There is increasing evidence to show that incorporating cultural intelligence into your business strategy can make a significant difference in all facets of your business or organisation, including bottom lines. By Shireen Chua.
“New Zealand’s defining issue through the coming decades will be, not diversity, but superdiversity.” – Mai Chen (2015).
This “superdiversity” is not only about national or ethnic diversity. Today’s organisations and businesses also include multiple generations working together.
Cultural intelligence (also known as CQ) will be the key to ensuring that every leader, manager and individual within an organisation can thrive in culturally diverse settings. This will create a more inclusive, innovative, and successful New Zealand.
In a city where there are more than 200 ethnicities and 160 languages spoken today, Auckland’s workplaces and communities are becoming more diverse and multicultural. We also have four generations working in our teams and organisations. Markets, work teams and communities are so ethnically different, with Auckland making the OECD’s shortlist to become a super diverse city (i.e. where more than 50 percent of the population is Māori, Asian and Pacific peoples). Globalisation is rapidly changing the way we work, do business and socially relate to each other. With cheap air travel and the rise of communication technology, the world has become a much smaller place; a global village where everyone can potentially be interconnected through business, travel, social spaces and via technology.
In this changing global context, the growing diversity adds complexity to how we understand and communicate with each other. Cultural intelligence is essentially how we listen and respond and communicate with a different and diverse “other”.
It is now no longer an optional extra but rather an essential skill to be successful in today’s business environment. Negotiating markets with other countries, managing or working in multicultural and multi-generational teams, undertaking overseas assignments, working in global virtual teams and developing inclusive organisations are situations that we find ourselves in when doing business in the 21st Century.
The success of partnerships, teams and businesses depends on growing and developing this capability to interact effectively in these diverse cultural settings.
Diversity is often linked to a group that we identify with, such as gender, age, sexuality, disability or nationality. Each one of us belong to more than one of these categories.
For example, I am an educated Malaysian-born Chinese Kiwi female professional living in Auckland. So in this super diverse environment, we require a cohesive way to develop the ability to learn to interact well with the different others, not because of one category, but as humans.
Culture is so much more than nationality and ethnicity, art and music. It is all of it and more. Culture defines how a group of people think, behave and interact.
It is the foundation in which we, as humans identify with a specific social grouping. This creates a cohesive sense of identity and belonging. It also creates boundaries and rules. These social groupings will have values, behaviour that governs what is, and isn’t, acceptable, and rules of relating.
Whilst we often think of national culture when we talk about culture, organisations and businesses have a culture, or many cultures. We use the terms Millennial, Generation X or Baby Boomer to describe a set of values and behaviour that is shaped by when we were born.
So, what happens when people who have more than one culture have to work together? Or when your business tries to negotiate a contract with a foreign company?
THE NEED FOR CULTURAL INTELLIGENCE
There has been over a decade of industry tested academic research looking at cultural intelligence. Earley and Soon Ang defined cultural intelligence in 2003 as the ability to function effectively across culturally diverse settings (Earley & Soon Ang, 2003). These settings include national/ethnic cultures, organisational cultures and/or generational cultures.
The basis for cultural intelligence in today’s diverse world is to focus on learning, understanding, connecting and communicating with the “other” before us – rather than just learning culture specific behaviours and responses.
Knowledge alone cannot make us successful in intercultural interactions. Because human beings are complex and our responses are influenced by our values, personality, life experience, or even how we’re feeling on a particular day, cultural intelligence is necessary.
WHO NEEDS CULTURAL INTELLIGENCE?
Before globalisation made the world a smaller place, with people moving around all four corners of the world, it was mainly our diplomats, exporters and exchange students who needed CQ.
Today, our world has become a global village, so everyone needs to develop their cultural intelligence capability. Our work teams are becoming increasingly multicultural, so our businesses have to become equally diverse and global.
Our local markets have to cater to the diversity in New Zealand as well as expanding their markets globally. The ready availability of international food products and takeaway options are a visible reminder of the diverse local markets. Mooncakes are being sold in supermarkets during the Spring Festival for the local Chinese to enjoy and IT suppliers such as PB Tech are selling computers and all that we need in New Zealand.
Cultural intelligence equips us all to understand and interact with each other in this complex business environment. It picks up where emotional intelligence leaves off. Having high EQ doesn’t necessarily mean having high CQ. When interactions become complex and different cultures are involved, a culturally intelligent response will lead to a more successful business relationship.
So how does one effectively interact and understand someone that has a different cultural background?
We do not see things as they are; we see things as we are.
Cultural Intelligence is learning to see things and people as we are, but also to see things from the other person’s perspective. Observing and recognising difference is a good starting point.
As humans, we are much more than a sum of our gender, nationality, sexuality, ethnicity, or all of the above. Effective interactions in culturally diverse settings require further understanding, checking and interpreting of visible behaviours and values in order to communicate and negotiate outcomes that benefit everyone involved.
Cultural intelligence isn’t about learning a specific set of behavioural responses of another culture in order to successfully negotiate a business contract or understand a market… although it may well help. But knowledge alone won’t cut it. It requires deeper awareness of ourselves, others and the world around us. CQ begins with greater self-awareness, and the first step is recognising and overcoming our unconscious fears and biases that we may have about another culture. As we know, and become familiar with, what is different we feel more comfortable and interested. In any interaction, we bring our previous experiences, perception and stereotypes. Unchecked assumptions can cloud our understanding, and can potentially be misleading. It may result in action or behaviour that is misleading or misunderstood.
What I’ve described is happening in our head – all the time. Our response and behaviour towards others is merely the visible response. This can make, or break, a working or business relationship if we don’t use cultural intelligence. For example, when negotiating a contract or relationship, trust can be built differently. For Kiwis and westerners, trust is built and demonstrated by signing a contract or MoU. For Asians and the Chinese, trust is built on the relationship prior to signing of the contract or document.
Cultural intelligence gives us insight into how we are reacting, processing, reframing and responding to any situation where diversity is a contributing factor.
Our values and way of communication (let’s call it the “red” way of doing things) may be polar opposite to the person we are dealing with (who thinks more “blue”), but rather than expect them to do things “my way”, cultural intelligence teaches us to negotiate and find the middle ground – the purple space.
It is in this space where mutual trust and respect can build relationships, grow high performing teams, close business deals and even intrinsically change organisations to become more inclusive.
Technically, cultural intelligence can be broken down into four distinct types of CQ Capabilities. These capabilities are similar to the emotional and social intelligence tests but are geared towards cultural challenges. David Livermore, CEO of the Cultural Intelligence Centre, explains the four capabilities as follows:
- CQ Drive (motivation): A person’s interest in and confidence at functioning effectively in culturally diverse settings. Studies have found that without an interest to take on the challenges of multicultural work, leaders often fail.
- CQ Knowledge (cognition): A person’s knowledge of how cultures are similar and different. The point is not to be an expert on every culture, but rather to understand core cultural differences and their effects on everyday business.
- CQ Strategy (meta-cognition): How a person makes sense of culturally diverse experiences. This comes into play when making judgments about one’s own or others’ thought processes. It helps to make possible effective planning in the context of cultural differences through reframing the situation and interaction.
- CQ Action (behaviour): A person’s capability to adapt their behaviour to different cultures. It requires having a flexible range of responses to suit various situations, while still remaining true to one’s own core values. (Livermore, 2010).
There is a robust evidenced-based tool that has been industry tested to help leaders and organisations measure the development of the above capabilities in their organisations. The CQ Tool is an online survey that measures CQ capability in leaders, managers, students in businesses and organisations globally.
Coaching and training can then help a person improve their cultural intelligence by identifying strengths and understanding their growth points.
SO HOW TO DEVELOP CULTURAL INTELLIGENCE?
It takes leadership to develop cultural intelligence. Leaders of organisations have the potential to build culturally intelligent organisations. These organisations become known for being inclusive and innovative. But only if they first develop CQ themselves. Transformative leadership requires leaders to practise what they preach.
Practically, developing cultural intelligence is a process of learning, experiencing and being coached to make wise and courageous choices. We can grow our CQ by combining new knowledge with daily experiences. It will enable us to put into practice any knowledge gained, where our responses are thought through. Ongoing reflection and coaching allows individuals to gain greater awareness, negotiate and move forward.
Cultural intelligence as a competency can also be measured in organisations. This allows for ongoing collective growth and development of the four capabilities.
Any cultural training needs to be embedded in an organisational framework that encourages further reflection and application of what was taught and learned. It is an ongoing process where cultural intelligence training is only one third of the equation. Combining it with coaching conversations and experiential learning will ensure that it is being developed continuously. We can improve our CQ, but because culture is always changing we will always need to keep growing.
The results will show. How does investing in something so abstract and “airy-fairy” make any business sense? When faced with tight budgets, the development of soft-skills such as this often takes a lesser priority. However, there is increasing evidence to show that incorporating CQ into your business strategy can make a significant difference in all facets of your business or organisation, including bottom lines.
That’s because it’s the foundation of how you lead, manage and do business that is being transformed. Cultural Intelligence is being used all over the world in global organisations to develop leaders, expand into new markets, embed diversity and inclusion programmes into business strategy, and assist with mergers and acquisitions.
Companies such as Google, CocaCola, Facebook, and organisations such as Harvard University, Fudan University and Nanyang University are entrenching cultural intelligence into their businesses and organisations with tangible results.
It will require an investment of time, money and strategy to see this embedded in your organisation, too. And it may take time to see creativity and innovation emerge, teams becoming engaged and high-performing, or a happier and more welcoming workplace.
But in today’s global world and in super diverse Auckland, can you afford not to invest in developing cultural intelligence in yourself and in your organisation?
Learn more with the IMNZ Cultural Intelligence one day course https://www.imnz.co.nz/events/206-cultural-intelligence
Shireen Chua is the director of Third Culture Solutions, a training company that seeks to deliver culturally intelligent solutions to New Zealand organisations through training, coaching and consulting. She is a Malaysian Chinese-Kiwi who has been educated in New Zealand. Her personal experience of moving between the East and the West led her explore how culture can have an impact in working and personal relationships
Chen, M (2015) Superdiversity has reached critical mass – it’s New Zealand’s future. NZ Herald, 19 October 2015
Earley, P.C., & Ang, S. (2003). Cultural intelligence. Stanford, CA: Stanford University Press.
Livermore, D (2010) CQ: The Test of Your Potential For Cross-Cultural Success, Forbes Leadership 1/6/10