The Green Hat Lesson

Years ago as I took over the responsibility for the Asia Pacific markets with a big international firm, my colleagues started filling me in on various anecdotes. I have since forgotten most of them. The following, however, is one of those few that have stuck in my mind.

Once our company was hosting a delegation from China, our long-time valued customer. The host presented gifts to each delegate: a T-shirt and a matching green hat. Our guests accepted the gifts, but no one put the hat on. When asked, our guests smiled awkwardly. Eventually someone in the team broke the silence and shared the story: in the Chinese culture, if a man is wearing a green hat, that means his wife is unfaithful - "his wife has put a green hat on him" is what you would expect to hear. "Wearing a green hat", therefore, is a symbol of a cuckold.

The Chinese have a saying: jia chou bu ke wai yang (domestic shame should not be published), the equivalent for "do not wash your dirty linen in public". In a culture where face is of utmost importance, one would try his best to save face. Therefore no Chinese man in the right mind would put a green hat on even if his wife is disloyal.

The lesson from this episode? Today, more and more, business is cross-cultural. If we are not culturally intelligent, we can embarrass ourselves and others, and cause discomfort for others. Lack of cultural intelligence, or a low CQ, can be very costly. Multinationals like Ford and Disney know all too well from their own experiences what it can bring about: loss of contracts in global business negotiations and loss of profit in global business ventures.

While big corporations may have deeper pockets and can afford the time and money to turn things around, small companies may not be so lucky. A New York-based research company, with an office in Asia, surveyed small and medium-sized companies doing business in China. Over 2,000 firms participated. The study revealed that, as of mid 2005, eight out of every ten surveyed companies had not made any profit. A significant factor in the failure was identified in the report: many companies do not understand the culture in which their businesses were operating.

Getting things done right in the first instance is important for companies engaging in global business, more so for small companies due to limited financial resources. Several things can be done to help achieve this:

Research. Do some homework. You may get some idea about your target culture online or from a book.
Use available internal resources. The green hat blunder could have been avoided had communications people, sales people or anyone preparing the gifts bothered to run this through internal staff of Chinese background or someone who is knowledgeable of the culture.
Get trained. Have anyone involved in international business (those in sales, marketing and communications, their assistants and even secretaries) attend courses. Accumulate global knowledge and develop cultural awareness.
Seek expert help from professional consultant. This is absolutely necessary in the absence of internal resources. Even with intelligent people on staff, it is still a good idea to get a second opinion. This serves one of two purposes: either a confirmation of staff advice (double assurance that a feux pas is not to occur), or a rectification should a suggestion is not quite right.

Companies serious in developing global business should make the time and investment to improve the CQ of their staff right from the start. Doing so will save a lot of grief down the road, earn respect and business, and ultimately increase the ROI of their global ventures.

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