Cultural intelligence a new imperative

How do we go beyond the obvious manifestations of culture to understand and appreciate the underlying drivers of employee behaviour?

According to the International Labor Union, 70 per cent of international ventures fail due to cultural differences. It is not surprising that organisations across the globe - conducting businesses across cultural and national boundaries - are looking for talent that is globally competent. A recent research report from the Economist Intelligence Unit finds that 90 per cent of leading executives from 68 countries believe finding effective cross-cultural personnel is a top management challenge. Thus, selection and preparation for cross-cultural assignments require focus.

Let's consider the following scenarios:

•  An Italian expatriate comes from his company's overseas headquarters to handle the profitable Indian set up, the focus and the growth location market for the MNC. The expatriate has a few years of work experience in other Asian countries. He is confident that his style of working will hold him in good stead in India as well. However, within months of his arrival in India, people in key positions start putting in their papers. They find his style of leadership stifling.
  

 

 A high performing team of software professionals is working closely with its American counterpart team on a project. The project is progressing but the teams are not working well. The Indians find the Americans way of functioning aggressive.
 

 An infrastructure project team in India is working with a Japanese team but finds the Japanese way of working slowing down processes what with lengthy meetings and focus on paperwork.

 

 An Indian family-run manufacturing company buys out a European firm in its bid to expand operations. The integration of the two companies is turning out to be much tougher than anticipated.

The examples given above are drawn from issues faced by leaders in real business situations. In most case studies, the failure to handle cross-cultural differences is leading to costly failure.

Interestingly, during diversity workshops, when asked to list down key issues faced in working across cultures, most often we get a list of what is wrong with the other culture(s) - the Germans 'go too much by the rule book'; the Japanese 'rely too much on meetings' and so on. Stereotyping is often a part of the problem.

How do we go beyond the obvious manifestations of culture to understand and appreciate the underlying drivers of cultural behaviour?

The concept of 'cultural intelligence or 'cultural quotient' (CQTM) provides a comprehensive framework to address these issues. CQTM was developed as a research-based way of measuring and predicting intercultural performance. According to researchers, PC Earley, Soon Ang, and Van Dyne, cultural intelligence can be defined as the capability to function effectively across various cultural contexts. It is a construct that is developed from the theory of intelligence, which is based on four key pillars derived from motivational, cognitive, meta-cognitive and behavioural aspects. These in CQ parlance are defined as CQ-drive, CQ-knowledge, CQ-strategy and CQ-action.

Each of these dimensions of CQ feed into each other in a cyclic manner. The desire to take on an international assignment is a reflection of one's CQ-drive. CQ-knowledge, perhaps, is one aspect of cross-cultural intervention that gets the maximum attention. We can find numerous resources - videos, books, sensitisation training workshops - where the emphasis is on internalising a set of dos and don'ts about the target culture. We all agree that acquiring knowledge about the target culture is important. But, when it is done in isolation, it leads to strengthening of stereotypes.

This is where CQ-strategy comes in - it is about awareness and ability to plan for cultural interactions. If you were to identify the most routine task being done across a cross-cultural team, writing an email requesting information on project update, for instance, then cultural background of the receivers should ideally influence the choice of words in the email. Further, the learning from each interaction needs to be incorporated into future interactions. These are part of CQ-strategy.

Cultural quotient, however, fails if CQ-action is not handled well. CQ-action is the ability to adapt one's verbal/non-verbal and other behaviours to align with the desired behaviour. Feeling motivated about working with the company's Japanese partners and acquiring knowledge about traditional Japanese greetings is not enough unless one is able to actually greet with a soft handshake or a bow executed at the correct degree. These four CQ parameters go hand in hand to evaluate the current level of cultural intelligence.

There are multiple cross-cultural competency tools available in the market, but what sets CQ apart from these regular assessment tools is its statistical robustness. Organisations across the globe, including Walmart, Shell, Lufthansa, Coca-Cola and Google, and academic institutions such as Harvard, Stanford and London School of Economics, are using CQ based interventions in various ways - leveraging the potential of cultural diversity, building leadership development programmes to drive new business initiatives, assessing and training recruiters to find high achieving individuals globally, driving customer service and sales and marketing efforts, improving M&A and execution of global projects and preparing executives for overseas assignments and relocation.

CQ is not a capability that is cast in concrete, but something that is enhanced through reflection. The problem is that we often over-estimate ourselves. This is addressed in CQ through the multi-rater assessment option. Organisations working within a matrix reporting structure can hugely benefit from the multi-rater assessment as the perceptions across different geographies and levels in a matrix can differ greatly.

CQ assessment-based learning sessions are not culture specific. The emphasis is on broader adaptability to cultural differences.

Not so long ago, IQ was seen as the primary prerequisite for success. With the passage of time, we have learnt that EQ trumps IQ in many settings. With businesses becoming more global, IQ, EQ and CQ will be the triumvirate of aptitudes that will frame tomorrow's global success stories.

Anindita Banerjee
Practice Head, Diversity, Renaissance Strategic Consultants