Developing agile leaders
- 1. Developing culturally agile global business leaders Paula Caligiuri The current lack of culturally agile business leaders is affect- ing organizations’ global competitiveness and their plans for future strategic growth. This leadership challenge has become a serious concern for those in the executive suite of global firms: over 1,000 CEOs in more than 50 countries named ‘‘managing diverse cultures’’ as one of the top con- cerns threatening the competitive success of their organiza- tions. These CEOs stated the need for leaders who are able to effectively manage in complex global environments, who are able to negotiate cultural challenges and conflicts, and who understand seemingly conflicting regulatory requirements, unexpected costs, and diverse stakeholders in foreign coun- tries. To address these needs, Johnson & Johnson, IBM, Procter & Gamble, and other firms require their leaders to possess cultural agility, the ability to quickly, comfortably, and effectively work in different cultures and with people from different cultures. The organizations better able to develop and deploy culturally agile leaders will gain compe- titive advantages in the future. The most effective global leaders know that while there are times when cultural adaptation is needed, there are also times when cultural adaptability is inappropriate; when the best approach is to minimize the differences across cultures and maintain the organization’s standard. There are other times when creating an entirely new approach — one which represents no single culture completely — is a strategic necessity. The most effective culturally agile leaders choose from these possible responses, knowing when to adapt to a cultural norm, when to minimize or persuasively override a cultural norm, and when to integrate multiple cultural norms. They leverage each of these three, when needed and when appropriate. Exhibit 1 presents the definitions and the sample tasks that tend to require these various beha- vioral responses of culturally agile leaders. DIMENSIONS OF CULTURAL AGILITY AND GLOBAL LEADERSHIP TASKS Ina studyI conductedwith IbraizTarique,wefound thatamong over two hundred global leaders from more than forty coun- tries, those global leaders who possessed the greater number ofavailableculturalresponses earnedhigherratingsfromtheir supervisors on their ability to effectively work with colleagues from different cultures. Effective global leaders are able to competently execute all three of possible responses: cultural adaptation, cultural minimization, and cultural integration. In other words, successful global leaders such as Carlos Ghosn (CEO of Nissan and Renault) and Liu Chuanzhi (former CEO of Legend Holdings Ltd., the parent company of Lenovo) appear to have multiple tools in their proverbial leadership toolboxes to address cultural differences. Let’s consider each of the three dimensions concurrently and times when they are stra- tegically advantageous for leaders. Cultural Adaptation and the Other Dimensions When responding with cultural adaptation, leader will adjust their behaviors to the expected norm of the cultural context. Leaders in sales, marketing, and customer service may require a more refined level of cultural adaptation than leaders in manufacturing or R&D to accurately understand clients’ tastes and preferences, develop client relationships, gain trust, appear credible, and meet expectations for ser- vice. In this context, researcher Chanthika Pornpitakpan found that in the sales scenarios when the American sales representatives adapted their behaviors to be more consis- tent with the expected cultural norms of their Japanese and Thai clients, they were perceived more favorably and had Organizational Dynamics (2013) 42, 175—182 Available online at www.sciencedirect.com journal homepage: www.elsevier.com/locate/orgdyn 0090-2616/$ — see front matter # 2013 Elsevier Inc. All rights reserved. http://dx.doi.org/10.1016/j.orgdyn.2013.06.002
- 2. better anticipated outcomes (such as being granted a con- tract or being considered for future sales) when behaviors were adapted to fit the norms of the culture. In the case of client development, adaptation was critical. For almost all global leaders, even those not in the func- tional areas of sales, marketing, public relations, or govern- ment relations (the functional areas with the greatest number of tasks requiring adaptation), there will likely be some component of their role requiring them to operate with cultural adaptation, comporting their behavioral responses to behave, as expected, in the given cultural context. This may happen, most generally, when leaders need to motivate, persuade, gain trust, instill confidence, and influence sub- ordinates at the local level. As leaders move away from headquarters and regional headquarters to local subsidiaries (e.g., manufacturing plants), they should consider how their behaviors appear in the eyes of those they lead. To do so, global leaders need to fully understand the cross-cultural differences and how to change their behaviors to be most effective in the given context. Cultural Minimization and the Other Dimensions At the other extreme of cultural responses is cultural mini- mization. When using this response, leaders aim to control any cultural differences to create consistency and limit variation from a desired norm. The clearest example of the need for cultural minimization is in the case of global operations. Many of the leadership tasks in production facil- ities need this response to maintain quality, safety, and efficiency standards while, concurrently reducing waste, time, inventory, and injury. Any cultural differences inherent in the behavioral index of, say, for example, safety or quality, would need to be minimized though effective leadership. This cultural response can rarely happen in isolation. The way in which leaders behave to motivate workers to hold these standardization goals should be adapted to the local culture. Many articles and books have been written on the cross-national differences in expected norms for leaders (and, by extension, followers). For example, comparing the predictors of productivity in the United Kingdom and China, Giles Hirst and his colleagues found that production workers from the United Kingdom felt less stress when their leaders gave them greater autonomy. The effect on the Chinese production workers, preferring more directive lea- dership, was the opposite. They experienced greater stress levels with the increased autonomy. When examining the cultural responses of manufacturing and operations global leaders, the leaders with a greater number of cultural responses, including higher levels of cultural adaptation and cultural integration, were rated as more effective by their supervisors on their ability to super- vise people from different countries. In the case of these manufacturing and operations global leaders, minimizing the Dimension of Cultural Agility: Behavioral response for the given dimension cultural agility: Sample leadership tasks in which the given behavioral response is often needed: Cultural Adaptation The leader will adapt to the cultural differences in the environment and adjust to the expected norm in each culture. Selling or marketing products and services Motivating and persuading subordinates from different cultures Building credibility and trust with colleagues and clients Working with host national government and regulatory agencies Cultural Minimization The leader will try to control any cultural differences that exist in order to create consistency and limit variation around the world and across cultures. Maintaining codes of conduct and ethical standards set by the organization Upholding organizational values Upholding regulatory and quality standards for production Cultural Integration The leader will collaborate across cultures in order to create a new approach, solution, practice, etc. acceptable to all cultures affected. Leading multicultural and geographically distributed teams Encouraging innovation and creative ideas from colleagues cultures Leading a international joint venture when integration of policies, practices, organizational values is a strategic imperative Integrating post merger or acquisition when motivating and retaining acquired staff from the other cultural context is critical . . . . . . . . . . . Exhibit 1 The behavioral responses of culturally agile leaders. 176 P. Caligiuri
- 3. goals was necessary but not sufficient for success. The opera- tions managers needed to adapt or integrate, the way they communicated and motivated their employees. For almost all global leaders, there will be some compo- nent of their role requiring them to operate with cultural minimization, working to control or override any cultural differences and to ensure consistency in the outcome in areas such as maintain safety standards, codes of conduct, quality standards, fiscal controls, corporate values, and codes of ethics. To accomplish this, global leaders need to fully under- stand the cross-cultural differences which might impede the creation of the standard and leverage their cross-cultural competencies to ensure the standard is obtained. At the same time, global leaders need to understand the cultural differences which affect a desired business outcome and also understand what to do with that knowledge to successfully influence others’ behavior. In a research study, Ping Ping Fu and fourteen colleagues from many countries examined the cross-national differences in the effectiveness of various influence strategies. Their study found that cul- tural differences affected the way in which influence tactics are perceived. People who held the cultural belief that the course of life is predetermined by fate and destiny found that being assertive and coercive to be an effective influence strategy. Those in the study who lived in more collectivist societies responded well to positive social relationships as the source of influence. Assertiveness and coercion were found to be less effective strategies. Global leaders need both cultural understanding and cross-cultural competencies to execute a repertoire of possible responses. Cultural Integration and the Other Dimensions The challenge for global leaders’ is even more nuanced in circumstances when they are working with those from more than one other culture and the situation requires that they operate with cultural integration. Global project or R&D teams in some of the world’s most innovative organizations, such as 3 M and CSL, often have high-skilled professionals from many cultures working together. The team leaders will collaborate with their subordinates and colleagues with diverse cultural lenses in order to create a new approach which would be deemed acceptable (or equally unaccepta- ble) to those affected. When leading global teams, whether geographically-distributed or co-located, a leader’s cultural integration is critical. They need to understand when to impose a standard team practice and when to take the time to create the approach that works across cultures but does not reflect any one culture specifically. In their research, P. Christopher Early and Elaine Mosa- kowski highlighted the need for cultural integration in het- erogeneous or culturally diverse teams. They found that, over time, teams functioned best when they had created a hybrid team culture which included their own team norms for interactions, communications, and goal setting. This seminal research provides solid advice for global leaders using cul- tural integration to encourage their teams to foster their own rules for ‘‘interpersonal and task-related interactions, crea- tion of high team performance expectations, effective com- munication and conflict management styles, and the development of a common identity.’’ Using all three cultural responses, team leaders will need to identify those non- negotiable elements of the team’s work (e.g., performance standards and deadlines) and determine the best way to ensure those standards are met. HOW TO DEVELOP CULTURAL AGILITY IN GLOBAL BUSINESS LEADERS These three cultural responses — cultural minimization, cul- tural adaptation, and cultural integration — are critical for global leadership success. Unfortunately, research suggests that less than fifteen percent of the leaders had orientations toward all three. Starting from a low base rate, it is also important to recognize that having these possible responses available is not enough. Successful global leaders need to not justhavethethreeculturalresponsesavailable;theyalsoneed to activate them appropriately when needed. To do this, leaders need to possess certain cross-cultural competencies that enable them to build their cultural understanding and repertoire of responses across a variety of situations. Cross- cultural competencies and, thus, cultural agility, can be devel- oped; however the conditions for development to occur need to be fully understood and implemented in practice. In a speech at General Electric in 1997, Jack Welch said ‘‘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 the training that will allow them to be the global leaders who will make GE flourish in the future.’’ The proclamation offers both the truth and the myth of global leadership development. While there is both wisdom and truth that significant international experiences can be developmental, it is a myth that anyone who spends time in another country will gain the necessary competencies to be a global business leader. A recent survey of Chief Human Resources Officers (CHROs) found ‘‘developing future leaders’’ to be the most critical deliverable of the HR function to help their organiza- tions compete globally. This same deliverable, however, is also high on another list; named as one of their function’s least effective capabilities. Three erroneous assumptions are at the collective root of the problem for the current state of global leadership development: (1) the assumption that any- one can develop cross-cultural competencies, (2) the assumption that all international experience is developmen- tal, and (3) the assumption that all organizations’ climates of global firms support the development of cultural agility. Each one of these erroneous assumptions negatively affects the speed and effectiveness of global leadership development. By understanding these assumptions in the context of how cross-cultural competencies are developed, practices can be better designed to increase the level of cultural agility among global business leaders and the speed in which this critical mega-competency is developed. The understanding of how cultural agility is developed is rooted in research suggesting the right people, when given the right developmental opportunities, and supported by the right organizational climate are the ones most likely to develop cross-cultural competencies, the foundation of cul- tural agility. Like other competencies, people vary in their Developing culturally agile global business leaders 177
- 4. level of proficiency depending on a combination of their natural characteristics. This suggests that better managerial selection is needed for global leadership development. At the same time, cultural agility is a skill, that is, a practiced act, suggesting that well designed developmental experiential opportunities are critical for global leadership development. Lastly, the organizational climate in which development will occur is also important. All three (summar- ized in Exhibit 2) managerial selection, experiential oppor- tunities and organizational climate — are discussed in the subsequent sections. Managerial Selection and the Development of Cultural Agility Cross-cultural competencies (and all competencies for that matter) are composed of knowledge, skills, abilities, and other personality characteristics which enable a leader to successfully perform a given job or task. We have found that successful global leaders share cross-cultural competencies such as tolerance of ambiguity, cultural flexibility, and low ethnocentrism. Leaders with these competencies are given higher ratings on their global leadership tasks (e.g., nego- tiating with people from other cultures and supervising people from other cultures) than those scoring low on these competencies. Within cross-cultural competencies, we also found that a large portion of each competency is composed of personality characteristics. For example, low ethnocentrism was related to higher emotional strength, higher openness, and extra- version — all personality characteristics. This is an important finding because personality characteristics are relatively fixed, predisposing individuals to behave somewhat predic- tably across situations. Personality characteristics are more immutable, less likely to change over time and tenure in the organization. This is important because it suggests that managers are not going to be able to change and gain competencies as a function of (even the best) of their developmental cross-cultural experiences. This finding makes selection and assessment for these characteristics critical at the time employees enter the organization, rather than hope they will ‘‘re-wire’’ once they move into the organization’s leadership ranks. Three personality traits are particularly relevant for developing global leaders: openness, extroversion and emo- tional stability. Leaders with higher levels of these person- ality characteristics are more likely to interact with others from different cultures, seek novel cross-cultural experi- ences, and act with resilience in ambiguous situation often encountered when working internationally. In the context of global leadership development, we should think about per- sonality characteristics in two ways: (1) these characteristics directly influence leaders’ ability to perform well in different Development of Global Leaders' Cultural Agility Organizational Culture and Climate that supports the development of cultural agility Experiential Opportunities that offer significant, peer-level contact with colleagues from different cultures. Managerial Selection to fill a pipeline of future leaders with traits necessary to readily develop cultural agility Exhibit 2 Factors affecting the development of global leaders’ cultural agility. 178 P. Caligiuri
- 5. cultures and with people from different cultures and (2) these characteristics are accelerators for the acquisition of cross-cultural competencies, enabling leaders to make faster developmental gains through well-designed experiential opportunities such as international assignments, global teams, and cross-cultural mentoring. In research parlance, personality has both a direct and moderating effect on global leadership success. Let’s consider these three personality characteristics a bit more closely. Global leaders who have a higher level of extraversion are comfortable in social settings, seek to form interpersonal relationships with colleagues from different cultures and, as a result, tend to be more likely to effectively learn the social culture when operating in different cultural contexts. Leaders who have a higher level of openness are receptive to experiencing new and different ways of doing things. Global leaders with higher levels of openness will actively seek novel intercultural experiences that, in turn, have the propensity to increase their cross-cultural compe- tencies. They also feel more comfortable with the ambiguity inherent in cross-cultural situations. Likewise, emotional stability is another personality characteristic related to global leadership development because the train increases leaders’ psychological comfort working internationally and with people from different cultures. Three are a variety of ways these characteristics can be assessed such as, validated tests, structured interviews and assessment centers. Experiential Opportunities and the Development of Cultural Agility Business leaders with international experience, whether as expatriates or frequent business travelers, have not, neces- sarily gained cultural agility. Global leadership development systems often have this erroneous assumption embedded in their succession plans: managers with greater levels of cross- cultural experience have ‘‘earned the badge’’ (so to speak) and are considered global leaders because they completed an international assignment or worked in a role requiring sig- nificant international travel. Our research has found this is not necessarily true. Merely labeling an assignment or role ‘‘developmental’’ in a succession plan does not make it truly developmental. However, international and cross-cultural experiences can be highly developmental when structured well with an understanding of how cultural agility is gained. The way in which cross-cultural competencies are devel- oped is known. Developmental cross-cultural experiences should have, at minimum, three key features: (1) meaningful peer-level collaborations with colleagues from different cul- tures, (2) opportunities to stretch one’s knowledge, skills and abilities in different cultures, and (3) opportunities to receive feedback on one’s performance in a cross-cultural context. Let’s consider each. The first feature suggests that meaningful peer-level interaction or contact with people from a different cultural group will create more positive attitudes toward people from that culture. For developmental gains to occur, positive affect toward people from different cultures is critical. Thus, it is important for leaders and future leaders to have mean- ingful, peer-level interactions with people from a different culture or cultures. These meaningful interactions allow peers to work collaboratively toward a common goal in an environment that supports their collaborative success. Inter- national assignees with greater levels of meaningful contact with host nationals had the greatest level of adjustment to their host country and the better potential for developmen- tal gains from the experience. The second feature of developmental experiences — that leaders and future leaders be given an opportunity to prac- tice culturally-appropriate behaviors in a different cultural context — warrants elaboration. The traditional corporate settings and expatriate communities do not, necessarily, provide rich developmental experiences. Oftentimes they are so inherently similar to one’s own culture that a beha- vioral stretch does not occur. In addition, developmental experiences should give leaders the opportunity to question and test the limits of their knowledge and assumptions and learn the extent to which they are culture-bound. In situa- tions similar to one’s own culture, this limit is not tested because the cultures of the expatriate community or regional corporate headquarters might be familiar to one’s home culture. The third feature of truly developmental experiences is that leaders should receive feedback on their performance in cross-cultural situations. To use a leadership example, cul- tures differ in terms of how directive, approachable, and paternalistic leaders should be to earn the respect of their subordinates. It would be helpful for new global leaders to understand how their leadership behaviors are being inter- preted through the cultural lens of their subordinates, espe- cially when cultural adaptation is needed in order to be effective. Global leaders from organizations such as Merck and Medtronic credit the feedback received during interna- tional experiences as instrumental in helping build their repertoire of responses in cross-cultural situations. These features pose an inherent dilemma for some global leadership development activities: Is it is difficult for more senior leaders to develop because they are less likely to have access to peers (there are fewer peer-level individuals across cultures) and those who will give them honest feedback about their performance. The latter is particularly true in cultures higher in the cultural dimension of power distance (e.g., Japan, Mexico, China), where people tend to show great deference to those in leadership roles. One approach to leadership development is to have high-contact experiences occur earlier in one’s career, when critical feedback is more likely to be offered and when peers are more readily available. For international and cross-cultural experiences to be truly developmental from the perspective of building cross-cultural competencies and, in turn, cultural agility, they need to satisfy these three aforementioned conditions. Any given experience can be assessed for these qualities, such as in the example of a developmental international assignment in Exhibit 3. Also to increase the rate and effec- tiveness of global leadership development opportunities, the measurement and reward of actual cross-cultural competen- cies gained should be used. Organizational Culture and Climate and the Development of Cultural Agility The previous section suggests that better selection (the right person) and leadership development experiences (the right Developing culturally agile global business leaders 179
- 6. Developmental Cross-Cultural Experience Will this leader have opportunities to collaborate and have meaningful contact with peer- level host nationals? Will this leader receive training and feedback on culturally - appropriate behaviors? Will this leader be working in an environment where the cultural limits of his or her knowledge, skills, and abilities will be tested? Exhibit 3 Example of how to evaluate the developmental qualities of a cross-cultural experience. Dimension of Cultural Agility Climate Sample Item Work Unit People in my work unit cooperate well with teams located in other countries. Immediate Supervisor My immediate manager is open to diverse ways of thinking and behaving. Senior Leaders Senior leaders have clearly articulated the importance of global growth for the long- term success of the organization. Global Work Facilitation I have the tools that I need to communicate effectively with work colleagues located in other countries. Global Competitiveness This organization is making the changes necessary to compete effectively in a global economy. Exhibit 4 The dimensions of the cultural agility climate. 180 P. Caligiuri
- 7. opportunity) would, collectively, increase the cultural agility of global leaders. These practices, however, cannot happen in a vacuum from the organization’s culture and climate. Leading global companies are instilling cultural agility into their organizational climates by reinforcing its importance through leaders, supervisors, and within work units. These organizations are highlighting the importance of global com- petitiveness for the future success of their organizations and demonstrating commitment by investing in ways to facilitate collaboration with colleagues around the world. They know that cultural agility climate is critical to attract, retain and motivate their most culturally-competent employees. In a global study of over 1,200 professionals designed to examine the five dimensions of their organizations’ cul- tural agility climate (see Exhibit 4). Given that people affect the creation of the cultural agility organizational climate, the first three dimensions of climate that we examined are people-related: work unit colleagues, direct supervisors, and organization leaders. The fourth dimen- sion of the cultural agility organizational climate is the organization’s effectiveness in providing the necessary tools and training to facilitate global work. The fifth dimension is the organization’s overall global competitive- ness, whether the company is perceived by employees to be successful globally. Our results suggest that senior leaders are the most important dimension when promoting a climate of cultural agility. Specifically, we found that employees need to (1) have confidence in their senior leaders’ abilities to lead globally, (2) perceive that their leaders are open to diverse ways of thinking and behaving, and (3) perceive their leaders to demonstrate the importance of globalization. When we consider this finding in the context of global leadership development, we have a ‘‘chicken and the egg’’ problem: culturally agile leaders will positively affect the organizational climate that will foster global leadership development. Organizations need to start from their own reality. If they have a strong cultural agility climate, their leadership development practices should thrive. If they do not, focusing on the organizational climate concurrently with the global leadership development practices is war- ranted. CONCLUSION Developing global leaders requires a full integration across a variety of practices within the organization, especially for the human resource management function. At the start of the employment lifecycle, it is important to recruit those future leaders who more likely to become culturally agile. Once in the organization, the leadership development practices should include well-crafted cross-cultural experiences, including international assignments, global project team- work, and cross-cultural coaching. At the organizational level, it is important to foster the firm’s climate for cultural agility which would include making an honest assessment of those in senior leadership roles and measuring the other dimensions of the climate to make positive changes where needed. These practices, however critical, cannot happen in isolation, but they can be successfully integrated into orga- nizations’ strategic and global growth initiatives. It is worth the investment of time and money to get these practices right because they are critical for an organization to compete globally and win the future. Developing culturally agile global business leaders 181
- 8. Selected bibliography This article expands on the research included in my book Cultural Agility: Building a Pipeline of Successful Global Professionals (San Francisco, CA: Jossey-Bass, 2012). This book delves into the specific practices necessary for organi- zations to build cultural agility and cross-cultural competen- cies in their current and future global leaders. For readers interested in a comprehensive overview of the global leadership research, see Mark E. Mendenhall, Joyce Osland, Allan Bird, Gary R. Oddou, Martha L. Maznevski, Michael Stevens, and Günter K. Stahl, Global Leadership: Research, Practice, and Development (New York, NY: Rou- tledge, 2013); and Joyce Osland, Ming Li, and Ying Wang, Advances in Global Leadership (Bingley, UK: Emerald, expected 2014). These edited volumes highlight the key findings affecting both the science and practice of global leadership development. To read more about the personality and experiential factors which influence the development of dynamic cross- cultural competencies, see Sharon Leiba-O’Sullivan’s, ‘‘The Distinction Between Stable and Dynamic Cross-cul- tural Competencies: Implications for Expatriate Trainabil- ity’’, Journal of International Business Studies, 1999, 30, 709—725; and Paula Caligiuri and Ibraiz Tarique’s, ‘‘Dynamic Cross-cultural Competencies and Global Leader- ship Effectiveness’’, Journal of World Business, 2012, 47, 612—622. For more information about the dimensions of the orga- nizational climate for cultural agility you can download the Cultural Agility Organizational Climate: 2013 Global Bench- marking Study from http://www.culturalagility.com/ research. Paula Caligiuri is the D’Amore-McKim Distinguished Professor of International Business and Strategy at Northeast- ern University, Boston, MA 02115, USA where she researches and teaches in the area cultural agility and global leadership development. She works extensively with leading organizations across a wide range of industries, including private sector, military, and non-profit organizations. She has written several articles and books including, Cultural Agility: Building a Pipeline of Successful Global Professionals (2012). She is the current HR Area Editor for the Journal of International Business Studies, is a research fellow with the E&Y Institute for Emerging Market Studies and is a frequent expert guest on CNN and CNN International covering career and management-related topics. She holds a Ph.D. from Penn State University in industrial and organizational psychology (email: pcaligiuri@gmail.com). 182 P. Caligiuri