Opinion: Cultural intelligence is key to the future of business

21 January 2016

Author: Felicity Menzies


Opinion: Cultural intelligence is key to the future of business

The workplace is changing dramatically, and skillsets must align with this new environment, says Felicity Menzies

Management scholars have long accepted the importance of interpersonal effectiveness at work. Our ability to communicate with others is central to business success, and we are now developing ways to quantify and improve it. Social intelligence describes the ability to understand emotions, motivations and behaviours of the self and others in social settings. One key subset of this is emotional intelligence (EQ), and in 2011 a review of more than 1,100 studies confirmed the importance of EQ over cognitive ability (IQ) and personality traits in predicting work performance.
 
But one barrier to discussing and acting on social intelligence and EQ is that they are culture-bound. Behaviour considered socially intelligent in one setting does not always translate to others, and there are marked cross-cultural variations in emotional expression.
 
 
Businesses in Asia face unprecedented diversity in their workforces. Workers interact every day with individuals from different backgrounds, both in home markets and across borders, often managing multiple sources of cultural diversity at once. These differences present new challenges for interpersonal effectiveness. Cultural diversity enhances the potential for language and other communication barriers. Diversity also heightens the risk of ambiguity, value conflicts, and reasoning and decision-making differences, while stereotypes and biases threaten rapport and stifle the exchange of information and ideas.
 
The workplace has changed dramatically over the last two decades, and skillsets must align with this new environment. That is where cultural intelligence (CQ) comes in to play. CQ is defined as an individual’s capability to manage culturally diverse settings – the knowledge, skills and abilities that enable us to detect, assimilate, reason and act on cultural cues appropriately. CQ is not the capability for effectiveness in a particular culture. It is instead a unifying approach to intercultural competency that helps anyone adapt to and function in any novel cultural setting.
 
Individuals with high CQ display four main competencies that transcend particular cultural contexts: drive (a willingness to work with others, overcoming unconscious bias); knowledge (an understanding of culture and cultural differences that takes in values and beliefs); strategy (an ability to flex mentally and move beyond our own world view); and action (altering verbal and non-verbal behaviour to reduce the risks of communication).
 
CQ can be reliably assessed at individual and group level, which is useful for setting development goals, selection and promotion decisions, performance appraisals and the management of multicultural teams. And because it is developed through education, training and experience, it offers businesses an opportunity to create an enviable competitive advantage. Culturally intelligent workforces have the skills required to detect cultural shifts, modify global business models for local markets, capture new markets, and establish relationships and negotiate successfully with diverse stakeholders.
 
CQ also supports innovation through the promotion of diverse networks, both inside and outside the organisation, and the exchange and integration of diverse perspectives, skills and experience. Not to mention the positive effects on retaining and engaging top global talent. I believe it is one of the most important ways for businesses to distinguish themselves in a rapidly converging global marketplace. I hope HR leaders will be sufficiently open-minded to embrace this new mindset and begin to think about how CQ might affect their development and performance management programmes, as well as their own ways of working. After all, we are all defined in some way by our culture. Shouldn’t we understand how that affects others too?
 
Singapore-based Felicity Menzies is a principal consultant at Culture Plus Consulting, a diversity and inclusion consultancy with expertise in cultural intelligence.