Thinking about entering Middle East markets? Avoid these 3 common mistakes made by "Westerners"
In my 25+ year career working with multinational device companies, I have worked with a lot of American and European executives. The vast majority are smart and well intentioned. But time after time, companies new to the Middle East market make the same mistakes. Often, those mistakes are deeply rooted in culture.
I have experience in this area as an Egyptian living in Cairo.
Here's a typical scenario. An American executive wants to enter the Saudi market. It's the largest device market in the MENA (Middle East & North Africa) region so it makes the most sense to Westerners. Typically, companies might attend a large tradeshow such as Medica (Dusseldorf) or Arab Health (Dubai) to meet potential new distributors. It's what happens next that often dooms potential partnerships before they begin.
Mistake #1 - Underestimating the value of relationships
Arabs do not separate business from personal life. Business revolves around personal relationships, trust and honor. It is crucial that business relationships are built on mutual friendship and respect. Arabs are fairly informal with names when doing business and generally address people by their first names. Americans often get into trouble early on because they maintain a wall between personal and professional relationships. Here's an example. How many colleagues you work with are your "friends" on Facebook? Probably a small percentage of all the people who know professionally. However, you are probably linked to 5x more colleagues on LinkedIn. Why? Because in a B2B setting, LinkedIn is generally for business relationships; Facebook is for personal relationships. In the Middle East, that distinction is blurred and it is important to understand this.
Middle Eastern culture also places EQUAL value on someone’s word AS written agreements. Contracts are viewed as Memorandums of Understanding (MOU) rather than binding. When signing agreements, be sure to promise only things that you can deliver, as failing to do so results in a loss of honor. This goes back to the issue of maintaining healthy relationships.
Mistake #2 - Discounting the importance of religion
First, let's clear up a few things.
1. Arabs (mostly) speak Arabic. People from Iran and Turkey are not Arab. Only 20% of all Muslims live in the Middle East.
2. Arab does not automatically mean Muslim. There are millions of Christian Arabs, although the majority of MENA residents are Muslim.
Don't underestimate the effect of religion on people’s values, rules and community relations. For example, Friday is the day for major prayers that are obligatory for all male Muslims. Friday/Saturday is also the weekend for most MENA countries with the exceptions of Lebanon and Turkey.
Mistake #3 - Impatience
Americans (especially) find this issue to be frustrating. American business culture is based on the strength of the individual. Americans, and many Europeans, place a high value on logic, speed and decisiveness. Contrast this with Japanese business culture which is more deliberate and team centric. When forging a new relationship, Westerners often want things to move along quickly, under the faulty assumption that the obvious logic of their business proposal will clearly be seen on paper. Again, Arabs take the long view and look beyond logic, ink and paper. The personal relationship is vital to them.
Initial meetings are about building trust and friendly relationships. Do not get offended if you notice meetings are not following agendas or targets. While Arabs emphasize punctuality, they rarely practice it themselves. However, punctuality is expected from foreigners.
The bottom line is that if your Middle Eastern business partner can trust you, they will do business with you. If you develop and maintain a strong relationship with a partner in the Middle East, you are sure to maintain that relationship going forward without worrying (within reason) that occasional problems, price rises or new competition might quickly derail years of effort.
Being aware of cultural differences when conducting business in foreign countries may seem like common sense, but sensitivity to these issues can prove crucial to success in Middle Eastern medical device markets. Beyond proper email and phone communications, timely responses to requests for proposals and other necessary business practices, the importance of fostering strong personal relationships with prospective business partners and customers in the Middle East cannot be overstated.