Un­seen con­nect

The Smart Manager - - Contents - SHIRISH C SRIVASTAVA IS AS­SO­CIATE PRO­FES­SOR, IN­FOR­MA­TION SYS­TEMS AND OP­ER­A­TIONS MAN­AGE­MENT AT HEC PARIS.

Cul­tural In­tel­li­gence is the en­abler of a firm’s global in­no­va­tion strat­egy, says Shirish C Srivastava.

Ac­cord­ing to Ang and Van Dyne (2008), Ear­ley and Ang (2003)*, “cul­tural in­tel­li­gence refers to an in­di­vid­ual’s abil­ity to func­tion ef­fec­tively across cul­tures—na­tional, eth­nic, or­ga­ni­za­tional, as well as other types of cul­ture.” This as­pect as­sumes more rel­e­vance as or­ga­ni­za­tions fo­cus more on in­no­va­tion to suc­ceed in global mar­kets.

The last decade has brought with it, per­haps, more change and de­vel­op­ment than the past fifty years com­bined. It is no longer enough for an or­ga­ni­za­tion to be sus­tained only through busi­ness tak­ing place within its home mar­ket. In­creas­ingly, com­pa­nies of all sizes are faced with the need to share their prod­ucts and ser­vices with an in­ter­na­tional au­di­ence.

With that has come the need for com­pa­nies to be present in the global mar­kets. Mod­ern cross-bor­der busi­ness in­volves com­pa­nies set­ting up satel­lite of­fices over­seas, or en­gag­ing a global work­force who, thanks to mod­ern tech­nol­ogy, can work re­motely from their homes re­gard­less of their lo­ca­tion, com­mu­ni­cat­ing in­stantly with their col­leagues as if they sat in the next cu­bi­cle in the of­fice.

Though the tech­nol­ogy cer­tainly ex­ists, and is af­ford­able enough for the vast ma­jor­ity of com­pa­nies to em­ploy, sim­ply se­cur­ing the means to con­nect with col­leagues across the globe does not au­to­mat­i­cally guar­an­tee suc­cess. Man­agers face a greater chal­lenge in ef­fec­tively com­mu­ni­cat­ing with dis­persed col­leagues, clients, and cus­tomers from di­verse na­tions and cul­tures, and find­ing ways to con­nect such in­di­vid­u­als to the com­pany, to each other, and to the world around them.

Un­sur­pris­ingly, cross-cul­tural man­age­ment is a top pri­or­ity for or­ga­ni­za­tional lead­ers look­ing to lever­age the full po­ten­tial of their global teams and make an im­pact in a new mar­ket. De­vel­op­ing a greater ‘cul­tural in­tel­li­gence’ (CQ) can be an ef­fec­tive method for help­ing such pro­fes­sion­als bridge the dis­con­ti­nu­ities be­tween them.

CQ, a the­ory pop­u­lar­ized by man­age­ment ex­perts and or­ga­ni­za­tional psy­chol­o­gists, per­tains to the ca­pa­bil­ity of a per­son to func­tion ef­fec­tively in sit­u­a­tions char­ac­ter­ized by cul­tural di­ver­sity (Ang et al, 2006; Ear­ley & Ang, 2003). It sug­gests that truly ap­pre­ci­at­ing an in­di­vid­ual’s cul­tural back­ground in an in­tel­li­gent way is vi­tal for both in­di­vid­ual and or­ga­ni­za­tional suc­cess in an un­fa­mil­iar en­vi­ron­ment.

The de­vel­op­ment of CQ is con­ducted across four ar­eas (Ang & Van Dyne, 2008):

■ CQ mo­ti­va­tion: fo­cus­ing on build­ing a per­son’s in­ter­est and con­fi­dence in func­tion­ing ef­fec­tively in cul­tur­ally di­verse set­tings

■ CQ cog­ni­tion: which builds a per­son’s un­der­stand­ing of dif­fer­ent cul­tures and how this can im­pact busi­ness re­la­tion­ships, pro­cesses, lan­guage, and be­hav­ior

■ CQ metacog­ni­tion: con­cern­ing how to build an ef­fec­tive strat­egy keep­ing in mind the cul­tural sen­si­tiv­i­ties at play and

■ CQ be­hav­ior: which fo­cuses on a per­son’s abil­ity to act, and be flex­i­ble in adapt­ing her ap­proach, their be­hav­ior, and own lan­guage in line with the above ar­eas, to best en­sure busi­ness suc­cess

There are, of course, plenty of in­stances where a lack of CQ has been a con­tribut­ing fac­tor to a failed busi­ness or prod­uct. A par­tic­u­larly well-known ex­am­ple comes from car man­u­fac­turer Gen­eral Mo­tors, which in the 1980s suf­fered em­bar­rass­ment when at­tempt­ing to launch the new Nova car in Spain, with­out tak­ing the time to get to know the mar­ket first. If they had, the ex­ec­u­tives at GM might have dis­cov­ered that the word ‘nova’ when trans­lated into Span­ish lit­er­ally means ‘not go­ing’—not ex­actly a ring­ing en­dorse­ment for a ve­hi­cle. Ex­pect­edly, the Span­ish mar­ket re­mained un­con­vinced.

Cross-cul­tural man­age­ment is a top pri­or­ity for or­ga­ni­za­tional lead­ers look­ing to lever­age the full po­ten­tial of their global teams and make an im­pact in a new mar­ket.

CQ is best de­vel­oped through ex­po­sure, which is why, in Oc­to­ber, I ac­com­pa­nied a team of ex­ec­u­tives from Euro­pean IT ser­vices cor­po­ra­tion ATOS to visit Mum­bai and Pune, as part of an ex­ec­u­tive ed­u­ca­tion pro­gramme pro­vided by HEC Paris busi­ness school. The aim was to en­able them to en­gage di­rectly with lo­cal busi­ness lead­ers and gain a first-hand per­spec­tive on the re­al­i­ties of con­duct­ing busi­ness in a wildly di­verse, fast-mov­ing, and in­creas­ingly im­por­tant econ­omy.

It is not just the op­er­a­tions in­side of or­ga­ni­za­tions which have changed in the last decade, but also the busi­ness land­scape they are re­quired to work within. Emerg­ing economies such as In­dia’s have dis­rupted the global order as they grow in promi­nence and con­tinue to do busi­ness on their own terms. It is no longer com­monly ac­cepted that the only way of do­ing global busi­ness is to fol­low the struc­ture set by the West. The com­pa­nies emerg­ing from mar­kets which may well prove to be the es­tab­lished global pow­ers of the fu­ture have up­set the sta­tus quo for even the most se­cure of Western multi­na­tion­als.

Man­agers from Europe and the US must ex­pe­ri­ence and un­der­stand the nu­ances of di­a­met­ri­cally op­po­site cul­tures. In­dia of­fers a unique op­por­tu­nity to those from the West in un­der­stand­ing, ab­sorb­ing, and in­ter­nal­iz­ing the dy­nam­ics of th­ese dif­fer­ences be­cause of the vast cul­tural dis­tance that ex­ists. And also be­cause of the po­ten­tial op­por­tu­ni­ties that ex­ist in In­dia—not only as a re­source provider for skilled tal­ents but also as a dy­namic and grow­ing mar­ket.

This en­hanced qual­ity of CQ could also help busi­nesses tackle another vi­tal el­e­ment for suc­cess on the global stage—in­no­va­tion.

As the play­ing field be­comes ever more global, the blur­ring of ge­o­graph­i­cal lines means greater lev­els of com­pe­ti­tion for all who come to the ta­ble. There­fore, or­ga­ni­za­tions must not only of­fer a valid prod­uct or ser­vice to their cus­tomers, but also be able to tailor their strate­gies for in­no­va­tion and growth be­yond their im­me­di­ate ge­o­graph­i­cal lo­ca­tions, to bet­ter tar­get a global au­di­ence.

Prior re­search on in­no­va­tion has shown that global teams span­ning across dif­fer­ent cul­tures have the po­ten­tial to be highly cre­ative be­cause of the di­verse view­points and per­spec­tives they bring to the ta­ble (Shirish et al. 2015). How­ever, though cul­tural dif­fer­ences amongst such team mem­bers can in­deed fos­ter high lev­els of cre­ativ­ity, such di­ver­sity can also de­ter the smooth flow of com­mu­ni­ca­tion across them. Re­cent re­ports from in­ter­na­tional agen­cies such as the Econ­o­mist In­tel­li­gence Unit (EIU) re­veal that more than 70% of in­ter­na­tional team projects fail due to seem­ingly un­sur­pass­able cul­tural dif­fer­ences among mem­bers.

A solid CQ can prove in­stru­men­tal in both fos­ter­ing and sal­vaging in­no­va­tion be­cause of the en­hanced un­der­stand­ing it pro­vides on how cul­ture can in­flu­ence the in­no­va­tion mech­a­nisms at play in dif­fer­ent parts of the world. It can also aid or­ga­ni­za­tions in de­sign­ing a holis­tic global in­no­va­tion strat­egy (Srivastava et al. 2013; Srivastava 2016) by help­ing them un­der­stand what po­ten­tial cus­tomers in a new mar­ket re­ally need to re­ceive from their ser­vices.

When it comes to get­ting a new in­no­va­tion off the ground, for or­ga­ni­za­tions op­er­at­ing in, or look­ing to set up within an emerg­ing econ­omy, price is of­ten the key de­ter­mi­nant for suc­cess or fail­ure. De­vel­op­ing economies with large pop­u­la­tions typ­i­cally face sig­nif­i­cant con­straints on re­sources when their com­pa­nies at­tempt to ex­pand their op­er­a­tions, mak­ing the prospect of in­no­va­tion seem out of reach for many. Un­til rel­a­tively re­cently, the in­flu­ence the rest of the de­vel­oped world held over the global busi­ness land­scape meant in­no­va­tion was viewed as a means for cre­at­ing new state-of-the-art prod­ucts and ser­vices—

In­dia of­fers a unique op­por­tu­nity to those from the West in un­der­stand­ing, ab­sorb­ing, and in­ter­nal­iz­ing the dy­nam­ics of th­ese dif­fer­ences be­cause of the vast cul­tural dis­tance that ex­ists.

some­thing which re­quired a level of ex­pen­di­ture that busi­nesses in such economies sim­ply could not match.

In re­sponse, in­no­va­tors in the de­vel­op­ing world be­gan look­ing for al­ter­na­tive routes to growth, de­vel­op­ing new prod­ucts and ser­vices at an af­ford­able price and with a qual­ity that could com­pete with bet­ter re­sourced global gi­ants (Srivastava and Shainesh 2015). Such fru­gal in­no­va­tions have, over time, en­joyed such suc­cess that the process has been adopted by larger firms in their ef­forts to pen­e­trate emerg­ing mar­kets.

A key ex­am­ple, cited by The Econ­o­mist in an ar­ti­cle ex­plor­ing fru­gal in­no­va­tion, con­cerns Gen­eral Elec­tric which, de­spite cre­at­ing cut­ting-edge in­ten­sive care tools and body scan­ners at its health­care cen­tre in Ben­galuru, counts a far sim­pler de­vice amongst its great­est in­no­va­tive suc­cesses. The Mac 400—a hand-held ECG de­vice— trans­formed what had pre­vi­ously been a bulky ma­chine into a small, light­weight tool with only the very nec­es­sary func­tion­al­ity. The smaller, much cheaper de­vice was widely adopted across In­dia as it sig­nif­i­cantly im­proved ac­cess to health­care and check-ups for a fi­nan­cially lim­ited pop­u­la­tion by re­duc­ing the cost of an ECG test to as lit­tle as $1.

Sim­i­larly, Tata Steel be­came the low­est cost pro­ducer of car­bon steel in the world by tak­ing the time to re­search lower cost, slightly lower qual­ity raw ma­te­ri­als for pro­duc­tion from In­dia, rather than sourc­ing more ex­pen­sive ma­te­ri­als over­seas, and used th­ese to man­u­fac­ture steel, which both met safety reg­u­la­tions and was af­ford­able to lo­cal de­vel­op­ers. The move en­abled them to ac­cess a wider mar­ket, as well as turn a profit and help to sup­port the lo­cal in­fra­struc­ture in more ways than one.

This non-lin­ear cul­ture of in­no­va­tion bet­ter con­nects the com­pany to the cus­tomer by tak­ing a back­wards ap­proach, first con­sid­er­ing the needs of the cus­tomers they aim to serve and work­ing from there. Of­ten, this process em­ploys in­tu­ition and emo­tion—senses de­vel­oped through a well-de­fined CQ. To do this, ex­ec­u­tives must be present on the ground, ex­pe­ri­enc­ing a busi­ness cul­ture first hand and gain­ing a per­spec­tive that tech­nol­ogy, for all its ad­vance­ments, sim­ply can­not pro­vide. Op­por­tu­ni­ties for global pro­fes­sion­als to leave the con­fines of their of­fices to get to grips with busi­ness at a grass­roots level, as the ex­ec­u­tives of ATOS have done through ex­ec­u­tive ed­u­ca­tion, should al­ways be em­braced.

As much as global or­ga­ni­za­tions can be looked to by smaller or­ga­ni­za­tions as a ro­bust case study for growth and suc­cess, such or­ga­ni­za­tions have, ar­guably, just as much to learn from the de­vel­op­ing world in order to tailor their man­age­ment and in­no­va­tion strate­gies to bet­ter fit the emerg­ing mar­kets of the fu­ture. Above all else, the abil­ity to com­mu­ni­cate and col­lab­o­rate will ul­ti­mately de­ter­mine busi­ness suc­cess or fail­ure. ■ Ref­er­ences * The Clute In­sti­tute The Im­pact Of Me­tacog­ni­tive, Cog­ni­tive And Mo­ti­va­tional Cul­tural In­tel­li­gence On Be­hav­ioral Cul­tural In­tel­li­gence (In­ter­na­tional Busi­ness & Eco­nomics Re­search Jour­nal –Third Quar­ter 2017 Vol­ume 16, Num­ber 3) Ang, S. and Van Dyne, L. (2008) Con­cep­tu­al­iza­tion of cul­tural in­tel­li­gence: def­i­ni­tion, dis­tinc­tive­ness, and nomo­log­i­cal net­work. In Hand­book of cul­tural in­tel­li­gence: The­ory, mea­sure­ment, and ap­pli­ca­tions (Sharpe ME, Ed.), (pp. 3–15). New York, New York: M. E. Sharpe. Ang, S., Van Dyne, L. and Koh, C. (2006) Per­son­al­ity cor­re­lates of the four-fac­tor model of cul­tural in­tel­li­gence. Group & Or­ga­ni­za­tion Man­age­ment 31(1), 100–123. Ear­ley PC and Ang S (2003). Cul­tural in­tel­li­gence: In­di­vid­ual in­ter­ac­tions across cul­tures. Palo Alto, Cal­i­for­nia: Stan­ford Univer­sity Press. Shirish, A., Boughzala, I., & Srivastava, S. C. (2015). Bridg­ing cul­tural dis­con­ti­nu­ities in global vir­tual teams: Role of cul­tural in­tel­li­gence. Pro­ceed­ings In­ter­na­tional Con­fer­ence on In­for­ma­tion Sys­tems, Dal­las. Srivastava, S.C., and Shainesh, G. (2015). Bridg­ing the Ser­vice Di­vide through Dig­i­tally En­abled Ser­vice In­no­va­tions: Ev­i­dence from In­dian Health­care Ser­vice Providers. MIS Quar­terly, 39(1): pp. 245-267. Srivastava, S. C., Mithas, S., & Jha, B. (2013). What is your global in­no­va­tion strat­egy?. IT Pro­fes­sional, 15(6), 2-6. Srivastava, S. C. (2015). In­no­vat­ing for the fu­ture: chart­ing the in­no­va­tion agenda for firms in de­vel­op­ing coun­tries, Jour­nal of In­dian Busi­ness Re­search, 7(4), pp.314-320. The Econ­o­mist, “First Break all the Rules”, pub­lished April 15, 2010: http://www.econ­o­mist.com/node/15879359

The abil­ity to com­mu­ni­cate and col­lab­o­rate will ul­ti­mately de­ter­mine busi­ness suc­cess or fail­ure.

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