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Cultural Intelligence Proves Critical to Global Strategy

To be effective globally, organizations need to foster cultural intelligence, especially in senior management.

A couple of weeks ago, I met with the chief operating officer of a leading contract manufacturer with $18 billion annual revenue. He was interested in our technology, and I know he has a reputation for being influential within his organization. I was curious to understand him and how he had gotten to where he is. I found that he attributed five years in China and Singapore as a prime reason that doors opened to him.  As a first generation Cuban American, this gentleman finished his MBA 25 years ago and found himself being offered just the right opportunity at the right time. The infamous “leaning in” and a bit of luck helped, but it was really the international experience that helped him reach his goals.

International experience instills the ability to work across cultures and understand local circumstances, he explained. The contract manufacturing business is tough: with tight margins of three to five percent, he added. The company works very hard to make it fun for their employees, and with that comes more emphasis on culture, and on being culturally intelligent and accommodating.

In today's world, people and places are tightly connected and physical distances don't matter any longer. We are going to be working and interacting across cultures more than ever before. Cultural intelligence, like emotional intelligence, is critical to inspire people, grow your organization, ensure customer satisfaction, win business, and build a great brand across boarders.

By working in other cultures, people are able to emphasize with people from other cultures. I'm not saying that you need to learn every single detail about the other culture, but you have to know enough to come across as respecting the other individual's culture, which in turn helps you to collaborate more effectively.

Now, let's look at some of the reasons that being culturally savvy is important both for an individual career, and for a successful business:

The world is getting smaller & smaller

Now more than ever before, there's a high chance of meeting/working/interacting with someone who is an expert in a specific field and is also from a different culture or a different country. I see the changes in my own neighborhood, where my family lives side by side with a Korean American family, a French American family, an Irish American family, an African American family and an Iranian American family. Every morning, when my daughter gets on the school bus, she interacts with all these kids and when they come home, all of them play together.  All the parents are connected in Facebook and they share pictures, meet at events and stay in touch. Cultural learning happens every day. Being smart about the cultures of other families help them maintain relationship. At work, particularly on virtual teams, the chances of working with someone from a different culture are even greater. 

The emergence of a sharing economy

The sharing economy is pioneering new industries and business models are both game changing and disruptive. For example. I travelled to New York City earlier this year and I wanted a good and cost effective place to stay close to the city and found a place through Airbnb. My stay gave me a different experience, more like staying with a distant relative that I'd never met than staying in a hotel. The gentleman subletting the room in his apartment was welcoming, presenting me with the gift of a new scarf and ear warmers to help me survive the cold. He showed me around his place and let me rest in a comfortable and tidy room…perfect.

Later, after I finished my business, I cam back and we had a pleasant conversation. He told me about the people who have stayed with him, travelling from China, Japan, Germany, Australia, New Zealand, and other countries. He's become friends with these people and kept in touch over social networks. He had a pin board, with a world map, that marks where his visitors have come from. Many people had sent post cards after their visit. I found the experience interesting, and, of course, it demonstrates the cross cultural savvy that these new models both require and support.  Companies like Uber, Lyft, Taskrabbit, Lending Club, Snapgoods, Roadie, Neighborgoods are disrupting established business models and require a lot more cultural intelligence to take advantage of them.

Letting the small guys compete with the big corporations

Small companies can compete head to head with billion dollar companies by leveraging resources that are available on the other side of the world. However, to really get traction, these smaller organization need to work across cultures. A good friend of mine got a website done for $1,000 through a global freelancing websites, a job which would have easily been $10,000 had he hired a web developer here in the US. Obviously, a lot of these web developers who work through these sites are from China and India.  If you don't understand their culture, you will not be able to effectively work with them and take advantage of the cost savings.

With the quickening pace of technology, many organizations are also looking to these global partners to create a software-based business at a lower cost. Of course, big companies can benefit from these worldwide resources as well. For example, Coca Cola and Amazon routinely use contractors around the world, a marketer told me during a presentation at the Advanced Technology Development Center in Alanta. General Electric, too, executed a massive SAP rollout by outsourcing the whole deployment to four major software services vendors based out of India.  They wrapped up the project on time and under budget even though one of the vendors had a major fallout and wasn't able to meet the commitments they made. GE managers swiftly transitioned that portion of the work to one of the other vendors without mishap or impact to timeline or budget.

People are everything

People are the core of every organizations and a major portion of those people are coming from different cultures and different geographies. It is important to empathize with them in order to lead them successfully. Understanding their cultures is a big part of that puzzle. 

At a previous employer, I ran a major program and, over the course of six months, had weekly and daily calls with a team spread around the world. These experts would share their updates. The group was comprised of people from different ethic backgrounds and geographies. People were spread from the East Coast to the West in the United States and lived in other countries that included Mexico, the UK, Germany and India. We had people on the team that were not just from our company but also from our vendors, who were Chinese and Korean. My job was to get the project done on time, within budget, and hitting every goal without disrupting customer service. In order to effectively work with these folks, I had to understand their cultural backgrounds.

I took to hear a story told by a supply chain professor at Georgia Tech, back when I was in school. He told us about a training program he had done in Latin America. On the first day, he taught with a lot of energy and enthusiasm until the announced one-hour lunch break. Promptly after 60 minutes, he came back to continue his presentation—and found an empty room. He waited another hour and nobody showed up. Finally, at 4PM people started showing up—and he learned about the “siesta.” In that culture, everyone goes home to eat lunch and relax and sleep.  Stores would close and all activity would cease until late afternoon. If he had known this, he would have scheduled the day differently and gotten his own siesta! He had lost those hours because of a lack of cultural learning.

The oriental world needs occidental expertise

Of course, the potential for exchanging know how has to flow both ways.  The other side of the world presents plenty of opportunities where western processes, systems, and infrastructure are useful. India is a great example. New political leadership has taken over India, and the Prime Minister Mr. Narendra Modi is crisscrossing the globe to win many more investment opportunities. He and his party men are working tirelessly to improve the country overall.

India has a major deficit in terms of systems. In fact, every single system in India was built on the British model that was built more than 70 years ago. All of them have become obsolete and irrelevant, starting from judiciary to law enforcement to transportation to the police protection force to governance to immigration. The list is very long, so the country's systems are in shambles, and require  a thorough overhaul. Fixing these systems will require a lot of muscle power and well-trained experts that can lay out such infrastructure, processes, and systems that have been extensively implemented in the Western hemisphere. People with such background can find plenty of opportunities. Again working with Indians, Indian systems and Indian culture requires a lot of learning in order to make an effective partnership engagement. 

Let us know in the comments section below: What steps have you taken in your organization to encourage and foster cultural intelligence? How has this helped your organization and your supply chain? 

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