Scaling Brands Across Cultures - Katherine Melchior Ray

0:00Katherine Melchior Ray:Hey, welcome to the CMO Whisper Show. I'm your host, Steve Olenski. Part marketing practitioner, part ad agency veteran, part journalist, I was a writer for Forbes for 10 years. I've had so many insightful conversations over the years with business leaders, to athletes, to celebrities, to of course, CMOs. The only difference now is instead of sharing those insights through written form, I'm doing it this way. My guest today is Catherine Melchior-Ray, one of the world's leading voices in global marketing. She's a former CMO of Shiseido in Tokyo and Babel in Berlin, and her career includes senior leadership roles at some of the most iconic brands in the world, including Nike, Louis Vuitton, Gucci, and Haia.

0:47Katherine Melchior Ray:Today, Catherine is the president of Globe Ally Consulting and also teaches global marketing at UC Berkeley's Haas School of Business. Fluid in French and Japanese, she has built a reputation for helping brands navigate the delicate balance between global scale and local cultural relevance. She's also the co-author of the book Brand Global Adopt Local, written with Natalie Kelly, CMO of Zappi. It's a book that offers marketers a practical framework for balancing global brand consistency with local cultural relevance. Catherine is a much sought after voice on marketing, culture, and leadership, speaking on global stages like Cans Lions and Adweek, and her insights have been featured in major media, including 60 Minutes, the New York Times, the Wall Street Journal, and CNN.

1:39Katherine Melchior Ray:And listen, I have to say conversations like this are exactly why I started this podcast. When you sit down with someone who has operated at the highest levels of global marketing and understands culture the way Catherine does, you know you're going to walk away smarter than when you started. No pressure, Catherine. Welcome to the show. Wow. Gosh, I got to hire you as my publicist. Well, listen, it is a treat. We've had some amazing off-air conversations, and we're just going to go and just going to rock, and the time's going to fly. Look forward to it. Thanks for having me. You're welcome, and I've got to start right at the start, right, with your journey.

2:15Katherine Melchior Ray:Now, you've had a fascinating career across marketing cultures, Tokyo, Berlin, Silicon Valley. When you look back on it, was there a moment, or plural, when you realized global marketing was really going to be a big part of your story? No. Okay. The answer was much more organic or the truth is much more organic than the 2020 hindsight. I did not really know I would be a global marketer. In fact, I was denied a job when I was at Nike to run marketing because they said I'm not a marketer. I'm a business person. And then, you know, I was hired as vice president of marketing for Louis Vuitton, not in France, where I was living, but to go to Japan.

3:01So I've been, I think, very fluid across the titles. But I mean, I've been a CMO in two different industries. So in cosmetics and in tech, and they could not be more different than, you know, industries could be. And so I think that it's much more that about the way I think about challenges and the way I approach new opportunities, especially in new markets and in new industries. So as you mentioned, all those brands that I've worked with, I've worked across five different industries from retail and cosmetics, tech, hospitality, and I started in Japanese television. I mean, how crazy is that?

3:42Katherine Melchior Ray:You're the first one ever on my show who can make that decision. Yeah, yeah, it is. It is kind of crazy. I mean, I actually learned something from each one of them. And then as most careers are these days, they're not linear, right? They're very circular. And mine was absolutely circular, if you can call the globe, my path. And so, you know, I mean, I studied history in school and I say all the time that history is an incredible training ground for working in business and understanding consumers. Because if you think about history, you're looking at how did we get here? What are the themes and trends that cross and align to be able to propel culture forward?

4:30And in marketing, you're doing the same thing, but going forward. trying to figure out what are the different compelling themes that consumers are interested in and that our culture is being influenced by and where are they going to go? So you're using the same thinking skills in a forward-looking approach that you use in history, which is trying to make sense of the past. And then of course, there's the storytelling, right? So in history, you have to be making it come alive. And in marketing, you're always telling stories to try to bring to life the consumer's needs and the opportunities that brands are bringing into the culture.

5:11Katherine Melchior Ray:I can't help, but I have to go back to something you said about Nike. And I think you said something about you were, you, they told you you were not in for marketing, you were business, right? Today, today, you know, this, right? Oh my God. They were like, wait, you have a business, put her in marketing because it's a revenue. Yeah, no, I know it was, I mean, I just thought it was such an unusually narrow perspective. But when I was at Nike, everything was pretty siloed, I have to say. I mean, Nike is actually even more siloed now than I think it used to be. But it was a bunch of guys from Oregon who were runners and basketball players.

5:51And anyone who wasn't from that group really had to prove themselves in a different way beyond the court or field or lanes in the Olympic swimming pool.

6:04Katherine Melchior Ray:Yeah, literally, right? Yeah, literally. Let me give you the microphone now to talk to people. If you're listening and you've only worked in one culture, one regional market, what do people like that, and I'm not knocking it, but what do people like that not fully understand or need to know about when it comes to global marketing? I think it's very easy to think that everyone behaves the way your existing customer does. And in fact, most businesses operate that way. They still kind of approach a one-size-fits-all to going global. They think, well, let's just do what we do here internationally.

6:39Okay, maybe we'll change the language and that will adapt it to culture, but that doesn't. In fact, over 60 % of global business failures are cultural. So most people all around the world want to buy from brands that speak their language. And that doesn't mean just the words, it means their culture. So you have to really learn how to understand a foreign culture, because values are universal. We're all human, you know, but the way those values show up needs to feel local. I have a great example. And I love the fact that Netflix has become as popular as it is, because we are all getting access to films and series from Japan, from India, from Spain.

7:25And we're seeing through those stories, how those cultures deal with love and romance and power and communication, getting to know each other, teamwork. And one of the things that I love about Netflix is they say any film that they are looking at, if it's trying to be global, it won't work. It's got to be local from the start. If it resonates locally, maybe that will translate. And that's why they keep them in the local language so that you're always aware that you're kind of looking through a prism at another culture and trying to understand how that culture operates. And that's why the stories are so good.

8:07Katherine Melchior Ray:Yeah, exactly. I want to get to the book in a second. But before we do that, I got to ask you about leadership across cultures, right? You've done all these different cultural differences, environments. How would you say those experiences shaped the way you lead? Leading is such a incredible skill that combines, I think, certain traits that everyone needs to have and then leveraging the traits that you personally have, right? Everyone needs to be a leader unique to themselves. But there are certain traits that we all want. You know, you need a leader to set a vision and to guide a team of people and create a really strong team of different kinds of individuals.

8:48But how that person operates has to really change based on the nature of the work you're doing, the country in which you're operating, the country that you're targeting. I think for me personally, my leadership has been refined through trial and error. So from Nike, I went to France. I was hired by Nordstrom, who bought a French brand in the south of France. And I came in, had this team. I was hired to try to grow this business that had been a French brand that Nordstrom represented in the United States and grow the business globally. But the team was very young. It had been a privately owned company in Nice, France, so by the Mediterranean.

9:30So we're not talking Paris here. And, you know, I had to try to develop this team to be able to work on a global level. I was like, we can't have 12 different logos. There's a reason why brands invest in one logo. But all these people thought that I was cramping their creativity. And it's like, no, no, no, no. We can be very creative in the logo, in the designs you want to put on the front of a t-shirt or in the way you cut a man's jacket or a woman's skirt, but not in the logo. It has to really be very consistent. But so I was trying to explain that in order for us to work really quickly, I respect people.

10:06And these are the values with which I want you to be able to operate, just like I did at Nike. All right. Set vision and values and basically delegate. And they all stared at me because in France, the leader has to make a lot of decisions. So they kept saying, OK, but Catherine, which blue do you want in the back of the windows for this new merchandising selection? And I would say, did you just not hear what I said? I'm empowering you all to make these decisions. But in France, it doesn't work that way. So to take the skills from one culture, like in the United States, that is very delegation driven, people don't want to be told what to do, right?

10:43Give me a budget, give me the objectives and get out of my way, right? Block and tackle for me and then leave me alone. And in France, it's very different. It's a much more intimate working style and hierarchy has a place. and people on the top side of the hierarchy are expected to make lots of decisions and manage directly down. And people under that on the hierarchy are expected to do a lot of work, but they also demand explanations as to why they need to be doing all the things that they're doing. So it's a very different culture. And then from there, I went to Japan. So Japan is, you know, all over very much.

11:18Again, one of the things that I love about Japan is that it is everyone together. Even though hierarchy has a huge place in the culture, people work together. So at the end of a project, if you as the manager are not also moving the chairs back to the other room and taking down all the decorations that you've had in a certain place, you lose respect because you're not really part of the team. But on the other hand, they will be the ones to make sure you get your taxis and pay for the meals after everyone enjoys a timeout. And so, you know, each culture is really different. So taking little bits of them to be able to create something that feels right for me and be able to then adapt it to the people I'm managing in a given place.

12:03Katherine Melchior Ray:You, I, I'm, I, people listening, I did not plan this, but you literally, my next question was going to be about leadership expectations were different depending on where you were. So we can move right along yeah yeah i promise i did not tell cancer and that was the next question so you read my mind moving right along which is great because i want to get to the book okay as i mentioned our other books called brand global adapt local and you co-wrote it with natalie kelly the cmo of zappy and it really gets at something every brand or global brand i should say struggles with which is staying consistent as a brand while also respecting operative the culture of each market.

12:41Katherine Melchior Ray:First question is what made you guys decide it was time to write this book? Well, I think it came out of teaching at Berkeley. I've been teaching there for three years and I have students from lots of different divisions. People want to go into finance or into tech or into chocolate or cosmetics and in fashion. And so I created a course that crosses countries, and industries. And as I've been teaching this, I personally have thought about one of the greatest challenges across all those different silos is this notion of that flexibility and tension. So opposites are fascinating. And when there's tension between opposites, I think there is opportunity.

13:30Like I was just talking about leadership from one culture to another. And so similarly, I think this opportunity and tension of having some things be globally consistent and other things locally relevant and distinct is one of the greatest challenges of building brands across industries. This way I could be industry agnostic in my book and in my teaching, because it's a skill that you learn that can create real opportunity and real bottom line results across industries. Because it's a mindset. It's learning how to really recognize what is really important about your brand that you want to keep universal.

14:10And where are you not only going to encourage flexibility, but actually you really want to demand it of your local teams and relinquish a little bit of that responsibility so that they will internalize that and come up with some good ideas. I have some concrete frameworks in here. One that represents this idea that's called freedom within a frame. So the best brands in the world create exactly that. They have a frame that they say, this remains sacrosanct around the world. We will not touch this. And then within that, we actually want you to innovate. We want you to be close to your consumer and close to your culture and come up with ideas that might be very different.

14:51So simple examples that we may know of is like Starbucks matcha, right? That didn't come out of Seattle. It obviously came out of Japan where Starbucks was trying to create innovation that would be based in the local market and local insights. Nestle's KitKat is an example that I love because if you think about KitKat, everyone has a similar view. It's a red logo. You know, those chocolate fingers that you break. So they're always in the same shape. And then in that chocolate, there's always a combination of chocolate and wafer. But beyond that, the flavors are up to local cultures. And so I talk about an example from Southeast Malaysia, where they were running out of cocoa from Ghana during COVID.

15:40And people were moving away from super sweet chocolate, and they wanted healthier chocolates. And they came up with a whole new idea of growing cocoa beans in the Malaysian rainforest itself, which created this incredible chocolate that was a darker chocolate, meaning less sweet. So it appealed both to the flavor profile of the local audience and the business economy of the Malaysian people, helping them move from palm oil crops to cocoa cultivation. And so that's where you see there's a win-win that can not only help your business, but actually help your brand and help the company feel very local.

16:23So this Malaysian chocolate bar, you know, most people would think that it was a very local brand and that creates a lot of pride. It creates brand trust and loyalty. And ultimately it actually leads to the, to higher brand equity on the parent company, Nestle.

16:39Katherine Melchior Ray:Really interesting. Okay. CMOs are listening right now and they say, give me the idea of this book in plain English. What do you say to them? The idea is how brands must learn to balance certain aspects of their identity on a globally consistent level while flexing other aspects to be locally relevant. Okay, perfect. Now, in the book, you use the term cultural intelligence a lot, right? For people who may not be familiar with that term, how do you define it? Yeah. Cultural intelligence is often known as CQ. We all know EQ, emotional intelligence. And so this is cultural intelligence. And it takes the steps of EQ, but it goes one step further about seeing and bridging cultural differences.

17:24So many cultural differences are hidden. We all know when you go to another culture, you might have different food, different language, different clothing, different customs, different ways of saying hello. But those are the things we see. So I often like to talk about culture as an iceberg. Most of culture is hidden under the water. And under the water is all of the things that are about hidden expectations about greetings, about how we show up, about the role of eating, about what's important to families and how quickly you speak, how closely you'll stand next to someone. So understanding culture means understanding what's under the water.

18:09And so I have an expression that you need to lower the waterline. And cultural intelligence is the ability to do that, not just across one culture, but across multiple cultures. And so we talk about how for brands, this is super important because, and here's another example, Airbnb went into China. Obviously, it's a very attractive market for a company like Airbnb that's done really well internationally. And this is a real story from 2019, 16, when Airbnb was growing rapidly around the world and it had targeted China and China was growing its own domestic travel very quickly. So Airbnb put a lot of resources, time, money, and people into the market to enter it.

18:53It even sent one of the two founders over. And yet after many years of trying to crack the Chinese net, they suffered a lot of difficulty vis-a-vis local competitors who were growing in the market. And they discovered things that, first of all, there was a lack of trust in the photos that you would see online. People didn't trust that. You have to take a leap of faith when you start with home sharing to begin with, right? Is this person getting a car, I go to someone's home? Is it going to be bugs? And the Chinese were really concerned about a couple things. One, they didn't trust the photos. They didn't think it would be clean.

19:32They didn't know whose place they were staying in. That proximity was very important in our culture in the United States. We think, hey, I'm going to pay you some money. I'm going to stay in your place. It's a transaction. Other cultures are much more relational. If I don't know you, I'm not going going to feel comfortable staying in your place. If you're a business, if you're a hotel, okay, I realize that's your business. But if you're an individual, I'm going to have some kind of obligation towards you. And I don't want that. And this whole thing of cleaning was a big issue too, because Chinese work so hard.

20:05They didn't want to have to clean afterwards. Some Americans don't like that either. And there was another problem in terms of credit. They didn't have the same kind of credit system that we did, which affected both the owners in terms of the reliability of someone coming into rent and then the renters saying, wait, I'm just going to like, I have to pay you somehow. So actually Airbnb pulled out of China and it's about trust. They couldn't overcome this gap between the words that we think of, of, oh, it's safe or it's clean or it's reliable. And the Chinese local Chinese expectation of what safe, clean and reliable meant.

20:42Katherine Melchior Ray:I think it's fascinating too, about you mentioned about the pictures, right? And I think either you said this phrase to me, or it's in the book, it's culture communicates without words, right? And it's fascinating. There's colors, there's symbols, there's numbers, there's gestures, right? That I think a lot of brands kind of, I don't want to say overlook that, or is that the right word? I do think a lot of people overlook the power of design and nonverbal communication. So I've spent a lot of time in Japan. I've lived there nine years, three separate stints for three different companies in three different industries.

21:15And I attribute my early years in Japan with helping me learn to hear things that aren't being said and see things in codes. So I'll give you an example. In Japan, silence speaks. What is not said communicates a lot. Now in the United States too, we kind of know this, but we are again, so focused on transaction and the written word and the contract. It is in the contract. I know I'm the daughter of a lawyer. So I look at contracts and I read the fine print and I know what I'm agreeing to and I can play that game too. In other cultures, it doesn't really matter if it is in the fine print or if it's not in the fine print.

21:56If there is a understanding amongst the people in the room of something else, that trumps. So you have to learn to understand that. There's an expression in Japanese called kuki o yomu and And it means read the air, literally. Kuki, air, oyomu, I read the air. And it means reading the room, you know. And it is a very, very important aspect of working in Japan. So I tell people who don't speak Japanese, it's okay, you know. But when you go there, listen with your eyes. Watch what's happening. Try to understand who is sitting where and why. Everything is planned. Everything has a reason. When I was young there, I went when I was 21 years old and I'm a tall person.

22:41I played volleyball in college and I was the youngest employee in this huge company. And so that means the way that Japanese offices are set up there in these large sort of football field type offices. And in the center is the senior guy in the room. And then all the divisions fan out from him and then fanning out from each of those managers. They have their teams. And so I'm way out and a manager all the way down at the end of a chair, at the end of a row of tables. And I am in this little chair every day. I would come in and it was hard for me to get my knees under the table. And I saw this chair on the saw against the wall and it looked like it was a little bit bigger.

23:19So I just, you know, didn't want to bother anyone. And I just exchanged chairs. And my manager at the end of my line in the middle of the whole cavernous room yells at me in Japanese, which means what the hell are you doing? And I was like, well, I just thought this chair might give me a little more room to get my big frame in. And he's like, Catherine, don't you see? And he said, see what? He said, that chair has arms. That chair is 15 years too senior for you.

23:48Katherine Melchior Ray:Wow. Armrest. Who knew? Who knew? Right? That's a great example though of what's the big deal? I'm just going to switch chairs. Yeah. So that tells you so much, right? It tells you that Americans are looking at practical things. Here's a chair. There's a chair. One's open. One's not. Just switch them out. Japanese will be, have little, have codes in everything. This type of chair is for something, that type of chair is for me. And arms, it's going to take me 15 years to earn the level of arms. You got to be kidding me. I've graduated to armrest. Okay, great. Right. In 15 years. 15 years. The other thing you talk about a lot is diversity inside marketing teams.

24:31Katherine Melchior Ray:And it's not just as the right thing to do, but as a real business advantage. And why is that so important when brands operate across cultures? Yeah. So this is fascinating. I discovered this through research because McKinsey did research, started, I think about 10 years ago, 2015, where they realized that the top companies in the top 25 % of ethnic and racial diversity, they actually deliver the highest returns of their competitive groups. I think it's about 35 % higher returns. And these are public companies that they were looking at. So they were like, why is this? And it's consistent. So why do racial and ethnically diverse teams deliver better than average results?

25:19Well, what's really interesting is that in New look at it, diverse teams will provide more objectivity because they question each other's assumptions. So if you have all similar kinds of people in a room, like we did at Nike when I was there 25 years ago, they're all going to think people want the same kinds of things. But actually someone who comes from a different background will say, well, I don't know about that. I think people may want this instead. So they will provide greater objectivity, more options, and they will question each other's assumptions. So the fact that they question each other's assumptions makes them go and do more research.

25:57And so they create more options and a wider range of different possible insights. And so the team actually, through their work together, they become more innovative and they can actually get smarter because someone catches you on an idea you had that wasn't fully baked and they may say, oh, well, maybe if you did it this way. And so then you go further in your own ideas. And so they've proven that diverse teams actually are more innovative and the team itself gets smarter. But there's a trick. You can't just put a bunch of diverse people in a room and expect them all to do this naturally. This is where leadership comes in.