The world is reeling right now with intense conversations and debates around cultural differences, political discord, and challenging social issues. Even with these debates in the background, leaders continue to expand their company’s global footprint, increase worldwide operations and hope to sell into new geographies. At the same time, more students, tourists, and workers are globetrotting the world. The world is getting smaller. Leaders today are presented with more cross-cultural challenges.  Over 90% of global executives identify cross-cultural effectiveness as their biggest challenge.

How does this generation of leaders (and the next) ensure success and navigate through unavoidable cultural differences in the global economy? The answer is cultural intelligence (CQ).  The four fundamental reasons why CQ is more important than ever are:

Ethnocentricity does not work anymore

Ethnocentrism is judging another culture solely by the values and standards of one’s own culture. The aptitude to be introspective about your own culture is an indispensable skill of a self-aware multicultural leader. The capability to see your own biases and know how you view others through your own cultural lens is vital.

Taking it one step further, respected multicultural leaders understand and adjust to the perspectives of others. Open-minded leaders gain advantages when they see the value of diversity of thought, perspective, and experiences. Innovation and problem solving are exponentially increased when different perspectives are sought out and accepted.

Plan ahead for unavoidable cultural differences

Smart leaders wisely avoid minimizing cultural differences and, better yet, plan for differences. Business guru Peter Drucker said it quite aptly, “Culture eats strategy for breakfast.” 

Cultural differences show up as geographical, ethnic, religious, generational, racial, and gender-based. Leaders who work across cultures know that cultural differences will surface with interactions among employees, peers or customers.  Proactively planning for this will help their teams recognize and leverage their cultural knowledge.

Create safe, collaborative environments where people build trust

Effective leaders foster positive relationships and trust across their teams. Shrewd leaders also understand that the first step to building rapport and trust is establishing personal, human connections. A key insight is to understand that the foundation for building constructive rapport, connections, and trust may be culturally unique. Great leaders prepare to build bridges, not walls.

Forging trust is a difficult and fragile concept, even in one’s own culture. So doing it within a different culture takes a tremendous amount of knowledge and effort.

CQ is a market advantage

Successful multicultural leaders develop high cultural intelligence (CQ), which is the capability to relate to and work effectively across cultures. The concept of cultural intelligence was developed by the work done by Ang and Van Dyne (2003) as a research-based way of measuring and predicting intercultural performance.

CQ can be thought of in the same way one considers an individual’s intellectual quotient (IQ) or emotional intelligence (EQ). These “quotients” are research-based measurements of human competence and capability. The remarkable thing about cultural intelligence is that it is malleable and can be increased. Furthermore, people with high CQ lead, adapt or blend in more effectively within any environment than those with a lower CQ.

As a result, mastering these competencies will help multicultural leaders to successfully navigate cultural differences in a rapidly-changing world.

Recent research shows that teams with higher levels of CQ are more successful. Especially relevant is that homogenous teams will outperform diverse teams if both teams have low CQ, while a diverse team with high CQ will outperform a homogenous team by an estimated factor of five. This concept can be crucial for leaders who are reaching for higher levels of innovation, productivity, profitability, speed, efficiency, employee engagement, marketing, and selling into cross-cultural markets. Cross-cultural explorers can take a CQ assessment to measure their baseline CQ levels and participate in training programs to enhance it, thus increasing their effectiveness across cultures.

Implementing these four concepts will help leaders deploy their strategies to leverage the power of diversity, which in turn, will lead to greater success in a multicultural, global marketplace.

Connie Wedel is a US-based global HR executive, leadership coach, equal rights advocate, global citizen, writer, speaker, and mom. Her background includes working with businesses, leadership, and employees over 6 continents across various industries.

Connie holds an Executive Masters in HR Management from Cornell University. She maintains SPHR, GPHR, SHRM-SCP certifications and teaches Organizational Behavior at the University of California, San Diego., She is periodic contributor Business Insider, Huffington Post, Chicago Tribune, and Ellevate Network.