The Alchemist Logo

Innovation Across Borders

How understanding and leveraging the cultural differences between German and American business can create the perfect space for innovation


“Learning another language is not only learning different words for the same things, but learning another way of thinking about things.” —Flora Lewis, The New York Times


In the world of business, speaking the same language can be critical to fostering rapport, trust, and efficiency. Our efforts can take us so much farther when we’re able to minimize what we sacrifice to translation. So as the world becomes increasingly interconnected, it follows that the demand for multilingualism will grow in tandem.


But in the complex social interactions of business, multilingualism extends far beyond just vocabulary and grammar. We communicate with each other in so many ways outside of spoken and written language. To do business effectively across global markets you need to be fluent in culture, too — understanding both what it is and what its drivers are.


The Netherlands, home of our European headquarters in Amsterdam, is a great example. English is the language of business here and a supermajority are capable of conversing in it, yet their mindset differs vastly from their English-speaking counterparts. With high population density and a sizable portion of its land sitting at or below sea level, the Dutch have developed a strong bias for cooperation in order to build and maintain complex systems of canals, dams, and levies that curb flooding and make life sustainable for everyone. Chris Zevenbergen, chair of the Netherlands-based Flood Resilience Group, describes the Dutch mindset perfectly citing that “there is a strong realization that we have to do it together.”


However, when it comes to business, the truth is that all cultural mindsets are valid. None are inherently superior to any other and each has its own contextual strengths and weaknesses. In some cases, mindsets are actually stronger together than they are independently. This is especially the case when the objective entails creating something new, or as business jargon calls it — innovation.


But as a term, innovation, has become banal and essentially meaningless. Companies across all sectors host “hackathons”, experiment with novel management structures, and lust after technology trends they barely understand. Everyone wants to be the force behind what’s “new,” even though nascent things are often equal parts alluring and confusing. Meaningful innovation requires more than buzzwords and superficial group exercises — it calls for a blend of divergent and convergent thinking that distinct cultural mindsets are perfectly equipped for.


Let’s take the two largest economies in the West as an example. While American business can be described as bold or imaginative, it is also highly vulnerable to charlatans and frauds. In Germany, however, the industry is known for its efficiency and high-quality output, but that often comes coupled with a culture of rigidity and formality. Culturally, the two countries are an odd couple, but this doesn’t mean that their partnership can’t be fruitful. Once we move past a shallow understanding of what separates different cultures, then we can marry their respective strengths and create an ideal balance for innovation.


Germany is Europe’s strongest economy and one of the world’s manufacturing hubs. Despite spending far fewer hours at work and school than their counterparts in other developed nations, German output remains the envy of much of the world. Why? Largely because Germans love rules. They believe that if everyone follows them it increases overall effectiveness and efficiency. Germans are punctual (as are their trains), they use formal salutations, and they focus on producing good results.


This mindset actually extends beyond business and into their social fabric. The German people, for the most part, don’t walk in bike lanes, they don’t cross streets on red lights, and they only use the left lane to pass other motorists while driving. Their collective rules-mindedness traces back to Prussia — the old German kingdom known for its unusually well-organized and effective military — and contributes to their reputation for efficiency. In German society, structure and effectiveness reign supreme.


The United States is a global economic superpower, but ironically its spirit is often defined by the individual. Its culture is rooted in an affinity for ‘rugged individualism’ or the belief that a single person can be successful by his or her own merit, with little governmental or institutional involvement. Historically, this draws from America’s earliest European settlements, which were comprised of pioneering individuals who sought out opportunities in an uncertain New World. In American mythology, this plays out through reverence for the Wild Wild West and the cowboys who tamed it using their own rules. And in present day, this mindset can be witnessed on the streets of New York where people, cyclists, and cars all move about with a bravado that signals a sense of independence and superiority.


This belief in the power of the individual is especially reflected in the business icons that Americans revere — figures like Henry Ford, Walt Disney, and Steve Jobs were incredibly creative and successful entrepreneurs who ran their companies like enlightened dictators, yet remain fixtures in American identity. Jobs, who famously said that he wanted “to put a dent in the universe,” developed a uniquely American innovation in the iPhone. Instead of trying to build a better phone, he reimagined what a phone could be and revolutionized the human experience.


The German mindset, however, operates with more reverence to its institutions — most notably education. Germans have tremendous respect for practical work and this perspective is reflective in the country’s robust apprenticeship culture. Roughly 60% of German students engage in “dual training,” giving them balanced exposure to both classroom instruction and on-the-job experience. This training model is used across a wide array of sectors including advanced manufacturing, IT, banking, and hospitality. Germans even extend this thinking to creative pursuits. Founded nearly a century ago in Weimer as a “new age” art school, Bauhaus revolutionized the way the world approached architecture, design, and craftsmanship and its influence reverberates globally even today.


Despite being two major economic engines, the United States and Germany are driven by two very different cultural mindsets. Germans adhere to structure, while Americans romanticize the singular hero. In Germany, this creates a society that operates like a well-oiled machine and produces its expected outputs consistently. But in America, this leads to creativity, curiosity, and blue sky thinking. The fusion of these two mindsets is what yields meaningful innovation. In a world that is increasingly interconnected, we need to lean into opportunities to learn about and experience each other’s cultures. By embracing our differences we can build synergistic teams that push the boundaries of what is possible. While an odd couple on the surface, the United States and Germany are natural partners for these types of challenges. One side of the operation is bold enough to establish the vision, while the other side develops the framework for achieving it. Together, both cultures can build the future.