By: Tara K. Lalonde
Globally competent leaders are becoming increasingly critical for organizations to maintain a competitive advantage as the environment shifts to one consisting of global supply chains, financial systems, customers, and competitors. As a result, the idea of global leadership representing a select few expatriate managers is rapidly being replaced with leaders sitting at their desks in their home country, interfacing with stakeholders around the world. This global economy presents significant opportunities for organizations but can also present significant challenges. But what distinguishes a good global leader from other leaders?
There are plenty of examples where companies that saw tremendous success in the United States failed in their international expansion attempts. One notable example includes the withdrawal of Walmart from Germany after opening 85 stores when a failure to understand the strict regulations and cultural viewpoints on overly friendly greeters cost them approximately $1 billion.[1] Another example is the collapse of eBay in China, which, unlike its main competitor, failed to understand the cultural need for sellers and bidders to establish relationships before finalizing contracts.[2]
These examples, and many others, illustrate the need for organizations to employ global leaders equipped to navigate the culturally complex waters that today’s business strategies mandate. The tendency is often for organizations to assign leaders with a proven track record of success within their home organizations. Yet, that strategy is often unsuccessful and, as shown above, can come with a significant cost when those leaders fail to translate their success across cultural borders.
Leaders who operate effectively in a cross-cultural environment possess competencies that enable them to build trusting relationships regardless of national borders, differing ethnicities, or local customs and beliefs, which allows them to develop solutions and create shared value across economic, political, or social boundaries.[3] Global leaders recognize that every culture holds a unique set of values that inform how people think and behave and can successfully influence groups different from themselves.
Cross-Cultural Differences Make a Difference
Culture is embedded in the mental models people develop from an early age and the surrounding social environments throughout one’s life.[4] Hofstede’s seminal research and subsequent studies, such as the GLOBE project, suggest that different cultures have different value sets that drive expected norms. Cultures hold varying perspectives on things such as equal power distribution, support for individual needs versus the collective needs of the group, how well uncertainty is tolerated, and various other dimensions depending on how each study classifies cultural preferences. Regardless of any nomenclature distinctions, there is clear evidence that different cultures operate based on a different set of fundamental beliefs, which in turn influence behavioral norms.
The difference in cultural norms has a direct impact on the expectations of leaders and followers operating in cross-cultural settings. Understanding these differences can impact communication, relationship-building and trust, decision-making, strategic planning, motivation techniques and reward systems, negotiation, job design, and the list goes on. Basically, every responsibility of a leader is influenced by different cultural perspectives. Consequently, it is critical for global leaders to recognize that the behaviors that make them successful in their home country may not lead to success in another country and, worse, could even be detrimental if those behaviors violate cultural norms.[5]
For example, leaders interacting with China should be aware that the high-power distance and collectivist culture prefers hierarchical structures where leaders make decisions autonomously, and rewards are based on group outcomes.[6] On the other hand, Germany, a culture that values individualism and does not tolerate uncertainty well, prefers leaders who involve followers in decision-making[7] and where leaders encourage open disagreement and debate.[8] As one might imagine, using a culturally inappropriate approach could render global leadership ineffective and possibly even destructive.
Of course, these are just a few examples of endless differences evidenced in cultures. Global leaders cannot, obviously, be expected to be experts in every culture around the world. What sets global leaders apart from other leaders is that they recognize that cultural nuances exist and can adapt, minimize, or integrate cultural behaviors accordingly.[9] This ability to modulate between cultures, knowing when and how to adjust, is referred to as cultural agility.
Identifying & Developing Culturally Agile Leaders
Knowing what characteristics make global leaders more successful can assist organizations in the selection of leaders with traits that predispose them to cross-cultural success as well as the development of training and experiential assignments designed to grow their potential to operate successfully in a global environment. These characteristics reflect the global mindset that makes someone more likely to possess the psychological ease necessary to adapt, as well as the ability to interact with people from other cultures effectively.[10]
Global leaders have a passion for learning about other cultures. They embrace diversity, are curious and open to new ideas and experiences, and are willing to take risks. These leaders possess the self-confidence to cope with ambiguity and navigate unfamiliar situations. They are flexible and have the humility to view other perspectives without judgment. Global leaders are good listeners, possess self-awareness, and can diplomatically negotiate and collaborate.
Organizations building a workforce with culturally agile leaders can start by selecting candidates whose prior experiences, education, training, and personality traits show a greater inclination to a global mindset. For example, recruitment and selection should include consideration for the number of languages spoken, any international degrees or courses, and the number of countries where a candidate studied or worked. Further, interviews and assessments can be used to evaluate the presence of global mindset traits.
Beyond selection, global organizations should continue building an array of culturally agile leaders by providing training opportunities that create a foundational understanding of how cultures think and act differently, as well as country-specific training that provides a more contextual depth of cultural norms and behavior expectations. Additionally, organizations should provide training for expatriate leaders that assist in the adjustment process when relocating to another cultural region.
Organizations can help to acclimate leaders to cross-cultural experiences, putting their global mindset and training into practice by participating in global project teams, mentoring programs that match people from different nationalities, rotational assignments in other countries, and even international volunteerism opportunities. Participation in any of these assignments should be accompanied by honest feedback on the individual’s cross-cultural performance so the employee can continue to gain cultural knowledge and improve their self-awareness of how to adjust their behaviors.
A Globally Focused Organizational Mindset
As cultural agility becomes increasingly important for organizations, it is critical for leaders to establish a climate that sets the tone from the very top, instantiating a global mindset in the organizational vision and then reinforcing it with their actions[11]. Senior leaders need to show their commitment by investing in resources and training that enable a global workforce and reward successful cross-cultural interactions. Perhaps most important, senior leaders of global organizations can develop a culturally agile climate by setting an example and demonstrating their own desires to grow their knowledge and experiences in different parts of the world.
Every individual holds cultural values that influence personal perspectives, which can make it challenging to effectively interact with people who naturally have their own different cultural values. Cultural agility requires knowledge of how cultures behave differently, but that is not enough. It also requires the mindset to embrace those differences and the willingness to accept that how one behaves in one culture may not be effective in another. It requires the eagerness to learn and experience cultures different from one’s own.
Globalization is becoming an almost inevitable fate for most organizations. Yet, global success is not guaranteed. Organizations need to invest in a pipeline of culturally agile leaders if they want a competitive advantage in the current and future global economy.
What experiences have you had with creating more culturally agile organizational leaders? What techniques helped you personally or helped you to develop leaders with the necessary cultural humility?
[1] Seale, A. Seven epic cases of companies that failed internationally. https://www.firmex.com/resources/blog/seven-epic-fails-by-businesses-that-tried-expanding-into-foreign-markets/
[2] MBA Skool Team (2015). Top brand failures due to differences in culture. https://www.mbaskool.com/fun-corner/popular/12291-top-brand-failures-due-to-differences-in-culture.html
[3] Cabrera, A. & Unruh, G. (2012). Being global: How to think, act, and lead in a transformed world. Harvard Business Review Press
[4] Hofstede, G., Hofstede, G. J., & Minkov, M. (2010). Cultures and organizations: Software of the mind (3rd Ed.). McGraw Hill.
[5] Javidan, M., Dorfman, P. W., de Luque, M. S., & House, R. J. (2006). In the eye of the beholder: Cross cultural lessons in leadership from project globe. Academy of Management, 20(1), 67-90. https://www.jstor.org/stable/4166219
[6] Littrell, R. F. (2002). Desirable leadership behaviours of multi-cultural managers in china. Journal of Management Development, 21(1), 5-74. https://doi.org/10.1108/02621710210413190
[7] Martin, G. S., Keating, M. A., Resick, C. J., Szabo, E., Kwan, H. K., Peng, C. (2013). The meaning of leader integrity: A comparative study across anglo, asian, and germanic cultures. The Leadership Quarterly, 24(3), 445–461. https://doi.org/10.1016/j.leaqua.2013.02.004
[8] Brodbeck, F. C., Frese, M., & Javidan, M. (2002). Leadership made in germany: Low on compassion, high on performance. Academy of Management Executive, 16(1), 16-30. https://doi.org/10.5465/AME.2002.6640111
[9] Caligiuri, P. (2012). Cultural agility: Building a pipeline of successful global professionals. Jossey-Bass.
[10] Javidan, M., & Walker, J. L. (2012). A whole new global mindset for leadership. People and Strategy, 35(2), 36-41.
[11] Lundby, K. & Caligiuri, P. (2013). Leveraging organizational climate to understand cultural agility and foster effective global leadership. People & Strategy, 36(3), 26-30.
