What is cultural intelligence and why is it so important to companies?
In an increasingly globalized workplace, many studies have highlighted the value of employees developing their cultural intelligence. The latest Pearson Skills Outlook identifies cultural and social intelligence as one of the 5 ‘power skills’ that are projected to be most in-demand by 2026. Ana CAMARGO and Grant DOUGLAS explain what this skill entails and why it has become so important to companies. They also outline some practical examples of how companies or individuals can hone this skill.
Could you briefly explain what it means to have cultural intelligence?
Ana CAMARGO: Cultural intelligence (CQ) refers to our ability to understand, communicate and adapt to a culturally heterogeneous environment. In essence, therefore, it’s about how we get along with people who are from a different culture, whether that refers to someone from a different nationality, generation, city, or workplace environment. The concept really started to develop some decades ago when companies began sending expats to work internationally and looked for different ways to prepare and train them for going abroad. It started with specific training related to the country they were going to work in (in terms of language and knowledge about local culture). Since then, CQ has really evolved enormously to encompass the way people from different cultures interact. So now we tend to focus on developing the way individuals gain knowledge about different cultures, languages, and customs, but also helping them to recognize how their own culture can impact the way they behave and think. This helps them to develop more appropriate behavior – whether it’s in terms of language or their nonverbal behaviors (e.g., facial expressions).
Grant DOUGLAS: Indeed, employees need to be able to appreciate and work effectively with people from different cultural backgrounds. I think it’s important to stress, as Ana said, that cultural intelligence is not just about nationality, it’s about culture in the broader sense. The idea is that as you develop cultural intelligence, you get more culturally appropriate behavior, and you learn how to adapt in a conscious manner.
CQ is not specific to one country. Therefore, if you can develop this skill, it will serve you just as well if you’re going to China, Europe or Africa. This is an advantage because it implies that it is a generic skill that can be useful for people in a wide variety of professional and personal situations.
The Pearson Skills outlook* projects that this will be one of the 5 power skills that will be most in demand in 2026. Why has it become so important to employers?
Ana CAMARGO: Firstly, I think we can mention the global economic context. The world has become increasingly intercultural and interconnected. In 2017 alone, there were more than 258 million expats around the world. Interculturalism in the workplace is already a reality. However, it is no longer necessary for somebody to go abroad to interact with people from different cultures and the COVID pandemic has also certainly acted as a catalyst in this respect. With technology we can now work easily with people that are literally on the other side of the planet, so it’s essential for many individuals to hone this skill.
Grant DOUGLAS: I would also mention some other factors that have driven the development of cultural diversity in companies. Firstly, many people would highlight the legal frameworks related to diversity at the corporate level. Companies now have many legal requirements to fulfill otherwise they can face penalties. There is of a course a strong moral argument that drives cultural diversity terms for example of providing equal opportunities for all or preventing discrimination.
Furthermore, studies have also shown that there is a very strong business case for developing cultural diversity as it hits the ‘bottom line’. A report from Mckinsey in 2020 documents this well and outlines how the most diverse companies are now ‘more likely than ever to outperform less diverse peers on profitability’.
Ana CAMARGO: There are certainly many specific examples of how cultural diversity can help business. It has been shown for example that it can act as a catalyst for creativity. When you have individuals from different cultures in the same workplace, they have different perceptions and ways of understanding a given issue. This increases the chances of having divergent thinking and stimulating creative solutions. An example can be seen in a study where the creativity of famous fashion houses’ seasonal collections was found to be predicted by creative directors’ foreign professional experiences in terms of variety and depth (Godart, Maddux, Shipilov & Galinsky, 2015).
Grant DOUGLAS: Indeed, diversity and inclusion strategies have become increasingly important. Companies that have well thought out and systematic policies that promote diversity and inclusion can create a sense of well-being individually among the employees.
What can companies, or individuals, do to help develop cultural intelligence?
Grant DOUGLAS: I think there are 3 key elements for developing cultural intelligence. The first, and the starting point, involves developing our ability to recognize our own culture. The second part then involves learning how to recognize and respect the cultures of those around us.
The final step, which is very important for those in management positions, involves learning how to reconcile cultural differences. This is where it becomes more challenging, as we must learn how to use our knowledge (with regards to differences) to adapt our communication and management style.
It’s important to realize that this is a long-term process and doesn’t just involve a couple of hours of training. But our work, for example here at IÉSEG (where staff and students undergo an intercultural training program) shows that you can give people the tools they need to consciously adapt the way they interact. People often think it’s enough just to be close to somebody from a different culture, or to spend time in a different culture. It doesn’t work like that. Being culturally intelligent involves a conscious effort to think about our points of difference and similarity and adapting our behavior.
I believe, therefore, that companies can help employees understand why respecting differences can be difficult: Why do we have certain prejudices? Where do they come from? And what can we do to try and combat these? There are also tools we use in training to help them develop strategies to reconcile these differences. It takes effort, but it can have a very positive impact when it’s done properly and when it’s done in a systematic way.
Ana CAMARGO: I agree completely with Grant – the first key step is about self-awareness before dealing with how employees interact. We see that some companies use attribution training where they try to help employees understand the root cause of a cultural misunderstanding, while others have contact-based training where they bring together people from different cultures to actively interact or use role-playing exercises. Most of the training programs I have seen focus on the development of knowledge and skills and getting employees to reflect.
For individuals who would like to develop their CQ, I would really encourage them to be as curious as possible. For example, if you travel abroad, or spend time with someone from a different culture, and you notice a behavior that is strange, ask yourself why? and what can explain this? And if it’s possible, try and discuss this with the person in question.
Both experts are part of the IÉSEG Center of Excellence for Intercultural Engagement which brings together academics, instructors and staff who wish to collaborate and exchange practices regarding intercultural dynamics in business and the development of intercultural competence. https://icie.ieseg.fr/
*Pearson Skills Outlook: https://plc.pearson.com/en-GB/insights/pearson-skills-outlook-powerskills