Bailey: Language Barriers and Miscommunications are Stifling Growth

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Contrary to the expectations of many experts, the current global economic downturn is spurring more and more companies to looks outside of their borders and become more international in the way they do business.

We are seeing more and more companies from developed economies looking to expand their operations to emerging markets, such as Russia, Brazil and China. The companies that will thrive however are the ones whose employees communicate and collaborate effectively with customers, colleagues, suppliers and partners. In fact I’d argue good communication is the key enabler of international trade, growth and corporate efficiency.

In a surveycommissioned by EF Education First in partnership with the Economic Intelligence Unit (EIU), of nearly 600 executives from across the world, almost half (49%) admitted that communication misunderstandings have stood in the way of major international business deals and therefore resulted in significant losses for their company. Language and cultural differences are therefore proving to be major barriers to businesses succeeding on an international level. We see this as a problem especially for companies who are making their first foray outside their native market, with almost two thirds (64%) saying that differences in language and culture have made it difficult to gain a foothold in foreign markets.

These challenges are compounded by the fact that almost nine in ten respondents thought their company’s number of overseas clients will increase in the next three years, and more than three quarters (77%) believe their firms will have an operational presence in more countries than it does currently. With all this in mind, it is crucial for companies ensure staff have the right skills to converse effectively. .

Linguistic diversity is considered to be a greater problem in Latin America and Southern Europe – key areas for business expansion and growth – with 38% of executives in Brazil and 40% in Spain highlighting that language barriers are significant hindrances to effective cross-border relations. Brazil has emerged as a top place to do business, so let’s train our employees to communicate in Portuguese. We may miss out on business opportunities otherwise.

It’s not all bad. There is an up-side; as Americans, we are at an advantage because the majority of executives from around the globe deem English to be the international business language, followed by Mandarin and Spanish. While this gives us a head start, we must still work hard to ensure our staff are communicating effectively and adapting to cultural barriers if we are to expand our horizons internationally. Despite business executives acknowledging this problem – there is a gap between this recognition and actually taking action to address it. Despite almost 90% of executives stating that if cross-border communication were to improve at their company, profits, revenue and market share would increase significantly, these same executives admit that there is a distinct lack of training to hone their employees’ language and communication skills.

It’s now or never. American companies must look to expand outside our borders and work with companies in emerging markets to foster economic growth. The time is now to focus on language and communications training for employees and new hires.

Andy Bailey is the Chief Marketing Officer, Corporate Language Learning Solutions (CLLS), EF Education First. As Chief Marketing Officer (CMO) for EF Education First, Andy is responsible for devising and co-ordinating all global marketing strategy and activities within the EF CLLS group – including branding, positioning, product and market strategy, communications and field marketing.