Why cultural intelligence matters in a global economy

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By louiseclarke

November 8, 2017

Cultural intelligence is becoming increasingly important in business today. To be successful, global organisations require connectivity through individuals and effective collaboration across the world.

As companies expand into different countries, this opens up access to different resources, knowledge and talent from around the globe.  It also offers individuals a diverse array of opportunities and perspectives not limited to one location. However, it also exposes employees to different and unfamiliar cultures or customs which, if not managed effectively,  can impact the quality of the work produced and a business’ performance.

Erin Mayer, Affiliate Professor of Organisational Behaviour at Insead, recently stated that: “Where you may have been a successful leader in your own culture, if you hope to motivate and engage people around the globe, you need to adopt a multifaceted approach.[1]

 

My colleague and I are currently delivering a leadership program for the Chinese office of one of our valued global clients. Through our facilitated conversations and sessions with participants, we are seeing firsthand how taking the time to understand the local culture can make a significant and positive impact.

One of the participants shared her experience of having worked for an English firm, where she had attempted to explain the important Chinese cultural norm of everyone leaving the office at lunchtime to eat a hot meal together. The UK firm norm was to work through lunch or eat at your desk and regularly go to a pub after work. The management of the English firm struggled to understand and held the perception that there was a lack of focus and commitment, with workers preferring to go for lunch and have a good time. Cultural differences often create unexpected perceptions.

Erin Mayer cites an example of a US firm setting up in China where the US management complained about a lack of initiative shown by the Chinese employees. After management sought advice from their Chinese colleagues, they were stunned to learn that they were perceived not only as arrogant by their Chinese staff but also incompetent. US management had failed to understand that Chinese managers defer to their bosses out of respect; and the American attitude to a flatter hierarchy with less importance on status, was culturally jarring for the Chinese staff.

By introducing the Geert Hofstede framework for assessing cultural differences, to the participants on our leadership program in China, they were able to consciously recognise cultural norms they needed to adapt when communicating with their counterparts offshore. Understanding these cultural variances helped them to identify differences in working methods and behaviour.

Closing the gaps in the understanding of cultural differences leads to a competitive advantage, as it improves communication, team work and performance. The US cultural Intelligence Centre in Michigan[2] cites research that 90 per cent of leading executives from 68 countries identify cross cultural skills as a vital component in order to remain competitive.

Allowing all parts of an organisation to explore cultural differences is also important for understanding how to work out the nuances and complexities when you are communicating in today’s cross cultural, global organisations.

Adaptability of communication styles to the cultural norms will ensure that as a leader, you are working to be heard and understood. Imagine what could be achieved in terms of genuine inclusive leadership practices if we all consciously acknowledged and communicated more thoughtfully?

Being cognisant of different cultural workplace environments and understanding that not all experiences, perceptions and perspectives are the same, can give you huge competitive edge. Lack of awareness of these cultural differences can in turn lead to friction, misunderstandings and loss of productivity.

As companies seek to penetrate different markets, it is increasingly important to be informed and flexible, to understand which style in a cultural context will work best and how to adapt to achieve the required results.

References:

[1] Harvard Business Review ( July August 2017)  Being the Boss in Brussels, Boston and Beijing.

[2] www.culturalq.com