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Cultural intelligence a new imperative

How do we go beyond the obvious manifestations of culture to understand and appreciate the

underlying drivers of employee behaviour?

Anindita Banerjee January 05, 2015Last Updated at 00:11 IST

According to the International Labor Union, 70 per cent of international ventures fail due to culturaldifferences. It is not surprising that organisations across the globe - conducting businesses acrosscultural and national boundaries - are looking for talent that is globally competent. A recent researchreport from the Economist Intelligence Unit finds that 90 per cent of leading executives from 68countries believe finding effective cross-cultural personnel is a top management challenge. Thus,selection and preparation for cross-cultural assignments require focus.

Let's consider the following scenarios:

An Italian expatriate comes from his company's overseas headquarters to handle the profitableIndian set up, the focus and the growth location market for the MNC. The expatriate has a fewyears of work experience in other Asian countries. He is confident that his style of working willhold him in good stead in India as well. However, within months of his arrival in India, peoplein key positions start putting in their papers. They find his style of leadership stifling.


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A high performing team of software professionals is working closely with its American

counterpart team on a project. The project is progressing but the teams are not working well.The Indians find the Americans way of functioning aggressive.An infrastructure project team in India is working with a Japanese team but finds the Japanese

way of working slowing down processes what with lengthy meetings and focus on paperwork.

An Indian family-run manufacturing company buys out a European firm in its bid to expandoperations. The integration of the two companies is turning out to be much tougher thananticipated.

The examples given above are drawn from issues faced by leaders in real business situations. In mostcase studies, the failure to handle cross-cultural differences is leading to costly failure.

Interestingly, during diversity workshops, when asked to list down key issues faced in working acrosscultures, most often we get a list of what is wrong with the other culture(s) - the Germans 'go toomuch by the rule book' the Japanese 'rely too much on meetings' and so on. Stereotyping is often a

part of the problem.

How do we go beyond the obvious manifestations of culture to understand and appreciate theunderlying drivers of cultural behaviour?

The concept of 'cultural intelligence or 'cultural quotient' (CQTM) provides a comprehensiveframework to address these issues. CQTM was developed as a research-based way of measuring and

predicting intercultural performance. According to researchers, PC Earley, Soon Ang, and Van Dyne,cultural intelligence can be defined as the capability to function effectively across various culturalcontexts. It is a construct that is developed from the theory of intelligence, which is based on four key

pillars derived from motivational, cognitive, meta-cognitive and behavioural aspects. These in CQparlance are defined as CQ-drive, CQ-knowledge, CQ-strategy and CQ-action.

Each of these dimensions of CQ feed into each other in a cyclic manner. The desire to take on aninternational assignment is a reflection of one's CQ-drive. CQ-knowledge, perhaps, is one aspect ofcross-cultural intervention that gets the maximum attention. We can find numerous resources - videos,

books, sensitisation training workshops - where the emphasis is on internalising a set of dos and don'tsabout the target culture. We all agree that acquiring knowledge about the target culture is important.But, when it is done in isolation, it leads to strengthening of stereotypes.

This is where CQ-strategy comes in - it is about awareness and ability to plan for cultural interactions.

If you were to identify the most routine task being done across a cross-cultural team, writing an emailrequesting information on project update, for instance, then cultural background of the receiversshould ideally influence the choice of words in the email. Further, the learning from each interactionneeds to be incorporated into future interactions. These are part of CQ-strategy.

Cultural quotient, however, fails if CQ-action is not handled well. CQ-action is the ability to adaptone's verbal/non-verbal and other behaviours to align with the desired behaviour. Feeling motivatedabout working with the company's Japanese partners and acquiring knowledge about traditionalJapanese greetings is not enough unless one is able to actually greet with a soft handshake or a bowexecuted at the correct degree. These four CQ parameters go hand in hand to evaluate the current level

of cultural intelligence.

There are multiple cross-cultural competency tools available in the market, but what sets CQ apartfrom these regular assessment tools is its statistical robustness. Organisations across the globe,including Walmart, Shell, Lufthansa, Coca-Cola and Google, and academic institutions such as


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Harvard, Stanford and London School of Economics, are using CQ based interventions in variousways - leveraging the potential of cultural diversity, building leadership development programmes todrive new business initiatives, assessing and training recruiters to find high achieving individualsglobally, driving customer service and sales and marketing efforts, improving M&A and execution ofglobal projects and preparing executives for overseas assignments and relocation.

CQ is not a capability that is cast in concrete, but something that is enhanced through reflection. Theproblem is that we often over-estimate ourselves. This is addressed in CQ through the multi-rater

assessment option. Organisations working within a matrix reporting structure can hugely benefit fromthe multi-rater assessment as the perceptions across different geographies and levels in a matrix candiffer greatly.

CQ assessment-based learning sessions are not culture specific. The emphasis is on broaderadaptability to cultural differences.

Not so long ago, IQ was seen as the primary prerequisite for success. With the passage of time, wehave learnt that EQ trumps IQ in many settings. With businesses becoming more global, IQ, EQ andCQ will be the triumvirate of aptitudes that will frame tomorrow's global success stories.

Anindita Banerjee

Practice Head, Diversity, Renaissance Strategic Consultants

www.business-standard culture quotient

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