How Culturally Intelligent is Your Business?

We are all familiar with HSBC’s slogan of the world’s local bank. It is a reflection of how important it is to understand the local environment while you are still being a part of the global world.   

In today’s world one of the skills that people should acquire is the ability to adapt to different cultures and manage interconnections. Similarly, organisations have to adapt to globalization and have people with the right skills to cope with the constantly changing global environment.  Globalization is an intertwined relationship between the local and the global, the so called local being the environment in which people create flexible transnational as well as trans-cultural communities (Bauman 1998, Giddens 1991).

Today companies are striving to become truly global and they try to acquire specific knowledge for individual and organizational goal achievement in culturally mixed settings and be able to handle “glocal” encounters.  This requires a different set of skills from the employees such as interacting with people from different cultural backgrounds and being able to adapt to working with and in different cultures.

As the world gets more global and so do the businesses, we need to acknowledge that the unfamiliar experiences created are unknown to us. Thus, Cultural Intelligence - the ability to create an impact across different cultures - is required in order to make sense of the unknown differences. Intercultural success is more reliant on Cultural Intelligence than any other forms of intelligence such as IQ and EQ.

A company’s level of adaptiveness to the different cultures and therefore its success is directly linked to its people’s cultural intelligence. Therefore, starting from the recruitment process, companies need to adapt different techniques to hire/appoint the person. Then comes the orientation programme. People with any managerial or leadership role would agree with me that having the right person in the right place is vital.

I personally experienced how cultural intelligence can be vital as an HRD working for many multi-national companies on 3 continents. I witnessed people being sent on overseas assignments by the HQs based on their technical skills or the skills that are relevant to their home countries. Sadly, they often failed in their roles by not being able to adapt to different cultures, different styles of doing business……Even having different weekends. That resulted in losing business, losing people, losing market share, losing clients and inevitably losing money. Therefore businesses need to have culturally intelligent strategies in entering overseas markets and more importantly they need to have culturally intelligent people to make the “unknown”, familiar!

In my next post, I will discuss how to embed cultural intelligence into a recruitment process especially for overseas assignments.

Bauman, Z. (1998) Liquid Modernity. London, Sage

Giddens, A. (1991) Modernity and Self-Identity: Self and Society in the Late Modern Age. Stanford: Stanford University Press.