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EACC Insights: The Hard Case for Soft Skills: A staff with cultural intelligence is good for business

By Mark Overmann, Vice President of External Affairs, InterExchange

Years ago, as an English teacher in China, I regularly failed due to cultural difference. I had no training in the Chinese culture or classroom, so I used what I did have: my own culture. The lessons I planned and the methods I used seemed right to me. But they bombed with my students. Eventually I adjusted, but it took trial and error, and it took time.

My teaching career isn’t the only international venture that’s seen failure because of cultural misunderstanding. The Society for Human Resource Management (SHRM) reports that 70% of international business ventures fail because of cultural differences. So it shouldn’t come as a surprise when the Institute of International Education (IIE) tells us that 90% of executives from 68 countries cite “cross cultural intelligence” as their top challenge in working across borders.

Cultural intelligence creates success. A lack of it means lost business.

Cultural intelligence can encompass tangible skills — knowledge of a particular region, country, or language, for instance — but that’s only scratching the surface. Another IIE report asserts that cultural intelligence can be broken down into three areas of competency:

Cognitive: strategic thinking and creativity

Intrapersonal: intellectual openness and work ethic

Interpersonal: teamwork and leadership

Add to this list: curiosity, confidence, adaptability, problem solving ability, and self-awareness. These are “skills to succeed in a global economy.” Young people need them, and employers seek them.

Cultural intelligence and its attendant soft skills are highly valued for a reason: they’re good for business. With a culturally competent staff, you:

Won’t lose out on international ventures because of cultural differences;

Will be able to compete more fully in emerging markets; and

Will be able to retain driven employees with leadership skills that cut across contexts, countries, and cultures.

“A cycle of increasing revenue”

A McKinsey study reports that leadership teams with significant cultural diversity are more likely, by one-third, to have returns above the national median. And because such diverse companies are high performing, those companies are better able to retain top talent, which makes them better at decision-making, which leads to “a cycle of increasing revenue.”

Access to emerging markets

The economies of Brazil, China, India, Indonesia, Mexico, Russia, and Turkey are expected to grow at an annual average rate of 3.4% over the next 30+ years, PwC reports. This as opposed to only 1.6% growth for Canada, France, Germany, Italy, the UK, and the U.S.

A culturally intelligent workforce that has experience in these regions, and has the cultural and linguistic skills to perform highly in them, will give businesses a substantial advantage in the fastest growing markets.

Building a culturally intelligent staff

Take active steps to surround yourself with a culturally intelligent staff:

Look for candidates who have had a work, study, or other abroad experience, or who speak another language.

Create opportunities for your staff to go abroad and be fully immersed in another cultural context: i.e., internships abroad, intra-company traineeship opportunities abroad, or conferences abroad.

Host international interns or trainees in your office. Directly inserting cultural diversity into your team will help your staff develop the skills of cultural intelligence.

Your business depends on it.

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