Eighty percent of Israeli startups are planning on incorporating abroad (Israeli Innovation Authority for Globes) and currently 58% of them have already moved their headquarters to locations outside of Israel. This is partly in response to Moody’s downgrading of Israel’s credit outlook from positive to stable and due to the current instability in Israel’s government.
The U.S. is, and remains, the most popular “relocation” destination to implement a “Corporate Inversion” strategy. Corporate inversion, also known as tax inversion, involves a domestic company moving its headquarters or base of operations overseas.
Until now, if the headquarters were based in Israel, the corporate culture and work processes were conducted according to Israeli standards. The need to understand the U.S. work culture and the possible misunderstandings that arrive from the cultural differences were relatively minor as stateside satellite offices inherently have a relatively smaller number of American employees who are comprised primarily of marketing and sales teams. This is about to change as the corporate inversion process dictates a change of venue and changes the tax status but moreover requires the organization to transform its corporate culture from being Israeli to becoming a full-fledged American corporation.
The impact of this is two-fold. First, it requires the Israeli organizations to recruit a local workforce of Americans, who might not be familiar with the Israeli work culture, communication, and risk-taking style. Second, many of the “American incorporated” organizations will want to move key personnel to the U.S. to ensure a smooth transition of workflow and build a new organizational operating strategy which will necessitate the Israelis to quickly adapt to the American work processes and culture. Because of this, and to foster a collaborative and productive environment, the cultural differences can no longer be ignored and in fact, need to be quickly addressed.
Codes of Communication
Employees who work in the same office or even in the same country often communicate through non-verbal communication cues. The closer we are physically to each other and share the same cultural background, the easier it is for us to understand one another. We communicate through voice intonation, body language and key words. Think of couples living together for extended periods of time where one begins a sentence and the other completes it.
To that end, when we encounter a colleague in the office hallway and know to read his/her facial expression and body language, we can help and solve a problem in a timely manner and collaboratively.
Learn to speak “American”
All the above need to be adjusted to learn new communication styles and find ways of working in a team that consists of people from other cultures.
Israelis in general believe the American and Israeli cultures are very similar. We like hamburgers just like the Americans and we watch American movies. Most of us have visited the U.S. and maybe taken a selfie in Times Square and we have American friends.
To top it off, we all speak English, it is the global business language, but is it the same English, and thus do we really understand each other? Imagine an Israeli, Indian, German, and Swedish businessperson sitting around the table. They all communicate in English; they hear the words spoken, but do they have the same understanding of the nuances behind the words? Language has a cultural characteristic and context differs from one culture to another, words and phrases can mean different things to different people.
How we communicate is deeply rooted in our culture. When we communicate with people from different cultures, we need to pay extra attention to ensure that our message is delivered clearly and understood the way we intended since we naturally tend to believe: “I say it so you must hear it and understand it.”
Back to our newly inversed Israeli company. When Israelis and Americans work together, there are cultural differences in how communication is perceived on each side. When an American manager politely says, “I’m not sure that your report has all the data needed,” the meaning translates to: “Fix your report.” Israelis often fall prey to American politeness and they in turn are offended by the Israeli directness frequently perceived as an aggressive tone.
Furthermore, virtual communications are also a ripe ground for miscommunication. When people on both sides of the Atlantic communicate, the familiar non-verbal codes don’t apply. If the American doesn’t use direct language when communicating with his Israeli colleague: “Your report is missing data, fix it,” the Israeli might not understand that he needs to review his report. Additionally, conflicts are common in virtual meetings. In the U.S. culture listening and not interrupting mid-sentence is the norm, whereas the Israeli communication style involves cutting into the other person’s speech, speaking in commands, and arguing to no end.
New work methodologies
Organizations that have completed a corporate inversion process need to adapt to the American teamwork style, decision-making, hiring, and firing policies. The organization’s character changes, and with that, its employees need to do the same. This might come in the form of dress attire, working hours, feedback, annual reviews, workload as well as how written communication is conducted internally and externally. Americans typically invest time in writing detailed emails explaining the issue and how they solved it while Israelis may answer in a short sentence “that works for me thank you.” This alone can create a conflict due to differing communication styles.
The “Four Levels” to Building a seamless organizational strategy:
In summary, it’s essential to keep in mind that both sides of the Atlantic have good intentions and a common objective – building an organization that is truly global, not just in its operations, but in its mindset since companies with a global mindset have a competitive advantage in the market.