There is a tradition dating back at least 3 decades in the Western world that technical innovation on its own is rarely the make or break thing in the competitive advantage of a business.
The Economist Paul Geroski, for instance, studied 440 United Kingdom companies in the period between 1972 and 1982 only to conclude in a 1995 paper that: “…the observed direct effects of innovation on [corporate] performance are relatively small.” And professor Geroski, mind you, was an innovation enthusiast.
All the farcical suits over patents day in and day out in the West might convince some to believe in the rising value of technical innovation, because, after all, the higher the value of an asset the more companies fight to protect it. All you have to do though is look closely and another thought emerges: successful copying has become so easy that technical edge, even in the vaunted area of user experience design (UX), has ceased to be the predictable differentiator it once was.
For those companies passionate about staying ahead, western business experts have tended to emphasise a focus on “culture”. In a detailed review of the state of knowledge in 1986, Professor Jay Barney then of UCLA argued that a strong corporate culture has been shown to be “vital for improving a firm’s financial performance”.
In an increasingly info-porous world, it is easy to understand why a business would want to bank its hopes on the hardest to copy intangible assets it has in its portfolio.
Since organisational culture is by definition very hard to replicate successfully, the richest source of performance advantage is probably cultural innovation. That is to say, how successful a company is in taking on board superior iterations of a proven cultural advantage over time.
The preceding description becomes particularly important when corporate culture is defined as the “set of non-material competences” a company has for resisting variability forced on it by changes in the broad market. Cultural innovation in this sense must refer to a company’s success in coming up with new ways of reinforcing its culture in the face of change.
That seems to me a fair summary of an entrenched wisdom in the West regarding culture and business performance. The key problem I see is how easily the model can be caricaturised into a premise for marginalising external culture and focussing all the attention on internal culture.
While a company may be able to get away with such an attitude for quite some time in a fairly homogenous regional market, the implications for that company’s global aspirations can be dire.
As western-style companies (this category also includes Global South companies built on Western norms) continue to look at expanding in emerging and frontier markets as a major competitive or anti-competitive strategy, I am of the view that, in Africa at least, building effective responses to market variability and its pressures cannot be premised on a lack of respect for the cultural nuances of the company’s host market.
In the following short pieces, I have compiled a list of observations I have made in a number of African countries in connection with this subject. It is possible that some of these insights are applicable to a wider range of non-Western countries. It is best however not to get too hanged-up about a particular “cultural element” or a specific country, so I have used broad headings and generalised their geographical relevance. The purpose of the list below is to increase awareness about some common attitudes to external culture, especially as exhibited by Western-trained business folks in non-western business environments.
1. The Cult of Precision
A common complaint I have heard business partners and employees of global (read: ‘westernised’) companies in Africa make is that the latter are too obsessed with exactitude.
2. CSR is Dead
There is a very deceptive paradox in the fact that in many African countries conversations around CSR tend to be hopelessly archaic while at the same time the way CSR is done can still be quite unconventional. Proof that you don’t always need jargon to be sophisticated.
3. Don’t Confuse “Culture” with “Structure”
This is hard. There is a long-running battle in the social sciences about which worldview – the cultural or the structural –best explains a wide range of social phenomena. You are not going to solve it by putting a ‘tiger team’ together. But at least try and be cautious about jumping to the conclusion, usually negatively, that a particular conduct is cultural and therefore hopeless to reform.
4. Sentiment Matters
It is not always a sign of rudeness for someone to barge in without an appointment. Sometimes it is a simple sign of affection. It is fine to come out shake their hands, smile, and explain that there are a group of biggies in the room with you and it is going to take all-day, so: “why not let’s try next week?”
5. Courtesy Should be a Line Item
So I had dinner with an African country chief of one of the world’s top 5 most recognisable brands. And in the course of conversation he confided in me that his relationship-building efforts in the country are being hampered. He can’t take folks out to lunch and pick up the tab as often as is necessary. Everyone knows that a meal is an important “cuddle factor” in African business.
Bright Simons is a Social Entrepreneur and Public Interest Researcher. He invented the mPedigree anti-fake drugs system (www.mPedigree.Net), and is a Fellow at IMANI, a think tank in Ghana.