Internazionalizzazione Management

Why developing intercultural management skills is essential in today’s complex world

by Myriam Callegarin*

In today’s highly globalized business world, developing Intercultural Management skills may seem almost unnecessary. People travel abroad for business and pleasure like never before. Everyone has at least an account on Facebook (or be it Linkedin, Twitter or Instagram), connecting them with hundreds of people worldwide. Within organizations, working with colleagues from other cultures has become normal. If interacting with people globally is so common nowadays, why should anyone spend time learning about Intercultural Management? Why would a manager who has been working internationally for 5 years or more need it?

As a matter of fact, the importance of intercultural management skills is vastly underestimated not only by individual managers but also by many organizations of any size. If your company wants to enter a foreign market you can ask the Chamber of Commerce or other public or private consulting firms for support. You will receive a long list of what to do in terms of dealing with the logistics, taxation, and international payments. They may organize business meetings for you with potential customers, suppliers or business partners in your desired foreign market, but in most cases you will not be offered any support in terms of how to relate, negotiate and work effectively with the people you are going to meet.

And yet, neglecting intercultural competence can be quite costly. Let’s look at some facts:

  • It is estimated that approximately 60 to 80% of international mergers and acquisitions fail because cultural differences are not taken into account 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, innovation stagnates.
  • According to the Forum for Expatriate Assignments, international assignments have a failure rate between 25 and 40%, rising to 70% in underdeveloped countries. The direct costs of a single failed assignment range between US$ 250,000 and US$ 1 million.
  • 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. The cost of losing local talents and hiring new ones cannot be estimated, nor the loss of profits, or the loss of key local customers and partnerships, or the cost of a damaged company’s reputation due to poor decisions. In business, whatever cannot be measured doesn’t exist. But the cost is there, and it is heavy.

Most people interact with others across cultures without being aware of the communication breakdowns and the invisible conflicts they unintentionally create. They 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. In the business world, this can result in unexplainable delays, in a suddenly poor collaboration from the counterparts, in chronic low employee engagement, in never-ending negotiations, and the mysterious failure of high investment projects. Often, the culprit is found in ‘the other’, the foreign counterpart who may be considered ignorant, mischievous, not trustworthy, incapable, lazy, arrogant, or whatever else comes to mind. Even very open-minded people tend to live by the underlying assumption that what they see is THE reality, and they may not understand why someone else cannot see what’s so obvious to them.

Intercultural management is more than just communicating, working and leading people across cultures. It is about interacting in a conscious and mindful way.
It involves:

  • the readiness to recognize our own cultural conditionings and to discover how we came to believe and see things the way we do. This helps us to realize and accept that our own way to see and judge things is just one among many;
  • learning about the other person’s culture, including history, economy, political situation and all those aspects that help us understand the underlying reasons for someone’s behaviour, beyond our personal assumptions and values. This can provide a totally new perspective on a person or situation;
  • the ability to reflect on how our behaviour may be perceived, interpreted and judged by someone from a different culture, as well as the maturity to recognize how we may be unintentionally contributing to a problem (and how we can contribute to solving it);
  • the ability to adapt our behaviour in order to find a common ground with the people we work with, valuing cultural differences and co-creating new and better ways to do things.

Effective Intercultural Management requires that we move from an instinctive, unconscious behaviour to a more conscious, mindful and strategic response that builds trust, enhances relationships, and even creates new business opportunities. It doesn’t just happen magically because we speak English and we have been traveling abroad for years. We may be used to working with colleagues from other cultures, but how often have we stopped to reflect on our own behaviour and to explore the true reasons why a certain issue came to be?

And yet, it doesn’t stop here. Intercultural Management may also involve finding the most effective way to explain to your Headquarter why a corporate strategy cannot be simply copied and pasted in the foreign market you are in. How do you transfer your cultural knowledge and sensitivity to your superiors and colleagues in the Headquarter, without them thinking that you are lazy or untrustworthy or a diva searching for attention? On the other side, how do you introduce important safety measures in a foreign subsidiary where local people are used to climbing on wooden scaffoldings wearing flip flops?

And then, there is yet a further dimension. Intercultural Management also involves the ability to manage your emotions and energy when facing ambiguity and uncertainty in an unfamiliar environment. How do you deal with corruption when the values in your host country totally collide with the values of your organization? How do you adapt while remaining yourself?


Managing effectively across cultures requires intercultural Intelligence, emotional intelligence, as well as maturity. As such, it is the evolving product of an ongoing personal growth process. The beauty of it is that it not only allows you to work with people across cultures more effectively, it also helps you to develop the mental agility to better respond to the ambiguities, uncertainties and complexities of today’s world. It creates a shift from a competitive model based on the belief in scarcity and the battle between superiority vs. inferiority (Win/Lose) to the realization of a collaborative model based on the belief in abundance and the recognition of each other’s value (Win/Win). At the same time, it is the result of a clear awareness and respect for the own and the other person’s needs and boundaries, and the skillful ability to  balance a Push approach (pushing my values, needs and goals forward) and a Pull approach (opening up to your values, needs and goals). The following real case will provide an example of the concrete application of these concepts.

How intercultural management impacts team performance and business results

An Italian multinational organization had transferred an experienced Italian manager to Thailand. As a Country Manager and CEO, his assignment was to set up a subsidiary and build the business in that market. After two years of hard and dedicated work he was still struggling. His Thai team kept demonstrating low engagement and no initiative. They kept making mistakes that made them lose clients and opportunities. The Country Manager spent most of his time telling them exactly what to do, how to do it, and controlling them at every single step. Just like the ‘veteran’ expats living in Bangkok had been telling him – ‘Thais aren’t ambitious. They don’t care about your work. They need a strong boss who always keeps an eye on what they are doing’. He was exhausted and frustrated. He was supposed to organize a big sales event each year, but he never did because he didn’t trust his people. The pressure from the Headquarter kept growing, and he was looking for ways to shorten his assignment in Thailand. He was fed up.

At that stage, despite his open mind and reading several books on Thailand, the Country Manager still lacked useful knowledge and awareness in relation with managing Thai people. Even though he appreciated the Thai culture, he was unconsciously holding a belief that the Italians are somehow superior to the Thais in terms of working, project management and doing business. He was not aware of the impact of his unconscious beliefs and behaviour on their engagement level and work performance, nor of what his Thai team needed from him in order to trust him and feel motivated.

His company hired me to coach him. Very soon, he understood the reasons for his team’s lack of engagement and accuracy, and how his own behaviour might have been perceived by them. He began looking at his people with new eyes. He realized what he needed to do differently in order to build trust and change the results he was getting. He immediately began spending more time getting to know each employee personally and organized one-to-one meetings with them. He was surprised to find out how smart they were and how much they knew about the market and what the company needed to succeed. His employees were surprised and delighted at the new way he was approaching them. He radically changed the way he held meetings and gave his management team a specific project to work on, asking them to come up with ideas on how to make it a success. Within few days, he received several ideas and the team designed a complete plan, which they implemented successfully. At this point, he was trusting them enough to ask them to organize the first sales event in Bangkok. The event was a huge success and brought in twice the revenues they were expecting. Since we started coaching, no-one in the team had been replaced, it included exactly the same people, and yet within few months, the team was completely transformed, highly engaged and top performing. The Country Manager could finally relax and focus on more strategic aspects, while continuing to be coherent with his new approach and behaviour. That year, revenues increased by 43% compared to the previous year. The Country Manager decided to extend his assignment in Thailand, and accepted the Headquarter’s offer to manage an additional country in Southeast Asia.

How did he achieve such remarkable results? It was possible thanks to his readiness to question his own beliefs about his Thai team, to reflect on his own behaviour and to change it in order to build trust and get the best out of his team, while still remaining authentic. He had brought the unconscious beliefs and behaviours to the surface, and developed a more conscious and mindful approach that produced a significant shift in his team’s behaviour. He had taken full responsibility. This was a personal growth process that had an impact on his team and on business results. This is what leadership is about.

Developing effective intercultural management skills involves the development of conscious leadership, no matter whether you are in a leadership role or whether you need to influence people without authority across cultures and functions. It is a matter of taking responsibility for both the problems and the solutions. It is a matter of increasing ‘response-ability’ – the ability to respond in a conscious and mindful way rather than acting and reacting instinctively. It is about recognizing and valuing differences, fostering true innovation, rather than forcing everyone to think and act in one and the same way. It is also a matter of thinking more strategically, and adapting your behaviour and actions in a way that feels authentic but also gets you sustainable results. Local people will always know much more than you do, and the level of information and key players that you get access to always depends on the quality of your relationships. When you work with a multicultural team, you can gain access to a wealth of different perspectives and ideas. Together, you can develop innovative and effective solutions to any challenge. You become much more resourceful than just by yourself. That’s where leadership becomes partnership.

In short, developing effective intercultural management skills allows you to grow as a person and as a leader, and it makes you more agile in dealing with the volatility, uncertainty, complexity and ambiguity (VUCA) of today’s world – no matter whether locally or internationally.

How to develop intercultural management and global agility skills

By now, it might be clear that in order to work and manage people and projects effectively across cultures, speaking a foreign language and having worked abroad is not enough. Developing any skill requires knowledge, awareness and practice. This is true also for developing intercultural management skills.

1) Knowledge

The knowledge needed to work across cultures in a conscious and effective way includes learning about the different ways to view and deal with certain aspects in life and work, such as for example:

  • Communication: some cultures prefer a direct communication style, while others are used to an indirect communication. Different cultures have different communication patterns to get the message across. The way you communicate may engage or annoy, it may build trust or destroy it, depending on the culture. How do you make sure that your message comes across effectively to each member of your multicultural team?
  • Perception of time: some cultures (monochronic) perceive time as linear. They are used to focusing on one thing at a time and plan things accurately, step by step. Punctuality is very important for them. Other cultures (polychronic) are used to multitasking and plan things just to have a rough guideline on how to proceed. Punctuality is not so important for them. The way you manage a project may receive appreciation or resistance depending on the culture you are working with. How do you ensure that deadlines are met and collaboration is smooth within an international project team that includes members from a polychronic culture, who deal with time and planning in a very different way compared to their colleagues?
  • Power distance: in some cultures there is a high distance between the boss and the employee. The boss tells the employee exactly what to do and how, self-initiative is not welcome, and the boss’s opinion or decisions must never be questioned. In other cultures a high degree of self-initiative is expected, the boss is almost at the same level as his team, and open discussions on possible scenarios before making decisions are encouraged. The way you interact with your employees may build trust towards you, or destroy it depending on the culture. How do you lead a team who is used to a high distance to the boss and expects to always be given precise instructions, if you want them to take initiative instead, but they look at you as if you came from the moon?

These are just a few dimensions that international managers need to be fully aware of if they want to become more effective and successful in their roles.

2) Awareness

Being aware of our behaviour is critical because, combined with knowledge, it helps us recognize how we may be perceived by people from other cultures. Awareness shows us whether our behaviour is useful or detrimental in the context we are working in. For example, we may be very focused on goals and task-oriented, and we may put a lot of attention on communicating goals clearly, trying to convince people with facts and figures. This may have always worked well in our own culture. However, it might fail in another culture because we didn’t realize that we tried to influence the wrong people, or we may have missed to connect with people emotionally and did not provide the bigger picture on why that goal is so important.

The International Profiler’, an online pyschometric questionnaire and feedback process developed by WorldWork Ltd is a very effective tool to generate such awareness. It allows international managers to recognize the qualities and behaviours they tend to focus on, and the ones they are 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 in order to deal with an unfamiliar environment, overcome challenges and achieve goals more effectively in the various cultural contexts (and functions) they are operating in.

3) Action

The knowledge, reflections and awareness that are gained in this process bring a different understanding of people and situations, and often lead to a natural behavioural change. However, changing a behaviour we have been used to all our life might be hard. This is where true (self) leadership kicks in. As described in the previous case, the Country Manager achieved such remarkable results because he made a conscious decision to change his approach. All his future actions and behaviour were coherent and consistent with that decision. His team had seen a change in their leader, they appreciated it, and the fact that he was consistent contributed to building and strengthening trust.

Working with a coach can help an international manager stay focused on their goals and the competencies they want to develop. It encourages a targeted reflection on the specific challenges they are facing in their international roles, on the impact on their stakeholders locally and in the Headquarters, and on exploring possible solutions that meet the needs of all parties involved. That way, the manager keeps strengthening their intercultural competencies until they become natural.

Conclusion

Developing intercultural management skills is essential not only for working with people across cultures more effectively, and thus getting better business results, but also for becoming more resilient and agile in dealing with the sudden changes, the uncertainty and the complexity of today’s life. It allows us to look at our own thinking patterns and behaviours in a conscious way, and to develop better responses to people and situations. It also helps us to recognize the value in people who are very different from us, moving us beyond our unilateral perspective, and to co-create new solutions with them that we might not have been able to find on our own. This generates a sense of resourcefulness, hope and even excitement that they might not have perceived before. Indeed, intercultural management skills help to build bridges and find new and better ways to do things, not only in business but also in the world. And that’s definitely something we could all benefit from.

*Independent Global Executive Coach and Intercultural Leadership Consultant. She works with leaders and teams, accelerating their ability to build trust, increase engagement and improve business results in global markets. She is a Senior Associate at TCO International and a visiting lecturer in International Management at the CUOA Business School.

 

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