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The Best Way to Compete in Today’s Global Economy

September 2019
Lucas Schellenberg
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Develop Intercultural Skills in Your Business Leaders

One of our largest Japanese clients was looking for a CEO for its European operations, which were headquartered in Zürich, Switzerland. The entire slate of presented candidates possessed all the necessary skills and experience. We had tested and confirmed their fit for the organizational culture. However, in the first meetings between the Japanese managers and the European candidates, it became very obvious that the candidates who were more familiar with Japanese greetings, business etiquette, and other formalities had a clear advantage in interactions with the management team.

The importance of intercultural skills extends beyond the selection process to day-to-day corporate management. In fact, cultural differences can adversely impact the functioning of managers in a cross-cultural setting. Differences in communication styles can cause communication problems, while differences in etiquette and social norms can result in misunderstandings that overshadow the true purpose of the business undertaking — to its detriment. In this paper, we’ll discuss why acquiring intercultural abilities and attitudes is important for today’s business leaders and what leaders can do to improve their intercultural skills.

Culture, Intercultural Management, and Cultural Intelligence

Culture refers to a set of beliefs, assumptions, values, actions, and norms that a specific group shares. This can be at different levels, including national, regional, religious, ethnic, linguistic, gender, generational, social, or organizational levels. Intercultural management, therefore, is concerned with the effective management and functioning of diverse groups of people in a professional setting. It involves the development of new managerial perspectives and skills in order to understand and manage cultural differences.1 And to effectively learn intercultural management, it’s first necessary to develop cultural intelligence — or cultural fluency.

Increasing Globalization Demands Cultural Intelligence

Since 2001, globalization has continued to increase. This is demonstrated by the growing percentages of capital, information, people, and trade flows across national borders.2 Organizations of all types and sizes regularly interact with entities from other geographical areas, and teams are made up of individuals from diverse backgrounds and cultures. As such, it follows that leaders are increasingly put into situations where they need to communicate, collaborate, manage, and/or negotiate with people from a variety of different cultures. To do so effectively, they need to understand those other cultures and how those cultures shape behavior. They also need to know how to effectively adapt their own attitudes and behaviors in order to effectively function in cross-cultural settings. In other words, they need to develop cultural intelligence.

Fortunately, cultural intelligence can be acquired. In the past, organizations have promoted the development of cultural intelligence among their leaders by sending them on assignments abroad. In some cases, young leaders were expected to go on rotational assignments in which they spent three months in a country before moving on to the next location. This allowed them to learn a great deal about functioning internationally in a relatively short period of time. In other cases, leaders — or high-potential leadership talent — were sent on overseas assignments in which they spent multiple years in a single country. However, these solutions were costly for companies — plus, they were disruptive for the professionals in question, as they were required to uproot both their personal and professional lives.

How Leaders Can Improve Their Intercultural Skills

Clearly, with globalization marching on at a steady pace, organizations need a different solution. The good news is that in our multicultural society where diversity is becoming more and more commonplace, physically relocating managers is no longer necessary for them to develop cultural intelligence and intercultural skills. Simply by interacting with people from other backgrounds in the workplace — whether by collaborating with them, managing them, training them, or negotiating with them — leaders can acquire the desired attitude and skills.

Of course, to do this, a certain amount of guidance is needed.3 It can be challenging to determine where leaders are lacking in terms of cultural fluency. Stanton Chase can assist in selecting the appropriate tools and methods to effectively assess — and subsequently improve — intercultural skills.

Leaders should also be open to learning intercultural management — in other words, to look for the most effective ways to connect with the people they’re working with. This can involve consciously stepping away from their usual management styles and looking for ways to interact and supervise that are more accepted in the other culture. This involves doing research, observing, listening, and asking questions.

Business Benefits of Developing Cultural Intelligence

One of the most important benefits of developing leaders with cultural intelligence is that they inspire more trust in multicultural teams and in multicultural settings. People from diverse backgrounds and with varying values and perspectives can have different understandings of professional roles and rules.4 This can lead to conflict and adversely impact the effectiveness of a team. By bringing in leaders who are skilled in intercultural management, organizations can promote communication, transparency, and collaboration, which in turn can help them achieve their objectives faster and more efficiently.

Conclusion

Cultural intelligence and intercultural skills can be acquired — but it takes time. By putting their managers in multicultural settings either in their own country or abroad and providing them with the guidance they need to develop, organizations can bring cultural intelligence into their top echelons. That in turn will benefit them in terms of building trust within their ranks and with business partners — and can have a positive impact on their bottom line.

 

Sources

[1] Caganova et al., Intercultural Management —  Trend of Contemporary Globalized World

[2] https://hbr.org/2019/02/the-state-of-globalization-in-2019-and-what-it-means-for-strategists

[3] https://hbr.org/2019/04/3-ways-to-improve-your-cultural-fluency

[4] Rockstuhl and Ng, The Effects of Cultural Intelligence on Interpersonal Trust in Multicultural Teams

 

About the Author: Lucas Schellenberg is a Managing Partner in the Zürich, Switzerland office.

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