Innovation Versus Status Quo

Clash of culture in business is always a matter values. Whether collectively or at an individual level, it’s in the trenches of values that determine cross-cultural or multicultural cooperation. One value that often causes friction is that of risk and innovation.

Risk, by definition, is to place something valued in a position or situation where it could be damaged or lost, or exposed to damage or loss…to incur the chance of harm or loss by taking an action.

North Americans love risk takers. We thrive on risk; it’s our heritage. Our forefathers left their countries of birth and took voyages of danger to an unknown land with the faith that their risk would lead to greater opportunity. Much of the accomplishments of our society are due to risk takers who we now celebrate as innovators.

Kouzes and Posner in their book on leadership state,

"Studies on innovative research and development teams, for example, show that the work climate for success is characterized by two things: an equitable reward system that recognizes excellence and a willingness to take risk and experiment with innovative ideas."

Why are Americans such great risk takers? One is our social structure of individualism. Individualistic societies have the luxury of taking risks because if the venture succeeds or fails only the individual feels the repercussions.

Risk averse societies are those who are collective, concerned about the group. They will not, cannot, take risks easily as it affects the extended family or society at large. Innovation may be valued among freewheeling individualism, but it's seen as irresponsible, even selfish, in high group cultures.

In Risk and Blame, British anthropologist Mary Douglas comments,

[Individualism] "is why risk is such an important subject for America...[its] away from protecting the community and in favor of protecting the individual...the only banner that will rally support: protection of the individual. The new dialogue about risks normally does not protect the collective good."

While risk aversion is common in high grid/high group cultures like China, Japan and India, most of Europe still value the collective mode of operation.

"The European lives a mentality like those who suffered the Great Depression in the United States, but to a much greater extent than we can easily imagine…They not only can't change careers so easily in Europe, most people don't even think of it. Mainly, the European becomes tired at the very idea of risk. He wants security. He gets no big thrill from freedom, opportunity, energy, and change, the way we do." (Stuart Miller – Understanding Europeans)

It’s true that politics and class is also a factor in risk taking. As Walter Anderson writes,

Planning ahead is a measure of class. The degree to which you can control your future makes you aware of how much power you have. Rich people plan for three generations; poor people for Saturday night.

Innovation is a great thing and needed in every business context. However, the value of risk and innovation is seen differently in every culture. If one understands this conflict of risk it will go along way in comprehending and coping with cross-cultural expectations.