Contextual Intelligence: The Powers to Lead
July 14, 2008
Effective management is a pipedream for those who remain ignorant about their culture (Excerpted from The Powers to Lead)
By Joseph S. Nye
Culture is the recurrent patterns of behavior by which groups transmit knowledge and values. Almost all human groups develop cultures, and they exist at multiple levels. Some aspects of human culture are universal while other dimensions are particular to a group. The culture of the group sets the framework for leaders: "Culture and leadership are two sides of the same coin in that leaders first create cultures when they create groups and organizations. Once cultures exist, they determine the criteria for leadership and thus determine who will or will not be a leader." If leaders do not "become conscious of the cultures in which they are embedded, those cultures will manage them."1
The psychological needs of followers to attribute charisma to leaders in times of personal or social need may be true of many groups, but the particular traits vary across cultures: "A charismatic leader of one organization does not necessarily capture the hearts and minds of followers from a different type of organization." Although Gandhi influenced Martin Luther King, Gandhi's style was very Indian while King's was very American.
To take a business example, a new American boss in a Mexican plant fraternized with subordinates to create a friendly climate in the workplace, but his Mexican managers (who relied on cultural values of strong power and authority) rebelled because their power base was undermined.2 Effective leaders inspire followers through the careful management of emotion, but appropriate levels of emotional expression vary with cultures. Japan is not Italy. A Thai sees more than 20 separate smiles providing subtle cues where a Canadian sees only one "friendly smile."3
Microcultures such as a club or a workplace require as much cultural intelligence as national cultures. Many a corporate merger that looked lucrative to investment bankers because of economic synergies and opportunities comes a cropper because of cultural differences. Wal-Mart is known for its corporate culture of discipline, attention to detail and careful accounting. When Wal-Mart took over Blockbuster Video, it inherited a company with a laid-back culture that grew out of the 1970s, resulting in problems that plagued profitability.4
When defense contractor Raytheon acquired a rival firm the cultures were similar, but the CEO realized that "we had been their enemy for years and they hated our guts." Rather than try to indoctrinate his new employees into an existing Raytheon culture, he articulated a new vision of perfection in production as the goal for the merged company, and adjusted rhetoric and rewards to reinforce this new culture.5
The 9/11 Commission attributed the failure to "connect the dots" of intelligence in advance of the September 11 attack in part to cultural differences which inhibited communications between the FBI and the CIA. The FBI law enforcement culture sought and communicated information in relation to preparing cases for trial and convictions, while the CIA intelligence culture treated information as a continuing flow to be protected for future monitoring and warning.6
Culture is not static, but it tends to change slowly. People get set in their habits, particularly when values are involved. But sometimes events and policies can speed up change. Take offshore oil platforms, which are known for a macho culture of men working in isolation from the rest of society. When an oil company discovered that a high rate of accidents was cutting profitability, it introduced sensitivity training, rewarded cooperation and changed the culture from a macho stereotype in the direction of a more caring and cooperative culture, and the rate of accidents declined.7
Even at the national level, impressive cultural changes occur. Japan had a militaristic culture in the 1930s, but changed to "Japan, Inc." with an intense economic focus after the shock of losing World War II. A Japanese leader cannot come to power today with the bellicose and nationalistic style that would have been essential in the 1930s. Economic and social trends also produce cultural change. A century ago, China's poor economic performance was attributed to its "Confucian" culture and India was said to be limited to a "Hindu rate of growth." Today both are ranked among the fastest growing economies in the world, and the success of Chinese and Indian political leaders now depends heavily on economic growth for their legitimacy.
Asian companies are known for a secretive family style of leadership, but this culture may be changing. Quinn Mills of Harvard Business School speculates, "As Asian companies rely more on professional employees of all sorts, and as professional services become more important in Asian economies, the less autocratic and more participative and even empowered style of leadership will emerge. Asian leadership will come to more resemble that of the West."8 At the same time, it is unlikely that all aspects of cultures will converge under the pressures of modernization and globalization. Japan has weathered a century-and-a-half of responses to globalization, but no one would say that its culture resembles that of Europe or the United States.
A Dutch scholar observes that "leadership in Holland presupposes modesty, as opposed to assertiveness in the United States. No U.S. leadership theory has room for that." In his view, American culture skews American management theories which feature three elements not present in other countries: market processes, emphasis on the individual and a focus on managers rather than workers.9 But a single European culture does not exist. Theorists have identified at least four patterns in Europe: Anglo market orientation; French pyramidal structures; Scandinavian consensual approach; and German machine efficiency. A European leader has to understand these differences. A two-hour meeting in Germany may take all day in Southern Italy.10 Even though German-speaking countries, Germany, Austria and Switzerland show significant cultural differences.11
At the national level, a comprehensive review of nearly 400 studies concluded that cultural values in a country will determine the optimum leadership profile for that country.12 The GLOBE Project administered 17,300 questionnaires in 62 societies, and on that basis identified 10 cultural clusters with different leadership characteristics: Latin America, Anglo, Latin Europe, Nordic Europe, Germanic Europe, Eastern Europe, Confucian Asia, Southern Asia, Sub-Saharan Africa and the Middle East.13 And within each of these clusters, national, regional, local, religious, organizational and other subcultures exist. Leaders face daunting challenges in understanding national differences in cultural context.
Some people are better able than others at encountering different environments—whether national or organizational—and learning the appropriate cues to figure out quickly what is happening in a culture. Such skills can also be learned. Just as some people are naturals in learning foreign languages while others have to struggle, similar patterns exist in cultural intelligence (which is a subset of contextual intelligence). People can alert themselves or be trained to increase the complexity of their thinking, experience cross-cultural settings, overcome negative stereotypes and imagine other cultural viewpoints.
Reprinted from The Powers to Lead (Oxford University Press, www.oup.com/us) by Joseph S. Nye Jr. © 2008 by Oxford University Press.
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