Monthly Archives: September 2014

The Cultural Ceiling

lanternsI wanted to bring to your attention this month a recently released report that I had the good fortune of contributing to by way of a focus group.  The study was conducted by the Diversity Council Australia in partnership with Deloitte Touche Tohmatsu and IBM Australia, amongst others.  The research report ‘Cracking the Cultural Ceiling’ was based on a survey of more than 300 leaders and emerging leaders from Asian cultural backgrounds who were working within Australia.  My apologies to the international readers for this ‘parochial’ topic but I think you will be able to see some applications for this in your own countries.

There is a lot of focus currently in Australia about ‘Embracing the Asian Century’ and providing goods and services to the fastest growing region in the world.  The study looked at why, despite large numbers of entry level and middle level Asian managers, there are so few Asian leaders reaching the top in Australian organisations; and further how Australian organisations could realise the promise and potential of Asian talent.

Some of the key barriers that were identified as locking out Asian talent in Australia were:

  • Cultural bias and stereotyping
  • Westernised leadership models
  • Lack of relationship capital
  • The case for culture is misunderstood

This report highlights the under-representation of Asian leadership that is fundamentally hurting Australian organisations.  Given that 46% of Australian consumers are born overseas or have at least 1 parent born overseas, that over ¾ of Australia’s exports go to Asia and that by 2030 Asia will account for 60% of the global middle-class consumption, studies such as this deserve attention.

When I read statistics such as 30% of Asian talent are likely to leave their employer within the next year and that only 17% strongly agree that their organisations usilise their Asia capabilities well, indicates that Asian talent is being seriously undervalued and under-leveraged. The impact that this has on organisations, not just in terms of talent, but also innovation potential and the impact on existing and possible international markets, demonstrates wasted opportunities within the Australian landscape.  While ‘Cracking the Cultural Ceiling’ was an Australian based study, barriers such as those identified here continue to exist in a similar vein in other Western countries. You can also extrapolate this to other categories such as gender, generational, LGBT, the disabled and others.

Leadership needs to be re-defined, it isn’t a singular stationary model. Cultural intelligence needs to be built into the organisational DNA, it needs to be a business as usual process.  Cultural intelligence can assist organisations to navigate themselves successfully through the ambiguity and ever changing business and talent landscapes that exist even in local/domestic markets let alone cross-border markets.

While I support recommendations from this report such as improved leadership models, unconscious bias training, improved mentoring and professional networks of workers with Asian backgrounds, we need to take one-step back.  Before any of these can be implemented one of the key challenges I see is around supporting organisations to realise that the cultural ceiling does in fact exist within their organisations.  There needs to be a level of candidness that exposes organisational deficiencies, such as the under-valuing and under-representation of workforces and the cultural biases and stereotypes that continue to persist. This can be a confronting and intimidating exercise to say the least; hence it needs to be conducted in a supportive and well-planned manner that is deemed as the next step in the organisational growth structure.

Cultural Intelligence – Sharing Stories

It is useful to take a moment to reflect on the CQ success stories and consider what the key principle and techniques were that led to some positive outcomes; and to consider those not so successful outcomes and learn from them. Rather than always reinventing the wheel we would do well to examine how other industries, organisations and governments succeed and fail in their CQ endeavours, strategies and practices.

The Kraft Experience – You may have heard of the Kraft blank cheque principle. It is just that – a blank cheque that is signed by company leaders and distributed to teams in a bid to make them feel more invested, responsible and empowered to make decisions in the pursuit of increased revenues. The concept is that when workers are free from budgetary constraints there is greater creativity and innovation. To qualify for a blank cheque teams must create a business model that demonstrates realistic and viable potential.

The blank cheque principle has had more successes than failures and has supported opportunities to do things differently in other parts of the world. One example is Cadbury India. In 2010, Cadbury India had its best year ever, with almost 28% revenue growth — doubling original growth targets and exceeding the $500 million blank check target. The momentum continued in 2011 with more than 30% growth.

Oreo in China, Tang in Brazil and the Dairy Milk Chocolate Bar in India are further success stories owing to the blank cheque principle. In terms of the Oreo in China it led to further investment in local talent that enabled Kraft to become closer to Chinese consumers. Sales of the diary milk chocolate bar in India exceeded expectations by teams employing alternative methods of displaying, marketing and distributing the chocolate bar. Tang in Brazil followed suite by employing Kraft’s global technology resources to develop flavours that are more in touch with local preferences and tastes such as tamarind and horchata in Mexico, mango in the Philippines, passionfruit and soursop in Brazil.

The Honda Experience – Honda has demonstrated flexibility and innovation as they have entered new emerging markets. Senior management toured some local villages in India to observe and understand the environment and local market needs and demands. Some of the observations and changes that were incorporated into the design of motorbikes for the Indian market were:

  • Designing sturdier motorbikes suited to Indian terrain rather than lightweight bikes that have greater appeal to the Japanese market
  • Designing stronger bikes that supported heavier loads
  • Longer seats that accommodate for 3-4 people
  • Improved headlights
  • Incorporating new colour schemes that riders were observed wearing
  • Dedicated a place for riders to write their names on visors (which were observed as a preference)

The Starbucks Experience – CEO Howard Schulz made a visit to India in 2011. From this visit came a variety of localised initiatives:

  • Sale of distinctly Indian Chai Tea Latte
  • Store designs that incorporate local themes
  • Food and coffee offerings in line with local preferences
  • Following research that identified a more leisurely café culture in India than in the West (where it tends to be more on-the-go) Starbucks stores offer larger stores for sitting in
  • Increased their tea offerings to satisfy the greater demand for tea rather than coffee

The Lenovo Experience – When Lenovo a Chinese computer company acquired the personal computer division of IBM in the U.S. only one member of the team spoke English. Even when the Chinese executive team began learning English it was quickly recognised that the cross border challenges were greater and deeper than anticipated. Different management, communication and decision- making styles were just some of the obstacles the Western and Chinese managers identified.

Some of the initiatives that have and continue to evolve are:

  • Lenovo has developed its decision-making processes, combining the best of the Chinese long-term focus on strategy with the West’s focus on meeting quarterly targets
  • A new generational attitude toward the traditional top-down management style
  •  Key managers undergo intensive training in business skills
  • Development of procedures to share and leverage the failures, experiences and successes of cultural practice differences in areas such as design, technology and marketing preferences, local preferences for smartphones as opposed to tablets, etc
  • Executives meet yearly with managers of acquired companies to explain and reinforce the global strategies and how where they fit into the strategies
  • Focus has been on breaking down silos and building a consistent global methodology.
  • Strategies such as cutting back on KPI’s and bringing key-decision makers together to reach solutions that draw on the cultural and organisational diversity that exists within Lenovo.

There is a lot of value in documenting, exploring and sharing where successes have been made and lost in terms of going forward. Too often I see global organisations making the same mistakes within their organisations because there is no cross fertilization of information across departments, regions and countries.

If you have any CQ success and/or failure stories please click here and share them with us.