In our last blog, we shared results from the first annual Cultural Agility Climate Survey. You may recall that the survey was administered to employees across thirty countries and many different industries. Responses came from employees of such well-known global brands as Eli Lily, HSBC, P&G, China Construction Bank, BASF, Sony, and Siemens.
We found some positive results but also some troubling ones. For example, results indicated that:
In addition to collecting opinions of employees from these organizations, we also cross-referenced results against objective financial and customer data. Specifically, we linked the Cultural Agility Climate data to return on assets (ROA) for the publicly traded firms and to customer satisfaction (based on the American Customer Satisfaction Index [ACSI]) for US firms. Together, these two metrics (ROA & ACSI) can be used to provide an objective indication of how well organizations are performing in the eyes of Wall Street and main-street.
So what did we find? The results suggest that cultural agility at the senior leadership level has a significant association with ROA. Specifically, when employees view their senior leaders as open to diverse ways of thinking, when they are viewed as culturally agile, and when employees are confident their leaders can succeed globally, ROA is stronger. Moreover, ROA and customer satisfaction (ACSI) show significantly stronger results in organizations where senior leaders have clearly articulated the importance of being global. However, ROA is not solely tied to senior leaders. Firms where immediate managers were rated as being culturally agile have significantly stronger financials than those where managers are not culturally agile, and the same is true for training to work with global colleagues. Specifically, firms where employees reported having received training to facilitate work with colleagues across the globe were also found to have significantly stronger ROA scores.
So what does this all mean for global organizations? First and foremost, these results suggest that cultural agility is important for the effectiveness of global organizations. While there is substantial evidence that international assignees (expatriates) are more likely to succeed if they are culturally agile, this is the first evidence that shows a link between organizational effectiveness and the cultural agility of senior leaders and managers. Further research is needed to understand the mechanisms underlying the relationship but one hypothesis is that the messages that leaders communicate are critical to setting a tone and creating the right organizational climate to foster global work. If leaders emphasize the importance and demonstrate through actions that being global is key to long-term success, employees are likely to follow. Another key finding is that training to help employees work with their global colleagues (and presumably clients/customers) is also important. Technology most certainly helps employees bridge the distance between global locations but technology alone cannot bridge the cultural differences and we believe that this is where training can help.
One recipe for success – While these findings need further study, they seem to suggest that there is a tangible benefit for global organizations to select leaders who are culturally agile and to develop the ability in those who are not.
We found some positive results but also some troubling ones. For example, results indicated that:
- Many employees do not feel adequately prepared to work in a global environment.
- Many senior leaders do not feel that their organizations are positioned to succeed globally and hence may be sending the wrong messages to employees.
In addition to collecting opinions of employees from these organizations, we also cross-referenced results against objective financial and customer data. Specifically, we linked the Cultural Agility Climate data to return on assets (ROA) for the publicly traded firms and to customer satisfaction (based on the American Customer Satisfaction Index [ACSI]) for US firms. Together, these two metrics (ROA & ACSI) can be used to provide an objective indication of how well organizations are performing in the eyes of Wall Street and main-street.
So what did we find? The results suggest that cultural agility at the senior leadership level has a significant association with ROA. Specifically, when employees view their senior leaders as open to diverse ways of thinking, when they are viewed as culturally agile, and when employees are confident their leaders can succeed globally, ROA is stronger. Moreover, ROA and customer satisfaction (ACSI) show significantly stronger results in organizations where senior leaders have clearly articulated the importance of being global. However, ROA is not solely tied to senior leaders. Firms where immediate managers were rated as being culturally agile have significantly stronger financials than those where managers are not culturally agile, and the same is true for training to work with global colleagues. Specifically, firms where employees reported having received training to facilitate work with colleagues across the globe were also found to have significantly stronger ROA scores.
So what does this all mean for global organizations? First and foremost, these results suggest that cultural agility is important for the effectiveness of global organizations. While there is substantial evidence that international assignees (expatriates) are more likely to succeed if they are culturally agile, this is the first evidence that shows a link between organizational effectiveness and the cultural agility of senior leaders and managers. Further research is needed to understand the mechanisms underlying the relationship but one hypothesis is that the messages that leaders communicate are critical to setting a tone and creating the right organizational climate to foster global work. If leaders emphasize the importance and demonstrate through actions that being global is key to long-term success, employees are likely to follow. Another key finding is that training to help employees work with their global colleagues (and presumably clients/customers) is also important. Technology most certainly helps employees bridge the distance between global locations but technology alone cannot bridge the cultural differences and we believe that this is where training can help.
One recipe for success – While these findings need further study, they seem to suggest that there is a tangible benefit for global organizations to select leaders who are culturally agile and to develop the ability in those who are not.
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