When asked about the biggest challenges they face in doing business in international markets, companies and business leaders often cite lack of cultural awareness and knowledge as being major obstacles to their success.
And yet when the same leaders focus on their business development strategies for overseas markets, the question of cultural knowledge is relegated to an also-ran, a soft and fuzzy ‘extra’ to the main business of winning market share and generating profits.
There are of course exceptions, but these tend to be leaders with high cultural intelligence, people who have developed their ability to adapt successfully to a new cultural setting.
WHAT IS CULTURAL INTELLIGENCE?
But what EXACTLY is cultural intelligence and why do some people seem to have it and others don’t?
Cultural intelligence (CQ) is related to emotional intelligence (EQ). People with high emotional intelligence are attuned to the emotions, needs and wants of others.
Culturally intelligent people take this further and apply EQ to reading and understanding the values, beliefs, expectations and physical expressivity (body language) of people from other cultures to their own.
For many years I have worked in and written about 12 Asian countries: China, Hong Kong, Indonesia, Japan, Malaysia, Myanmar (Burma), Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam.
I have also lived in Italy, Switzerland, France, Germany, Spain and the USA and I have studied their cultures in exactly the same way, ie from another viewpoint to my own.
Wherever I’ve lived, I’ve learned that cultural intelligence is not innate. You are not born with it or without it. Cultural intelligence can be and often has to be developed.
But once developed it functions like a sixth sense – or as the more militarily inclined might say, like a radar.
CULTURAL INTELLIGENCE IS LIKE MILITARY INTELLIGENCE
I was recently at a conference where cultural intelligence (CQ) was explicitly linked to military intelligence – the afternoon activities were devoted to military-style games and maneuvers, and the participants were then judged and addressed by a former general.
So the military comparison with CQ is not so far-fetched. Risk assessment and targeting, on-the-ground reconnaissance, mapping the terrain, forging alliances and network building, above all gaining some knowledge of the local language, customs, ethnic groupings and beliefs, are equally applicable to both the military and business.
Whether they leading a culturally diverse team at home, building rapport with a cross-functional team or cross-border team overseas, or developing business in international markets, all business leaders need this cultural intelligence.
A FORM OF COMPETITIVE ADVANTAGE
They don’t have to be experts in every culture, or suddenly develop extraordinary linguistic skills. They simply have to develop an openness of mind, a readiness to learn and their own personal ‘radar’ for what is going on, country by country, market by market where they operate.
In Asia’s extraordinary mosaic of cultures, beliefs, ethnic diversity and languages, cultural intelligence is not so much a nice-have as a MUST-HAVE. It should be developed not as an optional add-on to business strategy but as a central core of the strategy itself: a form of immense competitive advantage.
Here are 6 Key Competitive Advantages of Cultural Intelligence:
1) Creating trust, developing respect and and forming long-term relationships
2) Understanding local consumer needs and targeting brands and products to each individual market
3) Learning the importance of indirect communication in different cultures
4) Avoiding extremely costly mistakes, blunders and misunderstandings
5) Participating in local social, family and cultural life – and hence business networks
6) Adapting expectations away from short-term transactions and contracts towards sustainable revenue growth.
The good news is that cultural intelligence can be developed into a system that can be applied naturally in EVERY market or culture. All that it requires is the right motivation or mindset to learn about and adapt to a different culture.
Once that mindset is achieved – what I call the ‘bamboo mindset’ for both its strength and flexibility – it will become a natural part of your business strategy and your ability to ‘think on your feet’ in different cultural settings.