Multicultural Leadership Starts from Within

In yesterday’s HBR blog:

The world is getting smaller. As new technologies in social media, transportation, and telecommunications bring us closer together, it’s more critical than ever for organizations to recruit, develop, and retain multicultural leaders who can skillfully navigate both the opportunities and challenges of a more connected world.

Multicultural leadership involves deep immersion within different cultures to understand their values and specific context. This immersion unlocks insight into how to best reach customers, inspire employees, and drive organizational performance in geographies outside one’s “home base.” Only through knowing other cultures deeply can a manager effectively connect the dots between them and highlight meaningful differences between cultures that impact business strategy.

When executed well, the results are astonishing. For example, Kentucky Fried Chicken (KFC) built a leading 40% share of the Chinese fast food market through patiently tailoring its product offering to local tastes and building a strong team of local managers. Other consumer-focused companies such as IKEA and Starbucks are following in KFC’s footsteps, but the learning curve is both steep and long. And fortunes can reverse quickly if managers don’t progress their multicultural understanding as markets continue to evolve. Note the recent stumbles in China of French grocer Carrefour, which had previously dominated other supermarket retailers in the country. Indeed, multicultural organizational capabilities are becoming as significant a source of competitive advantage as other core elements of business strategy.

Though multicultural leadership is mostly associated with multinational corporations (MNCs) — an understandable phenomenon given the inherent cross-cultural challenges MNCs face in expanding outside their home countries — these principles also have a lot to offer “national companies,” companies with limited presence outside a particular country or subregion. Given the enormous cultural diversity within many countries’ own borders, taking a more deliberate approach to sourcing and developing talent across socioeconomic class, religion, academic field, and other backgrounds could be highly productive in driving product and service innovation.

Moreover, the increasing war for talent across borders suggests that national companies will need to do more to attract and retain the most promising talent for their existing operations, much less prepare for eventual expansion abroad with all the multicultural capabilities that such a strategy will require.

In order to build that multicultural and transnational talent, managers need to structure programs within their companies that expose promising talent to new geographies and cultures. Given the personal challenges of picking up and moving halfway around the world, such programs may need to draw on new technologies and models that allow more flexibility in cross-cultural collaboration.

So what can managers do to contribute their part?

1. Focus recruiting efforts to bring diverse, multicultural candidates into the company. This might include adjusting employer branding messages, diversifying recruiting talent sources, or even adjusting selection criteria to reward multicultural experience and leadership capability. It may also entail hiring experts such as cultural anthropologists who can support a more targeted exploration of a specific culture.
2. Make multicultural experiences an explicit part of career path conversations and performance reviews so that young managers can begin to treat view multicultural skill development more seriously.
3. Build multicultural elements into management training programs, either by adjusting existing curricula or developing new materials. Launch structured mobility programs that bring rising managers to different cultures and geographies on both short-term projects and medium-term rotations. This will ensure that multicultural leadership development is embedded throughout an organization’s talent management processes.
4. Integrate multicultural insights into business decisions and strategy. After all, the above interventions mean little if managers do not actively harness the insights that only multicultural leaders can bring to the table.

In an increasingly global age, the capacity of organizations to build multicultural and transnational leaders will be a critical competitive advantage. Is your organization prepared?

JEVAN SOO

Jevan Soo is a management and human capital consultant in Boston. He formerly managed McKinsey & Company’s Asia-Pacific recruiting across twelve countries. Follow him on Twitter @jevansoo.

Tags: Carrefour, diversity, IKEA, McKinsey & Company, Multiculturalism, Multinational corporation, Recruitment, Starbucks