Expert teaches community leaders ‘The German Way’

Hamilton County Herald, Friday, January 23, 2009
By David Laprad

Once upon a time, journalists from all over the world were asked to write a story about the elephant. The Frenchman wrote “L’ele’phant et L’amour.” The American wrote “37 Miracle Diets and the Modern Working Elephant.” And the German wrote “The Social Dynamic Nature and Fundamental Psychological Constitution of the Elephant: Volume 1 — The Burmese Ceremonial Elephant, Chapter One, From Karl the Great to the Present.”

“That sums up a German in a nutshell,” said Kevin Krause, managing partner of Atlanta-based executive recruiting firm BaxterKrause, during a breakfast meeting with the Downtown Council of the Chattanooga Area Chamber of Commerce on January 8. His reason for telling the story: to stress the cultural differences that will come into play when doing business with Volkswagen managers and German suppliers. “Germans love working with Germans, so there are going to be a lot of them here. Probably 80 percent of VW’s suppliers will be German,” Krause said. “You’re going to be dealing with Germans as a nationality, and let me tell you, they are different. They will shock you just as much as you shock them.”

One of the German traits Krause said would stun people in Chattanooga is their directness. “Southerners don’t appreciate directness, so be prepared for the Germans to knock you out of your boots.”

This straightforward manner is part of what Krause called “The German Way” of doing business. “You’ll never hear a joke during a negotiation with a German. You might want to lighten things up or crack a smile, but Germans don’t chitchat. They’ll sit down, introduce themselves and start the meeting.”

German businesses are also rigidly hierarchical. Information only travels from the top down on a need-to-know basis, for example, and seating during meetings is strictly regulated. “You don’t go into a German board room and just sit down. They’ll tell you where you’re going to sit. The CEO will sit in one seat, the vice-president in another and so on. And it’ll always be the same,” said Krause.

In addition, Krause said negotiations with Germans tend to be long because of the highly cautious manner in which they make decisions.

“Germans are detail oriented. They take a long time to make a decision and always want more information. And they stall. So if you’re negotiating with them, don’t think they’re ignoring you. Just relax and tell yourself they’re thinking about you.”

Krause said the cautious approach Germans have toward business is based on a cultural attribute called “angst,” or fear. Germans are “the most fearful people on the planet,” he said; consequently, they base their decisions on “reams of carefully prepared materials” and “interminable discussions” about potential legal actions. And nothing is decided until a consensus has been reached and confirmed in writing.

If anyone in the Southeastern U.S. knows how to do business with Germans, it’s Krause. Although American, he worked at a high level in the German automotive industry for 14 years and maintains a home in Germany. He also spends a lot of time speaking with German business leaders.

“I spoke with the vice-president of Faurecia yesterday, and he said his company is looking forward to coming to Chattanooga. If Volkswagen gives them their business, they’re going to need 300 people. That’s exciting, but you’ve got to brace yourself because your city is going to change.”

Krause says the transformation could include everything from new languages appearing on street signs to the emergence of new services. The businesses that will profit from these changes will be those that adjust accordingly.

“VW and its suppliers are going to need skilled labor, and they’re not going to want people from Chrysler and General Motors, so your universities and technical schools need to kick it up a notch. Perhaps somebody should go to Germany, partner with a technical school and bring their expertise back here.”

Krause said the Germans that make Chattanooga their new home will be looking for services that mirror the European lifestyle, such as the ability to walk from their homes to a specialty grocery store. He also expects superior bakeries, schools that teach German and colleges that offer International Baccalaureate Diplomas to be high on their wish lists.

Whatever the service, Krause said quality will be the key to success. “Germans don’t allow for inefficiencies. So when they go into your shops or tap into your legal services, they’ll be looking for quality.”

Krause says some businesses will profit from this knowledge and others will end up with regrets. The key to being in the first group is to anticipate the needs of the Germans and learn to do things their way.

“To most Americans, and specifically Southerners, Germans seem to be unfriendly. They’ll shake your hand — that’s very formal — but you’re not going to get any hugs or smiles. And they’ll always use your last name.”

In fact, Krause says using a German’s first name would be a “cultural faux paux of the highest order.” Other tips for doing business with Germans include arriving at meetings early, beginning negotiations on time, being impeccably dressed (three-piece suits are a must) and bringing as much documentation as possible. Krause also recommends avoiding the use of exaggerations and overstatements.

Ultimately, Krause says an understanding of the cultural differences between the U.S. and Germany will go along way. “Be prepared for your German counter-part to be blunt and even rude. They’re not going to show you a lot of love while they’re doing business with you.”

Before closing, Krause said the Germans will be doing some cultural fine-tuning of their own in advance of coming to the U.S., as he’s slated to travel to Germany in April to teach people there about “The Southern Way.”

Does that mean the Germans will arrive in the Scenic City full of smiles and hugs for their American hosts? Don’t count it. Instead, look for both sides to take small steps across the cultural divide as they work together to create a more prosperous future.

For more information about doing business with a German company, email Krause at kevin.krause@baxterkrause.com.

Reprint from the Hamilton county Herald by permission