What The 🌍 Construction Industry Taught Me About Culture
There is a lot the construction industry can teach us about working across cultures.
And the lessons drawn from this can apply to any industry, no matter where in the world they are based.
But first, I need to tell you why this is something which intrigues me.
As you might know, I’m the co-founder of CultureMee, a free app which helps travellers navigate other cultures.
But before I worked in CultureMee, I spent a number of years working with CRH, Ireland’s biggest company and one of the largest building materials companies in the world.
Ghelamco Arena in Ghent Belgium, where CRH subsidiary Ergon was a key supplier of structural products. I was the business controller for Belgium during the key construction phase of this project. Photo Credit: Essg.org
I first got exposed to CRH during my time with Deloitte in their Dublin office, where I had been working in the audit practice to become a chartered accountant. During that period, I was seconded out to CRH a number of times, mainly as I spoke a number of languages fluently and CRH needed the language resources for a number of their internal audit assignments.
I was immediately hooked. I loved the travel, meeting different cultures, seeing different business in action, and most of all I loved the organisational culture at CRH. The people I met there were very driven but more importantly very down to earth.
From Audit To Industry
After my 3 years in Deloitte, I jumped directly into CRH to join their internal audit department, where I continued to travel all around Europe and get to know the CRH operations in more detail.
The travel was intense at times, where you would sometimes be spending up to 5 weeks in a row at operating companies, but I loved it. I often took the opportunity to stay over at weekends to get to know the local people and culture a little better.
From Internal Audit To Business Control
Having spent 2 years in internal audit, I then got the opportunity to move to a more operational role by moving over to the European divisional offices in the Netherlands.
Here I got an incredible opportunity to learn from seasoned, experienced executives by being their right hand business controller.
This was a crucial development period for me.
Some established leaders took me under their wing, openly sharing their insights and leadership values which left an indelible mark on me.
It didn’t come without challenges, especially as this was during the financial crisis which meant there was a huge amount of organisational restructurings taking place.
From The Factory Floor To The Boardroom
Here I was on one of my many location visits. On this occasion, I was visited the innovative Gamma Zwolle DIY store in the the Netherlands. They had just won the best building materials store in the Netherlands.
If I was to summarize all this experience, I would say what I was most grateful for was being fortunate enough to get a ringside seat at all levels in a global company.
During my 10 year relationship with CRH I got to visit over 150 different locations which gave me a unique vantage point of how business was done on the front line.
But I was also fortunate enough to work at HQ in Dublin, at the Divisional offices in the Netherlands, and at the country and operating company offices throughout Europe.
At the very beginning of the food chain, it involved talking to plant managers about the production challenges and bottlenecks they faced making concrete pavers. Or talking to DIY store managers about how they were reaching their customers online.
In the middle of the food chain, I got to see how the divisional leadership drove change and strategic direction for their operating companies.
At the top of the food chain, I helped for example with the preparation of monthly board commentaries and helped headquarters navigate some of the questions posed by institutional investors during quarterly Q&A briefings.
Lesson #1: The Construction Industry Is Very Local…
Many people look at the construction industry and fail to appreciate just how local an industry this really is.
What I mean by this is that some global companies, like Apple, can design their products in California and do most of the manufacturing in China, shipping their product all over the world.
This is absolutely not the case when it comes to the construction industry.
There are two main reasons for this.
The first reason is due to the type of products that are sold in the construction industry. With very few exceptions, they tend to be heavy products, which are not easily transported over long distances. A rule of thumb I often came across is products usually have a 50km radius around their local plant to travel. Any distances beyond this are too costly to transport so are not economically viable. This means you have a very localised market.
The red brick houses you see here are very common in the UK. It was not just the local architectural style which drove this, but actually the locally available building materials, as there is a very high clay content in the soil in the UK.
The second reason is due to the type of materials. The materials used by the construction industry are massively influenced by what is locally available. And what is locally available is something which can vary hugely from country to country. This is why for example clay bricks are hugely popular in the UK, as the ground there has a very high clay content, something you don’t see in too many other parts of Europe. All of this means you have very localised products.
So when you have very localised products and very localised markets, well it’s pretty obvious to state that you have very localised businesses. Which is why more often than not local people are the main decision makers in the key executive positions of many operating companies; they understand the local market and they have the local relationships.
Think about that for a second, as it has some pretty significant consequences.
It means that if you ever want to drive strategic change in any global construction company, the first barrier you are going to run into is that the key enablers of any strategic change are going to be local people.
No matter how many different people you put in various different roles above operating companies, it is local people who are the ones who will be executing these initiatives.
Which means that for any of those people interacting with operating companies, you better be damn sure you at least have a high level understanding of the nuances of dealing with different cultures.
Or at least realise that there is an opportunity to boost the performance of your business by being more culturally aware.
Lesson #2: …But The Industry Is Becoming More Global
Like many industries, globalisation is finally beginning to make its impact on the construction industry.
The construction industry has traditionally been a conservative one which was slow to embrace change, partly due to the fact it is a very local industry, but also due to the structure of the industry which has had a high percentage of small, family owned businesses, particularly in the builder’s merchants and concrete products businesses that I often dealt with.
However in recent years, there has been a trend towards industry consolidation, particularly with the number of mega-mergers which you see in the Holcim-Lafarge tie-up and the big acquisitions announced by the likes of CRH.
The flip side of the coin is that after decades of growth driven mainly by acquisitions, there are fewer value-creating acquisitions on the table. As a result, the bigger players are now putting more of an emphasis on organic growth, as this is what can really move the needle when it comes to shareholder returns in the medium term.
But driving organic growth requires an entirely different set of capabilities.
Let’s take the sharing of best practices.
Business units across the industry were actively encouraged to compete against each other in the 90’s. This approach encouraged competitive silos, who were less interested in sharing best practices across different geographies and businesses. The financial crisis of the noughties forced these companies to break down these silos, however this was a considerable culture change in the industry which was never going to be easy to address.
You can really see this in the implementation of IT projects, regardless of industry or country, which can really run into challenges if the organisational or national culture risks are not put front and centre.
All of these elements combined have meant that the industry has been forced to adopt centralised processes and teams to help encourage the sharing of best practices across business units to help drive longer-term organic growth.
The end result: A very localised industry is being forced to become much more global.
A Quick Word On CRH
Before I go into any of the lessons I learned in CRH, I first want to make clear that CRH was a fantastic company to work for with many great people who I learned a tremendous amount from.
And the lessons around culture which I learned there are being learned by every global company in every industry every day of the week.
Cultural innovation in business was something that CRH did very well, whether that be having a clear strategic direction, or be that the executives there who taught me how to navigate different cultures through the use of cultural models in everyday business.
I won’t identify any companies or employees by name, but I will talk about specific country cultures.
Lessons #3: I’m Not Going To Japan Therefore I Don’t Need Culture
Here are the compare your culture graphs which you can access in our CultureMee app. These are licensed from our business partners Hofstede Insights. What is interesting is that when you compare Dutch to Belgians, there is a big gap between Power Distance and Masculinity. Straight away you can spot what cultural risks to look out for.
I was lucky that in CRH everyone understood the importance of culture. It was here I got introduced to the Hofstede model to compare cultures. It was here I was introduced to dedicated cultural trainers who explored the risks and opportunities of dealing with different nationalities in your own team or between your teams and the operating companies across Europe you were dealing with.
But this was not always the case outside CRH.
When asked do you feel whether understanding other cultures is important, some people have said cultural awareness was mainly something for when you go outside Europe, to places like Japan for example.
Such a statement really misunderstands what culture is all about.
Let’s take the Benelux. The Benelux is a region made up of 3 different countries: The Netherlands, Belgium and Luxembourg.
However these countries have radically different national cultures and completely different markets.
Take the Dutch and the Belgians.
Dutch people are famously direct in their communication style, have very flat organisations and have a feminine culture which means they are consensus driven in their decision making.
Belgians on the other hand are very indirect in their communication style, tend to have hierarchical organisations and generally have a masculine culture which means they have strong-minded leaders who are decisive in their decision-making and spend less time on building consensus.
In some ways, especially when it comes to business, you couldn’t pick out two more different cultures if you tried.
You even see this in how people eat their lunch.
With our Dutch friends, you’re more likely to get a few slices of bread, given a tub of butter and a packet of ham, and told “off you go.” If you’re lucky, you might get a few multi-coloured, sugary sprinkles to go with it (yes, this is indeed a treasured past-time of grown men and women in the Netherlands).
Whereas with our Belgian friends, you’re more likely to have a 3 course meal in a restaurant with the odd glass of wine or even a local Trappist beer to wash down those Belgian frites. Not a multi-coloured sprinkle to be seen.
Of course, these are all thought-provoking examples, but when it comes to driving strategic change in Dutch and Belgian companies, you really have to adopt a completely different cultural lens. Otherwise you’re going to end up getting a size 9 up the arse (a very Irish way of saying you’re going to run into challenges!).
Lesson #4: How To Deal With The Swiss
Here I was on one of my many visits to our Swiss Distribution business, at their Swiss French head office near Vevey, right beside Lake Geneva. While there were plenty of operational challenges to overcome, I have some wonderful memories working with some fantastic colleagues during my time there.
Another aspect which you can easily miss when it comes to culture is how some countries have one dominant national identity, while other countries have a number of very distinct identities.
Two countries illustrate this most sharply; Switzerland and Belgium.
In Switzerland, I honestly found the Swiss Germans and Swiss French to be more different from each other than the Germans and French themselves! Swiss Germans were very structured, very methodical, and very fact based when it came to decision making. Whereas the French speaking region was much more intuitive, more gut-feel and more relationship driven. If you were not aware of this going over to Switzerland, then you were in for a massive shock, as the same approach deployed successfully with Swiss Germans could backfire dramatically with Swiss French.
Likewise, Belgium offered up it’s own complexity in this regard. At one stage, Belgium had no central government for 541 days, such was the inability of the Flemish speaking and French speaking regions to agree a deal together. Likewise, in business, how you did business in the Flemish region was very different from doing business in the Waloon region. The role of leaders within organisations was seen very differently. The role of unions for example was seen very differently. How people interpreted change was seen very differently. Again, if you were not prepared for this in advance, you were in for a huge shock.
Lesson #5: How Cultures See Your Role
Another aspect I found interesting was how people see your role can differ massively across cultures.
Take the role of a business controller.
In some countries, the traditional role of a business controller has been to simply report the numbers, put a nice little presentation together, and that’s it.
Whereas in the Netherlands, I was fortunate enough that here, people saw the role of business controller in much stronger terms. They saw it as a right-hand to the MD and FD. You were their eyes and their ears. And in review meetings, you were expected to speak up if there were non-financial topics you could contribute to. This meant that as I built up trust with the leadership team, I got the opportunity to actively contribute to HR, safety and strategy discussions, especially when it came to the operating companies.
Whenever I ran into challenges dealing with other cultures who did not see that role in the same light, I really thrived when my leadership team supported the strong vision of the role of business controller.
You could also see the cultural interpretation of roles when it came to managing director roles.
Dutch MDs saw the executive team as the key decision-making unit, rather than the MD role itself. Whereas in France, which has a high score for Power Distance, people looked to the MD as the individual to make the key decisions and to inspire the organisation.
So it really is important to understand that different cultures see roles in a different light.
Lesson #6: Driving Strategic Change Across Cultures
Change was one aspect I was very comfortable with in CRH.
It was the financial crisis after-all, so this will come as no surprise that in an 8 year period there, I went through 8 different restructings and had 5 different bosses. I learned so much from all of them, and had to say goodbye to a lot of good colleagues, but it was all part of the journey of coming through one of the worst financial crises of the past 100 years.
I saw change in HQ with 3 different CEOs during that period. I also saw multiple changes at the division level, from moving from a geographic to product business unit focus, to multiple delayering initiatives.
And here is the key lesson I learned.
Driving strategic change across cultures and business units is very hard.
When it worked best, there was a common sense of purpose, there were clear values and rules of the game, and there was a laser sharp focus on tearing down silos rather than building them up.
But one aspect that surprised me, at least initially, was that people interpret instructions from HQ based on their cultural lens.
Let’s take the example of the Netherlands.
If you have a wonderful initiative from HQ, it does not matter how bloody wonderful you think it is, because as soon as it gets to the Netherlands, the first questions people will ask is “Why?”
This is partly because of the consensus driven business culture of the Netherlands, where everyone is actively encouraged to openly challenge decision making, in order to make in their eyes better decisions. This means decisions take more time, but ultimately have stronger buy-in.
Look at it from the set of eyes of HQ, and you could argue “Why are they asking so many questions.” HQ may get frustrated, if they are not from a consensus driven culture.
So you have to be conscious of this cultural tension when doing business internationally.
One of my biggest learnings was around this specific point.
When I went to the Netherlands initially, I was more forceful and spent less time building relationships with the different cultures I dealt with. This meant people took on board my points, but perhaps not with the buy-in we could have achieved together.
In my latter years, I spent more time building up the relationships with people over time, so that I understood their local culture and their own individual personality. This meant it took me a little longer, but it meant I had their trust, and could drive change much more effectively once we had that trust built.
Lesson #7: You Have To Live The Culture
Here I am playing for Delft RFC back in the day. Joining a local sports club is one of the biggest tips I would give for any expat moving abroad. It made life so much easier for me, getting to know the locals, speak their language and play a sport I was passionate about. Photo Credit: sjmphotography.nl
One other lesson I found to be so valuable was to try and really get under the skin of the culture of the people you are dealing with.
What I mean by that is to try and immerse yourself where you can in the local operations of the companies in your portfolio.
I did that by living in the Netherlands, as an Irish expat, under a local Dutch employment contract. More importantly, I got to learn the language, understood what made them tick, and of course make terrible efforts at cooking bitterballen (don’t ever put them into the oven when doing a house party!).
But it also meant I could drive very easily to Belgium, Germany, France and beyond. It’s part of the reason why I managed to get to visit so many of the local operations with CRH.
And this had a considerable benefit to CRH at the time, as when I had that flexibility to go and directly visit the operations, there was no hiding places in the numbers. By not having any layers in between me and the companies, as soon as I smelled anything off, I was able to go straight to the source (and in effect cut through the bullshit).
But for me the key lesson was that by going over to live in the Netherlands and trying to authentically understand and live the local culture, for example by learning the local language, I managed to build a high level of trust and respect with many of my colleagues over there. And I grew a huge amount myself from the experience, becoming more culturally aware and more adept at doing business internationally.
I also understood more about my home country culture, really appreciating how Irish people are actually quite indirect, who prefer to avoid confrontation, as eloquently elucidated by this local Irish proverb:
“What is Irish diplomacy? It’s the ability to tell a man to go to hell, so that he will look forward to making the trip.”
Lesson #8: Do You Use Cultural Models
So what is the difference between a feminine and masculine culture? This is about how much life is about ‘winner takes all’. Masculine countries are those where it is survival of the fittest with life having a winner takes all mentality. Feminine countries are the opposite, where it is about quality of life and work/life balance and consensus over confrontation.
I have two standout memories of my time in CRH when it comes to culture.
My first was within my first few weeks over in the Netherlands, my boss and mentor, showed my how he used Dr. Geert Hofstede’s cultural comparison tools to compare his culture to the culture he would be negotiating with. This immediately gave him an edge when approaching acquisition targets, or even simply to deal with the cultures in his portfolio of companies.
My second was a present given to me by another mentor (and boss) of mine, just before I left CRH for good. His parting gift to me was Erin Meyer’s The Culture Map. And perhaps it was his way of recognising the journey I had been on in CRH, which culture was at the very heart of.
Both of these people were amongst a wider group of mentors who were so generous with their time and experience which helped shape me into the person I am today.
Lesson #9: Do You Leverage The 3 Layers?
One of the last lessons I want to share with you is what I learned about the importance of 3 layers when doing business internationally.
- Organisational Culture
- National Culture
Wherever you’re doing business, you clearly need to understand the personality of the person you are dealing with. What makes them tick. Their behaviours and idiosyncrasies.
And you clearly need to understand the organisational culture of the company you’re dealing with. Both the global company culture, but also the individual operating company or divisional organisational cultures.
These first two get a lot of attention when doing business abroad.
Yet how much attention do we pay to the national culture?
It was when I started to unlock the national culture layer that I started to become more self-aware of my own culture, of my own personality and my own way of doing business. As a result, I became much stronger at dealing with other cultures, because I had understood my own culture and my own personality better.
There are thousands of tools to understand your personality, yet how many are there available to understand your culture?
So think of that the next time you’re doing business abroad, or even within your own team in your home country.
Think of the 3 layers and how you can transform your business by unlocking the potential of each layer.
Lesson #10: Use Every Tool In Your Toolbox
You can also access the Compare Your Culture graphs online by visiting our partners Hofstese Insights.
The last lesson I want to give is there are actually lots of tools available to help you understand other cultures.
The first is the range of tools from our business partners, Hofstede Insights, which I have included below.
You can also download our free CultureMee app.
Another great tool is to simply talk to your own colleagues, and ask them about their cultures. What makes them different. What makes them tick.
We often try to understand other people’s personalities, yet how often do we take the time to understand other people’s cultures?
For me I was proudest of my own Irish culture was when Ireland beat England in Croke Park in the 2007 6 Nations rugby tournament. Grown men cried that day, and I’ll never forget the respect shown to England’s national anthem or how every last drop of energy was given to singing the Irish national anthem.
But the biggest tip I can give?
Well it’s one I’m always working on, which is to really, deeply, actively take the time to listen to the people you are dealing with. In my view, it’s better to take the time to get to know people, and build up trust, so you can do business more effectively, rather than rushing business in a very transactional, top down manner.
This was my personal story about what I learned about dealing with different cultures.
As an Irish saying goes;
“A fool learns from his own mistakes, a wise man learns from the mistakes of others.”
I hope you can take something from some of the lessons I learned dealing with other cultures.
Thank you for reading.
Note: If you want to leverage the opportunity which culture offers, please feel free to get in contact. I can be reached at firstname.lastname@example.org. Dee and I can support you with cultural workshops in Ireland, or internationally with our partnership with Hofstede Insights.
For more info on Comparing Your Culture, see the About section of our CultureMee app which explains these cultural dimensions and what they mean. We also have lots of fun facts and culture tips on culture, see here http://culturemee.com/ for more info:
Here are some other resources and tools on culture which you might find useful:
Hofstede insights: Compare Your Culture Graphs
Sietar Europa Cultural Tools
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