Mary B. Teagarden
The Jack Welch of the Future cannot be like me. I spent my entire career in the United States. The next head of General Electric will be somebody who spent time in Bombay, in Hong Kong, in Buenos Aires. We have to send our best and brightest overseas and make sure they have training that will allow them to be the global leaders who will make GE flourish in the future. | ||
| --Jack Welch, Global Explorers (1999)[1] | ||
The need for effective cross-cultural leadership is not a recent business challenge. As the nature and scope of international business has evolved in recent decades, so has the way we consider the skills required of leaders in the international, or more recently global, business environment. In the late 1980s and 1990s the need for effective cross-cultural leadership was highlighted by business expansion into Asia, especially China, just as it had been highlighted in the 1970s and 1980s by expansion into Europe. More important, during the 1990s the emphasis shifted from a European, Latin American, or Asian “regional specialist” focus that complemented the international perspective of earlier times to a global or pan-regional focus. The days of the “old China hand” or the Mexico specialist with deep local cross-cultural knowledge and competency are fading and giving way to “globalists” with sophisticated, portable transcultural competency. The importance of this shift cannot be overlooked: cross-cultural leadership for a regional specialist is relatively straightforward; transcultural leadership for a global leader is much more complex and tightly intertwined with many other skills, behaviors, and competencies, and it takes much, much longer to develop.
Of equal importance, the focus of cross-cultural leadership has shifted from selecting and training the “right” executive for an international assignment—frequently an underperformer, in the 1970s and 1980s—to selecting the best and the brightest today, either an executive needed to execute critical strategic initiatives or a high-potential employee for an international stretch assignment to develop their global leadership skills and build the company’s leadership pipeline. In the 1970s and early 1980s, most markets were domestic and therefore were the domain of an organization’s top performers, high potentials, and stars. The underperformer was often assigned to international markets that were considered of minor importance—consequently, a “problem” was geographically out of sight, out of mind, and out of the line of real business activity. To make matters more challenging, global leadership skills are no longer bounded within the organization: they are extended to global alliances, mergers and acquisitions, and supply chain partners. Likewise, an organization’s global leaders are no longer “over there” somewhere; they are now everywhere—here and there at all levels of the organization. The field of cross-cultural leadership has gotten very complex and much more strategically important in the past decade. It comprises the competencies that differentiate both highly successful international organizations and highly successful global leaders.
Doug Ivestor, former chief executive officer (CEO) of Coca-Cola, observed, “As economic borders come down, cultural barriers go up, presenting new challenges and opportunities in business.”[2] And economic borders are coming down faster than ever. Javidan and House observed, “When cultures come into contact, they may converge on some aspects, but their idiosyncrasies will likely amplify.”[3] One key to being an effective cross-cultural leader is understanding this convergence—what unites us—and divergence—what makes us different. Two significant themes parallel the dynamic evolution of globalization. One theme is the importance of cross-cultural leadership, the ability to lead and make sense across cultures and contexts that are different from the leader’s own. A second, and by far the most alarming, theme is that there is a dramatic shortage of leaders with these competencies.[4] John Quelch, former dean of the London Business School, observes, “The lack of world-wide multicultural managerial talent is now biting into companies’ bottom lines through high staff turnover, high training costs, stagnant market shares, failed joint ventures and mergers and the high opportunity costs that inevitably follow bad management selections round the globe.”[5] Fewer than one in five CEOs of Fortune 500 organizations is satisfied with the current supply of global management talent capable of effective cross-cultural leadership.
Cross-culture leadership is an umbrella concept that comprises many issues. In this chapter, we address five questions that are fundamental to understanding the topic. The first is, Does cross-cultural leadership really matter? In other words, how critical is it to the future success of today’s corporations? A second issue is, How do we best understand and define the cross-cultural leadership concept? Third, what does it take to lead cross-culturally? Specifically, what are the behaviors, competencies, and skills that distinguish leaders who are adept cross-culturally? Fourth, how do we develop cross-cultural leaders? Finally, we must consider knowledge: What specifically does a cross-cultural leader need to know? This chapter answers these questions with a focus on cross-cultural leadership best practices. It can serve as a guide to the leader who wants to become more cross-culturally adept and for the human resource professional who is guiding the development of these leaders.
In the past the ability of an executive leader to think, understand, and work within the global environment was not nearly as important as it is today. | ||
| --Marshall Goldsmith (2003)[6] | ||
Global business activity has grown exponentially. By 2005, the growth in employment in the foreign operations of Fortune 500 companies was seven times higher than the growth in their domestic operations. Increasingly, employees are “there,” not “here,” and these employees and the multinationals in which they work must be led by cross-culturally competent leaders. In the 1990s alone, international flows of investment increased by more than 300 percent, and the international flows into developing countries—which are cross-culturally more challenging—increased by more than 600 percent. There is no hiding place: U.S. corporations face foreign competition even if they remain in their home country, since 70 percent to 90 percent of all U.S. corporations face some form of foreign competition in the United States, their home market. This highlights the importance of cross-cultural leadership for even the most “domestic” of leaders. And this globalization tsunami shows no signs of abating.
When the boom in information technology is superimposed on the globalization tsunami, we see the emergence of networked, integrated workspaces that extend the need for cross-cultural leadership skills into global, virtual, and even asynchronous contexts. To make matters more complex, cross-border mergers grew in number by four times between 1997 and 2000—from 2,100 to more than 9,200. That pace continues. By 2000, more than 40 percent of all mergers and acquisitions were cross-border, a statistic that highlights the importance of cross-cultural leadership in leading across organizational boundaries. U.S. companies purchased $20 billion worth of Asian companies and $43 billion worth of Latin American companies in 2000.[7] Almost overnight, the world has gotten smaller and bigger for cross-cultural leaders. It has gotten smaller because businesses are so extensively networked and integrated with partners around the world. It has gotten bigger because there are significant business opportunities beyond the domestic corporation’s organizational and national boundaries.
The unprecedented global search for goods and services coupled with intense pressure on costs has propelled businesses toward internationalization to compete or even survive. In the borderless world economy, resources—goods, services, technology, people, and capital—flow and move freely across national boundaries. Despite this flux, the fundamental resource necessary to formulate and implement global strategies and coordinate resource flows in global business activities is people—the human talent of any organization. There is a consensus that globally competitive organizations sustain their edge through the unique talent of their human resources and their systems for managing a supply of cross-culturally competent global leaders and workers who are capable of coordinating global strategic efforts of the organization and simultaneously integrating individual local host-country strategies.[8] Specifically, the single critical success factor in globalizing business lies with the pool of highly competent global leaders and skilled global workers who possess the global knowledge of production and service capabilities and consumer demands for products and services around the world.[9] Cross-cultural leadership competency is the lynchpin for this success.
In this context, management guru Peter Drucker cautioned, “Tomorrow’s business challenges are less technical than they are cultural. Culture must be managed just like any other business phenomenon.”[10] Cross-cultural competencies elevate a good business leader to the highly competent global leader status needed to meet globalization challenges. Understanding and appreciating cultural values, practices, and subtleties in those places where the organization operates or aspires to operate is the starting point. The leader’s flexibility to respond “positively and effectively” to different cultural values and practices is fundamental.[11] This requires the willingness to be open to others’ ideas and opinions and the motivation to do so. As we will see, cross-cultural leadership is a complex, multidimensional concept. Excelling at cross-cultural leadership best practices—selecting, developing, and deploying them—is a critical success factor for companies aspiring to outperform competitors in the globalized business environment.[12] Cross-cultural leadership matters. It matters now more than ever before. There is no hiding place for companies or their leaders in the new, complex, integrated, dynamic, global business environment.
The Buddha asked his disciples to get a large magnificent elephant and four blind men. He then brought the four blind men to the elephant and told them to find out what the elephant would “look” like. The first blind men touched the elephant leg and reported that it “looked” like a pillar. The second blind man touched the elephant tummy and said that the elephant was a wall. The third blind man touched the elephant’s ear and said that it was a piece of cloth. The fourth blind man held on to the tail and described the elephant as a piece of rope. And all of them ran into a hot argument about the “appearance” of an elephant. | ||
| --Buddhist Sutra | ||
The answer to the question, “How do we best understand cross-cultural leadership?” depends on whom one asks. The cross-cultural leadership literature mimics the fable of the grasp of the blind men and the elephant. Not unlike the elephant, the cross-cultural leader is sometimes defined by the role he or she fills, sometimes by the competitive environment in which the leader operates, often through a lens of the skill sets needed for cross-border assignments, and, although much less common, sometimes by the mindset that underpins the leader’s effectiveness. What unifies these perspectives is the reality of the global business environment, and the fact that regardless of the descriptions these leaders cross and bridge cultures in their work context. Nevertheless, Stewart Black, Allen Morrison, and Hal Gregerson remind us that “every global leader requires a certain set of unique skills and abilities that arise from country affiliation, industry, company, and functional dynamics.”[13]
We begin our journey through the field of cross-cultural leadership with an examination of four main perspectives that are often complementary and mutually reinforcing. We focus on these four because they flesh out the dimensions of the topic and highlight some of the basic tensions in the field. Leadership is contextually bound and cross-cultural leadership even more so. The role perspective offered by Bartlett and Ghoshal helps us understand the power that context has on leaders from a variety of functional roles needed in international contexts. A context-driven perspective is described by the Corporate Leadership Council’s identification of the “new global general manager” who must transcend the traditional roles described by Bartlett and Ghoshal and function with fluidity among and between these. Although cross-cultural leadership is contextually bound, it is carried out by individuals—thus we also consider the leader him- or herself through an examination of an interactive perspective represented in the “Mobility Pyramid,” a framework that bridges context, roles, and the individual leader’s motivations and abilities. Finally, we consider a behavioral perspective developed by the GLOBE (Global Leadership and Organization Behavior Effectiveness) research consortium that identifies specific leadership behavior sets that are appropriate under different cultural contexts.
The role perspective, exemplified by Bartlett and Ghoshal, considers the leader’s role as the key determinant, and they suggest that today’s international business climate creates an organizational need for three groups of “highly specialized yet closely linked” global leaders to manage the “transnational” organization.[14] One group includes the business manager, who is needed to further the company’s global-scale efficiency and competitiveness. This requires perspective to recognize opportunities and risks across national and functional boundaries. The business manager’s primary goal is to capture the full benefit of integrated worldwide operations. This first group has evolved as business has shifted from an international to a global orientation where business activity in multiple countries has to be coordinated and controlled, for example, by a global supply chain manager.
The second group is the country manager, who plays a crucial role in meeting local customer needs, satisfying a host government’s requirements, and defending their company’s market position against local and external competition. The country manager’s primary responsibility is to be sensitive and responsive to the local market. Historically, the country manager—for example, Intel’s country manager for China or Danone’s Eastern European regional manager—was the most common cross-border assignment and the one we know the most about.
The third is the functional manager, whose primary responsibility is to build an organization that uses learning to create and spread innovations. This requires transferring specialized knowledge while also connecting scarce resources and capabilities across national borders. The emergence of this third group is a reflection of one of the key drivers of globalization, the complexity of technology with which organizations now grapple—global product management or global technology management are functions representative of this role.
Bartlett and Ghoshal found that the greatest constraint in creating a transnational organization is a severe shortage of executives with the skills, knowledge, and sophistication to operate in a more tightly linked and less classically hierarchical network. From this role perspective, organizational forces, both structure and strategy, contextualize cross-cultural leadership and determine the skills, abilities, competencies, and roles that lead to the global organization’s effectiveness. Regardless of the leader’s role, crossing cultures and contexts and the need for competencies to do so are the commonalities for each of these three global leader groups.
The Corporate Leadership Council’s “new” global general manager exemplifies the context-driven perspective on cross-cultural leadership, one that emphasizes the strength of the contemporary global reality. The council identifies a “new” global general manager—one with the skills and abilities needed in the global competitive environment. They found that the “role of the ‘new’ global general manager is vastly more complex than that of the traditional country manager.”[15] The council’s study identifies specific responsibilities for new general managers that include entering new markets, launching operations in new geographies, making acquisitions and alliances, managing joint ventures, and stewarding new business initiatives. This research indicates that new general managers are responsible for driving operations along both product and geographical lines within an organizational matrix. These new global leaders’ responsibilities can be for all corporate operations within a particular country or for a particular product line within a region that includes several countries. This study also highlights a shortage of new global leaders. “Exacerbating this shortage is the fact that the sought-after global leader requires management skills that go well beyond traditional managerial competencies; the ‘new’ general manager must steward an enterprise with fully integrated operations across multiple geographies.”[16] From this perspective, we see that the nature of the job itself—integration across multiple geographies—partially determines cross-cultural leadership skills, abilities, and competencies that are the building blocks of organizational effectiveness. Once again, crossing cultures and contexts and the need for competencies to do so is the commonality for new global leaders.
A third view, the interactive perspective, is based on a hierarchical notion of cross-cultural leadership captured in the “Mobility Pyramid”—a perspective pioneered by Price Waterhouse Coopers’ London staff. The Mobility Pyramid is built around the confluence of the leader’s ability or willingness to relocate and the organization’s need for a leader in the foreign location. From this perspective, multinationals are encouraged to manage their international human resource requirements, giving consideration to employees’ mobility preferences and realities and the company’s needs. The Mobility Pyramid identifies five different kinds of mobility-based assignments: Glopats, Globals, Regionals, Mobile Local Nationals, and Rooted Nationals, each with distinct geographic, cross-cultural, and task considerations.[17]
Glopats are leaders with a world perspective, who can “fit in” and contribute wherever the organization operates, and are frequently on the move tackling short- and medium-term assignments. Glopats need the most sophisticated, expert cross-cultural leadership competencies, skills, and abilities, which might best be referred to as transcultural. They rarely have time or need to master the local culture. The transcultural demands mean that Glopats must learn how to learn culture quickly.
Globals are leaders who move around the world on medium-term assignments. Globals need advanced cross-cultural leadership proficiency, but enjoy a longer time frame than Glopats to develop proficiency in the specific local culture.
Regionals accept short-, medium-, or long-term assignments within a geographic region and/or at a regional headquarters. Regionals need cross-cultural competence and have a long time frame to master regional cultures, one of which is usually the Regional’s home culture. If they are not local, they may be mistaken for local because of their depth of localized cross-cultural knowledge and effectiveness. Regionals are capable of assuming the “cultural mentor” role for Globals and Glopats.
Mobile Local Nationals are functional experts and regional managers prepared for cross-border task force memberships, short-term projects, and training assignments abroad. This includes commuter assignments—one of the fastest growing forms of expatriate mobility in Europe. Mobile Local Nationals need both cross-cultural awareness and communication skills and virtual teaming skills, at least at the “advanced beginner” level. Mobile Local Nationals may be capable of assuming the “cultural mentor” role for Glopats, Globals, and Regionals.
Rooted Local Nationals are functional experts and general managers tied to their home base. Rooted Local Nationals need an awareness level of cross-cultural skills that would be characterized as a novice skill level.
Finally, a behavioral perspective on cross-cultural leaders comes from the Global Leadership and Organizational Behavior Effectiveness study and fills a substantial knowledge gap concerning the cross-cultural forces relevant to effective leadership in many societies around the world. This empirical research clearly shows that cultural forces influence many aspects of leadership. Most of the leadership research during the past 50 years was conducted in the West—the United States, Canada, or Western Europe. The GLOBE study overcomes this limitation by studying leadership and behavior in sixty-two societies.[18] Specifically, they looked at leadership by examining “prototypical requisites for leadership positions; privileges, power and influence granted to leaders; degree to which leadership roles are filled by ascription or achievement; model leader behavior patterns; preferences for and expectations of leaders; and follower and subordinate reaction to different kinds of leader behavior.”[19] The research identifies ten culture clusters of “culturally endorsed implicit leadership theory” leadership profiles that help delineate culture-specific boundaries of acceptable, effective leader behaviors and practices.
From the GLOBE study we see that followers’ expectations also influence an individual’s cross-cultural leadership effectiveness. If we consider the all-important leadership communication function, we can see how this plays out. The GLOBE researchers found that the typical American manager communicates using direct and explicit language anchored in facts, figures, and rational thinking. Contrast this with the GLOBE finding that Russian and Greek managers communicate using indirect and vague language. Facts and figures are suspect and are not taken seriously when available because they are hard to come by. Additionally, Greek managers believe effective communication is discussion and exploration of issues without any commitment or explicit results. For the Swedish manager, effective communication is in-depth dialogue that focuses on the content of the communication. Managers in the Philippines and Malaysia avoid conflict and communicate in a caring and paternalistic manner with followers. If gender is added to the mix, South Korean male managers believe that one-way, paternalistic communication that they initiate is appropriate. The expectations of Russian, Greek, Swedish, South Korean, Filipino, or Malaysian followers of effective communications are worlds apart from the typical American communication style. Unless the American leader is sensitive to these realities and adjusts his or her style, miscommunication will be the most likely outcome.
There is not one kind of cross-cultural leader; they vary by the scope of their responsibilities, the content of their work, the complexity of their work, the location of their work, their willingness and ability to travel globally, the expectations of their followers, their emotional maturity, their career stage, and their own developmental needs. What cross-cultural leaders do have in common is the fact that they cross cultures and contexts regularly in their work; they must be able to maneuver across these multiple boundaries fraught with multiple local expectations; and that reflective capacity enhances the ability to do this well. As we will see, investment in the development of cross-cultural competencies is a key driver of the organization’s and global leader’s success.
The question is no longer whether everyone will have to be globalized; the question is how much, and in what ways. | ||
| --McCall and Hollenbeck, Developing Global Executives (2002)[20] | ||
The identification of global leadership competencies is a complex, daunting task. In this section of the chapter we trek through the cross-cultural competency jungle and conclude with a synthesis to guide the leader who wants to become more cross-culturally adept and the human resource professional who is guiding the development of these leaders. To begin with, cross-cultural competencies are difficult to differentiate from general leadership competencies. And recognition must be given to the ongoing dialogue about whether the truth lies in a global or a local response—a debate that has raged among academics for the past two decades. As we can see in the GLOBE example given earlier, relative to cross-cultural leaders the answer to this ongoing dialogue is not one perspective or the other but a resounding “Yes!” Yes, there are ten distinct clusters of culturally appropriate leadership profiles that help delineate culture-specific boundaries of acceptable, effective leader behaviors and practices around the world. And, yes, there are also a few universal best practices like integrity and honesty, more regionally specific best practices like vague and indirect communication instead of direct and explicit communication, and many local best practices, such as top-down, paternalistic communication between men and women in South Korea. Adept cross-cultural leaders know these differences and can behave appropriately given this knowledge.
In a study focusing specifically on global leadership competencies, Gaelen Kroec, Mary Ann Von Glinow, and colleagues assert that while multinationals need to identify competencies now more than ever, the ability to do so has remained elusive “not because of disagreement about them, but because they often reflect generic management skills rather than a particular [multinational’s] strengths and unique culture.”[21] If we reflect back on the GLOBE study communication example, we see what this means. There is agreement that effective communication skills are a hallmark of effective domestic and cross-cultural leadership, but the GLOBE example makes it clear that effective communication is defined in the eye of the beholder—and beholders’ eyes change as we move between cultures.
When discussing competencies, definitional imprecision runs rampant because competencies are sometimes equated with skills and abilities, and are sometimes defined as capabilities for doing something by using a range of skills and abilities. Even culture itself exacerbates this problem. Some competencies vary fundamentally across different countries and cultures, to the point where they would be contraindicated.[22] For example, the American direct and explicit communication style would be contraindicated were the communicator an American woman manager and the audience South Korean male subordinates. Accordingly, McCall and Hollenbeck caution, “Moving into a different culture creates more, and more dramatic, opportunities for a particular pattern of strengths and weaknesses to shift from effective in one setting to disastrous in another. Because of differences in norms and values and misunderstandings due to language, behavior that is acceptable in one culture can become a derailer in another.”[23] The Swedish manager who engages in problem-solving dialogue with Japanese or Indian subordinates would be seen as a weak, technically unqualified leader since he or she did not have specific answers to their questions. Findings such as these highlight the high stakes associated with cross-cultural leadership competencies for both leaders and their organizations and the importance of understanding which competencies matter and when they matter.
There are as many lists of cross-cultural competencies as there are researchers who study them, and an organizing framework can help us make sense of this cross-cultural competency jungle. Alan Bird and Joyce Osland organize this panoply of competencies into a comprehensive framework they call the “Building Blocks of Global Competencies.”[24] It rests on a base of cross-cultural and business knowledge and categorizes competencies as (1) threshold or foundation competencies that begin with traits or natural abilities; (2) attitudes and orientations; (3) interpersonal skills; and (4) systems skills. This framework suggests a progressive, cumulative, developmental path for building global leadership competencies and provides a useful bridge between the what—What are necessary cross-cultural leadership competencies?—and the how—How are they developed? We look at this framework in more detail next.
Bird and Osland suggest that natural abilities or traits include integrity, humility, flexibility, inquisitiveness, and hardiness. Among these traits, inquisitiveness or curiosity and hardiness or persistence in the face of obstacles are the most commonly cited in the field. Attitudes and orientations include cognitive complexity and cosmopolitanism, often called savvy, open-mindedness, and flexibility by other researchers. Interpersonal skills include mindful communication and creating and building trust. Systems skills include spanning boundaries, building community through change, and making ethical decisions. Table 14.1 adapts and extends the Bird and Osland framework by incorporating competencies identified by many of the experts discussed in this section including Bird and Osland; Rosen, Digh, and Singer; McCall and Hollenbeck; and the author of the Corporate Leadership Council report. Once the multiple perspectives on cross-cultural leadership competencies are mapped we see that, in fact, there is considerable agreement about competencies needed in the global competitive environment.
Table 14.1. The Building Blocks of Global Competencies.
Skills | Bird and Osland | Rosen, Digh, Singer, and Phillips | McCall and Hollenbeck | Corporate Leadership Council |
|---|---|---|---|---|
Systems Skills | Span boundaries, build community through change, make ethical decisions | Social literacy | Honesty and integrity | Start up businesses in new markets Ability to develop individuals across diverse cultures Global team building Ability to interact with local political interests |
Interpersonal Skills | Mindful communication Creating and building trust | Cultural literacy | Stable personal life Cultural interest and sensitivity | Intercultural adaptability |
Attitudes and Orientations | Global mindset Cognitive complexity Cosmopolitanism | Personal literacy | Able to deal with complexity Open-minded and flexible in thoughts and tactics Honesty and integrity | Ability to cope with uncertainties and conflicts Willingness and ability to embrace and integrate multiple perspectives |
Threshold Traits | Integrity, humility, inquisitiveness, hardiness | Personal literacy | Resilient, resourceful, optimistic, energetic | |
Knowledge | Global knowledge | Business literacy | Value-added technical or business skills | In-depth business and technical knowledge and managerial competency |
Rosen and colleagues categorize the multidimensionality of global leadership competencies under an umbrella concept they call global literacy. They identify four competency sets that enable a leader to see, think, act, and mobilize in culturally mindful ways; these include personal literacy, social literacy, business literacy, and cultural literacy, which taken together create global literacy. Personal literacy includes self-awareness, self-development, and self-esteem. Rosen and colleagues contend that personally literate leaders must master key behaviors that include insight, humility, flexibility, decisiveness, and optimism. Social literacy is the ability to unleash the power of collective intelligence through the assembly, focusing, linking, and motivating of people, and through building strong teams. The behaviors associated with social literacy that make this happen include trust, listening, constructive impatience, teaching, and collaborative individualism. Business literacy is the ability to focus and mobilize the organization by embracing multiple roles—including chaos navigator, business geographer, historical futurist, leadership liberator, and economic integrator. Finally, cultural literacy is valuing and leveraging cultural differences and is associated with leadership roles including proud ancestor, inquisitive internationalist, respectful modernizer, culture bridger, and global capitalist.
Rosen and colleagues comment:
When you become proficient in the four global literacies, you begin to
See the world’s challenges and opportunities—which expands your horizons, illuminating your perceptions of the world.
Think with an international mindset—which helps you develop a global mindset with beliefs and attitudes that enable you to think internationally.
Act with fresh global-centric leadership behaviors—which teaches new relationship skills that help you navigate through the global marketplace.
Mobilize a world-class company—which helps you inspire and mobilize people across national cultures.[25]
In their report on the “new” global assignment, the Corporate Leadership Council found that “to meet the rising bar of global skills, leaders must possess specific, rare global skills including intercultural adaptability, ability to develop individuals across diverse cultures, global strategic thinking, global team building, ability to start up businesses in new markets and ability to interact with local political interests.”[26] While this study reinforces the competencies identified by Rosen and colleagues, it also extends that study in some important ways. The council study highlights the importance of boundary-spanning skill sets for global executives.
McCall and Hollenbeck take a more focused, traditional approach and identify seven global executive competencies that they believe can be developed.[27] First, the global leader is open-minded and flexible in thought and tactics—able to live and work in a variety of settings with different types of people and is willing and able to listen to other people, approaches, and ideas. Second, he or she has cultural interest and sensitivity and is able to live and work in a variety of settings with different types of people and is willing and able to listen to other people, approaches, and ideas. Third, the global leader has the ability to deal with complexity and considers many variables in solving a problem; is comfortable with ambiguity and patient in evolving issues; can make decisions in the face of uncertainty; can see patterns and connections; and is willing to take risks. Fourth, the global leader is resilient, resourceful, optimistic, and energetic— he or she responds to a challenge; is not discouraged by adversity; is self-reliant and creative; sees the positive side of things; has a high level of physical and emotional energy; and is able to deal with stress. Fifth, the global leader demonstrates honesty and integrity and is authentic, consistent; the person engenders trust. Sixth, he or she has a stable personal life and has developed and maintains stress-resistant personal arrangements, usually family, that support a commitment to work. And seventh, the global leader has value-added business and technical skills including technical, managerial, and other expertise sufficient to provide his or her credibility. This study extends the previous discussions by highlighting the importance of resilience, resourcefulness, honesty, and integrity—dimensions not emphasized in the other studies.
Chris Earley and Elaine Mosakowski approach the competency issue from another angle: they identify a concept that they call cultural intelligence, or CQ. CQ is an extension of earlier work on emotional intelligence and comprises a blend of knowledge, behavior, and motivation. Earley and Mosakowski contend that “a person with high cultural intelligence can somehow tease out a person’s or group’s behavior those features that would be true of all people and all groups, those peculiar to this person or group, and those that are neither universal or idiosyncratic.” They found that some aspects of cultural intelligence are innate yet “anyone reasonably alert, motivated, and poised can attain an acceptable level of cultural intelligence....”[28]
Cultural intelligence comprises knowledge—rote learning about cultural aspects of foreign cultures; physicality or body language—adapting people’s habits and mannerisms as evidence that you have entered their world; and, “heart,” often called resilience by others, which is the persistence to overcome obstacles and setbacks. Unlike other aspects of personality, cultural intelligence can be developed. Earley and Mosakowski identify six profiles that describe the range of this form of intelligence in most leaders. The provincial is effective working with people similar to him- or herself. The analyst “methodically deciphers a foreign culture’s rules and expectations by resorting to a variety of elaborate learning strategies....”[29] The natural relies on intuition rather than on a systematic learning style. However, he or she “is rarely steered wrong by first impressions.”[30] The ambassador “may not know much about the culture he has just entered, but he convincingly communicates his certainty that he belongs there.”[31] Among the multinationals they studied, Earley and Mosakowski found that the ambassador was the most common type and exhibited extraordinary confidence and humility simultaneously. The mimic has a great degree of control over his actions and behavior, “if not a great deal of insight into the significance of the cultural cues he picks up.”[32] The chameleon possesses high levels of all three cultural intelligence components and may be mistaken for a native of the country. They found this style is very rare—fewer than 5 percent of the cross-cultural leaders they studied—and many leaders have hybrid styles that combine two or more of these styles. Most important, Earley and Mosakowski demonstrated that cultural intelligence can be developed; more detail is provided on this process in the next section.
How does the leader who wants to become more cross-culturally adept or the human resource professional guiding the development of these leaders make sense of this cross-cultural competency jungle? Begin by understanding the “Building Blocks of Global Competencies” framework and how the different perspectives we have discussed map onto it. First, successful cross-cultural leadership rests on a base of cross-cultural and business knowledge—technical expertise plus the “facts and figures” of the countries and regions in which the leader will work. Business knowledge or technical expertise is taken as a given and is often the primary criterion used when selecting a leader for an international assignment. Alas, it is a big world, and cross-cultural knowledge is another issue. How can a leader possibly master the cross-cultural knowledge dimension? The GLOBE study is a good starting point, since it distills the world into ten distinct clusters of culturally appropriate leadership profiles that can provide the base of cross-cultural knowledge needed for cross-cultural leadership development.
Then assess yourself for threshold or foundation competencies and traits or natural abilities. You might ask which of these are the most important for your situation. Key foundation competencies begin with the all-important inquisitiveness, followed by willingness to learn from experience; integrity, humility, and resilience are almost as important. If inquisitiveness and a willingness to learn from experience are missing, efforts to develop cross-cultural leader effectiveness are not likely to be successful. Next, focus on attitudes and orientations that include the ability to deal with complexity, open-mindedness, and the ability to cope with uncertainty and conflict. Stretch assignments in international contexts that require the future leader to be uncomfortable and reframe are useful for the development of the attitudes and experiences needed. Foreign language acquisition is also a useful approach to developing the ability to reframe. The competency journey continues with the development of interpersonal skills that include mindful communication, creating and building trust, and intercultural adaptability. Here the recommendations of Earley and Mosakowski for developing cultural intelligence should be embraced. The journey concludes with the development of systems skills. In the following section we look at the development of cross-cultural leadership skills in more depth.
Two things seemed pretty apparent to me. One was that in order to be a [Mississippi River] pilot a man had got to learn more than any one man ought to be allowed to know; and the other was, that he must learn it all over again in a different way every 24 hours. | ||
| --Mark Twain, Life on the Mississippi (1883) | ||
I took a good deal o’ pains with his education, sir; let him run the streets when he was very young, and shift for his-self. It’s the only way to make a boy sharp, sir. | ||
| --Charles Dickens, The Pickwick Papers (1837) [33] | ||
What kinds of human resources practices might facilitate the development of savvy cross-cultural leaders? Mary Ann Von Glinow, Mary Teagarden, and colleagues conducted a longitudinal, multicountry, multi-researcher study to identify such best practices. They found that indeed there were a very few universal best practices, such as the use of training and development to close technical skill gaps; more regional best practices, such as a training and development focus on “softer management practices” in Anglo countries; and many more country-specific best practices relating to compensation, selection, appraisal, training and development, and strategic orientation, for example, an emphasis on the preparation of leaders for future assignments in the United States and South Korea.[34]
We know that cross-cultural leadership effectiveness develops over time. This journey might best be characterized as one moving from awareness and knowledge—knowing about other cultures—to wisdom or cultural intelligence, the profound understanding and appreciation of different others. Leaders and future leaders come with a range of global leadership skills that comprise the leader’s cross-cultural skills and abilities, and determine idiosyncratic development needs. Alan Bird and Joyce Osland provide a stage-based, developmental approach to global leadership mastery that makes an important distinction among novice and expert global managers, and levels in between. These levels closely parallel career stages. The level of mastery for the novice stage is “rules are learned as absolutes.” For the advanced beginner stage, “experience produces understanding that exceeds stated facts and rules.” The competence stage is where there is a “greater appreciation for task complexity and recognition of a larger set of cues and the ability to focus on most important cues. Reliance on absolute rules begins to disappear; risk taking and complex trade-offs occur.” At the proficiency stage, “calculation and rational analysis seem to disappear, and unconscious, fluid, effortless performance begins to emerge.” Finally, at the expert stage, “holistic recognition and intuition rather than rules dominates. Framing and reframing strategies as they read changing cues that others do not perceive or read is natural.”[35]
The implication of this perspective is that sophisticated cross-cultural leaders with world-class expertise achieve that level of competence in a cumulative way, and each level of expertise requires different types of experience and learning upon which the subsequent level stands. For example, the novice may require cross-cultural knowledge training and career pathing that builds cross-cultural expertise, while the expert may only need networking, feedback, or reflection opportunities to enhance cross-cultural effectiveness. The “Evolution of Mastery” framework, presented in Table 14.2,[36] is adapted and extended with examples of developmental activities.
Table 14.2. The Evolution of Mastery.
Stage | Level of Mastery | Developmental Examples |
|---|---|---|
Novice | Rules are learned as absolutes | Cross-cultural knowledge training Career pathing to build cross-cultural expertise Diverse team membership |
Advanced Beginner | Experience produces understanding that exceeds stated facts and rules | International posting in a moderately different culture within existing technical expertise Remote virtual team membership |
Competence | Greater appreciation for task complexity Recognition of a larger set of cues and the ability to focus on most important cues Reliance on absolute rules begins to disappear; risk taking and complex trade-offs occur | Stretch assignments that include a larger technical scope and more cultural difference than prior posting Global team membership |
Proficiency | Calculation and rational analysis seem to disappear, and unconscious, fluid, effortless performance begins to emerge | A second or third international posting with increasingly enlarged scope of responsibility Global team leadership |
Expert | Holistic recognition and intuition rather than rules Framing and reframing strategies as they read changing cues that others do not perceive or read | Networking Developmental feedback Reflection opportunity |
While there are various ways to develop cross-cultural leaders—business travel, multicultural teams, training, temporary international assignments, and expatriate assignments, for example—international experience is by far the most highly emphasized, common theme. Stewart Black and his colleagues found that foreign travel, participating in international teams and training programs with an international emphasis, and international transfers all contribute to the development of cross-culture leadership skills.[37] In fact, when Hal Gregerson and his colleagues asked executives to name the most powerful experience in their lives for developing global leadership capabilities, 80 percent of the leaders surveyed responded that living and working abroad was the single most influential experience in their lives.[38]
Additionally, McCall and Hollenbeck found that, focusing on the business side of a leader’s development, “the lessons of domestic and international experience weren’t all that different.” Indeed, there is a common core of learning about leading and doing business. However, they continue, “Learning to work across cultures is an essential competency of the global executive, and it is for most people an emotional education as well as an intellectual one.” They continue, “An executive cannot learn cultural adaptability and the competencies associated with it without actually living and working in another culture and successfully coping with the accompanying discontinuities.”[39]
The Corporate Leadership Council maintains that “the cross-regional management skills needed ...are so complex that managers must acquire hands-on experience of global business through international assignments.” Secondhand experience from working on virtual teams or training programs is insufficient for the development of global leaders who can be effective crossing cultures and contexts.[40] Bird and Osland contend that “executives working 24–7–365 in an international context have more frequent, novel, significant, and emotionally intense international and intercultural experiences. These experiences often crystallize into forms of expertise that are hard for novices to replicate.”[41]
While crossing cultures bootstraps the leader’s development process, adequate resources and time for reflection are very important to successful global leader development.[42] These resources include what McCall and Hollenbeck call “significant other people,” such as the opportunity to work in parallel with a predecessor, on-site learning from a local national, and exposure to others with global careers, and knowledge resources, such as advice from mentors or advice from others in an organizational network who have had similar task or cross-cultural experiences. Resources also include developmental training programs and related learning opportunities, such as work on a short-term assignment, for example, a special international project or an internal consulting role. Time for reflection is commonly provided in the form of an off-site development program, and less often in the form of a sabbatical or block of time away from work.
Osland observes, “Just as immersion is the most efficient and effective way to learn a foreign language, an expatriate assignment is the best way to develop global leaders.”[43] McCall and Hollenbeck extend this perspective by stating that “providing the appropriate level of feedback, resources, and support to help people learn from the [international] experiences they have ... and providing international perspectives and exposure starting early in people’s careers.”[44] It should be no surprise that multinationals around the world use international exposure as a vehicle for developing global leaders and their cross-cultural leadership competencies.
Earley and Mosakowski offer a process for the effective development of cultural intelligence that begins with the assessment or self-assessment of the leader’s cultural intelligence strengths and weaknesses to establish a starting point for subsequent development efforts. This can be a self-assessment using the Earley and Mosakowski instrument, the results of an assessment center, or 360-degree performance appraisal. The researchers cite an example where Hughes Electronics staged a cocktail party to evaluate an expatriate manager’s grasp of South Korean social etiquette. The second step is the selection of training protocol that focuses on his or her weaknesses. The third step is the implementation of the training in a way that sequentially adds capabilities. In the fourth step, the leader organizes resources to support the approach he or she has taken. It is important that “a realistic assessment of her workload and the time available for CQ enhancement is important.” The fifth step takes the leader into the cultural setting he needs to master and apply the learning. The sixth step requires the leader to reevaluate “her newly developed skills and how effective they have been in the new setting, perhaps after collecting 360-degree feedback from colleagues individually or eavesdropping on a casual focus group that was formed to discuss her progress.”[45]
Additionally, strategic repatriation policies cannot be overlooked as the final step in the development of cross-cultural leaders. Paula Caligiuri and Mila Lazarova found that multinationals agree that they enjoy an increase in global competence through the development of the cross-cultural leadership competencies of their business leaders.[46] However, these same multinationals also cite the low retention rate of global assignees upon repatriation as one of their greatest concerns. Development of talent is prohibitively expensive, and perhaps absurd, if the multinational is not able to retain that talent upon return. With repatriate turnover, the multinational loses a critical source of competitiveness—human talent—or worse, they provide potential global competitors with this talent. Caligiuri and Lazarova identify four reasons why this occurs. First, multinationals often do not integrate selection, performance management, and repatriation systems into one strategic process when it is necessary. Second, some turnover upon repatriation is functional, and possibly even strategic. Third, multinationals tend to treat all global assignments as if they had the same strategic objective when they do not. And, finally, multinationals believe that all global assignees tend to have long-term careers with the multinational when they do not.
To resolve this dilemma, Caligiuri and Lazarova suggest four classifications of global assignments, including technical assignments, developmental/high-potential assignments, strategic/executive assignments, and functional/tactical assignments, each with specific performance expectations and repatriation policies. Expatriates on a technical assignment have relatively little interaction with host country locals and describe their work as “quite similar” to what they do at home. “These assignments include technicians at an oil refinery, systems engineers on continuation at a client site, systems analysts interfacing with a computer system, and the like.”[47] Repatriation of the technical assignee is a function of where those skills are needed within the organization, and retention from a cross-cultural leadership perspective is relatively unimportant. They may return to their home country, be assigned to a third country, or their temporary assignment might be terminated. The functional/tactical assignment is similar to the technical assignment with one key difference: “Significant interactions with host nationals are necessary in order for the assignment to be deemed successful.”[48] The person selected for a functional/tactical assignment will fill a technical or managerial gap in the host country; this is the most common expatriate assignment. While these expatriates are sent to fill technical gaps, they come to realize that cross-cultural skills are needed for success.
Developmental and high-potential assignments should be part of the multinational’s strategic human resource development plan to build global competencies for sustainable competitive advantage. These programs are often rotational, and the goal is the individual cross-cultural leader’s development. Repatriation is often a move to the next assignment in the rotation, and retention of these employees is of high strategic significance. Strategic and executive assignments are usually filled by individuals who are being developed for high-level management positions in the future. These assignments are hybrids, both strategic and developmental in nature. These employees are the core “critical” group of assignees who may have the task of entering a new market, developing a county base in a new area, being the general manager of a joint venture, or the like. For these individuals, repatriation is often well thought out and a part of the overall succession planning initiative of the multinational. “An important aspect of the repatriation process will be to ensure that the position for which these individuals are being groomed will actually utilize their developed global skills.”[49] Best practice includes an integrated selection, performance management, and repatriation system that is aligned with the strategic planning process in which turnover is proactively managed. Global assignments should be differentiated based on strategic importance, with great care being taken to retain global assignees who have long-term career potential within the multinational.
Today, companies increasingly need softer people skills . . . and perhaps most important, working across cultures with Chinese, Germans, Indians, Italians, Russians, and a world full of suppliers and partners. | ||
| --Business Week (2005)[50] | ||
What does the leader who wants to become more cross-culturally adept or the human resource professional guiding the development of these leaders need to know? First, does this leader or future leader have a willingness to learn from experience and the motivation to do so? Identification of this motivation is critical, since this willingness is the first step of what can be a very long, iterative journey. The next question that needs to be answered is one regarding the strategic rationale for the international assignment: Is the leader developing these skills for a long-term global career or for a short-term, more tactical assignment? This is important because it takes us to the center of one of the most fundamental debates in cross-cultural leader development: Does the global leader need country-specific cross-cultural knowledge or does she need to have well-developed cross-cultural acumen at the proficient or expert level—in other words, cultural intelligence? At a minimum, cross-cultural leaders—the Glopats and Globals or the developmental/high-potential expatriates and strategic/executive expatriates discussed earlier—must have a comprehensive view of different countries’ cultural practices. The GLOBE study found that it is imperative to understand the “culturally endorsed implicit leadership theory” leadership profile of the culture cluster in which they will be working. These globally literate leaders must be able to answer questions such as:
• | What leadership qualities and business practices are fundamental to my own national culture? |
• | How can I create business cultures that mobilize diverse people in a multicultural world? |
• | How do businesses in different countries operate in culturally unique ways? |
• | What are the lessons and innovations to be learned around the world?[51] |
Development of cross-cultural leaders with the ability to answer sophisticated questions such as these requires that the company make a major investment in human capital, an investment that is well planned and integrated throughout the leader’s career path. At the same time, it also requires willingness on the future leader’s part to make the personal investment needed to reach the expert or proficient cross-cultural leadership level. The company and the leader are truly partners in this development journey. Development of cross-cultural leadership skills at this expert or proficient mastery level takes time. There are no shortcuts. The development journey requires that the leader be assigned to real work in cross-cultural settings in a progressively sequenced stretch assignment career path, one that takes the leader from novice to expert proficiency levels. The future leader must know and accept that he or she will feel awkward at many points throughout this process.
First, second, and even third international postings with increasingly enlarged scopes of responsibility provide opportunities for the development of expert cross-cultural leadership proficiency. Taking the leader to the expert cross-cultural leadership level also requires providing a resource-rich environment for the leader that should include networking opportunities with other global leaders at world summits like the World Economic Forum at Davos, Switzerland, or international forums at the Aspen Institute. Other helpful experiences would include rich developmental feedback from multiple sources (ideally in cross-cultural settings) on multiple dimensions—such as 360-degree performance feedback and executive coaching, and opportunities for reflection through developmental training programs, sabbaticals, and time away from day-to-day work pressures. The leader must be willing to actively listen, actively reflect, and actively learn!
On the other hand, those expatriates on more tactical assignments—the Regionals or Mobile or Rooted Nationals or the technical or functional/tactical expatriates discussed earlier—must have many of the interpersonal skills identified in Table 14.1, including cross-cultural communication effectiveness, intercultural adaptability, and competence in developing and maintaining good interpersonal relationships. These competencies also take time to develop and should be part of a strategic human resource planning system. However, there are techniques—classroom training, role playing, and simulations, for example—that bootstrap the expatriate’s skills and accelerate the time needed for cross-cultural success for those going on more tactical assignments. Best practices for leader development for these more tactical assignments include predeparture and postdeparture cross-cultural knowledge and skill training and, once in the new role, the use of cultural mentors, a function often filled by Rooted or Mobile Local Nationals.
The journey to cross-cultural leadership at the proficient- or expert-level mastery is a long one. Taking stock of personal progress on a regular basis can keep the journey on the right track. Asking the following questions on an annual basis can help the leader aspiring to grow cross-cultural competency with this process:
The most common reason that organizations do not have exceptional global leadership is a lack of commitment to the process of developing it. The problem is not lack of know-how.... The problem is that with the complexity and risk, few organizations have adopted a model robust enough to fit the challenge and then committed the time and resources necessary to implement it. | ||
| --Morgan McCall and George Hollenbeck, Developing Global Executives (2002) [52] | ||
In this chapter we have seen many dimensions of this complexity and many of the obstacles that inhibit implementation of a robust cross-cultural leader development process or model. Organizations can increase the probability of successfully developing cross-cultural leaders by implementing the following four practices.
First, organizations must have clarity on what kind of global executives with what kinds of skills are needed from a strategic perspective. Consider Komatsu: United States-based Caterpillar is Komatsu’s toughest competitor the world over. “Maru-C” or “Encircle Caterpillar” is Komatsu’s vision and rallying cry. All Komatsu managers on a senior-position career path are therefore required to serve at least one assignment in the United States.
Second, organizations should use experience as a teacher by providing relevant developmental opportunities for those capabilities the organization is trying to develop. For example, in the 1980s Colgate-Palmolive had a difficult time finding high-quality employees for top international assignments. In response, they implemented a program of systematically providing opportunities for high-potential managers to work in a variety of global markets to develop those critical cross-cultural leadership skills for top executives. They no longer have difficulty finding high-quality employees for top international assignments.
Third, organizations must provide appropriate levels of feedback, resources, and support to help people learn from the experiences they have. The Conference Board’s recent study on global talent development found that 47 percent of the survey respondents believe that providing targeted feedback on performance and potential is the most effective tactic in accelerating and nurturing global talent.[53]
Finally, by providing international perspectives and exposure starting early in people’s careers, organizations maximize the quality of their cross-culturally expert pipeline.
Cross-cultural leadership best practice begins with a deep understanding of the contributions that human capital makes in today’s dynamic, competitive global business environment. Does the organization’s ability to compete require international assignments? Increasingly the response is a resounding yes, even for “domestic” companies that cannot escape the globalization tsunami. The single critical success factor in globalizing business lies with the pool of highly competent global leaders who possess the global knowledge of production and service capabilities and consumer demand for products and services around the world. Cross-cultural leadership competency is the lynchpin for this success, and cross-cultural competencies elevate a business leader to highly competent global leader status. Best practice mandates the development of a pool of leaders with cross-cultural competencies to meet the organization’s strategic imperatives and competitive demands.
Who are cross-cultural leaders? There is not one kind of cross-cultural leader; they vary by the scope of their responsibilities, the content of their work, the complexity of their work, the location of their work, their willingness and ability to travel globally, the expectations of their followers, their career stages, and their own development needs. What cross-cultural leaders do have in common is the fact that they cross cultures and contexts regularly in their work; they must be able to maneuver across these multiple boundaries fraught with multiple local expectations; and that reflective capacity enhances the ability to do this well. Best practice is moving beyond a focus simply on the development of cross-cultural competencies to providing the leader with the resources—often knowledge, networks, and time—needed for reflection and learning from international experiences and the key drivers of the organization’s and the global leader’s own success.
Approaches to the identification of cross-cultural leadership competencies are numerous and fraught with definitional imprecision: whether we call them global competencies, global literacies, or cross-cultural leadership skills, the panoply of global leadership and cross-cultural competencies can be categorized as (1) threshold or foundation competencies that begin with traits or natural abilities and rest on cross-cultural knowledge and a base of business or technical skills; (2) attitudes and orientations; (3) interpersonal skills; and (4) systems skills. There is consensus that these competencies can be developed through a combination of international and local stretch assignments orchestrated through the strategic succession planning, and that traits like open-mindedness, resilience, cognitive complexity, curiosity, and willingness to learn are very important to a cross-cultural leader’s effectiveness. Best practice requires the organization to link the identification of competencies needed and the timing and location of these needs to the organization’s strategy.
Mastery of cross-cultural leadership competencies is progressive and cumulative. Global leaders identify the international assignment as the single most influential experience in their lives. The development of cross-cultural leadership competencies requires the reinforcement of international experience with an appropriate level of feedback, resources, and support to enable reflective learning. Multinationals around the world use a combination of expatriation and extensive international business travel to develop cross-cultural competencies. Given the relatively high turnover rate among repatriated assignees, strategic repatriation policies must be considered as the final step in the development of cross-cultural leaders. Attention must be given to the strategic alignment of the multinational’s need for talent and the competencies that the repatriated assignees bring upon their return. Best practices in cross-cultural leadership competency development require the use of international assignments that include feedback, resources, and support that enable reflective learning, with care being given to the management of turnover among repatriated assignees.
Cross-cultural leaders who are filling Glopat and Global positions must have a comprehensive view of different countries’ cultural practices. They must understand cultural differences and cultural similarities and be able to lead effectively across different cultures by reading changing cues that others do not read. These globally literate leaders must be able to answer questions such as:
• | What leadership qualities and business practices are fundamental to my own national culture? |
• | How can I create business cultures that mobilize diverse people in a multicultural world? |
• | How do businesses in different countries operate in culturally unique ways? |
• | What are the lessons and innovations to be learned around the world?[54] |
Expatriates on more tactical assignments also need cross-cultural interpersonal skills, including cross-cultural communication effectiveness, intercultural adaptability, and competence in developing and maintaining good interpersonal relationships. Best practice mandates that the multinational clarify its reasons for using the expatriate and then manage the development of cross-cultural leadership skills accordingly. The best way to accelerate global leadership development is to identify talent early and nurture cross-cultural competency development step by step. Globalization is a powerful force. Cross-cultural leadership development is a critical success factor for corporations aspiring to excel in the globalized business environment. Cross-cultural leadership matters, and it matters now more than ever before. There is no hiding place for companies or their leaders in the new, complex, integrated, dynamic, global business environment.