Intercultural Competence and Global Teams

Conventional wisdom holds that culturally diverse teams (and diverse teams in general), at their best, can out-produce homogenous teams. The key phrase here is “at their best” as many diverse teams actually fail miserably as cultural diversity can also cause friction. They key to success is, unsurprisingly, how those teams are managed.

Whatever the case, culturally diverse teams have become increasingly commonplace and important, and many companies consider them to be integral to their success. Here are some statistics that provide insight into the performance, and importance, of global teams:

• According to a recent study by Harvard Business Review, 84% of respondents reported that their organizations rely on global virtual teams to collaborate on projects, and 71% reported that these teams are becoming increasingly important to their business.
•  A study by McKinsey & Company found that companies with diverse leadership teams are more likely to outperform their peers in terms of financial performance. Companies in the top quartile for gender diversity are 25% more likely to have above-average profitability, while companies in the top quartile for ethnic and cultural diversity are 36% more likely to have above-average profitability.
• Another study conducted by the Project Management Institute found that globally dispersed project teams can outperform local homogenous teams when effective communication and collaboration practices are implemented. However, these practices need to be tailored to the specific needs of the team, such as the cultural diversity of the team members.
• On the flip side, in a study by the European Journal of International Management, they found that cultural diversity in global teams can lead to communication barriers and reduced trust, negatively impacting team moral and performance.

It’s clear that global teams are here to stay, and that their performance depends on how well they are managed. So how does one manage, or lead, them, considering the challenges that cultural diversity can present? Here are five suggestions:

1. Be culturally aware. Leaders should understand and respect the unique values, beliefs, and communication styles of the team members in order to foster a more inclusive and collaborative environment.
2. Provide intercultural training to team members to promote cultural awareness (including self-awareness) and sensitivity. Such training should include topics such as communication styles and decision-making processes.
3. Establish clear communication guidelines that accommodate different communication styles and preferences. By providing clear guidelines, companies can ensure that team members understand each other's expectations, thus reducing the risk of misunderstandings.
4. Embrace diversity and promote an inclusive team environment. Encourage members to share their unique perspectives as this can lead to more creative solutions and better team performance. Leaders should not only encourage team members to embrace their uniqueness, but they should also provide opportunities for them to share their experiences and perspectives.
5. Recognize and celebrate cultural diversity. This can help team members feel valued and respected, which can improve both morale and overall team performance. Hosting cultural events, having team members share cultural stories, and providing well-designed training programs are a just a few ways to do this.

By promoting cultural awareness, providing intercultural training, establishing clear communication guidelines, embracing diversity, and celebrating cultural differences, companies are more likely to have teams that not only work well together, but produce results. How are your global teams performing?

About the author: Brett Nelson is a US-based HRD Consultant, program designer, and facilitator. Having spent most of the past 25 years living and working in Asia, he is well acquainted with intercultural pitfalls. Helping others to avoid them is his mission. 

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