Firms succeed offshore by cultivating cultural intelligence at home

A 19th century engraving showing Australian &q...
Offshoring without cultural intelligence–A 19th century engraving showing Australian “natives” opposing the arrival of Captain James Cook in 1770 (Photo credit: Wikipedia)

I recently read an article (Ang & Inkpen 2008) that discussed success among companies that off-shore services; companies that already display high cultural intelligence firm-wide will succeed more in their off-shore ventures. Cultural intelligence includes four aspects: 1) challenging one’s cultural assumptions consciously (metacognitive), 2) knowledge of other cultures (cognitive), 3) staying motivated in becoming cultural intelligent (motivational), and 4) performing culturally correct speech and non-speech acts (behavioral).  When a firm already excels in these areas–especially on the executive level–the authors of the article call this firm-wide cultural intelligence.  When firms possess this level of cultural intelligence, they succeed more in offshore ventures.  Cultural intelligence brings success in challenging intercultural situations like off-shoring.

If we assume that offshore ventures will become more common as the global marketplace dominates more of the economy, then firm-wide cultural intelligence will determine companies’ success.  The most important question that remains is how do firms increase firm-wide cultural intelligence?  Firm-wide cultural intelligence requires fostering cultural intelligence among its individuals.  I will now focus on the work necessary to raise individual cultural intelligence through teaching languages.

Learning languages naturally leads to higher overall cultural intelligence based on the four criteria above.  Speaking and listening to a language force one to think in a different way.  One has to move out of an intuitive mode of communication to a highly self-conscious one (metacognitive).  As a result, one gains knowledge about the language and the culture in which it is found (cognitive).  Since no language exists in a vacuum, learning the language keeps one in constant contact with the culture.  Staying motivated to learn a language keeps one learning about the culture (motivational).  Learning about the language heightens interest in the culture the language comes from.  Finally, the language becomes the most essential feature in speaking and acting correctly in the culture (behavioral).

Cultural intelligence in one area offers advantages for another.  Even if I begin my language/cultural study with Mexico, the increased cultural intelligence transfers to, for example, India.  I already know that I have to challenge my cultural assumptions, and that I have to learn aspects of Indian culture.  I’ve demonstrated that I’m motivated, and I’m ready to discover the particular speech and actions that are appropriate for various Indian cultural situations.  After India I can move into another language/culture, such as the Philippines or China.  Cultural intelligence begets more cultural intelligence quickly and easily.  Additionally, the skills I use to learn one language transfer to another language.

Firms would find themselves more successful if they hire and foster culturally intelligent individuals.  Those knowledgeable in another language–any other language–would stand out as the best candidates.  Moreover, by offering ways for workers to increase cultural intelligence–especially through language-study–the firm has more in-house cultural intelligence to draw from for future leadership positions.  Firms will enjoy more long-term success in the global marketplace if they invest time and money in language-learning for employees.

If you’re in favor of firms investing more in language and culture training, please “like” this post.  Since language and culture study do not offer short-term gains for a firm, what are ways to convince firms to invest in this long-term project of increasing cultural intelligence?  Employees already don’t have enough time–where would that time come from?  Please let me know your thoughts, below.

Communication Problems Slow Business Growth

Culture Shock (TV series)
Culture Shock (TV series) (Photo credit: Wikipedia)

This report by The Economist illustrates how international managers view the importance of multi-lingual employees in the present and near future.  In sum, world executives recognize that international communication will make or break their business.  I would like to discuss two statistics from the summary of the report (I encourage you to read the entire report).

  • [Of 572 global executives surveyed] the overwhelming majority (bordering on 90%) believe that if cross-border communication were to improve at their company, then profit, revenue and market share would all improve as well. This is partly because potential opportunities in foreign countries are currently being spurned, with almost two-thirds of respondents saying that differences in language and culture make it difficult to gain a foothold in unfamiliar markets. (p. 4)

If businesses want to succeed in new markets, companies have to learn how to see the world and to express themselves through a new paradigm.  Every person sees the world through his or her own filter.  Business occurs when transactions take place among individuals, and each individual sees the world in through his or her cultural assumptions, and each expresses his or her interior world through language.  In all countries, executives are recognizing that profit, revenue, and market share are linked to cross-cultural communication.  These three categories represent the heartbeat of business health.  Companies can more easily learn to communicate on others’ terms than to force others to communicate on the companies’ terms.  As a result, the more nimbly businesses can adapt to these paradigms, the more successful their business will be; the less nimble they are, the more they will miss out.

  • Some 47% say their companies do not offer enough training to hone their employees’ language and communication skills, and 40% believe there is not enough emphasis placed on recruiting or selecting people who are suited to cross-cultural environments. (p. 4)

Many companies already consider language- and communication-training on the job as important.  The 47% statistic should be broken down into the 41% who say that they do not offer enough training, and the 6% who say that their training is negligible, since the 6% may believe that they do not need this training.  In any case, 41% believe they need more, revealing that these executives already assume that these types of training are important.  An additional 53% claim to offer adequate or more than enough training (p. 12).  The other statistic of 40% reveals that executives would like people who already possess this knowledge of other languages and cultures.

Executives loudly proclaim with these statements the need for employees to move nimbly across cultures and languages.  The difference lies in whether the company should supply training, in the first case, or should recruit workers who already possess this ability.

This survey expresses the mindset of executives across the globe; the US is a special case.  In many countries, the executives probably envision English as the language people need to know.  So perhaps one would guess that the US does not suffer from these communications problems.  This would be a wrong guess.  Another statistic illustrates that more US executives (55%) than Nordic ones (36%) found that language and customs hamper their plans for global expansion.

US companies, then, should be investing more resources into language and culture training.  US education does not emphasize these skills like the Nordic education.  What are some innovative ways that US companies could fill this gap?