if not a coat and tie) for men and more corporate pantsuits and dresses for women; although many workplaces still have “casual Fridays.”

 

As far as we know, there are no “casual Fridays” in Europe. A dark-colored coat and tie with a light shirt for men; and more formal skirt and pantsuits for women are de rigeur. Anyone wearing something less formal might be seen as someone who does not take his business very seriously, or who has too little respect for the people he’s meeting with to spend the time on his appearance.

 

Business Interactions

Typical business interactions are more effective (and more enjoyable) if you consider some cultural differences such as titles and introductions, language differences, differences in organizational structure and philosophy, and issues of style in matters such as taking blame and giving credit, giving compliments, and resolving differences of opinion.

 

Titles and Introductions

In the U.S., if you work for the same company as someone else, you can pretty much take for granted that you are on a first-name basis with them. Everyone from the CEO to the janitor is addressed by first name only, even if you’re barely acquainted with them. That often transcends companies, and anyone who calls you Mr. or Ms. is probably trying to sell you something.

 

The opposite is true in Europe. Calling someone by their first name (unless invited to do so) is considered presumptuous and too familiar for business interactions. Courtesy titles and last names are the norm.

 

Introductions are also very different. In the U.S., introductions are almost an afterthought- you get “introduced around” an office if you are new to the company, and introductions in meetings are cursory if done at all.

 

In Europe, introductions are very important, and they follow the old rules of introducing the “less important” person to the more important one. If Mr. Smith is the owner of the company you work for, and Mr. Jones is your newly-hired colleague, an introduction would be as follows…

“Mr. Smith, I’d like to introduce you to Mr. Jones.”

 

If you are standing when an introduction is made, shake hands (firmly, please) with the person you are introduced to. If you are sitting, stand up, face the person, and shake hands. Always stand when making introductions yourself.

 

In meetings, formal introductions may be made before the meeting before the participants take their seats, or everyone may go around the table and introduce himself or herself, (while seated) but a meeting is never begun if there are any participants that have not formally met. Follow the lead of the meeting host, or if you are hosting a meeting, ensure that introductions take place before addressing any items of business.

 

Language

You may be told by a company that all business will be conducted in English, so there is no need to learn a second language. You will find, however, that there are differences in structure and usage between American English and “European business English.”

 

Language is more formal, and although there may be some slang (especially in new fields like computers) it is best to avoid American slang and newer words.

 

The structure of sentences is a little different. The adjectives often come after the noun.

Take these differences in stride, and try to adapt your style of speaking and writing to the people you are doing business with. It is much more effective to communicate in he the way the majority of people are comfortable with than to try to change things to the style you may be more used to.

 

Organizational Structure and Philosophy

Companies in the U.S. have been tending in the last few years away from hierarchical systems and are more “flat” in style and structure. Senior managers might inhabit cubes the same as regular staffers, everyone is on a first-name basis, and everyone’s opinion carries equal weight if the idea has merit.

 

In Europe, things are a bit more traditional and people are more deferential toward people who have “earned their stripes”. It is fine to put forth ideas if you are not the “top dog”, the only difference is in the style of communication. It is much more effective to give suggestions than to pronounce opinions. (Note- although few would admit to it, this style often works better in the U.S., too)

 

In the U.S., managers often listen to discussions of team members and say very little- allow the team members to come to a resolution themselves, and only facilitate discussion, resolve issues, or provide information as necessary. In Europe, managers are expected to be active participants, actively asking questions during the entire process. Otherwise they may appear to be uninterested or not knowledgeable.

 

Take Blame and Give Credit

In the 1930s, an American named Dale Carnegie wrote about the practice of taking blame for things that go wrong and giving credit for things that go right. Unfortunately, too few Americans seem to have taken his advice. But Europeans have. (Or maybe it was their practice all along and Mr. Carnegie happened to be the one to pass that along in the States.)

 

By admitting fault quickly and emphatically when you have made an error, you immediately take the antagonism out of a problem, and everyone’s focus turns more quickly to a solution rather than fault-finding.

Once when there was new at a company and putting together a web page, it was discovered that the search criteria did not work as expected. Although they were not sure what was wrong with it, they admitted in an e-mail- “This is the first time I have done this, so I may have made an error on the page”.

 

One of his colleagues immediately fired off an e-mail to everyone involved indicating that there was absolutely nothing wrong with his coding and there must be another problem. It was discovered that there was a problem with the search mechanism (not the page). If he had not admitted fault (even incorrectly) or had been defensive about his work, these people would still be wondering if there was something wrong with the code, coming from a “green” programmer as it were.

 

Passing along credit is even more effective than taking it for yourself. If a project goes well and you are congratulated, it is much more charming and effective to say “Thank you, but the administrative staff set it up beautifully” or “The programmers did all the work”. The administrative staff or the programmers will appreciate it, and the person congratulating you will think more rather than less of you for passing along credit.

 

Compliments

Another thing that Mr. Carnegie wrote about that seems more common in Europe than America is the practice of giving compliments.

 

In America, compliments are often seen as passé or condescending. Complimenting someone is seen as unnecessary. People refrain from pointing out things about differences in people’s dress, practices or cultures. Some men refrain from complimenting women colleagues in particular because they are trying to be “politically correct”, which is wrong. No other country has or would use such.

 

Everyone likes to hear nice things about himself or herself, regardless of where they are in the world. But in Europe in particular, giving compliments is a perfectly acceptable and even expected mode of interaction. Compliments can be very simple- admiring someone’s taste in office furnishings (assuming you really DO like their office) or complimenting someone on their proficiency with the computer or complimenting their analysis of a situation. Many Europeans for whom English is a second language particularly like to be complimented on their grasp of English by Americans. And often their English is better than ours.

 

Being genuinely interested in other people, and expressing sincere compliments is a practice that is much more common in Europe but is effective in developing rapport with people anywhere.

 

Differences of Opinion

In the U.S., it is common practice at many companies to have spirited arguments in hallways and boardrooms. People that disagree with one another may use strong language or even raise their voices. In teams of people that have been working together for a long time, this is often seen as a healthy airing of opinions and no one takes the disagreement personally.

 

In Europe, however, differences of opinion are handled more decorously. If you disagree with someone, it is typically more effective to start with the points you agree on and work toward the differences.

 

“I agree that this advertising strategy will be expensive, and I understand your concerns that this year’s budget numbers will not support extravagance. However, I think that my idea may not cost as much as it might first appear.”

 

Handling differences of opinion in a more diplomatic fashion will be much more effective in Europe. And probably in the U.S., as well.

 

Meetings

Meetings in the U.S. are often brief, to the point, and may seem abrupt to people new to the company. There is often a focus on a particular problem or agenda item that people dive right into and attack from all sides. One company I worked for had fifteen minute meetings every morning to give status on the previous day’s results and the coming day’s planned activities. At exactly 8:30 someone would yell “Time” and the meeting would adjourn- anything unsettled from the meeting was postponed to the following day’s meeting or assigned to someone to resolve immediately.

 

It was a remarkably efficient use of time and everyone got immediately about their business without taking up too much of their day. It was also abrupt to the point where newcomers to the company considered it rude and even offensive, especially if they had something they felt warranted further discussion. Efficient companies often schedule meetings before 9:00 a.m. and after 5:00 so as not to interfere with “work time”.

 

People in meetings in the U.S. often “multi-task”- answering cell phone calls and pages; or responding to e-mail on their digital devices or taking notes.

 

Meetings in Europe are generally more relaxed. Introductions are never neglected, and meetings often start with a joke or a “brain teaser” puzzle or activity to get everyone involved and thinking together. Meetings are seldom scheduled before 10:00 a.m. or after 3:00 p.m., in deference to people’s family or social activities.

 

Often, a significant amount of meeting time is used in setting up ground rules, determining the purpose and expected outcome of the meeting, and so forth, especially when there are people from several cultures involved.

 

People participating in meetings in Europe are expected to be involved in the conversation, not buried in their digital device or steno pad. They demonstrate interest and attentiveness to the person speaking with their body language and by asking relevant questions.

 

Dining

No … Faux pas

Dining in the United States is often a rushed activity. Meeting someone over breakfast or lunch is often informal and hurried. People eat and talk efficiently, and are done in an hour or less.

 

Restaurants in the U.S. cater to this, and serve food quickly and do business by getting people in and out as efficiently as possible to make room for more customers. When entertaining a client, either you or the client may suggest the restaurant, people make selections from the menu for themselves (seldom asking advice, or giving it).

 

In Europe, dining is a more relaxed event. When dining with Europeans in Europe, it is best to take your host’s advice in the selection of food and wine at a restaurant they know well. (Food allergies or serious dislikes aside, of course) One does not talk about business immediately.

 

Let your host set the tone and the pace of the meal. Several courses and a significant amount of time may pass before business topics are brought up. Relax and enjoy, and of course, compliment the parts of the experience you enjoy. The rule of thumb is “do not discuss business before the wine and cheese”.

 

By being aware of the differences, and making small adaptations to style, Americans can accomplish objectives much more effectively and forge some richly satisfying relationships with people and businesses in Europe.

 

Yes … Faux pas

 

A Story … 8 Tips for Doing Business with Europeans

 

It is not easy for Americans to work with Europeans during the summer months. Paid vacations slow down the pace of work significantly, leading to misunderstandings on both sides of the Atlantic. How and why should you overcome this challenge?

 

A few days ago, I was at a concert with a couple of friends. My husband and I had just returned from Alaska back to Texas where we had spent three weeks. As a general rule, taking three weeks of vacation does not really impress Americans.

 

In fact, they will look at you as if you are lazy, idle or useless. Of course, they are far too polite to say anything disrespectful, so they use a word that kills any inclination to share anything more: “Interesting”. On the contrary, we were very curious, enjoyed hearing about my wonderful experiences, and left this weekend for three weeks of hiking, cycling and rafting in Colorado. I told them that they were completely atypical Americans for vacationing for so long. The reason is simple … She works in the academic world and he for an international organization. Both have work contracts with: 1. Paid vacation, which are 2. Relatively long.

 

Employers are not required to provide paid vacation in the United States

 

The United States is the only economically developed country in the world where there is no legal obligation to provide paid vacations to employees. Employees working for big companies often have two weeks of vacation (paid vacation), but it is far from the reality in SMEs. Basically, I noticed that the number of vacation days is positively influenced by their qualifications, their seniority and the size of the business in which they work. An American government study found that the lowest paid employees working in SMEs or on a part-time basis have less vacation than those with good salaries working full-time in large corporations.

 

Americans therefore work more days per year than their French or German counterparts. This is particularly evident in August when French factories and Paris offices are closed. This phenomenon is virtually non-existent in Germany, but the pace there also decreases in the summertime. It is not that easy for Americans to work with Europeans in the summer.

 

Cultural Misunderstandings

I see two problems.
– A lack of market understanding
– A lack of understanding of the cultural dimension
which systematically leads to poor summer planning.

 

Furthermore, the team based in the United States may become frustrated because it cannot make progress, while the French or the German teams may feel like their American colleagues are abrupt.

 

Often multinational teams work on a common business project without considering each other’s cultural differences. It seems easier to grasp technical differences like the voltage and the electrical outlets than those about paid vacations and holidays.

 

 

For the last 20 years, I have worked for and with French, German, Swiss, Polish, Dutch, British, Italian and American companies. Only one of these companies ever organized a two-day intercultural training session for the German team. In another case, I attended a one-hour presentation about the Dutch management style. That is not much considering the level of almost daily interaction required during cross-border projects.

 

I still always work with my own checklist that I gradually complete before, during and after a project.

 

– How do you hold a meeting? Is the agenda important?
North Europeans follow agendas to the letter, whereas the French and Italians tend to follow the current needs of the discussion.

 

– Who makes decisions? Does a leader have the final say? Can decisions be made on the fly during meetings?
The Netherlands and the Scandinavian countries are consensual. Decisions will be made during meetings while the French or American participants may not even be aware of it. Germans will easily make decisions during meetings while French people will need to report to their hierarchy first.

 

– What degree of accuracy is required?
The Germans want 120%; the French are happy with 90%.

 

– Timing or Quality? Is it more important to meet deadlines or to have a perfect product?
Here, the Germans drive both the Americans and the French crazy. Their drive for perfection makes them involve more departments, which requires a longer project duration.

 

– Can a decision be changed once it has been made?
Considering the number of people involved in making a decision in a German company, it is difficult to make them change their minds once the decision has been made. With French companies being more hierarchical, it is easier for them to change their position…if the boss agrees.

 

– Until what time can I reach someone at the office?
It is useless to call a French person before 9am or a German on Fridays after 3pm. Lunch breaks are fast to non-existent in English countries but sacred in France and other Mediterranean countries.

 

– Does the person I am working with have a replacement, assistant, or colleague as well versed as him?
This is the only question for which I cannot generalize. In my career I have met as many “I do not share information” people as I have multitasking teams. I can simply say that in general, a reduction in headcount leads to extra personal workload and therefore less availability for other people’s workloads.

 

– Who leaves for vacation when, and for how long?
In France, Italy and Spain, factories close for two to four weeks in the month of August. Offices often close for two weeks during this period, so it is useless to expect a prototype or any samples during this time.

 

Germany is a federation with 16 Länder, each of which provides different vacation timeframes for children that run anywhere from the end of June until mid-September. There is a definite advantage: the school holidays last only six weeks in the summer…but for three weeks around Christmas, when the Germans like to go skiing.

 

– When are the public holidays with extended weekends that could drastically reduce a workweek?
The month of May is filled with holidays. In Germany, single people and childless couples tend to take their vacations in May.

 

In the United States, however, public holidays always fall on a specific day of the week, like Thanksgiving Day which is always the last Thursday in November.

 

European holidays can fall on every single day of the week. In both France and Germany, many people will “faire le pont” when they have a Thursday holiday, which means they will also take the Friday off to enjoy a four-day weekend. Keep in mind that public holidays are not harmonized in Europe.

 

– Which people on the project can be reached during their vacation?
This is a sensitive question you should avoid asking.

 

Vacations in Europe are made for relaxing, spending time with your spouse and children, and especially for recharging your batteries. If your European partner does offer to be available, pay attention to their conditions. It will usually be a case of “You can call me in case of a real emergency”. The higher this person in the hierarchy, the more likely they are to suggest this. Otherwise, observe if he or she writes emails, calls the office and monitor their behavior.

 

8 tips for Working with European Colleagues during the Summer Months

The key to success when working on a project with colleagues from France, Germany or anywhere in Europe, in general, is to know and understand from the beginning of the project that the pace slows down significantly in the summer. For this reason, you must…

 

1– Accept that Europeans see vacation as a time for rest…not for working.

 

2– Explain to your European colleagues that paid vacations do not exist in the United States and that you never go on vacation for more than a few days in a row. Make them understand that it is no problem for you as you can make the most of it.

 

3– Integrate school breaks into the calendar. They are the best indicator of downtimes – do not plan any important steps during these periods.

 

4– Also integrate the public holidays, and do not make your European colleagues attend meetings the day before, during or after their extended “pont” holidays. They will appreciate it and return the favor at Thanksgiving.

 

5– Six months in advance, plan for the respective vacations of the project’s key people and integrate their absences into the calendar. Many employees with children plan their vacations far in advance.

 

6– Assign someone to handle any emergencies over the summer, if necessary. But do not rely on them to fill in for everyone else who is absent.

 

7– Two weeks before summer, organize a meeting to clarify expectations and to define realistic steps for the summer. It is a good time for Americans to make progress with product development, market studies and data analysis to present when everyone is back.

 

8– Schedule an update meeting for the first week after the summer break in order to rebound quickly.

 

Here is some final advice to help you build quality relationships with your European colleagues. Ask them about their vacation plans before summer arrives, do not forget where they are going and ask them about their vacations when they return. They will appreciate your interest and will be even more motivated to work with you.

 

Published by The Academy of Market Intelligence
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