Jocelyn: Good morning, this is Jocelyn, we’re at the Wu Way, this is January 29, and I’m here at the BP Building and I have the pleasure of meeting with Gary Wells, who is the Senior Managing Director for Media Relations and Global Communications for Dix & Eaton. I might add that Gary is a very well-traveled man. He continues to help broaden Dix and Eaton’s capabilities and has helped establish media affiliations in 65 markets, right?

Wells: A little more than 65, around 75.

Jocelyn: Okay. And including in the China market, such as Beijing and Shanghai. I’d like to talk to him today about international communications. Gary and I were just discussing Starbucks and an interesting point about…that you have to be careful about the kind of message to a country when you’re trying to move your brand into that market. Right?

Wells: Good morning, Jocelyn. I think it’s critical for any company moving into a global market, an emerging market, is to keep in mind cultural sensitivities. Okay? Of all US companies, Starbucks is generally the most alert and sensitive to such cultural issues…but lost sight of that with their decision to accept an opportunity to put the franchise inside of the Forbidden City. It’s one thing to install a Starbucks or any other American fast food restaurant in a shopping plaza, in a business center where there’s high traffic. It’s another to install what could be considered a foreign invasion in one of the most hallowed sites in all of China, the Forbidden City.

Jocelyn: Right.

Wells: The larger point here is for the global company building into an emerging market. It’s not enough to have a proprietary service that is in demand, you have to understand the cultural sensitivities. For China, for India, for other countries as well, these are countries that have for decades, for centuries were ruled and subjugated by foreign powers. They have long institutional memories. While they may not go looking for slights, perceived or real, they are very aware of slights as they see them. So the decision to install a Starbucks inside of Forbidden City couldn’t be taken any other way than something as an insult and somewhat as a slap in the face. I think Starbucks has handled the situation quite well, to their business savvy, some companies perhaps would not. I doubt they would make that mistake again either in China or in someplace else.

Jocelyn: Yeah, it’s interesting. I think it’s a great example of what can go wrong when you don’t think about how the media or how the public can perceive the message, maybe covert or overt, that your move in an international market may imply. And maybe, I was wondering if you could tell me some other examples of the challenges that a company might face when they’re trying to establish themselves in another country, some examples that you’ve seen from your own work.

Wells: I think if you’re a global company and you’re looking to establish operations, if you see a market for your product or service in central market countries Brazil, Russia, India, China…you have to understand the market forces, but also the culture sensitivities. Also political issues as well. Most companies will look at China and India as probably the two most important markets or two of the most important markets. Very different, very differently organized in terms of their politics. One of course is the People’s Republic of China is a Communist government. More of a market economy than ever before…but still run by the Communist party.

Jocelyn: Right. They call it – what is it — Capitalism with…no it’s…Socialism with Chinese characteristics, I believe.

Wells: And I think that China, to its credit, learned a lot by watching the mistakes that Russia made. Look at India, India is normally the world’s largest democracy. It’s a very messy democracy. Even though that’s a dichotomy when you talk about democracy as messy, it shouldn’t be. However, in India, there was such difficulty pulling the country together some sixty years ago when the British left, that I think a lot of the princedoms, fiefdoms, empires if you will throughout India were given considerable autonomy but the states inside India have considerable autonomy instilled. If you’re Microsoft, and this is a real example, if you’re Microsoft and you look to expand operations throughout India, at the same time you do understand the importance of helping the country and its people in a land where poverty is ripe….For example, the Gates Foundation, the Bill and Melinda Gates Foundation sends money for helping a variety of schools there. But in one state, the governor…thought that Microsoft was too much of a monopoly, and instructed the schools not to use Microsoft Office. Despite the fact that the company had products that were much in demand, had through its foundation, contributed a considerable amount of money to easing poverty and improving the schools, [that still was the governor’s decision]. Microsoft, to its credit, also reacted specially by making sure there was even more in the way of free software and free education to this particular state as well, and the governor relented. But that’s the sort of issue that a local company faces there and I’m afraid that not many – outside of a Starbucks or Microsoft – are as alert to these issues as they should.

Jocelyn: Sure. You know, that makes me think about how, you know, you talk about autonomous regions in India, you know, of course China has quite a few of its own. Like Xinjiang is an example of an autonomous region. Of course, countries such as India and China, they have thousands of years of history of these regions operating as just separate states. And each has its own culture, its distinctive identity. A lot of times, we come into a market, we assume that that market is just, you know, it’s all one homogenous being, you know, it’s all what we see in Shanghai or Beijing or in the case of India, New Delhi.

Wells: Particularly in a market as gargantuous as China — so many regions, so many cultures, languages or dialects – it is absolutely incumbent on any company…consumer products, business products – to understand the cultures where they establish operations.

Jocelyn: Right.

Wells: If you’re in the north, you’re in the south, it’s a much different operation. You’ve got to be aware of which dynasty ruled going back centuries, you’ve got to be very alert to not just the current issues but the past issues as well. It has an impact on how you’re perceived in the community, it has an impact on your ability to recruit employees for a region in China as well. It’s a huge issue for companies moving into China or India. The war for talent is acute. If you want to attract the best and the brightest, to borrow a phrase, then those people have to look at you as a tremendous opportunity. And not just to join your organization, but to stay with your organization. They have to see that there’s opportunity for them to grow. You also have to be well-regarded, well-respected in the community because they have to save face in the community as well.

Jocelyn: Sure.

Wells: If you don’t have a good reputation in the community, if you’re not seen as contributing to the community, you may have a difficult time even further attracting, much less retaining, employees.

Jocelyn: That reminds me of last year when you spoke at the [Going Global] panel and that was something that you had emphasized, was the internal communications in a company, correct? And that’s something that a lot of companies who go global, they often overlook this small piece of the puzzle that can be so important in perhaps, as you said, retaining employees and reminding people of the value they get from the company.

Wells: It’s actually reminiscent of the story over centuries about workmen in France. One of whom is asked what he’s doing, says he’s cutting stone. Another is asked what he’s doing, says he’s mixing concrete. Another is asked what he’s doing and he says “I’m building a cathedral.” He’s got a much larger vision and he’s part of a larger team. And if you’re establishing operations in China, or in India or elsewhere around the world, it’s not an isolated facility. Those aren’t people who work in isolation. Those are people who are part of a larger team. They will feel much more engaged if they understand they are part of a team which means introducing them – perhaps electronically, perhaps personally – to others on the same team, either in the same country or elsewhere around the world as well. It’s hugely important and I think too many companies miss out on that too.

(To hear more about Gary Wells’ views on international communications and China, listen to our full podcast. Total time: 18:32….WARNING – this is not NPR quality on the recording side, but it’s a great conversation.)