This article emphasizes the importance of building cultural intelligence (CQ) to enhance business performance. It argues that organizations that actively foster CQ see significant improvements in productivity, innovation, and employee retention. The article outlines a four-step approach for embedding CQ into organizational culture:
- Attitude: Use data to understand cultural diversity and make CQ a strategic priority.
- Awareness: Normalize cultural differences and encourage reflective practices.
- Knowledge: Align corporate values with the diverse cultural realities of employees.
- Skills: Integrate CQ into talent development and leadership training.
By implementing these steps, organizations can experience substantial gains, such as increased productivity and reduced staff attrition, making CQ a critical factor for success.
How to Develop Cultural Intelligence in Your Organization
If your organization is perfect, growth is consistent and you don’t ever suffer from disappointments that your business is underperforming, then you don’t need to read any more. You’ve clearly developed cultural intelligence already! You probably don’t need cultural competence training, and your cross-cultural attributes are functional at their full potential.
Cultural Intelligence: the resource you didn’t know you needed
For everyone else, cultural intelligence may be the boost you need. You don’t believe me? I suggest you don’t – but can you believe others, with no stake in this:
- Deloitte says that organizations that actively build cultural intelligence see productivity increase by at least 10% (2022 report).
- Companies that leverage cultural difference with CQ outperform their competition by an average of 29% (Blackrock, 2023).
- The UK loses £48 billion in lost opportunities due to a lack of cultural skills each year (CBI/UK Government report, 2013).
- Business that actively build cultural intelligence reduce attrition by up to 30% (SHRM)
Still unconvinced? Peer-reviewed research shows that diversity alone is not enough to increase innovation, productivity and performance. It’s only when you build connections between your employees, each of whom has their own perspective and cultural style, that the spark of creativity ignites. This backs up the ancient folk wisdom, ‘two heads are better than one.’
If you’re still reading, I’m going to assume you’re at least curious, if not completely convinced. But the next stage is the hard one.
Human capital: building a CQ-powered organization
There is a lot of literature on how individuals can build cultural competence. There are 1000’s of individuals and organizations offering instruction in how to develop cultural sensitivity, cultural awareness and cultural agility in teams in one hour, ten hours, three months…. But if you want to build a culturally intelligent organization, it’s suddenly less clear.
So, let’s assume you’ve invested in a base level of individual cultural intelligence. You’ve either delivered cross-cultural training or encouraged your people to access digital learning and masterclasses.
How do you take the next step and embed cultural intelligence in the organization?
After all, if it’s good, you want more of it. It needs to become a default part of your organizational culture and values.
Taking a practical approach
A mid-size pharma company took this approach. Recognizing the need to use all available tools to distinguish themselves in an extremely tough marketplace, they took the decision to go the full nine yards with CQ. The journey they went on works as a scalable template for any organization. They used the four elements of cultural intelligence – attitude, awareness, knowledge and skills – to plan out their transformation journey.
ATTITUDE
We no longer believe that a ‘picture paints a thousand words.’ In every successful organization, it is data that underpins transformation and tells every story.
Do you, for example, know how many languages are represented by your client base? How many locations are they in? When your engagement survey highlights communication and trust issues, have you considered the cultural side of why communication is misconstrued? Is your corporate language hampering the efforts of other language speakers to be heard and recognized, particularly at a middle management level?
This data is not only crucial in making the case for cultural intelligence, but it also helps you track your progress. You can start making the journey to cultural intelligence part of your growth plan, and that will drive up engagement as your people know that their perspective is valued and indeed part of the strategy.
This can quite quickly change the momentum in your organization. When you start positioning cultural difference as a strength and a resource, you challenge the notion of centralized power and authority and empower the whole organization to contribute. It tells every person that they can influence and contribute value that will be recognized.
Once you have the data, and you’re collating and analyzing it regularly, you’re in a position to demonstrate the value to the organization of taking a global-first mindset. You can show that you value the perspective of difference. Rather than talking about inclusion and belonging, you’re demonstrating that it is central to your business strategy as an action, not a marketing ploy.
AWARENESS
Most people who work for your organization consider them pleasant, reasonable and proficient professionals who by and large get on with most people. As you start talking about the data around cultural intelligence, difference becomes normalized.
As leaders recognize that lack of cultural intelligence is holding their teams back, it becomes normal to talk about difference, to consider the impact of language, time zone, attitudes to risk and communication and all the other ways that cultural values create differing norms of behavior and thinking.
This awareness of ‘normal’ being unique to one person is an important step towards organizational cultural intelligence. It undermines the position that there is one single source of truth and encourages true agility that can build real innovation and creativity.
After all, if you look to one person for every decision, for every explanation then, you’ll only ever have one perspective. But as soon as you start from the position that different perspectives are normal, then you have more solutions, more creativity, more engagement.
And engaged employees are productive employees.
This awareness should be reinforced at an individual level. Encouraging reflective practice and understanding your own cultural defaults are priority actions. Encouraging people to talk about their cultural styles and to apply them to how they approach day-to-day tasks reinforces awareness and moves you closer to leveraging the power of difference at a strategic level.
KNOWLEDGE
Knowledge starts with an understanding that the cultural values you have on your corporate website are not the corporate values your employees live and work by.
Through surveys and identifying behaviors, it’s possible to identify the rich variety of cultures you have within the organization. You will probably also want to use a tool, such as Country Navigator’s Worldprism to dive a little deeper into what’s going on beneath the surface. The advantage of a tool like this is that it is not an evaluation tool – i.e. not looking at good or bad, merely taking a snapshot of what is. This can mean that rather than looking for the correct answer – or a ‘protest’ answer, your people give an honest response.
With a little interpretation, you can see how your corporate values align to the lived behaviors of the people – but beware: it may come as a shock.
We’ve been working with one large organization for five or six years. This multinational has been very proud of their values – they are ambitious and are looking to transform their industry. Of course, there have been some glitches and hold ups, but it wasn’t until they looked at the cultural profile of the entire organization that the organizational development team saw the real picture.
Despite investing time and effort in building a forward-thinking entrepreneurial culture, the organization clearly had a significant leading towards Risk-Avoiding. There were outliers in the Risk-Taking dimensions, but most people had not got on board with the new direction. Rather than continuing with the same tactics, the OD team could start looking at what was causing the risk-avoidance and why significant teams were resisting.
Culture change, as we know, can be quite slow, but at least the OD team and C-Suite are clear on how to address the root cause. This is already filtering into the leadership cadres and some of the resistance is easing, as evidenced by internal engagement surveys.
SKILLS
Just as an individual has a skill profile, so does an organization. Even if you don’t have a formal competency framework, your talent program is responsible for ensuring that the pipeline of highly skilled people keeps your organization moving forward.
The first three stages of this laid the foundation for this final one. Building cultural intelligence into your talent development, leadership and general learning and development offers may seem a high investment, but it can be extremely cost-effective – even in the short term.
And it’s easy to do. You probably already offer decision making skills or conflict resolution, or communication skills. You certainly offer leadership and management courses. Adding a core of cultural intelligence to those existing offers is not hard or expensive.
Embedding CQ in your organization at every level
That’s exactly what an industrial manufacturer has done.
A base level of CQ is available to every individual – a foundation in targeted digital CQ skills aligned to the existing skills development offer. For new joiners, CQ is positioned alongside standard inclusive learning modules as a priority skill – after all, valuing and respecting difference is the purpose of both DEI and CQ learning.
These initial offerings are complemented by ongoing masterclasses, podcast-type content and more social-media style content to consolidate and activate the learning.
This foundation is supported by a range of targeted interventions – whether upgrading the global mobility offering, enhancing leadership development or upgrading the talent programs, cultural intelligence is behind each element. Sometimes it’s a reminder, sometimes it’s a central point, but it is a constant element.
The results are encouraging. Operating in several very complex markets, HR business partners are seeing a change in attitudes and relationships. Engagement is up, retention is up and relationships with key external stakeholders are more relaxed. The number of teams who have proactively created a cultural team charter has exceeded 50 – covering more than 700 people at all levels of the organization.
More than a marginal gain
Prof. Steve Peters worked with British Cycling at the start of the Millennium to turn a nothing cycling team into a world-beating team that has a legacy 12 years later. One of the keystones of their approach was the concept of marginal gains: if you improve several elements by 1% each, you can have a huge overall gain.
But investing in cultural intelligence is NOT a marginal gain. Re-read the data we presented at the top of this article. CQ-powered organizations outperform others by up to 29%, they experience up to 10% increase in productivity and reduce staff attrition by 30%. These are the kind of numbers that start-ups dream of, let alone multinational corporations.
How to add an extra day per week!
Another client analyzed how long their middle managers were spending just writing and replying to emails. It came to around 855 minutes (about 14 and a half hours) per week. When they probed further, they found that a significant number of those emails were clarifying previous emails, resolving misunderstandings or repeating earlier information. This is supported by research by the Economist Intelligence Unit which found that managers spend up to 25% of their time on activities related to clarifying misunderstandings – or around 560 minutes (about 9 and a half hours) each week!
If your organization is fueled by cultural intelligence, just saving a proportion of those 560 minutes will see a jump in your bottom line. Imagine freeing up a whole day in your calendar. Imagine what that looks like when your middle management and leaders are freed up from unnecessary communication and can focus on the innovation and action that your organization needs.
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