IMD: Leading with cultural intelligence

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Imagine that you're a manager sitting here in this classroom just a few weeks ago. This manager works for a fast moving consumer goods firm, a firm that's multinational. Until recently, it's been managed as a multi-domestic, so each country managed separately. But now, the firm is becoming much more global. They're trying to leverage their brand across global markets. They're trying to reduce costs by working more across markets, and they're also trying to get more information from the consumer into the firm at different touch points. What that means for implementing the strategy is that they will have much more lateral communication across business units and also much more bottom up communication.

Now, the manager in this classroom is a little bit worried about this. He's the country manager from Malaysia, and he knows that lateral communication and bottom up communication is not consistent with the Malaysian culture, which is much more hierarchical and top down. So he's got a dilemma. Should he implement what the global firm would like him to implement, with the lateral communication bottom up, or should he do what he knows works in Malaysia and work within the hierarchy top down? Now, this is the kind of dilemma that every global manager faces every day. And it needs high levels of cultural intelligence in order to deal with it.

Cultural intelligence is the ability to look at both the business aspects and the cultural aspects of a situation and to be able to manage the business aspects for results in a way that works effectively within the culture. This does not necessarily mean when in Rome, do as the Romans do. Instead, it means when in Rome, achieve business results in ways that empower the Romans and that work. In this case, the manager in Malaysia will be implementing the strategy, the global strategy, that works with lateral communication and bottom up, but he'll be implementing it in a way that increases trust, that's very respectful, and that works quite slowly in a step by step way to encourage the Malaysian employees to really take advantage of the information and the contributions that they have.

There are three components to cultural intelligence-- knowledge, skills, and mindfulness. In terms of knowledge, there are two kinds of knowledge that are really important. The first is specific knowledge or knowledge about a particular culture. This is the knowledge you get from reading books, like guidebooks, reading histories, watching films, going to art galleries, and learning about the culture in particular. This knowledge is very important if you know which culture you're going to, and you know which kinds of interactions you're having. It really helps you develop some expectations about that other culture.

The other kind of knowledge is general knowledge or knowledge about how cultures work and how to read and engage in learning in other cultures. This more general knowledge is helpful if you're in a situation of multiple cultures at the same time, or where a specific culture turns out not to be what you expected from the guidebooks. And as we talked about in session 1, with globalisation and things constantly changing, you're likely to come across this situation. So the general knowledge is very important.

Now, general knowledge involves understanding some anthropological theories that we don't have time to get into right now. But one of the ways to develop it is to use specific frameworks, like the cultural orientations framework. And you'll find more information on that in the support materials for this session.

The second component is competencies and skills. In terms of competencies, what's important is having an open mind, curiosity, humbleness, and also personal integrity so that your behaviour is predictable and reliable. Some important skills-- the foundation of cultural intelligence is cross-cultural communication and being an effective communicator. For example, using the mapping, bridging, integrating skills that we talked about yesterday in session 3.

The third aspect is mindfulness. This is the capacity to observe your behaviours, to carefully select behaviours, observe them, and observe the effects of them in the environment. In other words, it's the capacity to continuously learn from your own actions and to reflect on them. This capacity is particularly important and maybe one of the most important parts of cultural intelligence.

As we've talked about throughout this week, the globalised world today is extremely dynamic and extremely complex, so being able to learn as you're going along is important. Expect to make mistakes. No one is perfect in this area, especially as things keep changing. Also pay attention to surprises. If something surprises you, it means that you had some expectations to start with, and so paying attention to the surprise gives you an opportunity to learn about your expectations and to adapt them if necessary.

Mindfulness also is related to another key aspect of cultural intelligence, which is the ability to be yourself while allowing others the space and the respect to be themselves. People with high cultural intelligence don't change their behaviour for every situation, although, of course, they adapt sometimes. But they have a consistent sense of who they are that is the same across all situations. And this way, they act with integrity, but they also allow other people to be themselves.

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