Why Cultural Diversity Matters to Achieve Our Global Ambitions

IQ vs EQ vs CQ

In today’s interconnected world, understanding cultural diversity isn’t just an option—it’s essential. But how prepared are you to navigate this complexity? Beyond IQ (intelligence quotient) and EQ (emotional quotient), there’s CQ—cultural intelligence. CQ measures your ability to be effective in culturally diverse settings, which is increasingly critical in a globalized space.

Consider any aspect of your life, and it is likely influenced by your culture – the food you eat, the clothes you wear, and even how you address your boss are influenced by your culture. Our cultural backgrounds are always there with us and they color the way we look at the world and others. It’s not something we can leave outside the office and then pick up again when the workday is over.

Naturally, misunderstandings can easily arise if cross-cultural interactions are not properly managed. It is not a walk in the park, but the benefits of cultural diversity are simply too good to ignore. Collaboration across cultures leads to inventive solutions (which can unlock new markets), stronger team spirit, higher productivity, greater job satisfaction, and a strong global brand.

To truly harness these benefits, organizations must work on increasing their cultural awareness. Let’s start here:

1. Trust and Relationships

Take U.S. managers in Beijing, frustrated by Chinese hosts who seem more interested in socializing than closing a deal. Understanding that Chinese companies value personal relationships before signing contracts could prevent such frustrations.

2. Power Distance

In traditional countries like Japan, China, or Brazil, younger employees are expected to show deference to their more seasoned colleagues, reflecting a hierarchical structure. On the other hand, countries like the United States value individualism and equality, encouraging less experienced employees to be vocal about their opinions. In such cultures, silence might be perceived as a lack of engagement.

3. Negotiation Styles

Negotiation techniques vary widely across cultures. In Japan, silence during negotiation “haragei” is a powerful tool, while in other cultures, negotiations might be loud and seemingly combative. Some cultures prefer to negotiate over meals rather than in a boardroom. Understanding these differences can prevent missteps and lost opportunities.

4. Attitudes Towards Risk

In business, there will always be some level of economic risk. Hofstede’s Cultural Framework shows that Brazil, Japan, and France are among the most risk-averse countries, while the U.S., Australia, and the U.K. are more comfortable with uncertainty.

5. Time Management

One study described how a Dutch woman in Argentina waited for clients to show up to an appointment, then left when they didn’t arrive on time. Later, she found out they showed up two hours late, expecting her to still be there. Yet “arriving too late” to a meeting is one of Germany’s most commonly reported business nightmares.

What’s makes us different makes us better

There is no “right” or “wrong” in culture – what matters is our ability to grow in CQ. With a good grasp on cultural intelligence, many corporations are thriving as multinational melting pots. This is what we need to unlock a new level of innovation and growth as we seek to make our mark in this world.  Strap in for the adventure – it’s time to embrace the differences that make us better.

Sincerely yours,

Stephen Le, Lead Litigator