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Intercultural Leadership in Business

Updated: Sep 12, 2022

Leadership is a process by which an executive can direct, guide, and influence the behavior and work of others towards accomplishment of specific goals in a given situation. Leadership is the ability of a manager to induce the subordinates to work with confidence and zeal. There are lots of articles and books about the qualities of a good leader with tips and tricks how to become a good one.

The purpose of the present article is to pay attention to relationships between intercultural communication competence and leadership and to give some suggestions about the development of intercultural intelligence and thus intercultural leadership in business.

In the digital era of the 21st century, inevitably, the core competitive advantages of a global company are the talents coming from multicultural cultures. Moreover, in the post-pandemic world, the online business is part of the 'new normal' globalization, which means that work can more and more be executed from all over the world, but also that work will increasingly be done by people from different nationalities, ethnicities, values and beliefs.

Additionally, it is estimated that approximately 60 to 80% of international mergers and acquisitions fail because cultural differences are not considered before and during the integration process. Poorly managed mergers and acquisitions destroy shareholder value. Companies lose their best talents. Employees enter in an uncertain limbo and are skeptical towards their new foreign colleagues and, as a result, innovation stagnates.

Moreover, organizations usually send their best engineers abroad, for example to manage production plants. While these professionals possess strong technical skills, they usually have not developed intercultural management and leadership skills. As a result, while working in the host country they apply the same management style which proved to be successful in their home country, assuming it will work there as well. As it mostly doesn’t, they struggle in an incessant trial-and-error process that frustrates them and erodes local employee motivation and productivity.

Sociologist Edward T. Hall has called culture “the silent language” that controls our lives in unsuspected ways. Because we are embedded in culture, we intuit the rules but rarely give them conscious thought. Hall warns, “Culture hides more than it reveals, and strangely enough what it hides, it hides most effectively from its own participants.”

Most people are unaware of the unwritten rules and the invisible codes that are valid in the other culture. Most interactions are careless and clueless, not due to bad intentions, but rather because of a lack of knowledge and self-reflection.

There is no definition for Intercultural Leadership per se. One of the most prominent and influential studies to date regarding leadership in a globalized world is the Hofstede dimensions of culture. The study reveals similarities as well as differences across cultures and emphasizes the need to be open-minded to understand the differences in other cultures. In the leadership literature, there is another term used, Global Leadership, defined as “a process of influencing the thoughts, attitudes, and behaviors of a global community to work together synergistically toward a common vision and common goals”.

In today's multicultural world leaders must strive to improve cross-cultural awareness and sensitivity in the workplace, build multicultural teams and develop intercultural capability, which help them to look into the future of working internationally.

Intercultural Leaders should have a deep understanding and respect for all cultures, and no one is left unchanged because everyone learns from one another and grows together. Within this context, Intercultural Leadership is the ability to influence (not to abuse the power, but to empower), guide and engage employees, clients, partners from all cultures towards accomplishment of specific goals in a given situation. Therefore, leading across cultures is more critical and complex than ever.

How to develop intercultural intelligence and global agility skills

Becoming an intercultural leader begins with increasing self-awareness of cultural intelligence (CQ) and cultural profile (CP). Leading effectively across cultures requires moreover emotional Intelligence (EQ) as well as maturity. People with high CQ can learn from interaction with others, seek and develop ways of understanding, and respond to those around them.

Cultural intelligence is the ability to relate and work across cultures and then blend in. It can be developed through:

  • Cognitive means: "Do I know what is happening?" Understanding that cultural differences are happening in a given situation.

  • Physical means: "Can I respond appropriately and effectively?" Learning how to connect and attend to people across cultures.

  • Emotional/Motivational means: "Am I motivated to act?" Being prepared to relate and deal with people despite the difficulties imposed by cultural differences.

The International Profiler, an online psychometric questionnaire and feedback process developed by WorldWork, is a very effective tool to generate intercultural awareness. It allows international managers to recognize the qualities and behaviors they tend to focus on, and the ones they might be neglecting that would make a difference. It provides the starting point for reflecting on what is currently helping them and what specifically they would need to do differently to deal with an unfamiliar environment, overcome challenges and achieve goals more effectively in the various cultural contexts (and functions) they are operating in.

Intercultural leadership starts with people, not cultures

Richard Lewis developed a model of Cultural Profile to classify individual cultures into three main groups:

  • Linear-active culture, a culture whose people are task-oriented, highly organized planners, preferring to do one thing at a time in the sequence shown in their diary

  • Multi-active culture, an extrovert, people-oriented culture whose members tend to do many things at once, often in an unplanned order.

  • Reactive culture, an introverted, respect-oriented culture whose people are reluctant to initiate firm action or opinionated discussion, preferring to listen to and establish the other's position, then react to it and formulate their own

Leaders and managers cannot be experts in every culture they meet in business, but they can be experts in encountering cultures and in building intercultural relationships. Leaders can learn to be aware, self-aware, discerning, and culturally adept. Understanding CQ and CP prepare leaders to be more flexible and adaptable when encountering a new culture in business as well as lead a multicultural team smoothly.

What are the Steps to develop Cultural Intelligence

  • Know yourself better. Start with yourself. The tricky part is that we all have blind spots. It’s like „What is the color of water for a fish that lives its whole life in it? “. Our own culture is so natural to us that we don’t even realize that there can be different ways of thinking and making sense of the world. Furthermore, become aware of your unconscious biases.

„One of the most effective ways to learn about oneself is by taking seriously the cultures of others. It forces you to pay attention to those details of life which differentiate them from you “— Edward T. Hall, book The Silent Language.

  • Grow your awareness of others. Learn to change perspectives. Start by growing your knowledge about other cultures, their values, and customs. A great way to start and to demystify over-simplified stereotypes is to be open-minded and interact with people from a different culture, gender, age, marital status, social class, profession, etc. trying to escape your cultural bubble.

  • Interact mindfully. When you interact with different cultures, you will be facing many awkward situations. The culturally intelligent person takes a moment to pause and observe objectively what’s happening. This is the crucial moment where you need to put your familiar reaction patterns and instincts aside and use your prefrontal cortex to make sense of a situation. Ask open questions if you are not sure if you understood the person or situation well.

  • Build bridges. Develop your very own strategies for dealing with cultural differences so that you can communicate and work effectively across cultures while respecting both your own and the other person’s values.

  • Never stop learning. Cultural intelligence is not acquired overnight. Our world is very big and diverse, and we are on a life-long learning journey. Cultural intelligence is like a muscle that can be trained, just like a comfort zone can be stretched.

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