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Cultural Intelligence

You see them at international airports like Heathrow: posters advertising the global bank HSBC

that show a grasshopper and the message “USA—Pest. China—Pet. Northern Thailand—

Appetizer.”

Taxonomists pinned down the scientific definition of the family Acrididae more than two

centuries ago. But culture is so powerful it can affect how even a lowly insect is perceived. So it

should come as no surprise that the human actions, gestures, and speech patterns a person

encounters in a foreign business setting are subject to an even wider range of interpretations,

including ones that can make misunderstandings likely and cooperation impossible. But

occasionally an outsider has a seemingly natural ability to interpret someone’s unfamiliar and

ambiguous gestures in just the way that person’s compatriots and colleagues would, even to

mirror them. We call that cultural intelligence or CQ. In a world where crossing boundaries is

routine, CQ becomes a vitally important aptitude and skill, and not just for international bankers

and borrowers.

Cultural intelligence: an outsider’s seemingly natural ability to interpret someone’s unfamiliar

and ambiguous gestures the way that person’s compatriots would.

Companies, too, have cultures, often very distinctive; anyone who joins a new company spends

the first few weeks deciphering its cultural code. Within any large company there are sparring

subcultures as well: The sales force can’t talk to the engineers, and the PR people lose patience

with the lawyers. Departments, divisions, professions, geographical regions—each has a

constellation of manners, meanings, histories, and values that will confuse the interloper and

cause him or her to stumble. Unless, that is, he or she has a high CQ.

Cultural intelligence is related to emotional intelligence, but it picks up where emotional

intelligence leaves off. A person with high emotional intelligence grasps what makes us human

and at the same time what makes each of us different from one another. A person with high

cultural intelligence can somehow tease out of 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 this group, and those

that are neither universal nor idiosyncratic. The vast realm that lies between those two poles is

culture.

An American expatriate manager we know had his cultural intelligence tested while serving on a

design team that included two German engineers. As other team members floated their ideas, the

engineers condemned them repeatedly as stunted or immature or worse. The manager concluded

that Germans in general are rude and aggressive.

A modicum of cultural intelligence would have helped the American realize he was mistakenly

equating the merit of an idea with the merit of the person presenting it and that the Germans were

able to make a sharp distinction between the two. A manager with even subtler powers of

discernment might have tried to determine how much of the two Germans’ behavior was

arguably German and how much was explained by the fact that they were engineers.

An expatriate manager who was merely emotionally intelligent would probably have empathized

with the team members whose ideas were being criticized, modulated his or her spontaneous

reaction to the engineers’ conduct, and proposed a new style of discussion that preserved candor

but spared feelings, if indeed anyone’s feelings had been hurt. But without being able to tell how

much of the engineers’ behavior was idiosyncratic and how much was culturally determined, he

or she would not have known how to influence their actions or how easy it would be to do that.

One critical element that cultural intelligence and emotional intelligence do share is, in

psychologist Daniel Goleman’s words, “a propensity to suspend judgment—to think before

acting.” For someone richly endowed with CQ, the suspension might take hours or days, while

someone with low CQ might have to take weeks or months. In either case, it involves using your

senses to register all the ways that the personalities interacting in front of you are different from

those in your home culture yet similar to one another. Only when conduct you have actually

observed begins to settle into patterns can you safely begin to anticipate how these people will

react in the next situation. The inferences you draw in this manner will be free of the hazards of

stereotyping.

The people who are socially the most successful among their peers often have the greatest

difficulty making sense of, and then being accepted by, cultural strangers. Those who fully

embody the habits and norms of their native culture may be the most alien when they enter a

culture not their own. Sometimes, people who are somewhat detached from their own culture can

more easily adopt the mores and even the body language of an unfamiliar host. They’re used to

being observers and making a conscious effort to fit in.

People who are somewhat detached from their own culture can more easily adopt the mores and

even the body language of an unfamiliar host.

Although some aspects of cultural intelligence are innate, anyone reasonably alert, motivated,

and poised can attain an acceptable level of cultural intelligence, as we have learned from

surveying 2,000 managers in 60 countries and training many others. Given the number of cross-

functional assignments, job transfers, new employers, and distant postings most corporate

managers are likely to experience in the course of a career, low CQ can turn out to be an inherent

disadvantage.

The Three Sources of Cultural Intelligence

Can it really be that some managers are socially intelligent in their own settings but ineffective in

culturally novel ones? The experience of Peter, a sales manager at a California medical devices

group acquired by Eli Lilly Pharmaceuticals, is not unusual. At the devices company, the

atmosphere had been mercenary and competitive; the best-performing employees could make as

much in performance bonuses as in salary. Senior managers hounded unproductive salespeople

to perform better.

At Lilly’s Indianapolis headquarters, to which Peter was transferred, the sales staff received

bonuses that accounted for only a small percentage of total compensation. Furthermore, criticism

was restrained and confrontation kept to a minimum. To motivate people, Lilly management

encouraged them. Peter commented, “Back in L.A., I knew how to handle myself and how to

manage my sales team. I’d push them and confront them if they weren’t performing, and they’d

respond. If you look at my evaluations, you’ll see that I was very successful and people respected

me. Here in Indianapolis, they don’t like my style, and they seem to avoid the challenges that I

put to them. I just can’t seem to get things done as well here as I did in California.”

Peter’s problem was threefold. First, he didn’t comprehend how much the landscape had

changed. Second, he was unable to make his behavior consistent with that of everyone around

him. And third, when he recognized that the arrangement wasn’t working, he became

disheartened.

Peter’s three difficulties correspond to the three components of cultural intelligence: the

cognitive; the physical; and the emotional/motivational. Cultural intelligence resides in the body

and the heart, as well as the head. Although most managers are not equally strong in all three

areas, each faculty is seriously hampered without the other two.

Head.

Rote learning about the beliefs, customs, and taboos of foreign cultures, the approach corporate

training programs tend to favor, will never prepare a person for every situation that arises, nor

will it prevent terrible gaffes. However, inquiring about the meaning of some custom will often

prove unavailing because natives may be reticent about explaining themselves to strangers, or

they may have little practice looking at their own culture analytically.

Instead, a newcomer needs to devise what we call learning strategies. Although most people find

it difficult to discover a point of entry into alien cultures, whose very coherence can make them

seem like separate, parallel worlds, an individual with high cognitive CQ notices clues to a

culture’s shared understandings. These can appear in any form and any context but somehow

indicate a line of interpretation worth pursuing.

An Irish manager at an international advertising firm was working with a new client, a German

construction and engineering company. Devin’s experience with executives in the German retail

clothing industry was that they were reasonably flexible about deadlines and receptive to highly

imaginative proposals for an advertising campaign. He had also worked with executives of a

British construction and engineering company, whom he found to be strict about deadlines and

intent on a media campaign that stressed the firm’s technical expertise and the cost savings it

offered.

Devin was unsure how to proceed. Should he assume that the German construction company

would take after the German clothing retailer or, instead, the British construction company? He

resolved to observe the new client’s representative closely and draw general conclusions about

the firm and its culture from his behavior, just as he had done in the other two cases.

Unfortunately, the client sent a new representative to every meeting. Many came from different

business units and had grown up in different countries. Instead of equating the first

representative’s behavior with the client’s corporate culture, Devin looked for consistencies in

the various individuals’ traits. Eventually he determined that they were all punctual, deadline-

oriented, and tolerant of unconventional advertising messages. From that, he was able to infer

much about the character of their employer.

Body.

You will not disarm your foreign hosts, guests, or colleagues simply by showing you understand

their culture; your actions and demeanor must prove that you have already to some extent

entered their world. Whether it’s the way you shake hands or order a coffee, evidence of an

ability to mirror the customs and gestures of the people around you will prove that you esteem

them well enough to want to be like them. By adopting people’s habits and mannerisms, you

eventually come to understand in the most elemental way what it is like to be them. They, in

turn, become more trusting and open. University of Michigan professor Jeffrey Sanchez-Burks’s

research on cultural barriers in business found that job candidates who adopted some of the

mannerisms of recruiters with cultural backgrounds different from their own were more likely to

be made an offer.

You will not disarm your foreign hosts simply by showing you understand their culture; your

actions must prove that you have entered their world.

This won’t happen if a person suffers from a deep-seated reservation about the called-for

behavior or lacks the physical poise to pull it off. Henri, a French manager at Aegis, a media

corporation, followed the national custom of greeting his female clients with a hug and a kiss on

both cheeks. Although Melanie, a British aerospace manager, understood that in France such

familiarity was de rigueur in a professional setting, she couldn’t suppress her discomfort when it

happened to her, and she recoiled. Inability to receive and reciprocate gestures that are culturally

characteristic reflects a low level of cultural intelligence’s physical component.

In another instance, a Hispanic community leader in Los Angeles and an Anglo-American

businessman fell into conversation at a charity event. As the former moved closer, the latter

backed away. It took nearly 30 minutes of waltzing around the room for the community leader to

realize that “Anglos” were not comfortable standing in such close physical proximity.

Heart.

Adapting to a new culture involves overcoming obstacles and setbacks. People can do that only

if they believe in their own efficacy. If they persevered in the face of challenging situations in the

past, their confidence grew. Confidence is always rooted in mastery of a particular task or set of

circumstances.

A person who doesn’t believe herself capable of understanding people from unfamiliar cultures

will often give up after her efforts meet with hostility or incomprehension. By contrast, a person

with high motivation will, upon confronting obstacles, setbacks, or even failure, reengage with

greater vigor. To stay motivated, highly efficacious people do not depend on obtaining rewards,

which may be unconventional or long delayed.

Hyong Moon had experience leading racially mixed teams of designers at GM, but when he

headed up a product design and development team that included representatives from the sales,

production, marketing, R&D, engineering, and finance departments, things did not go smoothly.

The sales manager, for example, objected to the safety engineer’s attempt to add features such as

side-impact air bags because they would boost the car’s price excessively. The conflict became

so intense and so public that a senior manager had to intervene. Although many managers would

have felt chastened after that, Moon struggled even harder to gain control, which he eventually

did by convincing the sales manager that the air bags could make the car more marketable.

Although he had no experience with cross-functional teams, his successes with single-function

teams had given him the confidence to persevere. He commented, “I’d seen these types of

disagreements in other teams, and I’d been able to help team members overcome their

differences, so I knew I could do it again.”

How Head, Body, and Heart Work Together

At the end of 1997, U.S.-based Merrill Lynch acquired UK-based Mercury Asset Management.

At the time of the merger, Mercury was a decorous, understated, hierarchical company known

for doing business in the manner of an earlier generation. Merrill, by contrast, was informal, fast-

paced, aggressive, and entrepreneurial. Both companies had employees of many nationalities.

Visiting Mercury about six months after the merger announcement, we were greeted by Chris, a

Mercury personnel manager dressed in khakis and a knit shirt. Surprised by the deviation from

his usual uniform of gray or navy pinstripes, we asked him what had happened. He told us that

Merrill had instituted casual Fridays in its own offices and then extended the policy on a

volunteer basis to its UK sites.

Chris understood the policy as Merrill’s attempt to reduce hierarchical distinctions both within

and between the companies. The intention, he thought, was to draw the two enterprises closer

together. Chris also identified a liking for casual dress as probably an American cultural trait.

Not all Mercury managers were receptive to the change, however. Some went along with casual

Fridays for a few weeks, then gave up. Others never doffed their more formal attire, viewing the

new policy as a victory of carelessness over prudence and an attempt by Merrill to impose its

identity on Mercury, whose professional dignity would suffer as a result. In short, the Mercury

resisters did not understand the impulse behind the change (head); they could not bring

themselves to alter their appearance (body); and they had been in the Mercury environment for

so long that they lacked the motivation (heart) to see the experiment through. To put it even more

simply, they dreaded being mistaken for Merrill executives.

How would you behave in a similar situation? The exhibit “Diagnosing Your Cultural

Intelligence” allows you to assess the three facets of your own cultural intelligence and learn

where your relative strengths and weaknesses lie. Attaining a high absolute score is not the

objective.

Diagnosing Your Cultural Intelligence

Cultural Intelligence Profiles

Most managers fit at least one of the following six profiles. By answering the questions in the

exhibit, you can decide which one describes you best.

The provincial can be quite effective when working with people of similar background but runs

into trouble when venturing farther afield. A young engineer at Chevrolet’s truck division

received positive evaluations of his technical abilities as well as his interpersonal skills. Soon he

was asked to lead a team at Saturn, an autonomous division of GM. He was not able to adjust to

Saturn’s highly participative approach to teamwork—he mistakenly assumed it would be as

orderly and deferential as Chevy’s. Eventually, he was sent back to Chevy’s truck division.

The analyst methodically deciphers a foreign culture’s rules and expectations by resorting to a

variety of elaborate learning strategies. The most common form of analyst realizes pretty quickly

he is in alien territory but then ascertains, usually in stages, the nature of the patterns at work and

how he should interact with them. Deirdre, for example, works as a broadcast director for a

London-based company. Her principal responsibility is negotiating contracts with broadcast

media owners. In June 2002, her company decided that all units should adopt a single negotiating

strategy, and it was Deirdre’s job to make sure this happened. Instead of forcing a showdown

with the managers who resisted, she held one-on-one meetings in which she probed their reasons

for resisting, got them together to share ideas, and revised the negotiating strategy to incorporate

approaches they had found successful. The revised strategy was more culturally flexible than the

original proposal—and the managers chose to cooperate.

The natural relies entirely on his intuition rather than on a systematic learning style. He is rarely

steered wrong by first impressions. Donald, a brand manager for Unilever, commented, “As part

of my job, I need to judge people from a wide variety of cultural backgrounds and understand

their needs quickly. When I come into a new situation, I watch everyone for a few minutes and

then I get a general sense of what is going on and how I need to act. I’m not really sure how I do

it, but it seems to work.” When facing ambiguous multicultural situations that he must take

control of, the natural may falter because he has never had to improvise learning strategies or

cope with feelings of disorientation.

The ambassador, like many political appointees, may not know much about the culture he has

just entered, but he convincingly communicates his certainty that he belongs there. Among the

managers of multinational companies we have studied, the ambassador is the most common type.

His confidence is a very powerful component of his cultural intelligence. Some of it may be

derived from watching how other managers have succeeded in comparable situations. The

ambassador must have the humility to know what he doesn’t know—that is, to know how to

avoid underestimating cultural differences, even though doing so will inflict a degree of

discomfort.

The mimic has a high 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. Mimicry definitely puts hosts and

guests at ease, facilitates communication, and builds trust. Mimicry is not, however, the same as

pure imitation, which can be interpreted as mocking. Ming, a manager at the Shanghai regional

power authority, relates, “When I deal with foreigners, I try to adopt their style of speaking and

interacting. I find that simple things like keeping the right distance from the other person or

making eye contact or speaking English at a speed that matches the other person’s puts them at

ease and makes it easier to make a connection. This really makes a difference to newcomers to

China because they often are a bit threatened by the place.”

The chameleon possesses high levels of all three CQ components and is a very uncommon

managerial type. He or she even may be mistaken for a native of the country. More important,

chameleons don’t generate any of the ripples that unassimilated foreigners inevitably do. Some

are able to achieve results that natives cannot, due to their insider’s skills and outsider’s

perspective. We found that only about 5% of the managers we surveyed belonged in this

remarkable category.

One of them is Nigel, a British entrepreneur who has started businesses in Australia, France, and

Germany. The son of diplomats, Nigel grew up all over the world. Most of his childhood,

however, was spent in Saudi Arabia. After several successes of his own, some venture capitalists

asked him to represent them in dealings with the founder of a money-losing Pakistani start-up.

To the founder, his company existed chiefly to employ members of his extended family and,

secondarily, the citizens of Lahore. The VCs, naturally, had a different idea. They were tired of

losses and wanted Nigel to persuade the founder to close down the business.

Upon relocating to Lahore, Nigel realized that the interests of family and community were not

aligned. So he called in several community leaders, who agreed to meet with managers and try to

convince them that the larger community of Lahore would be hurt if potential investors came to

view it as full of businesspeople unconcerned with a company’s solvency. Nigel’s Saudi

upbringing had made him aware of Islamic principles of personal responsibility to the wider

community, while his British origins tempered what in another person’s hands might have been

the mechanical application of those tenets. Throughout the negotiations, he displayed an

authoritative style appropriate to the Pakistani setting. In relatively short order, the managers and

the family agreed to terminate operations.

Many managers, of course, are a hybrid of two or more of the types. We discovered in our

survey of more than 2,000 managers that even more prevalent than the ambassador was a hybrid

of that type and the analyst. One example was a female African-American manager in Cairo

named Brenda, who was insulted when a small group of young, well-meaning Egyptian males

greeted her with a phrase they’d learned from rap music.

“I turned on my heel, went right up to the group and began upbraiding them as strongly as my

Arabic would allow,” she said. “When I’d had my say, I stormed off to meet a friend.”

“After I had walked about half a block, I registered the shocked look on their faces as they

listened to my words. I then realized they must have thought they were greeting me in a friendly

way. So I went back to talk to the group. They asked me why I was so angry, I explained, they

apologized profusely, and we all sat down and had tea and an interesting talk about how the

wrong words can easily cause trouble. During our conversation, I brought up a number of

examples of how Arabic expressions uttered in the wrong way or by the wrong person could

spark an equivalent reaction in them. After spending about an hour with them, I had some new

friends.”

Brenda’s narrative illustrates the complexities and the perils of cross-cultural interactions. The

young men had provoked her by trying, ineptly, to ingratiate themselves by using a bit of current

slang from her native land. Forgetting in her anger that she was the stranger, she berated them for

what was an act of cultural ignorance, not malice. Culturally uninformed mimicry got the young

men in trouble; Brenda’s—and the men’s—cognitive flexibility and willingness to reengage got

them out of it.

Cultivating Your Cultural Intelligence

Unlike other aspects of personality, cultural intelligence can be developed in psychologically

healthy and professionally competent people. In our work with Deutsche Bank, we introduced a

program to improve managers’ work relationships with outsourcing partners in India. We

developed a two-and-a-half day program that first identified a participant’s strengths and

weaknesses and then provided a series of steps, which we outline below, to enhance their CQ.

Step 1.

The individual examines his CQ strengths and weaknesses in order to establish a starting point

for subsequent development efforts. Our self-assessment instrument is one approach, but there

are others, such as an assessment of a person’s behavior in a simulated business encounter and

360-degree feedback on a person’s past behavior in an actual situation. Hughes Electronics, for

example, staged a cocktail party to evaluate an expatriate manager’s grasp of South Korean

social etiquette. Ideally, a manager will undergo a variety of assessments.

Step 2.

The person selects training that focuses on her weaknesses. For example, someone lacking

physical CQ might enroll in acting classes. Someone lacking cognitive CQ might work on

developing his analogical and inductive reasoning—by, for example, reading several business

case studies and distilling their common principles.

Step 3.

The general training set out above is applied. If motivational CQ is low, a person might be given

a series of simple exercises to perform, such as finding out where to buy a newspaper or greeting

someone who has arrived to be interviewed. Mastering simple activities such as greetings or

transactions with local shopkeepers establishes a solid base from which to move into more

demanding activities, such as giving an employee a performance appraisal.

Step 4.

The individual organizes her personal resources to support the approach she has chosen. Are

there people at her organization with the skills to conduct this training, and does her work unit

provide support for it? A realistic assessment of her workload and the time available for CQ

enhancement is important.

Step 5.

The person enters the cultural setting he needs to master. He coordinates his plans with others,

basing them on his CQ strengths and remaining weaknesses. If his strength is mimicry, for

example, he would be among the first in his training group to venture forth. If his strength is

analysis, he would first want to observe events unfold and then explain to the others why they

followed the pattern they did.

Step 6.

The individual reevaluates 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. She may decide

to undergo further training in specific areas.

In the sidebar “Confidence Training,” we describe how we applied these six steps to the case of

Helmut, one of five German managers we helped at their employer’s behest as they coped with

new assignments within and outside of Germany.

Confidence Training

Helmut was a manager at a Berlin-based high-tech company who participated in our cultural-

intelligence training program at London Business School. Three months earlier, he had been

assigned to a large manufacturing facility in southern Germany to supervise the completion of a

new plant and guide the local staff through the launch. Helmut came from northern Germany and

had never worked in southern Germany; his direct reports had been raised in southern Germany

and had worked for the local business unit for an average of seven years.

Helmut was good at developing new learning strategies, and he wasn’t bad at adapting his

behavior to his surroundings. But he had low confidence in his ability to cope with his new

colleagues. To him, southern Germans were essentially foreigners; he found them “loud, brash,

and cliquish.”

To capitalize on his resourcefulness and build his confidence, we placed Helmut in

heterogeneous groups of people, whom we encouraged to engage in freewheeling discussions.

We also encouraged him to express his emotions more openly, in the manner of his southern

compatriots, and to make more direct eye contact in the course of role-playing exercises.

Helmut’s resourcefulness might have impelled him to take on more ambitious tasks than he

could quite handle. It was important he get his footing first, so that some subsequent reversal

would not paralyze him. To enhance his motivational CQ, we asked him to list ten activities he

thought would be part of his daily or weekly routine when he returned to Munich.

By the time Helmut returned to London for his second training session, he had proved to himself

he could manage simple encounters like getting a coffee, shopping, and having a drink with

colleagues. So we suggested he might be ready for more challenging tasks, such as providing

face-to-face personnel appraisals. Even though Helmut was skilled at analyzing people’s

behavior, he doubted he was equal to this next set of hurdles. We encouraged him to view his

analytic skills as giving him an important advantage. For example, Helmut had noticed that

Bavarians were extroverted only with people familiar to them. With strangers they could be as

formal as any Prussian. Realizing this allowed him to respond flexibly to either situation instead

of being put off balance.

By the time he was asked to lead a quality-improvement team, he had concluded that his

leadership style must unfold in two stages—commanding at the outset, then more personal and

inclusive. On his third visit to London, Helmut reported good relations with the quality

improvement team, and the members corroborated his assessment.

• • •

Why can some people act appropriately and effectively in new cultures or among people with

unfamiliar backgrounds while others flounder? Our anecdotal and empirical evidence suggests

that the answer doesn’t lie in tacit knowledge or in emotional or social intelligence. But a person

with high CQ, whether cultivated or innate, can understand and master such situations,

persevere, and do the right thing when needed.