Germany - this is the land of Ludwig van Beethoven, Johann Wolfgang von Goethe, and Albert Einstein, the land of the most iconic car brands in the world, the land of beer, pretzels, bratwurst, and sauerkraut, and the largest national economy in Europe with an annual GDP of $4.3 trillion (est. Jan. 1st, 2021), which puts this country of roughly the size of Montana at rank 4 worldwide measured by GDP.
Germany is an important trading partner for the US.
Many companies headquartered in Germany have subsidiaries in the US and vice versa. After China and the United States, Germany is the world’s third-largest exporter. Its top export items are vehicles, machinery, chemical goods, electronic products, electrical equipment, transport equipment, basic metals, food products, rubber and plastic.
Germany's highly developed social market economy makes it the largest consumer market in the European Union with a population of just over 83 million as of Jan. 1st, 2021. Germany's strong economy, extremely high level of productivity, highly-skilled workforce, above-average education system, excellent infrastructure, huge potential for growth and development in many sectors, and its central European geographic location make it an ideal country for US companies to start their European expansion.
Pitfalls of Doing Business with Germany
However, the EU's Common Agricultural Policy as well as a number of restrictions on biotech agricultural products in Germany can make the market entry difficult. The same applies for very strict safety and environmental standards. When starting a business in Germany, intricate and lengthy bureaucratic processes as well as the challenge of getting credit often pose an initial obstacle for foreign businesses. According to the World Bank's 2020 "Doing Business" report, the US score a 91.6 out of 100 in terms of how easy it is to start a business, while Germany lags behind with a score of only 83.7. But these are not the only challenges for US Americans doing business with Germany.
Since Germans are such productive, punctual, and direct business people, US Americans often assume that doing business with Germans is going to be a walk in the park. Yet, there are many cultural differences that can derail a US American-German merger, such as the Daimler Chrysler story, or render US American market entry strategies and negotiations unsuccessful.
Germans' love for honest, blunt, and openly confrontational behavior often catches US Americans off-guard. This coupled with a tendency to make consensus-based decisions, trying to achieve social fairness, and save the environment can leave US Americans baffled. When presenting to Germans, make sure you have lots of well-researched facts. Germans love detailed information, have an impressively long attention span, and are highly unappreciative of superficial, humor-filled, attention-grabbing presentations without depth and with unsubstantiated claims. If you fail to fulfill their expectations, you will be grilled with excruciating questions and met with suspicion.
The lengthy decision-making process and the strictly hierarchical and departmentalized flow of information in German companies can also drive US Americans crazy. Be prepared to be patient. The German saying "Was lange währt, wird endlich gut" meaning that things that take a long time will eventually turn out to be good is something to bear in mind.
Proverbs often allow us to catch a glimpse of a country's culture.
Therefore, another German saying: "Erst die Arbeit, dann das Vergüngen" should also be something you are familiar with. It means that one should finish a task or do their work first before engaging in enjoyable free-time activities. Germans are very sociable and love their free time, but they separate work from private life and need a lot more privacy than you would expect. They also prefer researching everything in detail and finishing one thing before implementing a plan or starting something new. Trying to push them to favor fast over proper is futile, will only draw their scorn, and make them highly unlikely to cooperate.
More things to consider
Apart from these cultural features, the German communication style, leadership style, preferred way of presenting, negotiating and problem-solving, their need for privacy, space, and consensus, their desire for formality and following rules, their love for knowledge and details, and their need to take things seriously can easily derail business negotiations when you come unprepared. It might even be a good idea to brush up on your table manners, dress and meeting etiquette, and choice of words. American English slang, sports idioms, overly religious statements, putting your feet up on a chair, or eating with only a fork in your right hand will be frowned upon, while your respect for formality, etiquette, and hierarchy as well as speaking a few words of German will be highly appreciated and will go a long way in building good and long-lasting relationships with your German business partners or colleagues.
If you think this is all there is to know about Germans, let me tell you that this article is barely scratching the surface.
Please, join WTCPB for our next event in our Series with Renata Urban: "Doing Business In Germany And Communicating Successfully With Germans"
"Doing Business in Germany and Communicating Successfully with Germans" on Wednesday, June 2nd at 11a.m. EDT.
Renata Urban is a language teacher, intercultural coach, and communication skills trainer, she helps people communicate successfully in their own language, in a foreign language, and across cultures. Being a German citizen and having lived and worked in both Germany and the U.S., she helps businesses and private individuals work with Germans, negotiate with Germans, sell to Germans, learn German, relocate to Germany, and build successful international teams and business ventures with Germany over time.