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Saturday, October 4, 2014

How to “culture manage” your customer

Scholars have never been able to agree on a simple definition of culture. In the 1870s,the anthropologist Edward Taylor defined culture as “that complex whole which includes knowledge,belief,art,morals,law,custom and other capabilities acquired by man as a member of society. “Geert Hofstede, an expert in cross cultural differences and management, defined culture as “the collective programming of the mind which distinguishes the members of one human group from another.” Culture in this sense includes systems of values and values are among the building blocks of culture. Looking at the above definitions we can say that culture is something which is passed on from one generation to another and is very unique and tailored for a society.

Geert Hofstede carried out a study, in the 1960s and 1970s, in which he used the information provided by more than 1, 16,000 questionnaires, filled by IBM employees spread across 70 different countries regarding their attitudes and values. On the basis of his study he claimed that different cultures can be classified with the help of four cultural dimensions-power distance, individualism versus collectivism, uncertainty avoidance, and masculinity versus femininity.

Power Distance: This dimension describes the relationships between the superior and the subordinates. In high power distance societies there is little or no interaction between the superior and the subordinates and the latter is expected to carry out the orders without questioning. In low power distance societies, there is lot of interaction between the superiors and the subordinates and subordinates carry out the orders of the superiors if they are satisfied with it.

Individualism versus collectivism: In individualistic societies people are more concerned about themselves, and their near and dear ones. In such societies greater emphasis is on individual freedom, individual initiative, individual achievement and individual recognition. In such societies relationships are mostly professional. Collectivism is the opposite of individualism. In such societies greater emphasis is on group identity, group affiliation, group achievement and group recognition. In such societies strong emotional relationships exist among individuals and loyalty is highly valued.

Uncertainty avoidance: This dimension tells us up to what extent people of a society are ready to accept ambiguous situations and uncertainities.In societies where there is prevalence of high uncertainty avoidance culture; people tend to develop formal rules and regulations which specify the standard operating procedures to be followed in every situation. In low uncertainty avoidance societies, people are not afraid of ambiguity and uncertainty, and are willing to take risk and venture into the unknown.

Masculinity vs. Femininity: In societies where there is greater emphasis on masculinity, the dominating values are – success, money and fame. In such societies people want to be the best and they have no sympathy for the losers. The sex roles are sharply distinguished and there is differentiation between males and females in the same job. In societies where feminine culture prevails, the dominating values are caring for others and quality of life. People place greater importance on cooperation and friendly working environment. In such societies differentiation is not made between males and females in the same job.

So now the big question is Can we apply Hofstede’s analysis to culture manage a customer and tailor our behavior and working style as per the customer.

I divided Hofstede attributes into the following two-by-two matrices:

1. Power distance-uncertainty avoidance matrix.

2. Individualism- masculinity matrix.

The results are as shown in the diagrams below.

So based on Power distance-uncertainty avoidance matrix we identify four types of customers:

1.”Convince me”: Such customers are willing to explore new avenues but the pre requisite is that the decision has to come from the very top. Every proposal has to be data and fact driven and the top management is the sole authority to take the final decision.

2. Visionary: They prefer a consultative style of working. They get excited by new avenues and ideas and are willing to take risks and go the extra mile. They are entrepreneurs by heart and are more functionality driven by nature and attitude irrespective of the costs.

3. Rule book: They have decided what they want and orders have come right from the top. So just give them what they want and nothing beyond their expectations.

4. Laggard: They are open to discussions and want to explore new avenues and opportunities but are highly risk averse by nature. They prefer to discuss the future without changing the present. It is preferable not to waste time in too much of discussions with these kinds of customers as decisions might not come or might come very slowly based on the market conditions.

So based on Individualism- masculinity matrix we identify four types of customers:

1. Happy go lucky: These organizations have mostly employee friendly cultures. They believe in getting to the top but not the cost of their employees and work ethics. Every avenue or opportunity explored by such organizations would have a societal quotient to it.

2. Laissez-faire: These are mostly declining organizations. They have a sense of inertia ingrained at every level within the organization and decisions either don’t get implemented or get stuck up in red tape. It is preferable not to waste too much time with such customers

3. Bulldozer: They are the “get things done” organization. They are always in a hurry and are filled with employees with innovative and out-of-the-box thinking. They are always looking out for new opportunities and avenues to get ahead of their competitors and have an insatiable thirst for knowledge and power.

4. Beehive: They want to grow and get ahead but the decisions have to be approved in a consensus way. Every decision and opportunity is valued based on the group comments and group approval. Such organizations spend a lot of time in building up consensus to explore new opportunities and growth markets and believe in group recognition and group success.

So these are some of the typical customer types which needs appropriate culture management to create win-win situations.

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