Author: Flo Oberhofer, http://www.make-in-india.de
The target of this article is to give Indian startups a first insight into the German culture and its implications on business behaviour and attitudes. This article does not claim to be a single source of truth and some facts are depicted in a slightly exaggerated way to cover extremes. The people startups will meet during their “business journey” into the German market are humans and every individual is different. So, a general recommendation is to always approach individuals with an open mind and without prejudices.
When talking about the German culture, there are a couple of stereotypes which one comes across commonly. This guide will take up some of those and investigate their impact on business life. Additionally, this guide will give hints on specific topics where cross-cultural pitfalls might appear.
It has to be clarified that nowadays there are significant differences in how individuals approach work and their jobs. This article will give an insight into both worlds, traditional enterprises (e.g. automobile manufacturers) respectively government entities as well as more progressive small, medium and startup-companies. The differences in attitude and behaviour are often based on the company’s culture but can also be dependent on the differences between generations.
Mentality
Punctuality & time management
There is a German saying “Fünf Minuten vor der Zeit ist des Deutschen Pünktlichkeit” which translates to „being five minutes ahead of time is a Germans sense of punctuality”. Indeed, punctuality is a very important and critical aspect in Germany’s business culture. For Germans it is a matter of respect to show up to meetings (be it virtual or in person) on time. If a meeting is scheduled at 10:00 AM, then someone who shows up at 10:05 AM is frowned upon. There will be no direct consequences of being late, but participants will have a negative impression of late comers which can potentially harm the business outcome. Since German business etiquette does not allow much spontaneity, one should plan meetings ahead. Those meetings should be held according to a previously shared and published agenda depicting all the individual points to be discussed. Germans tend to use those agendas to prepare themselves for meetings.
Punctuality is one of the highest regarded values, also in terms of adhering to timelines. If someone promises to send a set of documents until a specific time and date, be rest assured the people will have noted this down, either in their mind or their notebooks. If the documents do not arrive until the agreed time – again this will leave a bad impression. In general, it is advisable to always give a specific date and time to accomplish specific tasks. One should avoid “I will send this some time next week” or even worse “I will send this to you”.
This behaviour is based on multiple factors. First and foremost, traditional German businesspeople tend to schedule their day to the minute. They will evaluate how long a meeting will take and plan their day accordingly. If someone shows up late to meetings, this will jeopardize their schedule and create unrest, especially if it’s a meeting of a large group of people.
Furthermore, it is important to know that Germans value their spare time. Whereas Indians are willing to go out of their way and work longer hours, including on Saturday. This is why most large traditional German companies have a specified limit to their working hours. Those have been negotiated by workers unions and are usually applicable for all hierarchical levels – from workers to the mid-management level. The typical German work week is around 35-40 hours, Monday to Friday. Managerial level positions usually never work on Saturdays and Sundays. Typical office working hours are from 8AM to 5PM with one-hour lunch break. Business lunch is very common, while business dinners are rarer and usually only happen with long-standing business partners. Many traditional companies do ask people to avoid overtime and if overtime is required either financially compensate these extra hours or provide compensation days off. Startups tend to be more flexible and are generally not covered by the workers unions labour agreements. Especially in startup companies long working hours and overtime are not uncommon as timing is in general seen a little bit more flexible. Yet, the general attitude towards punctuality remains. In general, it is not advisable to call German businesspeople outside of business hours unless otherwise agreed.
To keep one’s word
On similar lines, keeping your word is very important for Germans. Germans do give high importance to promises/commitments given, or expectations risen by individuals or companies. They often base their level of trust and their willingness for cooperation on whether people deliver on their promises.
Germans are known to take a lot of notes during meetings in order to be able to record and fulfil verbal agreements, but also to keep in mind what has been promised to them. It is not mandatory but taking notes during conversations and presentations is often interpreted as a sign of interest and care. Germans value detailed documentation and it is not uncommon that participants receive “Minutes of Meeting” after a meeting has been held.
Risk taking
One of the major differences between Indian and Germans is the willingness to take risks. While taking risk is a fundamental part of the Indian DNA, Germans prefer to feel secure and failing is still seen negatively. This has to be kept in mind when approaching German businesspeople and companies. Risks correlated with a deal, product or agreement are analysed in detail beforehand and companies tend to develop potential solutions to mitigate those risks.
While “jugaad” solutions are an essential part of Indian business ventures, Germans give a high importance to profound and professional solutions to challenges. Usually there is always plan A, B and C for instances when things do not work the way they were expected to. However, there is a slowly growing fraction within the younger generation which are willing to take risks, because they know that even if one fails the good social security system and the current strong economic situation will mitigate this risk. However, this attitude mostly only exists in startup, that in Germany often also have a high percentage of other cultures and nationalities. The general risk-aversion has also led to difficulties for startups to identify sources of financial support. It is incredibly difficult for early-stage startups to find funding in Germany. German investors tend to develop an interest in startups with already strong traction and first steady revenues.
Being straight forward
One of the points most foreigners struggle with is the Germans directness. Especially when it comes to giving feedback, Germans tend to be very outspoken. Other cultures often tend to express criticism in a very soft and indirect way in order to not embarrass any involved individuals. This is not the case in Germany and businesspeople will mostly be straight forward if something is wrong or if there is something they do not like. This is not done in order to humiliate or dupe individuals but purely because Germans think that this way of approaching feedback will result in the best outcome and the fastest rectification of issues.
Negotiating
Most Germans are very much focused on details. Germans do notice and judge negatively e.g. when there are typos in presentations. At the same time, most local businesspeople expect to get a multitude of documents, charts, graphics, tables and calculations covering technical as well as business aspects when getting into negotiations. Negotiating with Germans thus can be quite formal. For them to enter a business deal, all the bits and pieces need to be in place, clarified and written down. They expect nothing less from their business partners. Germans take analysis very serious and information are usually reviewed and analysed several times before coming to a decision. However, if the decision is made, Germans usually stick to their judgment, whereas Indians tend to be rather flexible.
German business contracts are often written in a very extensive way in order to include respectively exclude any possible scenarios. Often contracts are checked and rechecked by lawyers or attorneys in order to minimize risks. After a contract has been signed Germans expect that both parties stick to the terms and conditions laid down in the contract. Retrospective alterations are usually not possible, and people expect to “get” exactly what has been laid down in the contract.
Overall, clear and honest, yet respectful communication is appreciated, and confrontation is not a problem. However, emotions should be carefully dosed. Germans are in general very particular when it comes to separating business from personal life. While personal conversations between colleagues are quite common, Germans usually do not exchange too much personal and family stories with sporadic business partners. While in India there is a large focus on building personal relationships amongst business partners, Germans mostly base their business relationships on facts, figures and past performance. Exchanging a few polite phrases rather than personal details is appreciated and will do the trick. In general, Germans often appear sincere and distant with little humour. However, this is something that evolves with getting to know each other. However, with startups being more open and flexible, there might be a higher emphasis on building a personal relationship culture, also with business partners, in the startup.
A no-go during negotiations is trying to bribe. While corruption exists, it can mostly be found on very high level. Germany ranks 11th out of 180 ranked countries in global corruption evaluations (Transparency International, 2018). It is thus strongly advised to not try to make any indications towards bribing individuals. Apart from corruption being ethically not accepted in Germany, there are many control systems in place which will uncover and punish such attempts. Along these lines, business gifts are rather uncommon in Germany and should be avoided especially between parties which have never met before and most organisations have strong regulations concerning external gifts. If one insists to give a present, it should be something with no monetary value (e.g. an expensive pen) and something of idealistic value like a small box of Indian Tea (value should be below EUR 5). Since business gifts are very uncommon in Germany it cannot be expected that there will be a “counter-present”.
Hierarchy & communication
The speed with which business decisions in Germany are made is highly dependent on the type of company that is dealt with. While traditional companies tend to have an extremely strong hierarchical system, startups often have flat hierarchies with fast decision processes. Some of the startups have also tried new models of working, with employees deciding on how much they want to work and how much leave they want to take. However, even bigger organisations have adapted mechanisms of more open communication to overcome hierarchical challenges, such as 360-degree feedback, etc. While in many German organisations, people are still addressed formally with their surname, an ease of this practice can be observed especially among the younger generation and in startups, addressing each other with their first given name. Titles are very important in Germany. In formal communication, titles like Doctor (Dr., PhD) and Professor (Prof.) should always be included. No matter how the addressing is, it is a custom to shake hands when meeting each other.
In Germany, it is of high importance that communication takes place through the person responsible for the specific topic. People appreciate if they are kept in the loop in emails (CC) and some tend to react adversely if they are “left out”.
While language skills in general have improved, especially elder German businesspeople might still have issues with the English, so it is recommended to speak slowly and as clear as possible. For professional communication, Germans prefer to communicate via email or phone. In regard to alternative communication channels, Germans are very particular about their privacy, so contacting individuals via Facebook or WhatsApp should be avoided unless otherwise advised, as those channels are reserved for private matters. For professional networking, locals either use XING or LinkedIn.
Germans are in general very friendly and open minded with a great respect for other cultures. Most Germans will be glad to “forgive” any cross-cultural mistakes if they see that the foreigners are interested in and try to understand the German culture. Most will be keen on sharing further insights into the German culture, but only if asked to do so. On the other hand – Germans are very curious to get to know more about foreign cultures even though they might not actively ask because they do not want to cause any discomfort to the foreigner. Most are very aware of cultural differences and will try everything to make foreigners feel welcome and comfortable. If there are any doubts or questions, one should use the “German straightforwardness” and just ask, no matter how irrelevant a question might seem.