How Leaders Use Cultural Intelligence To Succeed in the Global Economy

The world is reeling 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. So, how does this generation of leaders (and the next) ensure success and navigate unavoidable cultural differences in the global economy? The answer is cultural intelligence (CQ).

4 Reasons Cultural Intelligence is Important

Implementing these four concepts will help leaders deploy their strategies to leverage the power of diversity, which will lead to greater success in a multicultural, global marketplace. The four fundamental reasons why CQ is more important than ever are:

1. 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 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 will exponentially increase when different views are sought out and accepted.

2. Plan Ahead for Unavoidable Cultural Differences

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

Cultural differences are 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.

3. Create Safe, Collaborative Environments Where People Build Trust

Influential 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 critical insight is to realize that the foundation for building constructive rapport, relationships, and trust may be culturally unique. Great leaders prepare to build bridges, not walls.

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

4. Cultural Intelligence 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 came from the work done by Ang and Van Dyne (2003) as a research-based way of measuring and predicting intercultural performance.

CQ can be 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 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 reaching 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 them, thus increasing their effectiveness across cultures.

How Leaders Develop Cultural Intelligence

Cultural Awareness

Leaders can begin by developing their cultural awareness, which involves understanding the diversity of cultures and recognizing their own cultural background and biases. This can be achieved through self-reflection, reading, attending seminars or workshops, and engaging in conversations about cultural differences. By being more aware of various cultural practices, leaders can learn to appreciate and respect the uniqueness of each culture.

Active Listening and Empathy

To gain cultural intelligence, leaders should practice active listening and empathy when engaging with individuals from different cultural backgrounds. This involves paying close attention to verbal and non-verbal cues, asking open-ended questions, and validating the feelings and perspectives of others. Demonstrating genuine curiosity and interest in another person’s cultural experiences can lead to more meaningful connections and a deeper understanding of diverse perspectives.

Cross-Cultural Communication Skills

Developing effective cross-cultural communication skills is essential for leaders to gain cultural intelligence. This includes learning to recognize and adapt to different communication styles, as well as understanding the role of context, power dynamics, and non-verbal cues in various cultures. Leaders can improve their communication skills through training, role-playing, and seeking feedback from others.

Continuous Learning and Adaptability

Gaining cultural intelligence is an ongoing process that requires leaders to be open to learning and adapting their approach as needed. This involves seeking out opportunities to immerse themselves in different cultures, such as through travel, language learning, or participating in cultural exchange programs. By regularly challenging their assumptions and embracing new experiences, leaders can develop the flexibility and resilience needed to navigate a diverse and ever-changing global landscape.