Combating global uncertainty
Gurnek Bains is a man who knows a thing or two about executive leadership. As co-founder and chairman of corporate psychology consultancy YSC, he has helped coach leaders from FTSE 100 firms such as HSBC, Tesco, Royal Bank of Scotland and Diageo.
So when he says: “CEOs consistently tell me they’ve never known a time of more global uncertainty. One or two markets can blow a strategic plan apart,” it’s fair to assume that globalisation is playing on the minds of big business – and not always in a positive way.
“Business has become a multi-polar world. People talk about globalisation, but that has traditionally meant the export of Western goods and ways of doing business. Instead, we now live in a world where strong actors are emerging from different fields, ready to take over and challenge Western companies. That global competition requires greater understanding,” says Bains.
To this end, Bains has recently published Cultural DNA: The Psychology of Globalisation, an extensive examination of the strengths and weaknesses of 30,000 leaders from around the world.
In it, he explores how each culture has deep-seated attributes and values that have developed over thousands of years. By better understanding these values, he argues multinational businesses will be able to recruit more successfully, grow quicker and compete with local players.
However, as leaders, our default position when it comes to operating abroad is often to expect satellite operations to adopt the characteristics and culture of our home country – leading to frustration and confusion on both sides.
“A lot of multinationals complain of huge talent issues in some parts of the world, but you’ll always see problems if you impose your own values. If you attempt to build on existing strengths within the grain of a culture, you’re going to find it easier to get talent working for you in the right way, rather than trying to turn everyone into Western leaders,” argues Bains.
Getting under the skin of culture
One way of getting buy-in from foreign talent is to create an environment where dissent and discussion is allowed. Many leaders parachuted abroad often find that employees are intimidated into simply agreeing with whatever directives are handed down from head office.
Giving permission for – and actively encouraging – employees to say ‘this strategy might work in the UK, but will it really work here?’ will open up new ideas and engagement, suggests Bains.
Going further, the key to getting under the skin of a culture is to gain understanding of the history of the society you are working in. Examining the pressures societies have faced will reveal deep-seated values – or cultural DNA – that allow you to learn more about how business works in your local environment, and how to leverage it.
Why cultural DNA matters
Bains uses the Middle East and the commercialism of its leaders to exemplify this point. “Our research revealed that Middle Eastern leaders are the most commercial in the world and many people struggle with that directness. However, you understand it a bit better when you realise that the world’s first cities and currencies were born in this area. This is where trading first occurred to a substantial degree, so commerciality is very well ingrained in that culture,” he says.
“Look at Dubai. People are often surprised at how it has seemingly come out of nowhere. But if you peel back history a few thousand years, you’ll find there was once a flourishing trading centre called Dilma there.
“So I would argue that Dubai is doing today what it did 3,000 years ago; being a connecting and trading centre.
“Understanding the DNA of places helps to respect what is there and recognise traits, such as the trading skills of Middle Eastern leaders and why they are always negotiating,” adds Bains.
YSC’s research into global leadership also shows how awareness of cultural differences can aid better strategic business decisions. China’s recent crackdown on the import of foreign luxury goods caught many multinationals by surprise, including drinks manufacturer Diageo, which took a £264 million hit to profits.
For Bains, better awareness of the contextual influences in China and pressures of society could have helped them to avoid these pitfalls.
“One of my clients in China said the Chinese lacked creativity and that the copying of ideas drove him mad. However, after spending time there he realised that it’s seen as arrogant to put your own spin on things in China.
“There is creativity in the country, but people are reluctant to say controversial ideas or reject what authority figures say. Creativity is more hidden,” he says.
Implications for UK business
Bains’ interest in the psychology of cultures comes from his roots. As an Indian married to an Australian who lives and works in the UK, he says he has always held an interest in what makes societies successful. And in Britain, he sees a society well-placed to lead the world out of its current economic and cultural crisis – but only if it embraces others and combats the rise of nationalism that threatened recently.
“Britain can be a great connector of civilisation and society. It is uniquely equipped to lead an engaged approach by virtue of its history. We’re connected to America by language, to India, China and Africa through colonialism and we’re in the EU,” he argues.
In order to thrive globally, British businesses need to develop a spirit of enquiry over judgement. Rather than assuming that cultural differences need to be overcome, you have to dig deeper to discern why people are the way they are. In doing so, you can build new strategy on this understanding instead of going against the cultural grain.
Secondly, British businesses need to become more agile. According to Bains, Western organisations – particularly those in Europe – are seen as slow and bureaucratic by emerging markets, with too many systems, processes and rules. In order to compete globally, they need to become faster, more dynamic and more entrepreneurial.
“We need to start valuing intuition and intellectual flexibility. Strategic intent is more important than having a plan and sticking to it rigidly. This approach to thinking would benefit many leaders,” says Bains.
So does he believe that understanding cultural DNA is the key to future business success?
“Every society has positive cultural strengths which you can build on. If you’re building truly multinational teams, you need to compose them of people of different strengths. By having a better understanding of cultural traits and where they come from, your leaders will be able to form stronger bonds with their teams, be more adaptable and grow your business.”
Five ways HR can develop global business success
- Create genuine diversity: It’s vital to develop people from non-dominant cultures
- Hire leaders with strong relationship-building skills: Pay particular attention to those who can work at a distance and across boundaries
- Develop intellectual flexibility: Our VUCA world makes it impossible to utilise a set paradigm in leadership programmes
- Develop leadership insight: Ally strategic business knowledge with empathy skills
- Be curious about the world: Knowledge of the global themes buffeting business and society will broaden your knowledge base.