The leadership style is yet another area where cultural intelligence is required and where local cultures play an important role. The sort of leadership valued in the Netherlands is, for example, a weakness in Romania, where authoritative leadership is seen as a strength. On the same note, the qualities of a good leader in the US would not necessarily work in Central and Eastern Europe. We'd love to hear your stories and experiences when it comes to intercultural leadership in the CEE region.

By Irina Budrina

Once I went to a company’s regional office in Prague to join a two-day meeting with all of the company’s mid-level managers from Eastern Europe. After the two-day meeting, the company’s regional director asked me who among the group did I perceive to be the most promising up-and-coming leaders.

Without hesitation, I named three individuals who struck me as having “leader” written all over them. He laughed and said, “I thought you’d say that. Their charisma and initiative would probably be a huge asset in the United States, but it’s a liability here.”

He went on to tell me whom he thought were the most promising leaders — individuals: the Romanian, Bulgarian and the Czech, who had barely hit my radar. Two years later, one of the individuals he identified was the new regional director and performed with excellence.

Cultural intelligence is also needed to address the challenge of recruiting, developing, and retaining cross-cultural talent. Up-and-coming leaders in emerging economies, like Romania, have many options at their disposal and they’re seeking firms and executives who demonstrate culturally intelligent practice.

Executives should recognize the need to recruit the right personnel because 16 to 40 percent of all managers given foreign assignments as expatriates end them early. Nearly 99 percent of these early terminations are the result of cultural issues, not job skills. The cost of each failed expatriate assignment has been estimated anywhere from EUR 200,000 to more than EUR 1.2 million when you include expenses associated with moving, downtime, and a myriad of other direct and indirect costs (housing, schools, medical costs, etc).

Leadership style is another area where cultural intelligence is necessary to lead across different cultures. Just as individuals possess varying views and beliefs about preferred styles of leadership, cultures as a whole have varying preferences for certain leadership approaches. A participative leadership style, where the hierarchical pyramid is flat, where managers involve others in decision making was viewed as an essential way of working among most Dutch leaders and organizations. However, this same style was viewed as a weakness among many firms and leaders from Romania, where authoritative leadership was perceived as a strength.

The point here is to see the importance of having the knowledge, motivation, and flexibility to enact the appropriate leadership style in any given situation. A competitive advantage, increased profits, and global expansion are central to why many of us are interested in cultural intelligence; however, most of us would readily agree we’re also interested in behaving in a more respectful, humanizing manner to the people we meet throughout our work.

Cultural intelligence can help us become more benevolent in how we view those who see the world differently from us. The desire to treat other people with honour and respect doesn’t automatically mean our behaviour comes across as dignifying and kind.

Managing a diverse workforce – a major test of leadership

The task of managing a diversified and dispersed workforce at home and internationally is one the of the major tests of leadership.

Nearly 90 percent of leading executives from sixty-two countries named cross-cultural leadership as the top management challenge for the next century (The GLOBE study of 62 Societies).

Fostering good communication and building trust have always been two most important issues in leadership, but learning how to do so among a culturally diverse staff is a whole new challenge. – The main road to go for both The Dutch manager and his Romanian colleague from our last case that you can read here.

It’s impossible to master all the norms and values of each culture, but effective leadership does require some adaptation in approach and strategy. The most pressing issues executives identify are to understand diverse customers, manage diverse teams, recruit and develop cross-cultural talent, adapt leadership style and demonstrate respect/empathy to the local culture.

Human resource policies, motivational strategies, and performance reviews may need to be adapted for various cultural groups represented among team members. There is a need for leaders who can help teams form a local identity while still retaining the values of the organization as a whole.

Cultural intelligence is needed to achieve the right blend of flexibility and rigidity, which means “to embrace the local culture, but not to make any retreats on your values. One will get respect from the locals, if one shows understanding for the local culture/religion/behaviour, but equally respect will be gained if the locals can learn something useful from you. It is a two-way avenue, where best results and great working atmosphere is created when locals and expats are learning from each other” (from our reader, Romanian by origin, who has spent eight years as a senior manager in Holland, Germany, USA and Japan).

These five reasons for cultural intelligence — understanding customers, managing personnel, recruiting talent, adapting leadership style, and communicating respect — are the most consistent reasons identified by leading executives across the world.

irina-budrina@hotmail.com