The Culturally Intelligent Leader - Part 3
Updated: Jul 17, 2018
This is the third article in a 7-part series on Culturally Intelligent Leadership.
All references and further reading material is listed in Part 6.
The best way to approach this series to think about a particular dimension of Culture by considering:
1. How that description might describe your personal Culture
2. How it describes the Culture of someone you know that is different to you
3. How it might describe the Culture of your workplace, school, team, profession…
A Brief History of Culture Theory
Geert Hofstede is regarded as a major contributor to the literature of how values in the workplace are influenced by cultural heritage.
Working as a social psychologist for IBM, Hofstede conducted his “5-Dimensions of Culture” research across over 40,000 employees in over 40 countries.
This led to a model of Culture, illustrated below, that formed the basis of intercultural leadership theory today:
The publication of Cultures & Organisations (2010) saw the addition of a sixth dimension titled, Indulgence vs. Restraint.
The impact of Hofstede’s work on management theory, consumer behaviour and service industries such as L&D, finance and consulting etc. has been extensively researched (see resources for references in Part 4), leading to a substantial body of evidenced-based solutions to modern intercultural management challenges.
In fact major organisations such as the U.N., Western military and intelligence agencies, and global multinationals all now have specific cultural intelligence programmes in place.
Hofstede’s Dimensions of Culture
The following tables summarise Hofstede’s key cultural dimensions:
Dimension : Individualism & Collectivism
The high side of this dimension, called individualism, can be defined as a preference for a loosely-knit social framework in which individuals are expected to take care of themselves and their immediate families.
The opposite, collectivism, represents a preference for a tightly-knit framework in society in which individuals can expect their relatives or members of a particular in-group to look after them in exchange for loyalty and commitment to the group.
A society’s position on this dimension is reflected in whether people’s self-image is defined in terms of “I” or “We.”
In the West, a person’s self-image tends to be tied to their sense of self. They take their right to express their opinions, to be contrarian and to hold people to account very seriously.
Concepts such as ‘protecting the rights of the individual’ are viewed as strengthening their own rights, and not as threats to the group.
Contrast this with more collective societies in which self-image is strongly attached to group identity. “An insult to one is an insult to all” is often a prevailing theme; and qualities such as conformity, social protocol and tradition tend to emphasised. The explicit and implicit threat of social ostracization is a powerful motivator of behaviour and continued group membership.
Consider the attitudes different societies have towards homosexuality for instance. European Cultures (typically individualistic) view gay rights very differently to say Russia, which with its communist legacy, can be considered more collectivist in nature.
In a workplace environment, this has incredibly important implications. Capitalism is far more readily embraced in individualistic societies; while socialist narratives find favour in more collective ones.
Perhaps a more relevant example to a manager in a global firm are issues around performance and compensation.
Persons from individualistic Cultures are far more accepting of concepts such as ‘talent’ and management tools such as the ‘Individual Performance Appraisal’. They tend to attribute success to personal traits and dispositions – if budgets are met it’s because of their talent and hard work. In other words, they attribute success internally.
Conversely, when things don’t work out, individualistic persons tend to attribute this externally – “the markets weren’t conducive” or “my team let me down”.
From a behavioural science perspective, this is a fairly predictable response – an effort to enhance or protect one’s self-image is more important in individualistic cultures.
In societies in which self-image tends to be defined more by conformity to a group than being self-defined individual, success attribution tends towards external factors; “It was a team effort” or “by the grace of God”. Failure is often attributed internally and is viewed as letting the group down.
The Japanese are a good example of this phenomenon – a society in which individual failure is a great source of shame for that person.
Unfortunately, the mistake of modern human resource theory is the rigid application of Western-centric performance management practices in cultures that simply do not view concepts such “individual contribution” and “talent” as anything but part of a greater team effort.
This has a fundamental impact on the organisational culture of an institution.
Dimension : Power Distance Index
This dimension expresses the degree to which members of a society accept the unequal distribution of power – be that class, money and/or authority.
The fundamental issue here is how a society handles inequality.
People in societies exhibiting a large degree of power distance accept a hierarchical order in which everybody has a place and in which authority requires no further justification.
In societies with low power distance, people strive to equalise the distribution of power and demand justification for inequalities of power.
Power distance has enormous implications for business leadership.
Do employees respect the position or the person in that position?
Do managers in your organisation depend on ‘ascribed authority’ or ‘achieved credibility’ when dealing with their reports?
Can your CEO get away with behaviour that someone lower in the corporate hierarchy would never get away with?
That's culture right there!
Ascribed authority refers to the power inherent in the title; the position in the social hierarchy. High power distance cultures tend to unquestioningly follow whoever is in that position, because it is the position that confers authority.
Leaders in positions of power in cultures in which authority is ascribed, often engage in public displays of their title and their position. For instance, they may actively seek out opportunities to speak at events, or appear in magazine articles.
A preoccupation with titles tends to occur - and interestingly a mismatch between the way people see authority in their personal lives; and how they pursue titles in the workplace can occur.
This type of power-relationship is often characterised by excessive deference and social protocol, and managers from high power distance cultures can really struggle leading teams in low power settings.
For instance, promoting a person from a regional market that views power differently to that of the head office home culture can create tremendous friction when these managers expect nothing but unquestioning obedience in an environment where respect ‘is earned and not simply conferred’.
Achieved credibility on the other hand tends to prevail in societies that view the character, talent and hard work of the leader as a prerequisite for respect.
Putting a person that demands respect simply because of their title in a management position in a country such as Ireland or Denmark (where senior Cabinet Ministers walk to work or personally take their children to school), or a tech company like Google is bound to result in resistance and contempt.
Banks think can become tech companies with balance sheets....no they can't. They have to become tech companies that once were banks.
Managers from high power distance cultures tend to go to great lengths to preserve their image of power. This may manifest in behaviour such as insisting on having a company driver, flying first class, having teams of people spend days preparing their business trips in advance, and demanding employees remain at their beck and call 24 hours a day, even for unimportant business issues.
A key source of cultural friction in today’s multicultural workplace is the matrix management structure; especially in industries that don’t produce tangible goods but rather services such as banking and consulting. As much as we think we are capable of reporting to more than one centre of authority, this goes against all our hard-wiring.
While many employees in places such Canada, Sweden and Israel have less issue working within several reporting lines, employees from high power distance cultures often struggle with multiple sources of authority.
Remember...effective leadership is about leading the way your followers want to be led. No how you think they want to be led.
Managers from high power distance cultures also often struggle with the idea that their employees are required to report to other managers, and inevitably result in turf wars, office politics and destructive ‘us vs. them’ water-cooler gossip.
Make no mistake, matrix management is a uniquely Western-centric approach to leadership and inefficient in environments such as Africa, Latin America, and the Middle East because it is culturally inappropriate.
An example of Power Distance witnessed first-hand was the expansion of a global consulting firm across Africa. The business model, the same as all other major consulting players, entailed fairly recent MBA graduates redesigning the workflow processes of their clients. One of the cultural challenges arose when smart, young consulting associates spent much of their time questioning older, senior managers about their businesses. Such a model may work well in Germany, where social hierarchy in the workplace does not emphasise age over things like education and past achievement. The firm in question struggled to understand why an initial positive relationship with clients – when senior partners of the firm engaged with senior managers in securing the consulting engagement (so called 'power matching') – often deteriorated after the younger associates were sent in to do the actual work.
Culturally this model isn’t likely to find success in high power distant cultures such as those typically found in Africa or Latin America.
In high power distance societies, it is very important that C.E.O.s speak to C.E.O.s; an age and status mismatch is a big deal.
Another area that should be of concern to human resource managers in culturally diverse organisations is the issue of sexual harassment. Several studies, such as Luthar & Luthar (2008) , suggest a positive correlation between power distance index, and incidences of sexual harassment. This may be hardly surprising, sexual harassment is often an expression of an underlying power imbalance.
Dimension : Uncertainty Avoidance
The uncertainty avoidance dimension expresses the degree to which the members of a society feel uncomfortable with uncertainty and ambiguity.
The fundamental issue here is how a society deals with the fact that the future can never be known:
· should we try to control the future? or
· just let it happen?
This has big social implications. Consider the national propensity to save & insure, or whether the company you work for is more preoccupied with growth or resource preservation?
Societies exhibiting strong uncertainty avoidance maintain rigid codes of belief and behaviour and tend to be intolerant of unorthodox behaviour and ideas.
Less uncertainty avoidant societies maintain a more relaxed attitude, and in which pragmatism matters more than principle or ideology.
Anecdotally, if one were think of a person most likely to climb Everest or engage in extreme sports at great personal risk, would it be unfair or discriminatory, to suggest most people are most likely to think of an American, Britain or someone of Western European heritage. Yes, this is a generalisation, but so too is the study of culture. It is by definition, a study of general tendency. And while there are undoubtedly complex socio-economic factors involved in why some people might engage in high risk sporting activities more than others, general attitudes and stereotypes do exist.
This may be a somewhat weak example, but the key idea - how do we perceive our personal culture's attitude to risk? How do we perceive it of other cultures?
Some societies respond to the unknown through a preference to say 'conservatism', or through a social acceptance of a strict set of rules and regulations. These mechanisms are designed to mitigate uncertainty and ambiguity.
Other societies, including, perhaps especially, corporate cultures, explicitly reward risk aversion.
How many people round here ever got fired for not taking a risk? Well that depends whether you work for a bank that makes loans, or an investment bank trading desk... unfortunately too many times not taking a risk is implicitly entrenched in a high blame culture.
Silicon Valley’s tech funding culture would certainly not fall into that category – does this explain why much of the world’s greatest innovations of the past 50 years owe their existence to this culture of risk-taking?
A sales executive pitching for business in America might focus on the competitive benefits of their product, while in Tanzania or China may be more successful by spending more time on the risk mitigation benefits, such the guarantees and warranties that come with the product.
Perhaps nowhere is this more apparent than in banking. Several interesting studies have shown how a cultural aversion to risk significantly influences decisions made by credit loan officers (Nutt 1988) and financial market traders.
The culturally intelligent leader must able to recognise and manage the risk (and opportunity cost) of having overly-cautious decision makers in key revenue generating positions.
Dimension : Masculinity vs. Femininity*
Masculinity as a dimension represents a preference in society for task achievement, heroism, assertiveness and conspicuous, material reward. Society tends to be more overtly competitive.
The other side of the scale, describes Femininity, as a preference for cooperation, modesty, caring and quality of life. Society tends to be more consensus-oriented.
In the workplace, the degree to which an organisational culture is Masculine / Feminine, is often signalled through attitudes p/maternity leave and concepts of 'work-life balance'. For example, all major corporates outwardly espouse a commitment to a healthy balance between work and personal life. Yet in reality, consulting firms and investment banks, which tend to be highly task-orientated, competitive environments, certainly don't consider work-life balance in variable compensation discussions. In other words, they espouse a desired ‘feminine’ dimension, but in practice reward a more ‘masculine’ behaviour.
* The labels of ‘feminine’ and ‘masculine’ themselves carry a great deal of cultural implication and are perhaps not entirely appropriate in today's times.
The words ‘Masculinity’ and ‘Femininity’ in this context are general metaphors to describe social traits. (Again, one can appreciate the trickiness with exploring culture and the inevitable generalisations and stereotypical minefields)
Understanding which traits are celebrated in a particular culture helps the modern executive make an emotional connection in several ways.
Masculine societies tend to respond more readily to aggressive, heroic and competitive language than more feminine ones.
The high CQ leader (CQ being Cultural Intelligence Index) is generally more aware of the surrounding social cues (more 'feminine' in this context?) and is able to adapt their style and approach. This could be in managing a team, delivering a presentation to EXCO or even developing a culturally appropriate sales pitch.
Politics in almost any country usually provides a reliable example. One side tends to be more ‘masculine’ – using aggressive rhetoric, voicing strong views on subjects like gun control, defence spending and unilateral foreign policy. The 'other side' are usually more likely to push social and environmental issues in their core campaign message' yet both genders vote for both parties.
Interestingly, men voted overwhelmingly Republican in the US and Conservative in the UK at the last general elections respectively, while the majority of women voted Democratic and Labour.
The key point of this, is how a business leader may approach a market, or workplace team, knowing these differences may exist.
A sales pitch for a product or service in a country such as Nigeria (which scores high on a masculinity index) or the New York-based hedge fund industry will more likely resonate with potential customers by stressing the ‘competitive advantage’ users will gain. Contrast this with a brand messaging campaign in a Scandinavian country where social responsibility initiatives and eco-friendly credentials are more likely to achieve the desired emotional response.
Not convinced? Compare a country's attitude to maternity and paternity leave.
Some theorists suggests scores on the ‘Femininity Index’ are positively correlated with generous maternity and paternity leave provisions (Waldfogel 2001).
Dimension : Long Term vs. Short Term Orientation
Every society has to maintain some links with its own past while dealing with the challenges of the present and the future.
The key to appreciating cultural difference with respect to time orientation is understanding the relative value to people of the past, present and future.
For instance, could an emphasis on the present translate to higher acceptance of instant gratification?
Societies that score high on this dimension, tend to prefer time-honoured traditions and norms while viewing societal change with suspicion; yet take a pragmatic approach to resolving challenges, encourage thrift and value effort in education as a way to prepare for the future - all long-term solutions essentially.
Short-term orientation describes a tendency to value quarterly profits and sales targets, over relationships. It describes the acceptance of consumption over saving and the encouragement of lifestyle spending.
Perhaps one of the best examples of long-term vs. short-term is comparing the US with China.
The average middle class Chinese household saves around 30% of their disposable income (Chamon & Prasad 2008), much higher than in the US where the number is closer to 4.8%.
Apart from the obvious structural implications for an economy, this has important implications for business leaders too.
The key takeaway is not to debate the merits of consumption vs. investment - this is not an economics paper - but rather to explore whether this information gives us an insight: be that in managing diverse teams, designing a sales pitch to a new market or managing regulatory expectations.
Long-term oriented societies place value in building a relationship of trust before business can be concluded. Successful executives often spend greater effort in building relationships; a necessary step to doing business, that say Western-centric managers in head office may appreciate. Quarterly sales targets may be missed at first, but relationships are a core part of influence and persuasion.
In addition, this relational orientation in a more long-term oriented business culture tends to emphasise who benefits by purchasing a product or service. The issue of whether the salesperson receives a large commission plays a greater role in the buying decision, than say in short-term oriented societies in which the emphasis tends to be on whether the customer feels they are getting value for money, not what the salesperson stands to gain.
This is also apparent in dealing with regulators. One area of (frustrating personal experience) has been working with financial institutions seeking to introduce new products to market. Typically, product development specialists from short-term, results-oriented cultures are often left frustrated by the length of time it takes regulators to approve seemingly simple requests.
Senior executives should appreciate that their efforts to bring about organisational change requires a level of patience before a higher-scoring long-term oriented workforce finally accepts and enacts their vision. People change in direct correlation with their self-interests and whether it is culturally appropriate to embrace and champion change.
Dimension : Indulgence Vs. Restraint
Indulgence indexing scores a group on how they tacitly encourage the gratification of basic and natural human drives related to enjoying life and having fun.
Restraint, in this context, relates to how a society may suppress gratification of needs and even regulate it by means of strict social norms.
This dimension of culture covers both consumption patterns and the expression of emotion; and, like many culture models, can describe both national and organisational culture.
Indulgent cultures tend to view the use of credit to finance lifestyle activity (clothing, holidays) as part of the normal course of life. In the workplace, having fun at work is a key message from management, so too is 'working hard, playing hard' for instance.
On the other hand, cultures that value restraint often demand a corporate environment characterised by discretion and predictable emotional reaction. The use of swear words and off-colour humour in the office environment is often deemed inappropriate.
The manner in which customers express dissatisfaction is linked to expressions of restraint vs. indulgence. The way the British express dissatisfaction is very different to the way many Africans do; and both are different to the manner in which an American client is likely to respond to a service failure.
The above is a brief, very brief in fact, introduction to the Hofstede model of cultural dimensions. A series that delves deeper into this and other models of culture will be made available through the GIG Culture blog and video website.
The next article, Part 4, will continue to explore different models of Culturally Intelligent Leadership such as those by anthropologist, Edward Hall, as well as examining the GLOBE Study of Effective Leadership looks like in different countries around the world.
Thanks for reading....