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6 Ways Businesses Benefit From Cultural Competence

Dr. Richard Nongard
Aug 20, 2018

Recognizing differences in others can help improve your business.

Understanding cultural differences and building a culturally competent company isn’t just a skill for global businesses. Your small business can learn a lot from the principles of international business.

Cross-cultural competencies keep businesses from making stupid decisions, especially in advertising. Recent notable failures illustrate why they are necessary. Dove soap pulled a racially insensitive ad featuring women of color removing an article of brown clothing to reveal white women in clean clothes underneath. A few years ago, Pepsi apologized for an absurd Mountain Dew ad directed by Tyler, the Creator that featured a battered woman picking a perpetrator, which was really a “dewed” up goat, out of a lineup of African-American men.

Many companies have learned the hard way that the old adage “there is no such thing as bad press” just isn’t true. More than avoiding faux pas, business leaders also know cross-cultural competencies can have an enormous impact on success in international business. Many Western companies have learned the hard way that by not developing “guanxi,” a personalized network of influence, often formed through socialization, they have missed the boat and others have swooped in to earn the business they worked hard to obtain.

But cross-cultural competencies go far beyond simply helping a company avoid racial stereotyping and exposing an internalized bias. Cultural competencies are also far more practical than being reserved for elite international companies doing business abroad. Cross-cultural competencies are essential for every business, even a local business, because everywhere there are people, there are differences.

When business leaders focus on cultural competence skills there are six predictable outcomes:

  • Cultural competence creates rapport
  • Cultural competence improves efficiency
  • Cultural competence opens new markets and networks
  • Cultural competence makes people feel valued and builds loyalty and repeat business
  • Cultural competence is interesting, and interest creates innovation
  • Cultural competence helps you avoid mistakes, miscommunication and dissatisfaction

Imagine how your bottom line would improve if you could increase cultural competence in your leadership and reach these six outcomes. Decreased dissatisfaction reduces cancellations and returns. Innovation yields higher profit products and services. It is always easier to sell something to an existing customer than a new customer, and loyalty is always profitable. Efficiency reduces waste, new markets yield new customers, and rapport gets us to the goal faster. In most businesses time is money, and time saved is literally a dollar earned.

Many years ago, I met a salesman who told me his success came from doing one thing: Learning “Hello,” “Please,” “Thank you’” and “You’re welcome” in as many languages as possible. I am up to about 20-25 languages for these four words, and it has worked wonders for me all across America. The Thai waitperson has given me better service with a “Kob Kun Krub,” which means “Thank you,” when my tea is refilled, and I have surprised Russian customers by greeting them with a smile and a simple “Privyet,” which means “Hello” in Russian. In fact, I have one Russian customer who has bought my services for years, and she says it’s because I make her feel welcome at a time when many Russians in America feel the reality of global politics playing out in judgments about their character.

But again, cultural competencies are not always this obvious. It is about knowing that generational experience between people with otherwise very similar backgrounds can have a profound impact. Younger tech support people in my company have become exasperated with older customers who are not native users of technology, and I have had to teach them patience as a cross-cultural competency when dealing with customer adaptation of technology.

The culturally competent leader understands that differences exist among all people and the skills used in international business apply equally to local businesses. Leaders who want to discover the six ways cross-cultural competence can increase the bottom line need to pay attention to the bridges that span these differences, obvious or not.

The top three skills leaders can develop and teach team members include:

Empathetic responsiveness

This is all about stepping out of our own worldview and responding after we have taken a moment to understand another’s vantage point. This is easier said than done, as there is a lot of difficulty in understanding someone else’s frame of reference when we might not have our own experiences that help us to see clearly. This is why leaders always need to expand their own world-view by creating as many new experiences as possible and really taking the time to listen to others before responding.

Reserve value judgments

In the customer service training I do, one of the chief complaints I hear from staff members is, “Our customers are idiots!” And if your staff believes this – your customers will know they are disdained even if it is unspoken.

The No. 1 reason for this belief is that customers who are new to a product or service do not have the same experience trained customer service people have in the exact same product or service. We often forget that one person’s experience is different than another’s and inject a value judgment about the situation. Learning how to put space between our thoughts and our value judgments is an essential skill. When we do this, instead of driving customers away with a culture that disdains them, we build a culture that affirms them and values them, and that always fosters loyalty.

Values clarification

A skill to develop is the ability to ask customers what is most important to them. I watched a window salesperson do a presentation once. He spent 30 minutes losing rapport with a customer when he focused on the durability of his product. Yes, valuing durability is important, but for this customer, aesthetics were far more important than durability. Both were features of the windows and both are important, but a simple question at the outset of the sales call could have changed the dynamic. I suggested to the salesperson that he lead with a visualization, asking the customer: “If you came home tomorrow and all your windows were magically replaced with new ones, why would you be happy about it?” The answer will always contain the core value of the customer.

Cross-cultural competencies lead to higher profit, innovative teams and outcomes that benefit everyone. There are no downsides to paying attention to cultural competencies – only positives for every leader, in every organization and in every place.

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Dr. Richard Nongard
I am an entrepreneur, business owner, and the author of numerous books on leadership. I have a doctorate in Transformational Leadership from Bakke Graduate University where I am now also a faculty member.