Navigating Global Success: Cultural Diversity and Consumer Behavior — In conversation with Liz Lempres
Consumer behavior varies significantly across different regions and cultures, which is a fundamental consideration for companies operating in global markets. As stewards of their organizations, board members must recognize that consumer preferences, shopping habits, and product perceptions can differ widely from one country to another. These variations can be especially pronounced in consumer-oriented industries, where local customs, traditions, and societal norms significantly shape purchasing decisions.
We are in conversation with Liz Lempres, a board director with extensive experience in various industries, disciplines, and geographies. We delve into the art and science of board leadership and explore the critical role of cultural diversity in global decision-making. Through the insights shared, we aim to uncover the strategies and approaches that have shaped the success of organizations operating in diverse markets, while keeping the needs and preferences of consumers at the forefront of business strategies.
Given your extensive experience across various regions and industries, you’ve likely encountered diverse business environments and consumer behaviors shaped by cultural differences. Could you provide an example of a situation in which you had to navigate and leverage these cultural nuances to drive the success of an organization’s global initiative or a board’s decision? What strategies or insights did you employ to ensure businesses operated effectively and that consumer preferences were well-understood and addressed across different cultures and markets? How do these experiences influence your approach to guiding boards in understanding and adapting to international differences in business operations and consumer behavior?
Having worked in consumer industries for over 30 years, I’ve encountered many situations in which consumer preferences and behaviors vary significantly across markets. This is very common in food, for example, which tends to be more local than other consumable categories such as soft drinks or snacks, and can also be common in channel preferences, such as when, where, and how frequently consumers shop in different types of stores and for what purpose.
I remember the incredulous look of a senior European executive when I said that the majority of Americans purchase fast food in the drive-through vs. going into the store. The popularity of drive-throughs continues to be robust, with 60–70% of fast food sales going through the drive-through window. The executive, who had been knighted and was referred to as “Sir,” asked, “Does that mean that American mothers feed their children in the back seat of their cars?” I’m sure he thought I was a terrible parent when I replied, “Yes, I do, especially when we’re coming home late from soccer practice!.
Costco-type formats, for example, do well with higher-income consumers in the US who can drive to typically suburban/exurban sites, buy larger pack sizes, and have sufficient storage. Even higher-income consumers in many geographies outside the US would be unable to regularly shop at Costco due to the constraints of smaller apartments and limited storage space.
While these are just a few simple examples of cultural differences that executives can face when pursuing opportunities outside their home markets, the challenges are even more significant for board members who aren’t working for the company full-time and aren’t “living” these issues every day. Some companies bring their boards to visit different geographies, which is helpful, but there’s only so much you can learn in three days of back-to-back meetings and store visits while jet-lagged.
So what’s a board member to do?
First, ask questions. Don’t assume that the experience you have in your home market translates into opportunities in other countries. Try to tease out what the fundamental differences are between the new market and the company’s strongholds. Keep pushing until you understand what it’s going to take to win.
Second, proactively build your knowledge. In addition to carefully reviewing the information provided by the company, spend time informally with executives asking follow-up questions. Talk to your fellow board members who have deeper firsthand knowledge of the geography. Read analysts’ reports and other industry analyses with an eye toward understanding who’s winning in the markets you’re interested in and what you can learn from their mistakes.
Third, don’t rely solely on your experience, as even the deepest consumer behaviors can change. Most board members come to their roles with deep industry experience, but sometimes even the most fundamental consumer behaviors change, challenging what a board member thinks she knows.
In conclusion, staying current, particularly in understanding consumer behaviors and preferences, is critically important for board members. .”
Thank you for your insights, Liz.
A seasoned professional with a multifaceted career, Liz Lempres is currently a dedicated Board Director, specializing in cultivating resilient consumer businesses at scale. Holding the prestigious title of Senior Partner Emeritus at McKinsey & Co., her expertise in strategy, organization, and board governance is widely acknowledged. With a global footprint spanning over 20 countries, her international exposure has enriched her perspective, enabling effective collaboration across diverse cultural and business landscapes. Renowned for assuming pivotal roles in audit, governance, compensation, and CEO succession, she brings a wealth of experience to every boardroom. Committed to driving sustainable practices, her active involvement in shaping and implementing ESG strategies underscores her belief in positive change for long-term success in today’s dynamic business environment.
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