Multicultural organizational skills are as much of a competitive advantage as other elements of business strategy. Managers can grow these skills in the workforce by recruiting diverse candidates and including multicultural elements in leadership training. (Originally published January 17, 2012)
By Jevan Soo, HBR Blog Network
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.