Photo by Allen Cai

The digital world is often described as flat; as a level playing field for companies where location has little to no influence on outcome. But inside large multinational companies the world is decidedly lumpy, with structural and cultural barriers inhibiting flatness everywhere. Navigating the challenges of a culturally-diverse working environment has been a key topic for organisational anthropologists for some time.

Why do some people flourish in culturally diverse situations, whilst others flounder? 

An increasing body of work looking at the role of Cultural Intelligence (CQ) is beginning to unpack its role in leading global teams and businesses. Effective global leadership skills are essential for modern organisations; especially those facing challenging VUCA conditions in their markets.

CQ is a multi-dimensional construct, going beyond the basics of cultural sensitivity and awareness. True cultural intelligence is a core capability needed when moving from positions of domestic leadership, towards leading global teams or businesses. 

Cultural Intelligence (CQ) is most often applied on an individualistic level; leaders are encouraged to decode cross-cultural complexities in order to lead and influence direct reports more effectively. On a collective level, however, there is even more at stake. When considering a move into new geographies, or moving from domestic to global leadership, the considerations are infinitely more complex. When Whirlpool made the strategic decision to move into the Chinese market, they struggled against the incumbent Haier due in a large part to not understanding the customer or culture. Boards making these decisions must as themselves difficult cultural fit questions, that require high levels of cultural intelligence to answer with any certainty. Will your company culture work in the selected new geographic locations? Will cross-collaboration between regions work effectively, or crumble into dysfunction?

The Problem With Conflating Culture And Organisational Values 

People too often conflate ‘culture’ with the values of an organisation, or, worse employee engagement. As a result, we focus less attention on knotty cultural work involving cross-regional teams and global leadership. By elevating the organisations culture over the pre-existing regional culture, there is an assumption that alignment has been created, and that all members of the organisation can effectively work in the same way, using the same tools. A carefully considered expansion strategy, with corporate cultural alignment at its core creates the right dynamics, but a continual focus on culture influenced by region, ethnicity, religion, etc., is needed to continue the trend.

The culture map work done by Erin Meyer has created techniques for organisations addressing this issue; her mapping techniques offer insight into key differences between the way regional cultures approach issues such as decision making, leading, persuading and communicating.

Fig 1: Comparing teams across multiple national cultures (Source: Erin Meyer)

Corporate versus Geographic Culture

When talking about culture, it is not unusual for there to be no distinction between corporate culture and regional culture, even though each of them have significant impact on the workplace, and in fact can create additional conflict if they are not aligned. This is easiest explained through a brief example.

Whilst carrying out focus groups and interviews with an Argentinian industrial firm, I came across a team who were in crisis – finding themselves unable to work together. When working on planned activities there were no problems; all members of the team could pull together to deliver. But when it came to weekly check in meetings, emotions ran high, and nothing productive was happening.

The team in question was a virtual one made up of colleagues from Argentina, Mexico, and the US; more specifically Texas. The Argentinian contingent was always 10 minutes late, the Americans felt like they were sitting in an unnecessary hour long meeting that could have been finished in 20 minutes, and the Mexicans felt like they spent their time peace-making, not sharing their ideas. Having never met face-to-face the team hadn’t managed to form any kind of bond. To cut a long story short, we eventually discovered that each group was coming to the meeting for their own reasons; for the Americans it was a checklist exercise to make sure everyone was on track, for the Argentinians it was an opportunity to learn more about each other, to exchange stories and build rapport. Creating a new team ritual for checking in at the beginning, and wrapping up at end of meetings, helped create the space for the team to learn about each other, begin to heal the rift and focus on the project.

This also happens when groups of employees from different divisions, with different motivations, get together to try and solve a problem. Bringing together the sales guys, with the engineers and designers, facilitated by a leader, can lead to non-intuitive solutions, but without careful facilitation, the misunderstandings and lack of alignment of priorities between the group can stifle the very strengths you are looking to harness.

To give you more concrete examples of why CQ matters in modern organisation, here are two typical scenarios at different levels:

1. The Strategic Scenario: Leading Decentralised Organisations

Companies who rely on heavy decentralisation must embrace healthy tension between the HQ company culture, and the local, regional flavours that develop and flourish. This adaptability between core cultural components, and flex cultural components, is crucial to creating authenticity. This must be a core priority for centralised divisions managing change; it is impossible to drive centralised top-down change through a decentralised organisation. Ownership and accountability for change must sit in the local organisations, meaning they should feel like locally created change actions – especially in terms of motivation, desired behaviours and language used.

In this scenario, it is essential that leaders consider the macro-view of culture, and prioritise enabling local flavours of culture, through providing editable material, creating local focus groups and engaging in open discussion, starting with what has not worked in the past, and gathering ideas from local teams for how to create a decentralised change movement.

2. The Team-Centric Scenario: Leading a Culturally Diverse, Virtual Team

Most studies on the topic of CQ focus exclusively on applications for leadership; in our globalised world, being part of a multi-cultural team is a far more common occurrence. The same challenges apply to getting the most out of a culturally diverse team as they do to leading a culturally diverse business. Learning to assert intentional influence needs different mechanisms in different cultures. From a cognitive complexity perspective, leaders need to generate adaptive outcomes and behaviours for the team, and the team needs to understand how to work together to achieve the expected outcomes.

The cultural differences between the members of virtual teams can give rise to conflicts that at first seem to be groundless. For example, while a Brit would write a straightforward email describing an issue with a project output, or simply pick up the phone, this would be perceived as impolite by a team member in India. This would lead to conflicts, mistrust and difficulties in fruitful collaboration which is so vital for the success of virtual team functioning. Due to the absence of non-verbal cues that would be present in a face-to-face conversation, the issues become more difficult to solve. 

If teams understand some of the basic cultural underpinnings of each team member; their way of working, how differences can arise, and how they can be solved (like in the above example in South America), then the working relationship is already on a healthier footing. 

Where to Start: Diagnosing Culture Issues

Diagnosing cultural issues often starts with discovery – understanding more about your company culture, and the geographic culture of the areas you are working in. Once you have understood this macro-view, it is time to dig into the specific ways of working that are either supporting, or at odds with, the prevailing culture. This is a typical sore spot that can be instantly addressed to create buy-in for a wider examination of cultural intelligence across the business.

If you are interested in understanding more about how we can help with diagnosing your organisations unique cultural tensions, especially in relation to the implementation of change and business transformation, please get in touch.