Good-to-knows about the Spanish relational business culture

Updated: Jul 28, 2020

- Build trust, not deals.

Two opposite business cultures are the Relational business culture and the Transactional business culture. Spain belongs to the latter as oppose to the former that many countries who are dominating the Business scene today belong to.

What follows is an attempt to give you my perception of how this type of culture shows in everyday Spanish life and also to challenge you to think of doing business more as if you would be thinking of enjoying life.

You put personal relationships first.

Sun, Holiday, Fiesta, these are words that pop up for many non-Spaniards when they get asked what they associate with Spain. All of these words imply a sense of spending time with other people, directly or indirectly, which is the default mode in Spain.

So are they just partying and enjoying life all the time? I would say that the unfair stereotype of "Latin people are lazy" might come from the fact that they mix socializing and working in a way that other cultures don't.

The enjoying life part is not necessarily kept separate from the doing business part. Doing Business happens while you are sort of doing both.

I'll elaborate on this type of relational culture with two everyday examples that still - after almost 3 years living in Spain - I find very funny and much unlike the Swedish, more transactional and individualistic culture I grew up with.

The supermarket product-jam

In the supermarket there are typically 2 "lanes" for the cashier to put the products to avoid "product-jam", mixing products from two customers. For me it's natural to follow that logic but in my supermarket, 9,9 out of 10 times, this is not applied and so I often have to interact with the person after me, to make sure I go home with my products, and only my products.

Physically close all the time

I'm small so I don't take up a lot of space in the street but even so I find myself being passed, from my perception quite intimately, by people walking by me very close, as they were about to hug me. I know by now that it's not at all personal, they just don't need so much personal space or rather they just like being close to each other.

Build relationships and the business will come

These two mundane examples are to highlight the Spaniards natural state of being close to each other - all the time- why I actually never feel alone in Spain.

In Business this translates to many, many meetings talking about -yes, Business- but also about life in general, getting to know each other. Often taking place in a café or restaurant. Meeting in the conference room or in an office? Nope, a coffee or other beverage outside is often preferred.

On that note, I remember my first time in Madrid studying Spanish. The cafés and restaurants seemed to always be filled with all kinds of people and I asked myself (from my very Swedish perspective) isn't anyone working? What I know now is that many of these meetings taking place were just regular business meetings, and probably successful ones.

Build trust, not deals

In my early days here I many times felt unsure, and frankly a bit uncomfortable, with not really grasping if I was in a Let's-do-business meeting or a just-get-to-know-each-other meeting. Now I know it's all about building trust. No business is done without establishing trust first, which comes from interacting in person, preferably many times in different scenarios.

Which makes perfect sense when you think about it. But we (from the transactional culture) are all so used to all the digital help nowadays that in many business negotiations it's perfectly fine to talk through various screens, to establish a good enough common ground over time, to agree to put pen to paper and sign a deal. In Spain not so much.

EDIT June 2020:

Due to the pandemic this is all changing to more screen-time but starting from relatively low levels of Remote working before the outbreak and quarantine (March 14) started.

Feelings are not left aside

It may feel like many hours of "just hanging out" without any visible progress but this is how it is done in a relational business culture.

Another thing I hear quite a lot is "The Spaniards are just so emotional", talking about both men and women. Yes, they are. You might say to yourself "but this is business, we need to leave feelings outside of the negotiation". Wrong! Not in this culture. Feel free to express, and maybe you will feel better in the process! :)

The upsides to a relational culture

Here comes the good stuff. The expression "Go big or go home" is often used for planning an expansion into the US market, meaning come with A LOT of dollars to spend (of which much of the money goes to lawyers) or just don't try in the first place.

The equivalent for expanding into Spain could be "Come with a lot of patience and win big, with less money".

Using business metrics, I'm sure you like "High retention", "Low churn" and "Recurring Revenue". Right? These nice rewards all come with the whole Relational Business culture-package, which reaps higher loyalty down the (longer) road.

I sometimes hear from a frustrated person, from a typical transactional culture:

"Everything just takes so much time here in Spain". True that. You need to be willing to nurture relationships for some time before you get the outcome you want.

Considering your potential success in Spain can help you further advance into the LATAM market as a next step, maybe you will find it worthwhile to grow some patience.

Crafted by Caroline Lagergren

What do you need to know about Spain's startup ecosystem? Get this 70 pages, data-rich* report for clarity! (€20): REPORT: Spain's startup ecosystem and digital economy * Packed with names you will want to contact. ;)

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