As the world's economy continues to globalize, it has become increasingly common for business people to deal with colleagues, customers, suppliers, or partners that do not share the same cultural backgrounds. While it brings further richness to life, such cultural diversity also creates potential obstacles for people to effectively work together. That's why cultural competencies have become one of the indispensible qualities of global leader, said IESE Business School Prof. Lee in meetings with senior executives in Manila recently.
Creativity comes from diversity, but diversity is not easy to manage. Research shows that the greater international experience of a CEO, the higher the international performance of a company, said Prof. Lee.
Yet in the United States, 70 percent of expatriates are sent overseas without any type of training. Of these, 16 percent return home even before starting work, as a result of a lack of cross cultural training, translating to a loss of US$2B each year.
Expounding on the concept of culture as the "collective programming of the mind which distinguishes the members of one group or category of people from another," Prof. Lee explained that everyone makes decisions based within a certain cultural framework through which they see the world. Leaders lead and interact in specific contexts. Problems arise when these differences are unknown or unimagined by those coming from a different world, or not knowing how to manage these differences so as to leverage diversity into valuable assets, he said.
In cross-cultural contexts, Lee urged managers to take three "R" steps: recognize the difference; respect the difference; and reconcile the difference. It is important that cultural differences are seen in neutral terms, holding back any judgment and regulating emotions, he stressed, adding, "yes, to see is to believe, but also ask yourself how reliable are your eyes?"
To conclude, a framework for developing cultural competencies at the individual, team, and organizational levels was presented, citing the differences in the dimensions of time, power, high (inexplicit) or low (explicit) contexts, universalism vs. particularism and individualism vs. collectivism.
During his 3-day visit in Manila, Prof. Lee met with companies in manufacturing, business process outsourcing and water services sectors, among others, who are seeking to expand internationally.
