Dive into Inclusion & Diversity Vol. 2 “Acquire Cultural Intelligence, an essential skill to survive in this age of diversity!”Event Report
Date and time: October 29, 2021, 12:05-13:15
Dive into Inclusion & Diversity is an in-house online seminar held every few months to update knowledge on inclusion and diversity.
This session's theme was cultural intelligence, an essential skill to survive in this age of diversity.
With intensifying competition in the global marketplace, industry restructuring, and the increasing mobility of human resources (*NEC has also seen a significant increase in the number of mid-career hires), collaboration with members from different national and organizational cultures has become inevitable.
In addition, as the values and work styles of individual employees become more diverse, it is essential to create inclusive teams where members with different cultural backgrounds can demonstrate their individuality and strengths, rather than assimilating them, in order to create innovation and become an organization that is resilient in face of change.
We invited Ryukichi Miyabayashi, author of "Cultural Intelligence as a Management Strategy" (Visiting Associate Professor at Graduate School of Project Design*), to talk about the impact of culture on management and business and Cultural Intelligence essential for building innovative teams.
This article features content from the seminar in digest format.
- *The affiliations and positions of the speakers are current at the time of the event.
What was missing at the CIA? Diversity!
First, Miyabayashi introduced his thoughts on diversity and culture with examples.
Here is the essence of the seminar.
- The CIA started reforms to create a diverse organization after the 9/11 terrorist attacks. Because of the failure to foresee 9/11, an investigation into the state of the organization identified lack of diversity as one of the flaws that could not be overlooked (statement by Carmen Medina, former Deputy Director of the CIA Intelligence Division).
- At that time, the CIA staff was skewed toward the so-called "obvious elites," such as white, Protestant, and Ivy League-educated people. No matter how talented the people are, if an organization is made up of people who all see things from a single worldview, there will be many blind spots. The larger and more complex the issue, the more areas cannot be covered.
- However, diversity is not the answer to everything. If you were to select five relay athletes, wouldn't you choose five in order of how fast they are on their feet rather than diversity? In some cases, if the issue is straightforward and easy to understand, a uniform organization may work more effectively. A perspective that incorporates diversity according to the size and complexity of the issue is necessary. Otherwise, diversity becomes a cost.
- Culture can be compared to an iceberg. Beneath what is visible on the surface, such as rituals and customs, there is an invisible part called values. Values are developed by the age of 12, and people perceive things based on these values. Therefore, it is not always the case that the other person sees the same thing in the same way as you do. The same person may be evaluated completely differently in different cultures.
In order to understand different cultures, it is important to take off one's own glasses and look at things from a broad view with someone else's glasses
Miyabayashi continued by introducing Hofstede's six-dimensional model as a tool to see different cultures. Due to time constraints, he limited his explanation to four of the six models.
Power distance has a significant impact on management style
- Power distance can be easily understood by imagining the distance between the most powerful person in a country and ordinary people. An example is the president’s office in Germany and France. Germany, where a simple president’s office is OK, is a country with a small power distance. On the other hand, France, which accepts a luxurious and gorgeous president’s office, has a large power distance. Even countries next door to each other have very different attitudes toward power.
- Power distance has a great impact on the approach to management. In countries where power distance is small, participatory management is preferred. Supervisors and subordinates are equal peers. The ideal supervisor supports what they want to do, and authority is transferred to them. In countries with large power disparities and deep organizational hierarchies, the ideal supervisor is someone who directs and judges everything. Hierarchy is important in organizations, and power tends to be concentrated in one point.
- It is difficult to apply the management style of a country with a large power distance to a country with a small power distance. The reverse is also true. The power distance score is 35 for Germany, 68 for France, and 54 for Japan. Many countries in the Middle East have high scores. It should be recognized that the majority of countries in the world as a whole have large power disparities.
Which do you prioritize, personal connections, or professional skills? - Collectivism or individualism -
- Collectivism prioritizes the interests of the inner group to which one belongs, while individualism emphasizes the interests of oneself and one's immediate family.
- When recruiting, which is more important: personal acquaintances or professional skills? In collectivist organizations and societies, a person's personal connections are valued more than his or her professional skills. The subject is "we" and the opinion of the group to which one belongs takes precedence. They are most averse to losing their status within the group. On the other hand, in countries where individualism is strong, individual professional skills and experience are valued.
- In Japan, the score is 46 (moderate, meaning slightly more group-oriented). While many people in the US say that they and those around them are individualistic, one survey uniquely points out that many people in Japan say that they are individualistic, but those around them are collectivistic. Globally, collectivism is far more prevalent than individualism.
What is achievement orientation that even changes the catchphrases of advertisements?
- In some countries, people are praised for putting up posters that say “Top salesperson of the month,” while in others, they are the target of teasing. This is due to the difference between societies where social success and status are important (= high achievement-oriented score) and societies where quality of life, consideration for the weak, and harmony are important (= low achievement-oriented score).
- Nordic countries tend to have generally lower achievement-oriented scores. Quality of life is emphasized in welfare-oriented societies. A good supervisor is a relationship builder. Family is more important than work, and the roles and expectations of men and women are equal. On the other hand, in a society with high achievement-oriented scores, successful people are admired and work is more important than family. Differences in the roles and expectations that men and women play tend to exist in society.
- Advertisement expression is also distinctly different. Even in the same Budweiser advertisement, the wording in the US is “King of Beers,” whereas in Denmark it is “Probably The Greatest.” The difference between the US, with its high achievement-oriented score, and Denmark, with its low achievement-oriented score, can be seen in the advertisement expression.
- In Japan, the score is 95. In fact, Japan has the highest achievement-oriented score in the world. It is said that Japan's craftsmanship culture is supported by the strength of achievement orientation, which is not all negative factors. However, the existence of a sense of "if you are a man or woman, you should do X" is thought to be influenced by this high score. Many economically advanced countries have high achievement orientation scores.
The score for uncertainty avoidance has a significant impact on project management
- Uncertainty avoidance is the degree to which people are willing to take action to avoid uncertainty in unknown situations. For example, the way restaurant guides are made is different. The Zagat Survey in the US is a ranking voted on by the general public, while Michelin in France is based on an undercover survey by experts. France has a higher uncertainty avoidance score, reflecting a tendency to value the opinions of experts in the field.
- In countries with low scores, less regulation is better. Many people enjoy even an uncertain future. It is natural to take risks for success. They see it as part of the learning process. People in countries with high scores don't like to have uncertain things happen. Therefore, they make a lot of rules and manuals in advance. In Japan, the score is 92. The excellence of Japanese manufacturing operations is due to the combination of a high tendency to avoid uncertainty and a strong achievement orientation.
- Uncertainty avoidance affects project management. People in Japan and Germany, which score high in this area, communicate with necessary stakeholders in advance and steadily eliminate risks as they move forward with projects. This takes time, but the project proceeds quickly to its goal once a decision is made.
On the other hand, project management in the US and the UK, where uncertainty avoidance is low, sets short-term goals and aims for the final goal through repeated trial and error. Because the “common sense” of how to proceed with a project is completely different, even if the two countries work normally, there will be a difference in the speed of decision-making, and it will not go well. It is essential to understand each other's differences when working together on a project.
Eddie Jones, a famous rugby coach, is a master of utilizing diversity
Eddie Jones, former coach of the Japanese national rugby team, managed diversity very well. The Japanese national rugby team is a global team. It is said that he analyzed the personalities of his teammates and their compatibility, and led the team by thoroughly considering where each player could make the most of their strengths, how to combine them, and how to encourage their growth. This may provide a hint for us in our business activities as well.
In closing, I would like to share a few words from Eddy. First, understand the cultural background of the country and recognize the differences. From there, think about how to find their strengths (from “The Words of Japan's National Rugby Coach Eddie Jones: Ideas and Strategies for Winning in the World”).
Q: When addressing diversity, some people ask, "Why do you give special treatment to only some people? It is unfair.” How should you respond to that?
Miyabayashi: We are in a transitional period. At this point, we are only focusing on one part of the diversity issue (for example, the utilization of women). To move this forward more, incorporating diversity is an attitude that we should focus not only on the right things to do by doing the right thing and being equal as human beings, but we should also discuss what is absolutely necessary to improve the company's performance, the better things to do. If all employees understand that the purpose is to improve organizational performance by leveraging diversity, there will be no discussion about equality and inequality.
According to a McKinsey report ("Diversity Matters"), companies that embrace diversity have higher profit margins. One might criticize this by saying, "Well, if the company is so profitable and doing so well, it should also be able to embrace diversity." However, as in the case of the CIA, it is clear that the more complex the issue, the more essential it is to have diverse perspectives. The situation should change if more and more companies faithfully measure whether diversity is linked to performance as non-financial information and disseminate the results both internally and externally. Government policy already requires companies to disclose 19 management information items related to investment in human resources, including diversity. This trend will accelerate in the future.
Q: In an organization where the majority of employees are Japanese, what points should be paid attention to in order to include foreign employees well while taking advantage of their strengths?
Miyabayashi: I think the first step is for both the newcomer and the accepting organization to commit to turning differences into strengths. As we have seen in the discussion so far, differences tend to be easily dismissed as a cost. Rather than seeking assimilation, the will to leverage differences is the foundation for everything. On top of that, it is important to objectively understand the cultural characteristics of individuals and organizations, and to promote understanding of others and oneself. It was when I studied abroad and placed myself in a completely different environment that I became keenly aware of myself as a Japanese person in my life. I suspect that foreign employees also first became more deeply aware of their own identity when they come to Japan. After deepening their understanding of their position, Japanese culture, and NEC's business operations, they should begin to think about the “Next Stage,” how to develop their strengths. In doing so, we believe it is important to develop leadership to create an inclusive organizational culture while firmly conveying the company's message of "We want you to make the most of your individuality in the organization, not assimilate them."
Q: I think it is necessary for each individual to adapt to different cultures and for the organization to accept different cultures. What are the key points related to this?
Miyabayashi: As you say, there is a limit to what individuals can do by themselves. Tangible improvements, such as providing diverse human resources with opportunities to play active roles and a fair personnel system, must be combined with intangible measures. Individuals, on the other hand, need four things: a willingness to collaborate with cross-cultural personnel (motivation), an understanding of cross-cultural issues and self-bias (knowledge), the ability to design to utilize knowledge (strategy), and practice and reflection (action). First of all, you must have a strong motivation to take on a leadership role in this environment. We believe that people who have this mindset, even more importantly than their abilities and knowledge, have the potential to grow into global leaders.
With this motivation as a base, you must learn what is common sense to others and what is different from yourself, and then change your leadership style based on what you learn. While there are bound to be failures, this provides opportunities for reflection and redesigns the next action, and by repeating this cycle, not only will the leadership of each individual be transformed, but also the organizational culture itself will be transformed.
Q: We have become accustomed to a harmonizing or “read the air" culture that is unique to Japan. How can we transform our consciousness?
Miyabayashi: As a basic premise, I think it is not necessary to think in terms of the need for a change. The culture of reading the air has its advantages in building smooth relationships. We should properly acknowledge that benefit. On the other hand, when doing business globally, we must consider where we should change in order to be on par with others. One of the biggest downsides of reading the air is the inability to have lively discussions. When working with people from a culture that demands it, we need to be willing to change ourselves while asking others to understand our way of doing things. For example, it may be effective to start by changing the way meetings are held (such as units of time, number of participants, and rules regarding objectives).
Comments from participants
Comments from employees who listened included the following:
“I feel that we are now at a stage where each member is being asked to make a decision and commitment to achieve not only diversity, but also inclusion in order to produce results. I would like to take advantage of opportunities such as this seminar to enhance our individual and organizational inclusion capabilities.”
“I realized once again how difficult it is for new ideas to emerge from a group of people with the same values, and how important it is to remove one’s own glasses and look at things in a different way.”
This reflected how it was an opportunity to rethink the importance of intercultural adaptability of each employee and intercultural adaptability of the organization.
He graduated from Keio University, Faculty of Economics. He acquired an MBA from IESE Business School. He acquired a Doctorate in Business Administration from Hitotsubashi University. He specializes in cross-culture, marketing, and technology.
After working in the sales and marketing department of Dentsu, he was engaged in investment and IPO support for cutting-edge technologies in Japan and abroad at Dentsu Innovation Initiative.
He realized the importance of CQ while working on numerous overseas projects in the US, India, Brazil, Saudi Arabia, Israel, and Europe. In addition to developing a CQ leadership program for expatriates, he has been involved in leadership training for executives of overseas subsidiaries.
His mission is to bridge two different cultures, not only in the context of Japan and overseas, but also in the context of large corporations and start-ups and academia and practice.
After leaving Dentsu, he co-founded a VC firm specializing in IoT and data technology.
He is author of "Cultural Intelligence as a Management Strategy" (2019, JMAM), "Marketing Practice Text" (2020, JMAM), and translator of "Grant Contemporary Strategy Analysis" (co-translation) (Chuokeizai-sha, 2019).