Cultural Intelligence - the Key to Asian Success
As you would have seen in our Managing Change and Growth in Asia series, there is no more important region in the world to understand right now than Asia. In just over 10 years, four out of the top five world economies will be in Asia. Asia is home to half of the world’s fastest growing companies and will account for half of global consumption growth in the next decade. The region is thriving, the population is growing, and the middle class continues to rise.
However, for all the potential for unlocking opportunities, this region has some business challenges we need to face. Many businesses hold the misconception that in Asia you can be an overnight success. But a lack of cultural intelligence (CQ) – the ability to interact comfortably with other cultures – often prohibits successful expansion. This gap is often overlooked by businesses expanding into Asia, leading to otherwise preventable failures.
With more than 48 countries making up the broader region, and almost 200 widely-spoken languages, Asia is an eclectic mix of nationalities, religions and beliefs. Possessing cultural intelligence is a key differentiating factor which can put you ahead of your competition, help secure business and allow you to attract and retain quality talent.
Acknowledge the importance of cultural intelligence
Any leader considering how to further their business challenges and growth in the region needs to take a holistic overview of cultural nuances, as these can both greatly affect your understanding of others, and your own ability to be correctly understood. This is an important consideration for new market entrants and can also be the difference in driving a successful business strategy, inclusive of multi-nationals who already have established footprints but are yet to effectively harness the rewards and benefits of achieving growth within Asia.
Businesses and individuals with high cultural intelligence display four main competencies:
- Drive: proactively welcoming the opportunity to work with people from diverse cultural backgrounds
- Knowledge: understanding of culture and valuing cultural difference
- Strategy: adapting to alternative perspectives
- Action: understanding verbal and non-verbal nuances in communication, and respecting differences to create shared meaning while building rapport and trust with culturally diverse others
As part of developing a heighted sense of cultural intelligence leaders and their teams need to take the note of the following:
Demonstrate in-depth country and cultural knowledge
When doing business in Asia, it’s important to gain an understanding of the people you will be doing business with, and their country and culture – whether that be your customers, partners, investors or other stakeholders. Understanding and embracing cultural differences, and knowing how to engage with diversity positively, is one of the greatest capabilities any leader operating in Asia can have.
You are respected as a foreigner in Asia if you learn something about the country you are in. Spend time to understand their history, political views, geography, economy, politics and culture. If you can also learn some basic greetings and daily terms in the local language, even better.
Leaders who gain know-how about the local country and culture can minimise tension caused by cultural differences, while also promoting a collaborative environment. They know how to promote co-creation, add value to supply chains, and promote fruitful partnerships. They also know how to embrace cultural differences which comes from a deeper curiosity about the world and desire to understand and value the complex and diverse fabric of humanity. Differences of ideas, methods, motivations and competencies are tools that successful leaders use to help build strong international businesses. While cross-cultural differences harbour potential for misunderstanding and cultural faux pas, diversity in the workplace can be a creative force of business challenges and growth.
Prioritise people over profit
Relationships are the lifeblood and business challenge in Asia: deals aren’t done in the space of a few meetings, but rather are all about building strong people-to-people relationships of trust. Naturally, garnering such trust takes time. Despite the seemingly fast-moving pace of business, and high levels of technological disruption, the emphasis on relationships remains core to Asian business cultures, even in economies like Hong Kong and Singapore.
The best leaders, operating at the highest levels, are authentic in their interactions. They recognise that connections are paramount, and work towards mutual benefit. They build good relationships with people within the organization, but also actively create networks outside the organization.
Spend time on-the-ground
Authentic cultural intelligence has a strong experiential element. It’s best to develop this through time spent gaining an immersive understanding of the culture and country in which you wish to operate. Overseeing operations from a distance, engaging in the rare short visit or learning about a culture from your armchair can often lead to only a shallow understanding; it’s hard to replace real-life interactions with the people you wish to work with, in the country you wish to work in. So, visit often, approach your Asia strategy with an open and curious mind, and enjoy the process.
International companies operating in Asia recognise that the ethnic, linguistic and cultural diversity of the region is difficult to navigate, but a carefully considered Asia strategy can offer excellent returns. In our next article we’ll dig deeper into the ways you can lead successful change in Asia.