TOP 3: BUSINESS IMPACTS OF LANGUAGE AND CULTURAL BARRIERS

Andy Chaves, senior manager, global diversity and inclusion for Marriott International says “The staffing models of today are leaner and leaner. It’s a challenging world out there. There are a lot of competitors. As we improve our efficiencies, we can do better business and faster. Improving communication among our associates is one of the key opportunities we see.”

Why is there so much room for improvement? Chaves explains that employees often do not share the same first language; he says “When you have limited staff at a hotel, and you can help them develop language proficiencies to communicate with other staff in their language instead of written notes or hand signals, that’s powerful.”

Marriott International focuses on language first and foremost because of its business impact. In any business that operates globally, deals with a diverse customer base, or employs people of many nationalities there are three main business drivers for global readiness training.

1.      Internal productivity

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You may have had the experience of going into a store and a clerk tells you that the inventory system says they have a product, but no one can find it because it has been misplaced. This is called a phantom stock-out. It drives retailers crazy. Employees waste time looking, a product goes unsold, and a customer walks away unhappy. This is just one of the innumerable operational problems that go on daily in organizations. Even something as seemingly simple as putting a product on the right shelf can be hard to get right, and even harder to get right when language barriers or cultural nuances prevent staff members from fully comprehending what they need to do.

Business leaders are looking to drive greater organizational agility, flexibility, and productivity by improving alignment and engagement. If the organization fails to do this, the risk is loss of productivity—which translates to a host of problems: from failure of getting products to market on time to missing targets on your margins. Operational missteps can kill productivity, yet HR is often unaware of the root cause of operational problems (just as the vineyard president was unaware of the detailed operations of the vineyard). If language problems are dragging down productivity then HR needs to detect the problem and act to solve it.

How global readiness training impacts PRODUCTIVITY:

Building language and cultural skills reduces operational missteps and time lost. In fact, 70% of respondents from the 2015 Rosetta Stone Business Language Impact Study (see box) said using language training has made them more productive in their work with teams, partners, and vendors who speak the language they are learning[1].  More than half of employees using language training reported saving at least three hours per week on the completion of tasks involving stakeholders who speak the language they are learning. More broadly, a study by the British Council, Booz Allen Hamilton, and IPSOS reinforced the importance of cultural skills. The report said:  “Employers are under strong pressure to find employees who are not only technically proficient, but also culturally astute and able to thrive in a global work environment.”[2]

2.      Collaboration

A case study on Ford Motor Company in the People & Strategy Journal notes that the days of doing everything out of Detroit have long since passed; the company says “. . . an IT project might be run largely out of Mexico with a supervisor in India.”[3]  For that kind of global team to work effectively, team members need language skills and cultural training. In fact, a survey of 600 randomly selected employees of multinational corporations found that 64% of respondents said language was a problem on virtual teams, and perhaps is one reason why so many teams (40%) were only somewhat successful or not successful.[4]

shutterstock_255653545How global readiness training impacts COLLABORATION:

There are multiple mechanisms by which language and cultural training aid team collaboration. The most obvious one is to improve the language skills of people who do not speak the common business language (usually English in global firms); a second mechanism is to create an opportunity to make a little small-talk with a colleague in his or her native tongue; even being able to ask about the weather is helpful in making all team members feel included and build the trust needed to make teams collaborate successfully. Cultural training, as well as language training, enables team members to become more sensitive to the difficulties non-native speakers may face, and are thus better able to communicate with them. If your organization has virtual teams, then HR needs to look at the impact language training would have on collaboration.

3.      Customer Retention

Prioritizing customer retention means not just enhancing the quality of your products and services, but also sharpening your organization’s global understanding of your customers’ needs. If you fail to do this, you risk losing sales to competitors. No company can afford to continually replace lost customers and expect to still make a profit. One study by Bain & Company found that a 5% improvement in customer retention increased profits between 25 and 85%. Understanding your customers’ needs means being able to speak to them in their language, and with the cultural nuance and sensitivity they expect. According to the 2015 IDG study, 64% of business leaders reported that employee-customer interactions are the number one language challenge their organizations face. In another recent survey, 89% of business executives felt that customer loyalty would increase if those customers were served and supported in their native language. In an increasingly global marketplace, this has implications on the skills of your workforce.

How global readiness training impacts CUSTOMER RETENTION:

For many organizations, customer retention is the main business driver for global readiness training.  Retailers, the hospitality industry,

and health care are all places where organizations are likely to run into customers speaking a wide range of languages and representing diverse cultures. Jez Langhorn, chief people officer at McDonald’s UK and Northern Europe, said “Soft skills like communication and teamwork are incredibly important to our business because of the impact they can have on our customers’ experience.[5] . Indeed, 57% of respondents to the 2015 Rosetta Stone Business survey said that as an outcome of their language training, they are now capable of serving a larger range of customers[6]. Similarly, intercultural training can help avoid damaging faux pas such as calling a Japanese client by their first name or using gender-biased language in the US. Looking at the customer base is an important clue as to whether language and cultural training would help with customer retention.

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[1] Rosetta Stone Business 2015 Rosetta Stone Business Language Impact Study

(January 2015)

[2] British Council, Culture at Work: The value of intercultural skills in the workplace (2013)

[3] Creelman, D. Globalization and Talent Strategies. People & Strategy. (September 1, 2014)

[4] RW3 CultureWizard The Challenges of Working in Virtual Teams: Virtual Teams Survey Report (2010)

[5] http://www.cipd.co.uk/pm/peoplemanagement/b/weblog/archive/2015/01/15/reputational-problem-remains-for-soft-skills-worth-163-88bn-to-uk-employers.aspx

[6] Rosetta Stone Business (2015)



Neda is Marketing Coordinator at Rosetta Stone and takes care of Marketing activities within the EMEA region. She grew up in Germany and is now based in London. She speaks German, English, Persian and Spanish and is now adding Portuguese to her language portfolio.

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