What is cultural intelligence and why is it important for business?

In his book, Leading with Cultural Intelligence, David Livermore describes cultural intelligence as ‘the ability to be effective across various cultural contexts – including national, ethnic, organisational, generational, ideological, and much more.’ Whether you are conducting business at home or abroad, you cannot escape the fact that customers who are buying your products or services are a reflection of the global marketplace in which we now live. This global marketplace is made up of people from diverse cultural backgrounds with different perspectives, ideologies, experiences and expectations when it comes to building relationships.

The economies of Brazil, Russia, India and China (BRICs) account for one quarter of global GDP. In addition, seven of the 10 fastest growing economies in the world are in Africa. The opportunities that these markets present mean that businesses of all sizes are crossing borders, both physically and via technology, in order to compete and gain a share of a new and increasingly upwardly mobile customer base. However, businesses cannot use a one-size-fits-all approach when it comes to communication and engagement in these markets. Engaging with different cultures means that businesses have to adapt to fit the needs of the marketplace. However, they must first be aware of the need to adapt; you need to have cultural intelligence.

A good example of a company that lacked awareness of the need to adapt is the food manufacturer Sharwoods which, in 2003, spent £6million on a TV campaign to launch its range of Bundh sauces. The sauces were pitched by Sharwoods as a range that would “change the way consumers make curry”. Following the launch of the TV advert, numerous Punjabi speakers contacted Sharwoods to inform the company that ‘Bundh’ is the Punjabi word for ‘arse’. It seems like an obvious thing to check the meaning of a word before going to market, but this is just one of many examples where a business has highlighted its lack of cultural intelligence to the detriment of its reputation and, ultimately, its bottom line.

As well as engaging with customers and clients, there is also the factor of cultures within organisations to consider. If you are working on a project and interacting with colleagues from different cultures, you need to be able to understand different cultural settings and cultural values, and adjust your behaviour accordingly in order to achieve a positive result. This video is a clear example of how a lack of cultural intelligence can have a negative impact on business.