Why Cultural Intelligence Matters for Global Business Leaders

As companies grow and thrive, some choose to expand overseas to capitalize on foreign markets.

However, for a U.S.-based company, succeeding in another country or region is easier said than done. Not only do most other countries not speak or write English, but many of them have unique cultural customs and practices. 

So, if a business tries to conduct itself the same way abroad as it does at home, there could be cultural barriers preventing both short and long-term gains. That’s where cultural intelligence comes in — and it can have a substantial impact on whether your brand thrives overseas.

What is Cultural Intelligence?

Cultural intelligence is the ability to learn about and understand different cultures so that you can conduct yourself accordingly. For example, in some cultures, shaking hands is not a sign of respect, but bowing is. Thus, this concept is when you discover these differences and implement them in a natural way within the confines of your business structure. 

Someone who possesses cultural intelligence is not only aware of multiple cultures but is also adaptable to them. They can effectively work with people belonging to various cultural backgrounds and be equally productive. In the next section of the article, let’s explore how to incorporate it into your entire organizational structure. 

How to Incorporate Cultural Intelligence Into Your Leadership Style

Knowing about cultural intelligence is much different from using it in daily operations. As a rule, CQ involves four unique factors: 

• Drive: To be as successful as possible, you have to want to embrace other cultures and their customs. The more driven you are, the more likely you’ll understand other people better. 
• Knowledge: This aspect involves more than just learning the basic elements of another culture. You must also understand how to incorporate cultural knowledge into your business practices and operations. This factor is hugely important because it allows you to turn cultural intelligence into actionable goals. 
• Strategy: Planning is often the key to success, so the more time you can spend on strategic goals and initiatives, the easier it is to incorporate cultural intelligence. For example, when planning a meeting or corporate event, consider the cultural needs of different employees and guests (i.e., translating materials into different languages or offering culturally appropriate snacks and foods). 
• Action: This phase of cultural intelligence is where you put your knowledge and strategy into action. By showing employees, clients, and fellow executives what it means to understand other cultures, it’s easier to bring everyone together and align them with the same objectives.

Because each company is different, the specific steps necessary to implement cultural intelligence will differ from one brand to the next. It also matters where your employees are from and where you’re marketing your brand. For example, if you’re expanding to India, you’ll need different cultural intelligence than if you’re expanding to France or Germany. 

Another way to ensure your understanding is accurate is to consult with people from the culture you’re learning about. Sometimes, this means one-on-one sessions with employees from the country or region. In other cases, you may want to bring in cultural consultants. 

Why Cultural Intelligence Matters for Success?

There are various ways in which how cultural intelligence makes a business better. Let’s check out how: 

More Harmony

The world is a global village, and you must be with others in the same field. So, accepting the differences and engaging in cultural reciprocation is always better. This is one of the great ways to learn the craft of intelligence. The more you accept others, the better you can integrate with others in the workplace. 

Cultural intelligence increases sensitivity and compassion in your team members and teaches them divergent perceptions and opinions. With adaptive coworkers, team members can easily adjust themselves to other cultures and, consequently, develop more harmony. Workplaces with extended harmony promote a greater culture and more productivity. 

Enhances Communication

Communication is the next most important aspect. In some settings, it acts as an icebreaker and makes things a lot easier. Two people belonging to entirely different cultures can easily communicate, share their thoughts, and work towards the same goal. And all of this becomes possible due to cultural intelligence. 

This present workplace is a confluence of diverse cultures. You have to understand it here and ensure that the integration is successful. One of the most important ways to establish a relationship is effective communication. It is the sharpest tool to be compatible in any situation. 

The world is a global village, and it is better to be an important part of it by learning the art of communication and understanding diverse cultures, societies, and, most importantly, people. 

Case Studies Of Successful Cultural Intelligence Implementation 

Because companies are becoming more globalized, they must be culturally intelligent. Otherwise, the brand may be off-putting and find it hard to gain new customers in different countries or regions. East West Bank’s understanding of cultural and business practices on both sides of the Pacific gives its customers the ability to seamlessly and efficiently scale their business between East and West.

This focus has helped the Bank establish itself as the premier financial bridge between the U.S. and Asia and to deliver relationship-driven solutions to an increasingly diverse and sophisticated customer base.

Over three decades, East West Bank’s Chairman and CEO Dominic Ng has transformed the bank. It used to be a small savings bank with just $600 million worth of assets and a loan association. But today, it has become a fully operational commercial bank with more than $68 billion in assets. 

The Bottom Line: The World is Shrinking, and Businesses Must Adapt

Although the U.S. is still the largest consumer market, its share is slowly diminishing. Companies must adapt as other countries build their middle class and buying power. That means, as a leader, it’s your job to be culturally intelligent so you can expand to these markets effectively and seamlessly. If you don’t, your competitors will.

Conclusion

So, that’s the end of this article. If you find this comprehensive guide useful, don’t forget to share your comments below. We always appreciate hearing more from our readers. Signing off! 

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