Pages Menu

Helping you succeed in international markets

Categories Menu

Five Top Tips on Creating Trust in International Business

This week, I’ve been reading a great book by Stephen M.R. Covey (son of the author of 7 Habits of Highly Effective People) called The Speed of Trust, and this has prompted me to think about the importance of trust in international business.

Too often, trust in international business is low. This is apparent in the way that we think and speak about  doing business with people from elsewhere. Business people in the United States are often reluctant to work with companies in the Middle East and business people from the Middle East are hesitant about working with Chinese companies.  It’s common to hear Australian business people say that “Indonesia is a hard market” and Ghanaians are concerned about what might happen if they strike up a deal with the French.

Business people around the world worry about working with foreign companies and  foreign people … because they don’t trust them. And the lack of trust is not uni-directional. Iranians are just as suspicious of American companies as the Americans are of the Chinese… And the Chinese don’t especially trust the Kiwis either.

Essentially, not many people are willing to extend trust, and this creates problems.

What is trust and why is it important?

In a nutshell, trust is confidence in people, in their integrity and abilities. One reason that trust is so important becomes apparent when you think about what relationships are like when there is no trust. When trust is absent, we are suspicious about other people’s motivations, capabilities, integrity and their ability to produce results. You only need to take a moment to think about the relationship that you enjoy with someone you trust and then contrast it with the kind of relationship that you have with someone you don’t trust to feel how different they are. As Covey says “the difference between a high- and low-trust relationship is palpable”.

Yet, it’s not just the difference in how we feel about these different kinds of relationships that matters, and Covey argues that there is a strong business case for the importance of trust in commercial settings. He says that trust always affects two outcomes – speed and cost. When trust goes down, speed will also go down and costs will go up. When trust goes up, speed will also go up and costs will go down.

 

He cites the dramatic changes in airport security around the world following the 9/11 attacks as an example. Before 9/11 you could arrive at an airport and go through security quite quickly. But after 9/11, stringent procedures were put in place because we no longer trusted that we could safely board an aeroplane and we wanted to increase trust in the safety of flights.  While the measures have had the desired effect, it now takes longer and costs more to travel than it did fifteen years ago. As trust in airline travel went down, speed went down and cost went up!

So, what happens when there is no trust?

Essentially, low trust causes friction, whether it is caused by unethical behaviour or by ethical by incompetent behaviour. Covey says that

“low trust is the greatest cost in life and organisations … it creates hidden agendas, politics, interpersonal conflict, interdepartmental rivalries, win-lose thinking, defensive and protective communication – all of which reduce the speed of trust”.

Low trust slows everything down and makes relationships more difficult and business clunkier and more expensive.

If you have been involved in an international business deal you’ll probably recognise these problems. When we begin working with people who are different to us we often wonder “are they telling the truth?”, “will they do what they say they will do?”, “how do I know that their motives are good?” and “how do I know that we really want the same things?”. These kinds of uncertainties create suspicion, often lead to delays in decision-making  and cause people to second-guess the real meaning of what a foreign business partner or colleague says. It might also mean that contracts become unnecessarily complicated or in the worst case, cause a deal to break down entirely.

Conversely, trust speeds things up, produces results, builds loyalty, creates a winning culture and  causes customers to purchase more and to refer people, products and services to their friends. In the context of international business it can encourage people to “think big”, plan ambitiously and move quickly.

Five top tips for creating trust

Volumes have been written on creating trust and I can only share a couple of ideas in this post, so I have chosen five behaviours which I believe are key to creating trust in an international context.

Develop strong interpersonal relationships

When you embark on an international business deal, with all its complexity and stress, it can be tempting to focus on the mechanics of the commercial transaction and forget about the people involved. Don’t do it! Getting to know the people you are working with as people will go a long way to increasing the flow of trust between you. Make sure that you make the effort to create a real relationship with colleagues and partners that extends beyond the immediate boundaries of the work at hand. Take time to share meals, find out about their families, their goals, aspirations and what motivates them. Look for shared areas of interest and common ground that you both understand, whether it’s antique clocks, tenpin bowling or mountain climbing.

The best part about this is that it’s not rocket science. Naturally, the better you know someone and the deeper appreciation you have of their character, motives, capabilities and ability to get results, the better you will know how far you can trust them and the easier it will make the process of making commercial decisions. Or, if you get to know someone well and decide that that they are not to be trusted, this might be a good reason not to pursue a commercial relationship with them.

Understand the other person’s expectations

When you are dealing with a person from another culture, it is vital that you take the trouble to understand what their expectations are likely to be, at the outset. This is particularly important when you are dealing with someone who has  different standards with respect to, for instance, time.

 

Business people from India, for example are likely to have a more laid-back approach to time and deadlines than Americans. Unless each side understands that the other has a certain view of and approach to time, the Indians are likely to see the Americans as pushy, greedy and only interested in closing a deal, while the Americans will probably feel that the Indians are careless and have little respect for time – a value which Americans hold dear.

These kinds of misunderstanding around expectations can damage trust quickly, by affecting the way that people perceive each other’s intentions and competence. Make sure that this doesn’t happen to you by making sure that you know in advance what other people are likely to expect in the context of commercial dealings and social interactions.

 

Demonstrate respect

I can’t overstate the importance of demonstrating respect for your foreign colleagues and business partners. When people run their lives differently to us or hold different values and beliefs from ours, it’s easy to trivialise the way they do things. But if you want to win the trust of the Taiwanese business man sitting across the table from you, showing respect is a great place to start. In many cultures, especially Eastern ones, showing respect is highly valued as evidence of a person’s good upbringing. Consequently, the casual manner that is typical of Western business people is considered by some to be abrasive or rude. Understanding a cultural difference like this one is critically important in seeking to build trust across cultures.

You can demonstrate respect by genuinely caring about the person opposite you at the negotiating table, taking an interest in who they are and what they need. Thinking about your business partner as a person (with particular character traits and habits, hopes and dreams) and not just a means to a deal is a good starting point. Showing that you care about them in the words that you use and the way that you act is a great way to follow up. But make sure it’s genuine though, there are few things more insincere than fake concern.

 

Listen before you speak

To build trust, you need to listen well (to actively seek to understand another person’s thoughts and perspective through their words) to what your foreign colleague says. Just as importantly, you need to listen and to understand what they are trying to communicate before you start putting across your point of view.

This can be quite hard to do, especially in a conversation where there is a lot going on and you find your mind buzzing with things that you want to say. But if you don’t listen before you speak, and get too focussed on getting your agenda across without finding out what information and ideas other people have, you may be acting on assumptions that are totally incorrect.

If you already deal with people from cultures different to yours, you’ll know how easy it is to make assumptions based on filling in gaps in your knowledge with with information which is not particularly factual. What I really mean is, don’t assume that you know what matters most to others and never presume that you have all the answers.

Extend trust

It goes contrary to how we often feel when working with people we don’t know well or those who are different to us, but extending trust is key to building trust. I’m not suggesting that you go around blindly trusting every person who proposes a business deal to you, but I believe that it’s better to begin with a mindset which is open to trusting people. And that’s because extending trust builds trust. When you extend trust first, it’s likely to build trust with your business partner or colleague much more quickly, which in turn should help to speed up what ever it is that you’re trying to get done.

For more on working across international boundaries, visit Dearin & AssociatesCross-Cultural Consulting page, or ask me a question in the comment box, below!

Business Beyond Borders Episode #14 – Rob Rawson, Founder & CEO of Time Doctor

Posted by on Cross-cultural Management

Business Beyond Borders Episode #14 – Rob Rawson, Founder & CEO of Time Doctor

In this episode of the Business Beyond Borders podcast, I interview Rob Rawson, Founder and CEO of Time Doctor. Rob Rawson is a former medical doctor turned entrepreneur. After starting several successful and failed businesses ventures, he became the founder and CEO of Time Doctor, which offers employee time tracking software for companies with global virtual teams. Tune in to my interview with Rob to find out about: How...

read more

Business Beyond Borders Podcast Episode #7 – Gemma Manning, Businesswoman, Author, Speaker and Strategic Marketing Expert

Posted by on Cross-cultural Management

Business Beyond Borders Podcast Episode #7 – Gemma Manning, Businesswoman, Author, Speaker and Strategic Marketing Expert

To mark the launch of our #GirlsGoingGlobal campaign this month, we’re interviewing successful female entrepreneurs every week throughout March, to coincide with International Women’s Day and celebrate the successes of women all around the world. In the first of our interviews with female powerhouses, I had the pleasure of interviewing Gemma Manning – a serial entrepreneur and recognised business leader who knows how to stay ahead of the game....

read more

Business Beyond Borders Podcast Episode #3 – Peter Evans, Global Business and Supply Chain Expert

Posted by on Business, International Business

Business Beyond Borders Podcast Episode #3 – Peter Evans, Global Business and Supply Chain Expert

In this episode of the Business Beyond Borders podcast, we speak to Peter Evans, global business and supply chain expert and founder of Mawson Global. Based in South Australia, Peter has worked for some of the world’s largest global supply chain experts, including Walmart Stores International, Aldi Stores, Woolworth’s and lots of Australian small and mid-market businesses. Peter talks about how started his international business journey through his family...

read more

Cynthia Dearin interviews Melinda Richards about SuperSprout

Posted by on Business Leaders, Business Strategy, Global Expansion, International Market Entry

Cynthia Dearin interviews Melinda Richards about SuperSprout

   Cynthia Dearin, Managing Director of Dearin & Associates, interviews Melinda Richards about going global with her company SuperSprout, which delivers a 100% pure, real, non-GMO fruit and vegetable powders with no additives, preservatives or artificial colours. Melinda started her own business after 21 years in the corporate world. She was inspired by her entrepreneur father to start her own business and after running her own consultancy, she...

read more

Cynthia Dearin interviews Aaron Gilchrist about Bridge to Life

Posted by on Business, Business Strategy, Global Expansion, International Market Entry

Cynthia Dearin interviews Aaron Gilchrist about Bridge to Life

Cynthia Dearin, Managing Director of Dearin & Associates, interviews Aaron Gilchrist, one of the original partners of Bridge to Life Pty Ltd. Aaron grew his company from a tiny two-man operation in the US to an international company operating in 50 markets around the world. Bridge to Life is working with the cause of organ donation. Bridge to Life’s products serve to preserve organs while they are being transported...

read more

Introduction to the Business Beyond Borders podcast: Episode #1

Posted by on Home, International Business

Introduction to the Business Beyond Borders podcast: Episode #1

https://dearinassociates.com/wp-content/uploads/2017/12/Episode-01-Introduction-to-Business-Beyond-Borders.mp3Podcast: Play in new window | DownloadSubscribe: Android | RSS We’re pleased to launch the first episode of our bimonthly podcast, Business Beyond Borders with Cynthia Dearin. In this introductory episode, we introduce our podcast host – Cynthia Dearin. Cynthia is the Managing Director of Dearin & Associates, Founder of the International Business Accelerator and author of Camels, Sheikhs and Billionaires – Your Guide to Business Culture in the...

read more

Doing Business in Russia: Interview with Anton Fleck

Posted by on Cross-cultural Management, Home, International Market Entry, Investment, Russia

Doing Business in Russia: Interview with Anton Fleck

  Dan: You’ve spent a number of years working in Russia. Can you tell us about Russia and what’s happening in the country at the moment? Anton: First of all I would stress that despite the problems in Russia’s current macroeconomic environment, the country offers vast opportunities for foreign manufacturers and service providers, due simply to the sheer size of the country. Australia could fit 2.5 times into Russia’s surface. So...

read more

Are Rockstars Risk-Takers?

Posted by on Business, Business Leaders, Global Expansion, Home, International Business, International Market Entry, International Trade

Are Rockstars Risk-Takers?

https://dfkfj8j276wwv.cloudfront.net/episodes/2f74a98e-c86d-4211-8d7d-3c99464bd9c6/9031fdc1005c66a47e49f32dee5db77dd94bd5193717df4cd9778447b3b51fd674e34aa359ca8e3e38dbe11e12f7618ba73654ee0a4251f2f4702758d152b6ad/The%20Tim%20Ferriss%20Show%20-%20Richard%20Branson.mp3Podcast: Play in new window | DownloadSubscribe: Android | RSS    Have you ever looked at another business that does the same thing as yours but has clients all around the world and felt just a tiny bit jealous? Why are some companies international rockstars while others are plodding along, just getting by with clients in one city or one state? Do the rockstars have more money? Better ideas?...

read more

Doing Business in South-East Asia: Interview with Michael Lee (full transcript)

Posted by on Asia Pacific, Business, Cross-cultural Management, Global Expansion, International Business, International Market Entry

Doing Business in South-East Asia: Interview with Michael Lee (full transcript)

  With a population of 625 million people, South-East Asia offers some enormous export markets for your company’s goods or services. But why is South-East Asia really so important? Which countries should you consider and how do you get started? I recently sat down with Dearin & Associate’s Michael Lee to discuss the ins and outs of doing business in South-East Asia. Why is South-East Asia so important? Michael: South-East...

read more

Cynthia Dearin interviews Chris Simpson on expanding to New Zealand

Posted by on Global Expansion, International Market Entry, New Zealand

Cynthia Dearin interviews Chris Simpson on expanding to New Zealand

  International Business Accelerator Director, Cynthia Dearin and New Zealand market entry expert, Chris Simpson talk about opportunities in New Zealand and how to access them. Chris Simpson is a corporate strategy consultant based in New Zealand who helps businesses enter the New Zealand market by navigating them through legislations and regulations. In this video, Chris firstly gives a quick snapshot of how the New Zealand economy looks like...

read more
website security Google+