How to Attract, Retain and Develop Culturally Diverse Talent
Via LinkedIn : CULTURALLY DIVERSE LEADERSHIP AND ORGANISATIONAL PERFORMANCE
The impact of culturally diverse leadership on organisational outcomes may be magnified relative to other sources of leadership diversity. Cultural diversity is most likely to involve differences in perspectives, knowledge and experience necessary for optimal information-processing, risk-assessment, decision-making and innovation; for inspiring and uniting geographically dispersed and diverse workforces with a shared vision; and for understanding the needs and concerns of different consumer segments and diverse stakeholders—including shareholders, suppliers and regulators—at home and across borders.
In 2015, McKinsey released the results of its global study of leadership diversity and corporate financial returns. The results present a compelling case for cultural diversity at top management and board level. Companies in the top quartile for racial and ethnic diversity are 35 per cent more likely to have financial returns above their national industry median, while companies in the top quartile for gender diversity are 15 per cent more likely to have financial returns above their national industry median.
With a greater focus on the strategic value of cultural diversity, organisations across all industries are setting more aggressive diversity targets and ramping up their cultural diversity efforts. Despite those efforts, many organisations fail to achieve their cultural diversity goals. Leaders struggle to create the inclusive work environments necessary to attract, retain and promote culturally diverse employees.
THE CHALLENGES OF CULTURAL DIVERSITY AT WORK
Workforce diversity is a double-edged sword. Culturally diverse groups can both enhance and detract from group performance. While diversity offers potential benefits, diversity also enhances the potential for language and other communication barriers. It heightens the risk of ambiguity, value conflicts, reasoning and decision-making differences, and stereotypes and bias threaten rapport and stifle the exchange of information and ideas.
1. CULTURAL BARRIERS
Cultural assumptions involve unspoken expectations about what should happen in a particular context. In multicultural settings, conflicting assumptions about the way to interpret and respond to events can lead to frustration, confusion and disagreement.
Cultural variations in management style (participative vs. directive), conflict resolution (competitive vs. cooperative), the formation of trust (task vs. relationship), decision-making (individual, top-down, consultative), the giving of feedback (direct vs. indirect), meeting etiquette (decision-making vs. discussion), problem-solving (analytical vs. holistic) and communication (e.g. silence means agreement vs. silence means disagreement) are just some examples of cultural differences in work patterns that can negatively impact group performance.
2. LANGUAGE BARRIERS
Also, language barriers can stigmatise and penalise non-native speakers. Non-native speakers may lack oral confidence and be hesitant to contribute, particularly in public settings. Consequently, native-speaking group members might dominant discussions and exert greater influence on group decisions and outcomes. Also, there are cross-cultural differences in norms related to speaking in a group setting, contradicting superiors, challenging peers, interrupting and turn-taking that might result in some members dominating others in group discussions.
3. SUBGROUPS (FAULT-LINES)
In groups with multiple members sharing a similar cultural background, perceptions of differences drive ‘us-vs-them’ distinctions that create fault-lines or cultural subgroups that negatively impact group integration and cohesion.
We all sort people into two distinct groups: people we consider to be similar to ourselves—‘the in-group’, and people who we consider are different to us—‘the out-group’. In-group/out-group categorisation has important social ramifications. Studies show that, in general, people extend greater trust, positive regard, cooperation and empathy to in-group members compared with out-group members. That is, we exhibit a preference for people like ourselves.
This preference for people similar to ourselves creates physical and emotional distance between members of different social and cultural groups. We seek out others who are similar to ourselves. We cluster in groups with people like us to enjoy their affection and positive attention. Their similarity and attraction to us reaffirm our identity and boosts our self-esteem. A look around most workplaces will reaffirm this: from the day they step into the office, new employees seek out and form friendships with people from their ethnic group, gender or cultural group.
4. CULTURAL BIAS
Our preference for people like ourselves also influences our judgments and treatment of others. We make more favourable assessments and confer greater benefits on people from our social group compared to out-group members. We are also more likely to attribute the successes of in-group members to favourable character traits while excusing their failures as the result of bad luck or external circumstances. Whereas for out-group members, we attribute their successes to luck and their failures to innate character flaws. We are also quicker to condemn the failures and non-conforming behaviour of out-group members compared to in-group members.
Regarding employment, in-group bias can compel people to favour those who are most similar to themselves, thereby leading to a tendency for managers and human resources personnel to hire, develop, promote, or otherwise value those who mirror attributes or qualities that align with their own. Cultural matching is ranked as one of the three most important criteria used by recruiters when assessing candidates—more than half of elite employers report ‘fit’ as the most important criterion, ranking over analytical thinking and communication. Practically, this emphasis on ‘mini-me’ cultural matching stifles diversity efforts and perpetuates homogeneity at higher levels of the organisation.
Research supports that the notion of cultural fit is misplaced. Dissimilarity between organisational and leader culture is a better predictor of firm performance than cultural fit. Leadership is more effective when it provides resources lacking in the organisation’s culture.
5. STEREOTYPES, PREJUDICE AND DISCRIMINATION
When individuals interact with one another, we make rapid judgments based on deeply embedded stereotypes. Stereotypes refer to beliefs that certain attributes, characteristics and behaviours are typical of members of a particular group of people. Stereotypes assign a whole suite of characteristics, positive and negative, to anyone categorised as being from that group. Stereotypes involve societal and cultural groups like Chinese, African-American, homosexual.
Stereotyping involves taking what we learn from our social or cultural setting to be typical of a group of people from either our direct experiences with them or indirectly via the media or social discourse and assigning those traits and characteristics to all individuals belonging to that group. As we are repeatedly exposed to stereotypical associations from an early age, those become automated in our brain as unconscious beliefs regarding members belonging to that group.
Stereotypes drive our judgments and behaviours. What we believe about others influences how we feel about and respond to them. When our stereotypes are negative or biased, they can manifest as prejudice and discrimination towards members of different social groups. Prejudice refers to our feelings or attitudes towards a group and its members. Discrimination refers to differential—usually understood to be unfair or negative—treatment towards members of a particular group of people. If we hold negative stereotypes towards members of particular groups, we might overlook members in promotion or hiring decisions, or might act in a hostile manner towards individuals belonging to those groups. Stereotypes and bias are a significant cause of workplace incivility and harassment.
We also hold stereotypes for roles, for example, leader, lawyer, engineer. Role stereotypes are often linked to group membership. The predominant stereotype for leader is middle-aged white male. The predominant stereotype for nurse is female. At work, discrimination often manifests when there is mismatch in role and group stereotype. For example, the ‘glass ceiling’ that prevents women from achieving leadership positions is linked to incompatibility between stereotypically feminine traits and the masculine traits and characteristics associated with leader stereotypes.
Similarly, cultural differences in leadership styles may contribute to the ‘bamboo ceiling’ faced by individuals of Asian descent in achieving greater leadership representation in Western contexts. Of note, concern for “face” and preference for an indirect communication style characteristic of Asian cultures is seen as impeding outstanding leadership in Western workplaces. A 2011 study by the Center for Talent Innovation reported that Asian Americans account for just 1.4 per cent of Fortune 500 CEOs and 1.9 per cent of corporate officers overall despite making up 5 per cent of the population and constituting 18 per cent of the student body at Harvard and 24 per cent at Stanford. The study reported 63 per cent of Asian men feel stalled in their careers.
Other studies evidencing workplace discrimination related to cultural background include:
- Asian names increased discrimination in short-listing job candidates. Asian minority groups “whiten” resumes by changing their names to “sound more American or ‘white,’” or using a middle name instead of a first name. Whitened resumes were twice as likely to get callbacks—a pattern that held even for companies that emphasised diversity. (Kang, DeCelles, Tilcsik, & Jun, 2016)
- Callback rates are approximately three times higher for a resume with a white name and Canadian education and experience than for an otherwise similar resume with a Chinese name, education, and experience (Oreopoulos, 2011).
- When Asian Americans were in roles in which they were perceived to be more technically competent that Caucasian Americans (e.g. engineers), they were still perceived “to be less prototypical leaders” than Caucasians (Sy et al. 2010).
- People are less likely to believe factual information when it is delivered by someone whose accent is different than the dominant accent, even when alerted to the phenomenon (Keysar & Lev-Ari, 2010).
Professor Kenji Yoshino from NYU discusses ‘covering’ as a strategy through which individuals manage or downplay their differences to avoid negative stereotyping, prejudice or discrimination. Diverse employees can mask their difference in four ways:
- Appearance-based covering—26% of employee alter their self-presentation (grooming, attire, mannerisms) to blend into the mainstream
- Association-based covering—14% of employees avoid professional or personal contact with individuals belonging to their identity or group
- Affilitation-based covering— 32% of employees altering their behaviour to avoid engaging in behaviour associated with their identity or group, often to avoid being stereotyped
- Advocacy-based covering—26% of employees avoid public displays of support for their identity or group
Covering has significant costs at the individual and organisational level.
At the level of the individual, when an individual’s behaviour or state of being is incongruent with their cultural values, the individual’s self-concept, self-worth, and well-being are negatively impacted. Thirty-two percent of employees who engage in covering report covering has negatively impacted their sense of self.
At the organisational level, the emotional dissonance experienced when an individual is required to act in a manner, or even observes activity inconsistent with his or her cultural values, acts as a demotivating force that can negatively impact engagement. Employees that engage in covering strategies to fit into dominant organisational norms report:
- 16% less committed to the organisation
- 14% lower sense of belonging to the organisation
- 15% less likely to perceive having opportunities to advance
- 27% more likely to have considered leaving the organisation in the past twelve months
EXPLAINING THE MCKINSEY STUDY: CULTURAL INCLUSION
Cultural diversity, per se, does not drive improved performance. A 2011 review of 108 studies across 10,632 culturally diverse groups reported that the mean effect of cultural diversity on group performance is zero. In other words, while some culturally diverse work groups outperform culturally homogenous groups, others underperform.
The differentiating factor is cultural inclusion. Companies with culturally diverse leadership have work cultures that recognise, respect, value and embrace cultural differences. Culturally inclusive organisations encourage the expression of unique cultural identities and value the contribution of every individual. Cultural inclusion is achieved when every member of the organisation is enabled to participate fully in and contribute to an organisation’s decision-making processes and operations and when every member has a fair chance of achieving success. Ultimately, cultural inclusion is evident in the extent to which a company attracts, retains, develops and promotes culturally diverse talent.
Companies that are culturally inclusive can be distinguished from organisations that manage diversity through assimilation. Assimilation involves moulding a diverse group of employees into standardised policies and practices and encouraging and rewarding conformity to the dominant culture. Assimilation is evident in a firm that actively recruits culturally diverse employees but rewards and promotes on the basis of Western leadership stereotypes.
In contrast, an inclusive workplace does not seek to assimilate its members to a dominant group culture. Inclusion involves the preservation of a diversity of cultural identities. An inclusive culture nurtures and supports pluralistic diversity—a context in which a collection of different voices are heard as well as seen. In an inclusive work setting, employees are encouraged to bring their whole selves to work. In an inclusive context, employees from non-dominant backgrounds are more likely to share their diverse perspectives, knowledge and experience. Cultural sharing enhances decision-making quality and problem-solving, drives innovation and creativity, and supports growth in new markets.
The impact of cultural inclusion on innovation and market growth was highlighted in a 2013 report by The Centre for Talent Innovation. Organisations that give diverse voices equal airtime are nearly twice as likely as others to unleash value-driving insights and their employees are 3.5 times more likely to contribute their full innovative potential. Firms with inclusive cultures are 45% more likely to report growth in market share over the previous year and 70% more likely to capture a new market.
Inclusive workplaces also benefit from increased employee morale and engagement. All individuals, irrespective or their cultural orientation, seek to maintain a positive view of themselves and to experience a sense of worth and positive well-being. Self-evaluations are heavily influenced by cultural values. Cultural values are standards or preferences for a desired mode of conduct or being. They are represented in the self and influence one’s self-concept. When an individual behaves in a manner or achieves a state congruent with their cultural values, self-concept is positively affirmed and the individual experiences a sense of worth and positive well-being.
ACHIEVING CULTURAL INCLUSION WITH CULTURAL INTELLIGENCE
While there is increasing recognition of the business case for culturally inclusive work settings, there is a critical lack of understanding about ‘how’ to achieve this. Cultural inclusion requires a different set of competencies to the ‘gender smarts’ required for gender inclusion.
A culturally inclusive work setting requires a culturally intelligent workforce and leadership. Cultural Intelligence (CQ) is the collection of knowledge, skills and abilities that enable an individual to detect, assimilate, reason and act on cultural cues appropriately. Individuals with high Cultural Intelligence (CQ) display four main competencies:
- CQ Drive is your willingness to work with diverse others. This involves your ability to overcome explicit or unconscious bias and your capacity to persist in challenging interactions—even when confused, frustrated, or burnt out.
- CQ Knowledge is your understanding of culture and cultural differences. This involves more than awareness of variations in language, customs, and appearance. Core cultural differences like values, assumptions, and beliefs are often invisible but cause the most problems—and are frequently overlooked.
- CQ Strategy is your ability to flex mentally. With high CQ Strategy, you are not confined to a single worldview. You are open to new or integrative ideas. This drives innovation and creativity.
- CQ Action is your ability to flex verbal and non-verbal behaviour. This decreases the risk of miscommunication and helps you to respond to diverse others in a manner that conveys respect and builds trust and rapport.
Cultural intelligence is positively associated with work group cohesion, integration, trust and performance. Cultural intelligence predicts the formation of diverse networks and the sharing and integration of information and ideas. Cultural intelligence dismantles ‘us vs them’ social categorisations and negative stereotypes and enhances intercultural understanding and respect. Workplace incivility, harassment and discrimination are lower. Workers with cultural intelligence experience higher levels of sociocultural adjustment and psychological well-being and lower levels of stress.
LEADING IN GLOBAL MARKETS WITH CULTURAL INTELLIGENCE
Today’s business environment is increasingly diverse, fast-moving and unpredictable. Swings in consumer demand, the emergence of non-traditional customers and suppliers, technological innovations and policy changes all can radically alter the competitive landscape with incredible rapidity. The business environment has become increasingly volatile, uncertain, complex and ambiguous (VUCA). That makes innovation and understanding the diversity across your markets critical. Innovation and diversity awareness will ensure businesses stay relevant, capture new opportunities and engage the top talent they need to thrive and survive amid the chaos.
In a world of difference, cultural diversity will emerge as an increasingly powerful driver of performance and profits. Cultural intelligence can help you to attract, retain and promote the culturally diverse talent you need to build a sustainable business that captures as many customers as possible and provide them with the best products, continuously. Cultural intelligence can accelerate you ahead of your competitors. You can’t lead in global markets without it.
ABOUT THE AUTHOR
Felicity Menzies is Principal at Culture Plus Consulting, a Singapore-based diversity and inclusion consultancy with expertise in cultural intelligence, unconscious bias, empowering women and global diversity management.
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