Don’t Ignore Cultural Intelligence (Even If You Want To)!

Photo Credit: Štefan Štefančík

In this Mumbai based accounting firm, Jack McNeil was a strange implant. This was not a call center, diplomatic enclave or multinational company, so no American had ever stepped inside this firm. Founded by J.B. Mishra and now operated by his two sons, this was the quintessential family venture that made Indian business communities proud. Jack’s entry was an outcome of a recent business deal that was now the Mishra family’s point of pride. Their firm had recently secured an outsourcing contract that had the potential to bring in millions of dollars over the next decade.

Jack McNeil had been sent by his American firm to implement the workflow that would operationalize the outsourcing loop. His Cincinnati based employer, Fryer and Pool LLC, would be transferring their client’s files through a secure network, so the accountants at J.B. Mishra and Sons Private Ltd could maintain these accounting books. Jack was responsible for setting up the secure network and supervising the work done by the Indian accountants, to make sure they followed American protocols and standards.

J.B. Mishra’s younger son had spent a couple of years in Melbourne, Australia, where he completed a MBA. With his foreign experience, the younger Mishra took charge of the new partnership with the American firm. As part of this initiative, he wanted to kick up a rapport with Jack as a possible route to bring in new business. Mishra was a bit lost, however, regarding how to socialize with Jack outside work. Should he take Jack to a fancy restaurant or would a sports pub be better? Maybe a lavish Indian meal at the Mishra household would be the way to go, as Jack would get to meet the whole family?

The younger Mishra had other concerns. In Mumbai, their business network was informal so he had never really hobnobbed in a formal corporate environment. In fact, many of their clients were distant relatives who used their services due to family referrals. Observing Jack McNeil’s behavior in the office, the younger Mishra tried to guess whether the same style of networking would work in the United States. He was similarly unsure about how to communicate during the many virtual meetings that were organized by Jack to speak to colleagues in Cincinnati.

Recognizing their international ambitions, some fundamental changes had already been made by J. B. Mishra and Sons Private Ltd. Their informal billing procedure, put in place back in the nineteen sixties, had been replaced by systematized invoicing. Employees could no longer provide temporary replacements to go on unpaid leave. Background checks were conducted whenever a new accountant was hired. All the office software had been licensed and anti-virus software installed on every computer. Employees were urged to speak in English during meetings, as this would prepare them to communicate with foreign clients.

Yet, there were significant gaps in terms of the company’s overall knowledge of American business culture. The younger Mishra would have to take the lead regarding acquiring this knowledge.

In case you were wondering, there is no real J.B. Mishra or Jack McNeil that this example is based on. This is a hypothetical situation aimed at demonstrating the need for cultural intelligence in today’s global business setting.

As many experts will tell you, there are genuine financial incentives associated with acquiring cultural intelligence. If you are trying to convince yourself or your company that they should invest in cultural intelligence, a few supporting reasons are as follows.

1. Cultural intelligence helps you manage culturally diverse teams

Managing a team is a challenging task. The manager should switch between the expressive and practical aspects of the role. Given the demands made by clients, however, such as quality control and project deadlines, the manager may rarely get time to nurture relationships within the team.

Yet, it is important that the manager expresses their human side.

Relationships are easier to develop in culturally homogeneous environments, since everyone is familiar with the cultural context. Cultural familiarity is not even a concern.

It gets challenging when a team comprises people from diverse cultural backgrounds. It takes more effort to bridge the differences and relate to each other. In such a situation, the team benefits if the manager has enough cultural intelligence to navigate these differences.

As the coordinator of the team, the manager can relate to each member based on his knowledge of their cultural background. He can also help team members from dissimilar cultural backgrounds interact with each other. More importantly, the manager can help a culturally diverse team develop a coherent identity that brings the team together.

2. Cultural intelligence helps you respond to cultural conflict within the team

Cultural differences are manifested through both verbal and non-verbal behavior. Underlying these differences are cultural values that may not be visible but are powerful causes of cultural conflict. Cultural values lead to attitudes and habits that are manifested as culturally rooted verbal and non-verbal behavior.

As a manager of a culturally diverse team, you are likely to have to deal with cultural conflict. At times, the cause of these conflicts may be obvious and it could be a minor conflict. A conflict due to dietary restrictions of team members is one such example. The solution could be as simple as making sure everyone has the option of avoiding food that they do not consume.

Other times, however, the conflicts could be more serious or even if not serious as such, they could be difficult to resolve. For example, team members who have attended conservative religious schools may have a more structured approach to their work, as compared to those who have been educated in a non-religious liberal institution. This may lead to conflicts that are hard to decipher. In such a situation, a manager’s cultural intelligence will help them resolve the conflict faster as they can analyze it effectively.

3. Cultural intelligence helps you identify business opportunities

To grow their businesses, entrepreneurs may be forced to look outside their cultural comfort zones. Without adequate cultural intelligence, however, it is difficult to understand consumer behavior and marketing strategies in a foreign territory. Consequently, business opportunities are hard to identify as well. It is, thus, prudent for an entrepreneur to invest in developing cultural intelligence, as this will enhance their ability to enter a foreign market.

In many cases, businesses spend thousands or even millions of dollars conducting market research to identify opportunities in a new market. This process is likely to be less expensive if an entrepreneur possesses cultural intelligence about the market that they intend to enter. In addition, it will be easier to utilize the market research data and take appropriate action. Overall, the chances of successful business expansion are higher.

4. Cultural intelligence helps you develop better products/services

Once the decision to enter a market has been made, it is time to develop products/services that will hopefully be popular in this market. The intimate link between cultural variables and product development is now widely acknowledged. Companies hire cultural anthropologist and qualitative researchers to work as cultural detectives, so to speak, and present an inside scoop on the new cultural market that the company is trying to enter.

Again, cultural intelligence helps this process as it allows a business to get a head start on understanding the consumer and consumption context in this unfamiliar territory. This might lower the overall expense on product development related research.

5. Cultural intelligence helps you respond to cultural unfamiliarity

While cultural intelligence is certainly useful to understand specific cultural markets, it also helps to deal with the cultural unknown in general. The more you learn about various cultural groups, your mind is better conditioned to deal with cultural difference. If you learn cultural theory that allows you to academically analyze a culture, it further strengthens you to embrace the cultural unknown.

So, in a sense, cultural intelligence can be a tool that enhances your mental toughness. In a world where many people are clinging to the familiar, you can stand out as someone who is not scared to venture into culturally unfamiliar territory. As an entrepreneur or employee, this can be the chip on your shoulder.

Returning to the hypothetical example presented earlier, it is perhaps obvious why J. B. Mishra and Sons Pvt. Ltd should invest in acquiring cultural intelligence. The organization could eventually secure multiple foreign contracts and open an office in the United States.

If you consider yourself to be in a similar situation, please take the initiative to enhance your cultural intelligence. You may choose to do so simply out of curiosity as well.

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I help professionals develop communication and cultural skills to succeed internationally. If you want to schedule a meeting or workshop with me, please send an email to OR start building cultural intelligence by CLICKING HERE!