BUSINESS BRIEFING
BUSINESS BRIEFING |
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People coming to Spain to do business are often struck by three things: the cultural differences between the regions, the need for a continuing relationship for successful business, and the fact that the Spaniards are prone to improvising or making last-minute changes to plans.
Spain’s most important business areas are in Madrid and Barcelona and their surrounding areas, and Andalusia in the south. The Catalan approach to business and work is different from people of other regions in Spain. They can come across as direct, even abrupt, and not as expressive as one might expect from Spanish people. Other Spaniards consider them to be hardworking, frugal, aloof, and humorless. The Catalans find the Madrileños, the people from Madrid, arrogant, bureaucratic, and extravagant tricksters who like showing off. The Andalusians tend to be more laid-back, more prone to long lunch breaks and to doing business outside the office. Despite these stereotypes, however, attitudes to time, appointments and deadlines are often an individual matter.
What is common to all, however, is the fact that, as in Italy and Portugal, good personal relations are the sine qua non of successful business. With good personal relations, a business may still fail, but without them there will be no business at all. Spanish business people have always networked, even before this activity became fashionable. Deadlines may not be adhered to unless contact is maintained. The personal relationship gives importance to the matter at hand, and deliveries will be ready if you follow them up.
Spain has two forms of company, the stock company, Sociedad Anónima (SA), and the limited company, Sociedad de Responsibilidad Limitada (SRL). Companies with more than fifty employees must have a works committee. Companies with more than five hundred employees have an employee representative on the board. The number of autónomos or trabajadores por cuenta propia (freelancers or self-employed) has multiplied in recent years as a result of high unemployment rates. The government has tried to make it easier for start-up companies, however, in comparison with countries such as The Netherlands, there is still much to be done to improve areas of the bureaucracy and taxes.
Offices tend to work a forty-hour week, from 9:00 a.m. to 1:00 or 2:00 p.m., with two hours for lunch, and then from 3:00 or 4:00 p.m. to 6:00 or 7:00 p.m. or even later. These hours may be adjusted in the south to allow for a longer lunch break and to avoid the main heat of the day. Deals are often agreed upon in principle over lunch, dinner or a coffee, with subordinates fleshing out the details with you later, in the office.
People are sometimes allowed to take a four-day weekend over public holidays. In July and August, most people go away on vacation and, depending on their industry, offices may change their working hours, have only a skeleton staff, or often, close down altogether for a month. The legal amount of holidays is 2.5 days per month worked, which amounts to 30 days annually.
Leadership and Hierarchy
Traditionally the Spanish management style has been “top down,” with all key decisions being made by the boss. This is typical of the older-established companies and family firms, where the president is the absolute controller and subordinate positions are held by members of the family. Knowledge of English is not automatic among older managers, who may speak French as their first business language. However, such working practices are radically changing. Today new employees need to know more than two or three languages, but it will take several more years until companies are able to develop their business completely bilingually. Depending on the company you are dealing with you may need to find an interpreter or check whether there is a younger manager from the company who can serve as interpreter. Spain does have a professionally trained cadre of managers, many of whom have studied internationally and are up-to-date on modern management techniques, and speak excellent English.
A Spanish boss (jefe) is expected to make decisions and to be courageous. He (or she though it usually is a he) is also expected to work at gaining and maintaining the personal loyalty of his subordinates. His decisions will be concise, concrete, and short-term, with clear instructions as to how to implement them. However, managers may not feel committed to implementing them, and will pass even small decisions back up the line. This is especially true in the civil service, where immense bureaucracy can slow things down. In many older companies, written objectives and profiles are unusual, as are appraisals.
Spanish managers tend to work less from logic than from intuition, and they pride themselves on their personal influence with their staff. A Spanish manager is expected to be aware not only of the business lives but also of the personal lives of the staff and the people they are doing business with, and to be prepared to deal with problems in either area. Instructions are never given coldly. Warmth is an important part of giving orders and instructions, especially in the south, but the underlying authority is always clear. Logic is often secondary to force of emotion.
Human Responsiveness
If a Spanish employee approaches his or her boss with a personal problem, it is important to pay attention to it immediately, even if only to make an appointment to deal with it or discuss it in more detail later. The personal and human dimension takes priority.
The Spanish executive generally likes to work near his or her family. A few years may be spent studying and working in Madrid, but then employment is usually sought in the hometown. In many companies connections (colloquially enchufe), rather than qualifications or aptitude, are still the key to recruitment. Education is still regarded as extremely important, but other qualities such as professional and international experience as well as proactivity and responsiveness are expected as part of the package. The qualifications for promotion are personal loyalty, friendship, and ability, usually in that order. Intelligence alone may seem a bit suspect. These values together with the high rate of unemployment have created immense frustration among people of all ages. And many of them have chosen to leave the country in an attempt to find better opportunities elsewhere. Sometimes they do, sometimes they are not so lucky. Overall, however, the country has suffered a major brain drain since 2008.
Although Spain is a hot country, appearance is important, and people are expected to dress in an acceptably businesslike, formal and stylish fashion—dark suits or navy blue blazers and ties for men, and formal suits or dresses, always with nylons, for women. Jackets and ties may be removed in the office, especially in summer. Symbols of wealth in clothes, watches, cars, and jewelry are usually a good sign; they show that you have done well. The Spaniards take great pride in their possessions, and set store by quality and taste. Your Mont Blanc pen or Cartier watch will be quietly noticed and appreciated, but not commented upon.
Spanish business style is generally quite informal and relaxed, but first meetings are formal. A senior man, for example the president of a company, named Don Sr. José Antonio López, might be addressed as Don José Antonio or Don José. Use the formal usted (abb. Ud.), and change to the informal tú only if suggested by your hosts. You will probably move to first-name terms rapidly, and continue in this informal style thereafter. If this happens, do not be surprised if e-mails start ending with “Estamos en contacto” (“Let’s keep in touch”) or even “Un abrazo.”
It is important to have a relationship based on trust. It is also important not to be overassertive, as this may impinge on personal pride. The Spaniards take more pride in their personal qualities, in particular personal honor, than in their business or technical excellence. The personal touch is all-important, and getting out of the office to chat and “network” is part of the job. That is the way many businesses work. One cup of coffee with you may count for more than a hundred exchanges of e-mails. In a highly competitive atmosphere where most of the population is often over educated, this is a way of standing out. If you are in another country, then a telephone or videoconference conversation can fulfill the same function.
Lunchtime at work often happens. Even if it is just an hour, people will mix with their colleagues in a café to have “el menú del día” or in the company’s kitchen or lunchroom for the staff. However, the bosses do not mix with the staff and tend to have lunch separately at a restaurant where they are well known.
Despite the traditional Spanish macho image, there are many women in middle and senior management positions, and their qualifications ensure that they are universally accepted. That said, however, you will not meet many women at the top of a Spanish company—unless she is the daughter or granddaughter of the founder. Businesswomen expect a completely professional attitude from the men they are dealing with in business. A lunch or dinner invitation will be considered as part of the business relationship.
To do business in Spain you must first earn the trust of your Spanish counterpart by establishing a personal relationship. Your business partners will be hospitable, and any social invitation should be regarded as an investment in a trusting relationship. Talking about families and children is an important part of this, and having photos of your family ready to show will help greatly in building the relationship. It will demonstrate to your Spanish counterpart that you have roots in your society, and therefore a stake in ensuring that things are done correctly. At job interviews you might be asked about your parents’ profession, your family members, or personal status. Companies like to know their staff. Contrary to other cultures, CVs are expected to have a professional ID photo.
The social relationship extends to small family favors. If you can help a relative or friend of your business partner in some way, it will be seen as a real favor, and will be of immense value in building trust. A successful business relationship has to move beyond mere good business relations.
For a man in business, pride and the macho image are still important. Crucial to Spanish business is the concept of honor and of not losing dignity. Spanish business partners are men and women of their word. Once you have established a relationship, they will not let you down. By the same token, you must be careful not to do anything that lets them down in the eyes of their peers.
One key aspect of this is the employment of Spanish agents to act on your behalf. They are your eyes and ears in the market, and once you employ them you must work with them—they will be very unhappy if you make any move behind their back. Make sure you choose such contacts wisely, as they can make or break your presence in the Spanish market.
A Spanish businessperson, although equipped with agenda and timetables, also prides him or herself on being flexible. This often means three things: that planning may seem more haphazard; projects may progress at a slower rate than you would expect or like; and that they are open to new ideas and changes if these are interesting and reasonable. Spaniards know how to cram a lot in. This means that they are essentially multitasking, prioritizing continuously, juggling a number of things and reacting to the most important or urgent requirement.
The Spaniards prefer long-term visions and short-term plans. They can do this because of the immense importance of networking in Spanish society. It has been maintained that they can achieve in three days what for an American or German might take three months, because they can do it all personally, on the telephone. Their years of networking mean that they can achieve things through personal contact that would be quite difficult for their counterparts in Europe or USA. One of most valuable possessions at work for a Spanish businessperson is their address book with contacts for their clients, suppliers, business people, and other key persons.
The Spaniards, like the British, write the day first, then the month, then the year, so November 15, 2003 is written 15.11.03. When making an appointment, book ahead, and then telephone and confirm it on arrival. When you arrive for an appointment, the most appropriate way to announce yourself is to introduce your name and position or company, presenting at the same time your business card to the receptionist, who will let your Spanish contact know that you have arrived. You should be punctual yourself, though sometimes you might be kept waiting between ten and thirty minutes. However, Spanish businesspeople are more and more international and they have got used to different business practices.
Keep in mind the normal business working hours, and remember that hours are often reduced, or offices are closed altogether, in general holiday periods. Avoid scheduling appointments around Easter, Christmas, or in August.
The Spanish business communication style is relaxed and friendly, and relies above all on the human touch. It is important when sending a business e-mail to a Spaniard to be slightly more long-winded and warm than you might be in a similar e-mail to a US or UK contact. Use greetings such as Estimado/a (Dear)— avoid Querido/a which has a more personal meaning—to begin your communication, and Saludos, or Saludos cordiales or Atentamente (similar to Regards or Best regards) to close with. When the relationship becomes closer or more personal your first line can also be “Buenos días Miguel,” (“Good morning Miguel,”) and when it is a follow-up you can simply use the name followed by a comma “Miguel,”. On the telephone also, do not forget the human side.
In Spain, the function of a meeting can be to get to know clients, to communicate instructions, to give an update on a project or topic, or to deal with an urgent issue. Meetings usually have a scheduled agenda, although very often, new topics come up, that can extend the proceedings. Depending on their relevance, they will be addressed immediately, left until the end or scheduled for another meeting. The final decision will always remain with the boss, and if he or she cannot take part in the full discussion they will usually check in to make their presence known in the course of the meeting.
The Spanish will usually begin a meeting with a long speech that serves to establish their own status and qualifications as well as to outline their aims. This is followed by an equally long response from the other side. It is important during a meeting to find points of agreement to comment on wherever possible. Honor demands that a Spanish boss should not be contradicted in public, and a “compliant” foreigner may well gain concessions in a more relaxed atmosphere over lunch or dinner.
The meetings culture is not well established in all companies, and the idea of thrashing things out to arrive at a common agreement is not universally recognized, nor are action points or follow-ups. It is important for the person in the chair, however, to win everyone over to his or her point of view. The chairperson will either make the decisions or will have to put the decision made to the boss for ratification.
Spanish managers are quite individualistic, and will use a meeting to score personal points. They have an expressive style and negotiations can be loud, with frequent interruptions, and people called in at short notice to contribute to the negotiation. It is important not to be upset by conversational overlap; is not felt to be rude in Spain. Everybody prepares the basics, but negotiations (often lengthy) depend on intuition and thinking on your feet rather than the careful preparation of, say, German and Swiss companies. The personal touch is enhanced by strong eye contact. Spaniards want to be able to “read your eyes,” to know who you are.
Spaniards are often more concerned about giving a good impression and are not always the most dedicated listeners. They may appear to be less interested in the content and more in style and your appearance. They will observe your physical characteristics, your mannerisms, and your attitude and willingness to participate in the congenial socializing that will follow. If you are making a “substance” presentation, keep it short, and use a few imaginative phrases that people will remember. The Spaniards do not appreciate palabrería (empty verbosity) in business meetings or negotiations. They will want to interject and discuss points, so limit your presentation to thirty-minutes.
The dependence on the personal relationship means that standard company functions, such as strategic planning, and even financial business plans, may be based on business sense and intuition rather than on systematic data. Schedules, budgets, and forecasts will be rough guides only. Everything must be done by personal negotiation, although written proof such as contracts or e-mails are requested. If they have not called you to confirm a delivery, it is recommended that you get in touch with then and find out whether the stock has been delivered or even left the warehouse. “Inspect, not expect,” should be your motto.
THE PERSONAL TOUCH
A Spanish representative, working in Spain for a London-based British company, had for some months been underperforming in the market. An executive of the British company flew over to visit the offices in an attempt to find out what had gone wrong. He talked to each staff member personally, then took them all out to lunch, and generally formed a good relationship with them. “Now that we feel we know you,” said some of the staff, as he left, “we’ll try to do better for your products.” And they did. Sales rose 50 percent.
Be prepared to spend some time outside the office on building and maintaining good relations. Although today’s business world no longer always allows for a siesta in the afternoon—despite being world famous, nowadays it mostly happens during weekends—the Spaniards still start work early and finish late, going out to dinner as late as 10:00 p.m. and finishing at 2:00 a.m. Weekend socializing can go on far later. Be prepared for the strain on your constitution—and on your digestion!
Business entertaining usually takes place in restaurants. If you are invited to a Spanish home, it may just be for a drink before moving on to dinner in a restaurant. You may otherwise be taken first for tapas in a café or bar.
Traditionally Spanish business protocol dictates that you wait until coffee is served at the end of the meal before bringing up the subject of business. However, as companies adopt international business practices and get busier they like to make the most of every second they have in their meetings.
Remember that whoever has extended the invitation pays the bill. If you have been invited out for a meal, you should return the compliment at a later date, but when doing so you should be careful not to mention “repaying” your hosts. When the time comes to choose a restaurant, ensure that it is an excellent one, as the Spaniards are extremely appreciative of fine food and wine, and will respect you for your good taste! Do not forget that many restaurants close for a month of vacation or open only during the evening or weekends, especially some of the more superior ones.
Gifts are not usually given at a first meeting, but may serve as a sign of willingness to establish the relationship at a later date. They may also be given at the conclusion of successful negotiations. If you receive a gift, you should open it immediately. A stylish ballpoint pen, a small case of local wine, or produce are typical gifts.
If you are taking gifts, do not give anything too extravagant, or your generosity may be perceived as a bribe. Presents of single malt whiskey, quality English gin, or chocolates are very acceptable. If you want to give a bottle of Spanish wine, make sure that it is a special one, such as Vega Sicilia. Your country’s local crafts, illustrated books, and CDs related to your home region are also often appreciated. Only give a gift advertising your company name if it is discreet and tasteful.
On the rare occasion that you might be invited for a meal at a Spanish home, take a box of good chocolates, or dessert items such as attractive little pastries, or flowers—but count these, for thirteen flowers are always considered bad luck. Be sure to avoid buying dahlias or chrysanthemums, as these flowers are associated with death.
In business, as in most areas of Spanish life, the importance of personal relationships must not be underestimated. At first there is formality, but once introductions are over a more personal, informal approach is expected. However, dignity must always be maintained, and respect and honor are necessary for building trust and a working relationship.
Spanish business is “multitasking”—many things are dealt with at the same time, not separately. You, too, will be expected to be flexible. You should prioritize tasks and develop a good working relationship with both colleagues and subordinates. Good contacts are crucial as the concept of enchufe (the right contact) is a part of business life. If you are well considered by the right people, you are on your way toward success. Your product will be more easily accepted once your business partners accept you and like you.
But management practices are changing in Spain. The new and professionally trained managers have adopted a more decentralized, team-based, target-oriented, and quality-focused management.