Cultural Agility: The Unfair Advantage?
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This document discusses the importance of cultural agility for global organizations. It provides examples of companies like Intuit, Walmart, and Target that failed to consider cultural differences when expanding internationally. Cultural agility involves understanding local contexts and adapting behaviors accordingly. Professionals can leverage cultural adaptation, minimization, and integration. Building cultural agility is a process that includes developing competencies like cultural curiosity and perspective-taking. While agile methods provide a framework, applying agile principles with cultural context can improve business outcomes for multicultural teams.
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Cultural Agility: The Unfair Advantage?
- 1. Cultural Agility: The Unfair Advantage? Tathagat Varma @TathagatVarma http://thoughtleadership.in
- 2. Imagine… You have a great product, and you want to launch it in other countries. Easy…right?
- 3. Finger-lickin’ good…not quite in China!
- 4. No pictures on the box in Africa!
- 6. No ‘v’ in Germany!
- 7. Brown vans in Spain?
- 8. But…we are IT…and we are different! Not quite…let’s see some more examples…
- 9. Intuit Quicken, 1993-94 Quicken was #1 tax and accounting software in the US. It was followed by successful expansion into Canada and UK. In 1993-94, it was launched in Japan, Mexico, South America, and several European countries After the initial press, etc., the product tanked! It was simply the language translation of the American product, and the the users didn’t like the product! It wasn’t an execution problem. The product was simply based on “what we had in US” and had no international context.
- 10. Walmart Germany, 1997-98 Walmart acquired two companies, Wertkauf and Interspar. Precise reasons are still argued, but most agree that culture played a big role in US $1 Billion losses! Some internal practices and management styles did not fit the German workforce, such as Chanting the company name every morning The autocratic nature of management Encouragement of spying on co-workers and Dismissive attitude to employees
- 11. Target Canada, 2013-15 Entered Canada in 2013 by buying 220 leases of Zellers, a defunct discount chain. After realising that stores won’t be profitable until 2021, it shut down 133 stores in 2015. Laid off 17,000 and wrote off over US$ 7 Billion. Canadians had similar lifestyle as Americans, but very different behaviors! Other examples from retail: Tesco’s Fresh & Easy stores in the U.S. went bankrupt; Best Buy closed its stores in the UK after less than two years; Wal-Mart pulled out of Germany and South Korea; and Carrefour left Algeria and Thailand.
- 12. Mergers & Acquisitions 83% fail to create a sustainable competitive advantage (Wharton) 66% fail to add shareholder value (Harvard) 60% destroy company value (Deloitte) 91% mergers fail due to culture shock (Hay, 2007) “Intercultural dissoance” is a major indicator of why international M&As fail Examples: New York Central and Pennsylvania Railroad (1968), Daimler and Chrysler (1990s), Novell and Wordperfect (1994), AOL and Time Warner (2000), Sprint and Nextel (2008),
- 13. What do all these examples tell us? Despite similar appearances, we are all wired differently! What works here might quite possibly not work elsewhere. Adapting to the other cultures might be key to operate better.
- 14. So, what is Culture? A nation’s culture resides in the hearts and in the soul of its people. Mahatma Gandhi The way we do things around here. Marvin Bower Culture eats strategy for breakfast. Peter Drucker The thing I have learned at IBM is that culture is everything. Louis Gerstner
- 15. Edger Schein’s Levels of Culture Artifacts Espoused Beliefs and Values Underlying Assumptions Visible organisational structures and processes (hard to decipher) Strategies, goals, philosophies (espoused justifications) Unconscious, taken-for-granted beliefs, perceptions, thoughts and feelings… (ultimate source of values and action)
- 16. Hofstede’s Dimensions of National Culture Professor Geert Hofstede conducted one of the most comprehensive studies of how values in the workplace are influenced by culture. He defines culture as “the collective programming of the mind distinguishing the members of one group or category of people from others”. Power Distance Index (PDI) Individualism vs. Collectivism (IDV) Masculanity vs. Feminity (MAS) Uncertainty Avoidance Index (UAI) Long-Term Orientation vs. Short-Tern Normative Orientation (LTO) Indulgence vs. Restraint (IND)
- 17. India vs. US vs. China
- 18. Hofstede’s Dimensions of Organisational Culture Organisational Culture is defined as the way in which members of an organisation relate to each other, their work and the outside world in comparison to other organisations. It can enable or hinder an organisation's strategy. Means-oriented vs Goals-oriented Internally-driven vs Externally-driven Easygoing work discipline vs. Strict work discipline Local vs. Professional Open system vs. Closed system Employee-oriented vs. Work-oriented Degree of acceptance of leadership style Degree of identification with your organisation
- 19. Cultural Agility? The ability to understand multiple local contexts and work within them to obtain consistent business results. Financial Times The mega-competency which enables professionals to perform successfully in cross-cultural situations. Dr. Paula Caliguiri
- 20. Why Cultural Agility? For today’s global organisations, cultural agility is the new competitive edge. Financial Times Culturally agile professionals succeed in contexts where the successful outcome of their jobs, roles, positions, or tasks depends on dealing with an unfamiliar set of cultural norms—or multiple sets of them. Dr. Paula Caliguiri
- 22. How people become culturally agile? Culturally agile professionals achieve success in multicultural, international, and cross-cultural situations by leveraging three different cultural responses. Dr. Paula Cailguiri Cultural Adaptation: adaptation of one’e behaviour to the norms of the context Cultural Minimization: supersede the cultural expectations of others by one’s own cultural norms Cultural Integration: finding a compromise is important and well worth the effort Successful professionals are adept at toggling between them.
- 23. Cultural Agility Competency Framework Competencies affecting Behavioral Responses Cultural Minimization Cultural Adaptation Cultural Integration Competencies affecting Individuals’ Psychological Ease Cross-Culturally Tolerance of Ambiguity Appropriate Self-Efficacy Cultural Curiosity and Desire to Learn Competencies affecting Individuals’ Cross-Cultural Interactions Valuing Diversity Ability to form Relationships Perspective-taking Competencies affecting Decisions in a Cross-Cultural Context Knowledge and Integration of Cross-Cultural Issues Receptivity to Adopting Diverse Ideas Divergent Thinkng and Creativity
- 24. How to build it? …often includes making structural changes as an organisation moves from active operations in a few countries to multiple continents. This brings about diversity of experience and thinking and this usually results in better business decisions. Financial Times Cultural agility is a practice, not an achievement, and building it is a process, not an event. Dr. Paula Cailguiri
- 25. Cultural Agility for IT Teams? Agile Manifesto provides one path to agility for software teams. Agile methods are largely “culture-neutral”. This could be utopian at best, and a daily chaos at worst. A “horses for courses” approach is much better than a “one size fit all” one! However, applying agile principles with a cultural context could amplify the results.
- 26. Some situations… Face-to-face communication is best? Think again in multi-cultural context A team where power distance is high might have challenges accepting the notion of leaderless teams People who look for instructions might face challenges in cultures that value individualism Team members from very high and very low long-term orientation working together might have conflicts A customer comfortable with high uncertainty avoidance working with a team with low uncertainty avoidance
- 27. Recap Culture is the collective mindset of a social group. While it provides a “way” for a group to survive and grow, it could also become its weakness, especially if is too rigid to adapt to new situations. Cultures that treat people as mere machine parts and adopt a one-size approach eventually perish, or the people desert them. However, cultures that continuously adapt not only survive, but even prosper and thrive. Cultural Agility is a people-first mindset that unconditionally respects people as equals first and foremost, and always. It is nurtured by being open to different cultures without being judgmental. While agile methods provide great framework for solving problems, they are “culture- neutral”. Unfortunately, processes are never agile. However, people almost always are! A team can significantly improve its problem-solving abilities and its business outcomes by acquiring the mindset of cultural agility and focusing on adapting the solutions per the context.
- 28. Thanks! Q&A?