• GIG_Culture

The Culturally Intelligent Leader - Part 4

Updated: Jul 19, 2018

Workplace culture is the experience that employees, customers, suppliers, regulators and other stakeholders have when they come into contact with a corporation.

When one speaks of the culture of banks, anyone that has worked in a bank will intrinsically understand, have a sense of what that is. Yet, working for a large British retail bank such as Barclays will obviously be a very different experience compared to, say, working for Goldman Sachs.

So while industries have specific cultural expectations - think advertising agency and firm of accountants - understanding intra-industry cultures is too a key skill. Consider the challenge of merging cultures in a corporate acquisition; something that is often blamed when the transaction fails to deliver the promised value. One would think more attention would be paid to this in the due diligence phase.

Apart from Hofstede’s major contributions, Edward Hall, an American anthropologist, developed the concept of social cohesion. Under this model, Hall sought to define aspects of culture – with a particular focus on interpersonal interaction.

In the context of the workplace, Hall’s ‘Expressions of Culture’ are used by a number of multinational organisations in preparing their leaders for diverse cultural management roles such as overseas assignments or global marketing campaigns.

Failing to resist the temptation to resort to cliché, Germans, for instance tend to view time as rigid and sequential. If culture is described as an ‘expected attitude and behaviour’, one appreciates the German cultural perception of time is very different from say, Nigeria, where one is more likely to hear another cliché, “we operate on African time”.

This series will explore some of the theories around why attitudes and behaviours around the concept of time may be differ – but it worth reminding the reader of the importance of cultural relativism if we are to meaningfully understand culture as a concept. Time, or at least the concept of time from one group to another, is an effective example that most people can relate to.

Another example raised by Hall describes the differences in how some societies reach agreement and understand reciprocal obligation. In all cultures, trust is the fundamental element to successful commercial outcomes. Employee’s trust they’ll be paid for their labour, traders trust they will be paid for their goods, and consumers trust they will get value for money. In the absence of trust, very little can happen.

Understanding how trust is established is probably the most basic reason we study culture.

For instance, some societies place a great deal of emphasis on existing relationships – so a simple handshake often suffices. Others have found that hiring relatives is the only way to ensure trust, while others reject this as nepotism. Most Western societies require a written contract, enforceable in an independent court, in which almost every conceivable outcome is explicitly covered.

In fact, time and agreement are two of six elements in Hall’s basic model of culture…

Description: Space

Personal space can be great source of cultural friction. This is because concepts of personal space can vary widely across from culture to another.

Some researchers suggest that those living in densely populated places tend to have a different expectation of personal space to those that live in wide open spaces.

For instance, living in the U.S. Mid-West or in Australia, where people live in detached houses and use their personal cars to get around will almost certainly feel different to residents of densely populated cities like Japan or London. They are likely to feel uncomfortable in small apartments and on crowded public transport – at least at first.

Difficulties can arise by failures of intercultural communication due to different expectations of personal space.

For instance, when business executives are disembarking a flight in some countries, it is common to feel claustrophobic as people push up against each other while waiting for the aircraft doors to open. Similarly, riding an elevator can also be quite uncomfortable in a country in which someone may not be used to having strangers stand in their personal space, as more and more people enter the elevator.

But space in this context is far more meaningful than just one’s personal zone. It is used to signal status and authority.

For instance, it is usually fairly easy to gauge the hierarchy of authority in a meeting based on where people sit. Once displays of body language are added to seating arrangements, there is often very little doubt. Most people are highly attuned (albeit unconsciously) to who the senior people in the room are; we’re hardwired to pick up cultural cues – space, movement, body language – long before the formal cues such as titles and qualifications are used.

Space as a social cue, a status signal, is a powerful motivator of behaviour. While it is obvious that money incentivizes people, a business leader should not underestimate the role of space as a motivator. This is because in status-conscious cultures, space is a very public display of authority.

The idea of ‘the corner office’, ‘preferential elevator privileges’, or ‘access to the executive parking lot or dining area’ are strong signals of Western-corporate hierarchy.

The open-plan office is another example. Only a person being promoted gets to move from the cubicles to an office. And while cost-conscious, low-power distance scoring Western companies may favour an open-plan outlay, or even ‘hot-desking’, perhaps these layouts do not consider the cultural implications of the workforce.

Working in East Africa, a multinational decided to do away with offices and put all their staff into an open plan area. It was a cultural mistake. The senior managers continued to have telephone conversations on their speaker phones as if they were still in their old offices and were extremely upset that their status within the organisation (and within the local culture) was simply ignored.

It makes sense to at least have awareness of personal space diversity, since research suggests personal space intrusions often result in judgements of the other person, despite them being culturally appropriate in another. And no one wants unnecessary workplace prejudice and cultural friction.

Description: Relationship vs. Task Orientation

Some cultures emphasize well-defined separation governing personal and work relationships.

In the West, friendship and relationships in the workplace are viewed as secondary to getting the job done. Ever heard a manager say, “It’s business, it’s not personal”? In some cultures, work and personal identity are inseparable.

The West tends to a more task-orientation. Getting the job done takes precedence on how people feel while getting the job done. In fact, it could be argued that much of today’s leadership training is an effort to move to a more relationship-based environment (although in an effort to get the job done more efficiently)

Understanding how workforce views relationships has important implications for leaders. Many cultures (national and organisational) do not distinguish between personal self-concept and the work they do. This means a greater sense of loyalty and engagement is likely, as the employee relationship tends to endure and often comes with a very real sense of reciprocal obligation.

Some cultures do not view relationships with the same concept of ‘social insurance’ that others do. Relationships are fostered for relationship sake, but people may not rely on them as heavily for pecuniary gain.

One form of ‘social insurance’ is the so-called ‘Old Boys Club’; it is often a major factor in why people send their children to expensive, traditional boarding schools. They are keen for their children to establish networks. Sending one’s children to boarding school is likely very differently received in England than say Italy.

In another example of a relative task-orientation, Westerners generally find it easier to say “no” to family in business matters. This separation of personal / work life means that, for instance, if a friend or family member asks for, say, a job in the organisation, no realistic expectation of nepotism arises.

Social obligation in more relational cultures is a different matter. Managers in many countries might apply company policy by avoiding nepotism and exclude or recuse themselves from hiring family and friends, but they face the real threat of social ostracization in their private lives.

A number of private equity investors have found this out when investing in companies in Russia, India and the Middle East – where relationships to the original owners tend to be the primary factor in promotion and authority.

Again, there is no right or wrong answers here, simply culturally appropriate ones. One may have a natural aversion to concepts such as nepotism or feel very strongly in the inherent fairness of meritocracy – but remember that is your cultural programming. Many societies believe, as strongly as you do, that developing the required level of trust to operate a large business requires hiring those with close personal connections.

One interesting area of research has been investigating the cultural factors in the distribution of bonus pools at year end. Task-oriented people tend to uphold fairness and relative contribution in determining who ‘deserves’ what; in relational societies, bonuses are often distributed according to, and in order to maintain, social hierarchy.

If a senior manager manages to secure a deal, but does little work on executing the transaction, the proportions of the bonus pool with respect to the deal, will be highly dependent on the cultural environment. In many places, there is no way a larger portion of the bonus pool can be paid to persons lower in the corporate hierarchy.

Similarly, some banks may pay traders or investment bankers bonuses at are larger than that of the CEO; so too there are many countries and organisations where that would simply not happen.

The credit process of multinational banks often fails to capture the cultural nuances of doing business in diverse environments. If a credit committee consists predominately of individuals from, say, a task-oriented culture, they are likely to disappoint the business development executives in regional offices where relationships are an important factor in accessing finance.

Upon receiving a loan application from a very senior person or government institution in a regional office, a strict, centralised credit process may result in the loan being declined as the credit committee members have little appreciation of the relationships and the role that the potential client plays in their society.

Local management however will in all likelihood argue that declining the application will result in harming the relationship the bank has in that market, severely hampering efforts at reaching strategic objectives.

Description: Time

This element describes the way different cultures deal with issues around time. Time is a culturally-loaded concept – apart from the surface elements such as punctuality, time plays an extremely important role in non-verbal communication.

The culturally attuned leader understands that how cultures deal with time affects:

  • Lifestyle, expectations around working hours;

  • Planning, agendas (filling that diary, prioritising work tasks);

  • Speed of speech, speed of movement (speed walking between one meeting and the next);

  • Whether investment are made redesigning cities (High Speed Rail, traffic flow), redesigning workplaces;

  • Using technology to speed up decisions (credit models, robo-advisors), meetings (video conferencing etc.);

  • And how long people are willing to listen (pitching for business, reading your emails, writing this article).

Americans and Germans for instance tend to be extremely time sensitive. Not just punctually, but a deadline, for instance, creates an immovable timetable that must be met, and is closely tied to task completion.

Missing deadlines or holding meetings that routinely run over time is unacceptable in some cultures, while in others it serves to entrench existing power structures.

Time is an important indicator of status.

For example, in most companies the boss can interrupt the daily routine and workflow to hold an impromptu meeting. If an ordinary employee tried to see the boss without an appointment, some societies would not approve. The degree to which this is deemed acceptable varies greatly between cultures.

If the Chief Operations Officer of a major bank wants to see some one in middle office, regardless of how trivial the issue, in all likelihood, they won’t wait until that person as a gap in their diary. That is an expression of power.

These different concepts of time can be described as:

  • Monochronic; vs.

  • Polychronic.

Monochronic people tend to do one thing at a time, take time commitments very seriously, require explicit information, and tend to be highly task-oriented.

Polychronic's enjoy multi-tasking, are less concerned with punctuality as a statement of social signalling (unless dealing with a superior) and tend to value relationships over task-orientation.

Polychronic people also tend to spend more effort building long-term relationships and view reciprocal social obligation more seriously than monochronic people.

In the workplace, these differences can create cultural friction as a manager from a polychronic culture may not perceive making people wait, talking for longer than is necessary, allowing meetings to overrun, expecting employees to work overtime or calling their employees after hours as an inconvenience or intrusion.

Another example might include trying to conclude business over lunch, where the French for instance, often don’t feel the need to discuss actual business until much later in the interaction. They may suggest drinking wine at lunch time, using the meal as an opportunity to establish trust, while their American guest, task-oriented and monochromatic as they may be, simply want to get to the point, start discussing business, while viewing drinking during work hours as unprofessional. (The reader will permit my use of stereotype to illustrate a point)

Description: Communication

In this element of culture – Hall describes the communication environment as being:

  • High-context; and

  • Low-context

In a higher-context culture, many things can be left unsaid, but people understand the context, and infer meaning. Words and word choice become very important in higher-context communication since a few words can communicate a complex message highly effectively.

Those members of an ‘in-group’ will understand and identify with the group’s ability to communicate in as few words as possible; in fact, it is likely to strengthen group bonds as those from outside the group struggle to understand the context.

This doesn’t only pertain to spoken language, but computer coding too. For instance, when coding in Python, style is very important to the community in which members strive to be more ‘Pythonic’. Using as few lines of code to achieve the desired outcome is generally encouraged.

Conversely, low-context communication cultures require explicit communication. For instance, English, Dutch, and German display a preference for clear communication. The language itself, and the words presented, convey much more of the information being exchanged. Elements such as intonation play less of a role, than in high-context cultures, in which the meaning of a message depends as much on the context in which the word is spoken.

Typically, a message is more dependent on how & when it is said, than on the explicit content of the message. African Cultures, French and Spanish speakers, as well as Chinese and Japanese tends to be far more contextual than English.

Metaphor, parable and analogies are typically used more frequently in conveying a message in high-context settings. Often, speakers from high-context cultures refer to themselves in the third-person, which can seem strange to people from low-context backgrounds.

Consider how culturally loaded a word such as ‘Respect’ is. If we consider the importance of words in high- and low-context environments, we can appreciate that setting the corporate values statement in one place, the head office of a multinational corporation, may mean different things to different people in the same organisation.

Furthermore, communication style tends to correlate highly with the level of diversity of an organisation. High-context societies tend to feature lower levels of diversity, while low-context communicators tend to have more diversity with their ranks. This makes sense, when we consider that the ability to communicate in a high-context environment requires a deeper understanding of the predominant cultural and linguistic context.

In addition, high-context cultures tend to have strong feelings towards concepts of tradition and are more likely to resist change compared to lower-context societies. A point that change managers often fail to appreciate.

Humour is another example of how different cultural communication style often results in a “loss in translation”. Jokes are highly contextual expression of cultural norms. So too is the manner in which humour is delivered. For example, self-deprecation, a useful tool in low power-distance cultures, almost never has the same effect in strictly hierarchical ones. While the English tend to use self-deprecation as an ice-breaker, it hardly ever works outside of a low-context setting.

Description: Materialism

Many cultures are highly sensitive of how others in their group use material objects.

Clothing, electronics, houses, even the space and décor of the office environment are strong cultural signals of status.

Financial services firms in countries like the U.S. will spend a great deal on material objects that have little to do with managing money, and everything to do with creating the impression that they are wealthy, dependable and trustworthy – think corporate art collections, huge marble-clad lobbies and expansive office ‘campuses’ for example.

The Japanese workplace for instance is often described as functional first; while in the Middle East and Africa, the office of a large company is often sparsely furnished, in a surprisingly average part of town, by comparison to their American counterparts.

Materialism plays an important role in how employees are remunerated.

In some countries, the corporate standard is paying ‘cost-to-company’ packages, while in others, the cash component is merely part of a package that includes several signals of wealth and status, such as country club memberships, fees to exclusive schools & institutions, and expensive company cars.

American firms buy loyalty by paying certain individuals very high bonuses, and often an important employee’s bonus will exceed that of the C.E.O’s; something that will almost never happen in a strictly hierarchical society.

In cultures with more developed notions around the idea of a professional management class, as opposed to a more owner-managed model, it is entirely conceivable that the management bonus pool exceeds the shareholder dividend payout. Something that is unimaginable in many parts of the world.

Description: Agreement

No modern business executive can plead ignorance in understanding how different cultures reach agreement – both when negotiating and in situations between leaders and employees.

A great deal of literature exists on how agreement is reached in varying cultures.

No society can function without some type of mechanism for reaching and enforcing agreement. Societies typically reach agreement in three ways:

  • Rules and regulations; such as contracts, the rule of law, company policy.

  • Moral practices; a kind of code of honour that societies teach as principles such as respect for women, propensity to honour debts and the importance of follow through (for example honouring the statement “I give you my word”).

  • Informal customs; which all understand and learned vicariously without being explicitly told. Respect for one's elders, for authority etc.

All three operate within our own personal cultural paradigm, but also within the organisational culture framework in which we work.

Western societies place much emphasis on the first. Negotiations essentially end once a contract has been signed.

In many other cultures, Westerners are often astounded when customers from other cultures pay less than the contract amount after a service has been provided, or simply renege on a deal because the terms no longer suit them. The signing of a contract, be it a loan agreement or for the provision of services, is for many the start of the negotiating process, not the end.

Many an investment banker who has done deals in Africa and Eastern Europe have similar stories to tell, and this is particularly prevalent in knowledge industries. Global consulting and advisory firms, looking to expand in Africa and the Middle East, have found that the value of innovative ideas is viewed as secondary to the value of tangible goods. This is often described as the difference between paying people for their time and ideas vs. paying for things.

Different cultures view the concept of compensating people for their time, effort and ideas very differently indeed. Some call it ‘labour arbitrage’, others call it ‘outsourcing’.

One example of how agreement is reached, whether explicitly or tacitly, is the idea of providing a good or service on credit.

If one could describe the trading economy of Nigeria it would summed up as “cash upfront”; almost no transactions take place on a credit basis (at least at the retail level). In many countries, a service provider might provide a service on the unexpressed understanding that payment will be made upon completion of the task; by contrast very few suppliers will supply goods and services on credit in Nigeria. Agreement is understood, and reached, on a cash upfront basis. Contrast this to the U.K. or U.S. where store credit is readily available to those seeking to purchase almost any conceivable item.

In this section, we covered Hall’s ‘Elements of Culture’ model, but in the next article, Part 5, will explore some specific leadership examples by using the GLOBE study of Leadership Effectiveness across the world.

© 2018 by GIG Culture.

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