12May2015
It’s not about who you are nowadays, it’s whom you know. In a world with shrinking boundaries, people are increasingly interacting with others from different cultural backgrounds. Consequently the ability to operate in cross-border relationships and networks is assuming growing importance.
We are already familiar with the concept of emotional intelligence, which helps us empathize with the people with whom we interact. In the last ten years, we have also seen more attention paid to cultural capabilities in our professional backgrounds. That’s because while individual efforts count, teamwork is often the factor that helps us achieve our goals. So team-based communication challenges entrepreneurs to become more self-aware about their interactions with others and to adopt a more open-minded approach.
In the realm of start-ups in particular, where borders are highly fluid, individuals with strong cultural awareness capabilities will be able to form bridges to help achieve shared goals. However, companies and organizations looking to cross-border expansion exclusively on the basis of a killer product or service without the required cultural sensitivity must prepare for the possibility of cultural misunderstanding in the target market.
It’s not enough to say that a company has an international team or that it is expanding into foreign markets. Leaders must also be prepared to invest in nurturing cultural intelligence to build long-term success.
According to the business magazine Fortune’s, 2013 Global 500 listing only 14% of the top 500 CEOs came from countries other than their corporate homelands. U.S. companies hire foreign CEOs far less often than European companies. Over the past four years, for instance, just 14% of U.S.-based companies hired a foreigner compared to fully 30% of Western European companies, although “foreigners” were most often hired from other European countries. In Japan, just 1% of new CEOs were foreign.
Whether they are business students or CEOs of global companies, culturally intelligent individuals possess four essential attributes. Cultural intelligence is required to effectively manage situations in cross-cultural environments – involving personal interactions, business, travel, or even online. Professor David Livermore, a thought leader in cultural intelligence, describes the four traits accordingly:
DRIVE – motivation, a person’s interest and confidence to connect to other cultures. Only 14% of the 2013 Global 500 CEOs came from countries other than their corporate homelands. Motivation is a drive for seeking a new career path.
KNOWLEDGE – a person’s knowledge about how cultures are different, but similar to his or her own. In Japan, just 1% of new CEOs were foreign. A narrow cultural background, and a weak understanding of other traditions and norms usually lies behind this approach.
STRATEGIC THINKING – how a person makes sense of culturally diverse experiences, reflects, checks assumptions and adapts to effective interaction. European companies hired “foreigners” most often from other European countries. To receive expected is more appreciated rather surprised miscommunication.
ACTION – a person’s ability to adapt verbal and nonverbal behavior to make it appropriate to diverse cultures. U.S. companies hire foreign CEOs far less often than European companies. Europe has a uniquely diverse business culture spanning French, German, British, Swedish or Italian business environments. The US by contrast has a more homogenous business culture.
For example, the biggest pharmaceutical company its headquarters, management and employees are based in Israel gives a bigger picture of four capabilities to be exploited. As one of the owners commented on the resignation of the foreign CEO was placed that the need for a cultural and communicational connection to the Israeli society is critical. This company is among the cornerstones of the local industry and its products can be found in every home.
A 2009 review of the “Most Respected CEOs” by the online publication CEO Quarterly reveals that culture or social background does not matter as much as most companies think. Carlos Ghosn, CEO of Nissan Motor, and one of the most successful CEOs of all time, proved that you do not need to know the culture or speak the language to run one of the largest companies in the world. The right leadership skills can turn around a foreign company with a foreign culture in a foreign country. It is worth noting that when Mr. Ghosn took the up CEO position at Nissan he did not even speak Japanese.
However, Ghosn’s background as a child born to Lebanese parents in Brazil and educated in France could speak to his innate or inherited cultural intelligence. Nevertheless he was considered a gaijin (alien) in a society that suspects foreigners, and he does not speak Japanese! Ghosn went on to make history by his legendary feat reversing the fortunes of the stalling car manufacturer in very difficult circumstances.
Fledgling entrepreneurs eager to spread their wings internationally would be well advised to brush up on their cultural savvy by following a few tips:
- Connect to the market you want to enter. Follow recent updates on the country including news and other relevant information.
- If your team is international, take time to get to know the people – their culture, food, sport. Even a chat about hobbies can open up the potential for new levels of interaction.
- Think before you act and communicate honestly. Try something new and enjoy the experience.
- Share your culture and its uniqueness.
The journey toward cultural fitness begins with a small step. Why not start with a meal or movie from a culture other than your own?
Loreta Pivoriunaite is a training consultant by heart, a lawyer by profession and a writer by choice. She has served different international NGOs, and has traveled and lived in numerous countries to pursue with the interest of personal growth, cultural intelligence and leadership. Loreta was a member of the Nordic Business Report jury selecting young entrepreneurs from Northern Europe for the 30 under 30 ranking. More about Loreta at www.loretapi.com.
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