What role does cultural intelligence play in international business?

Intelligence is a nuanced term used to refer to a range of skills and abilities. You may have heard of spatial or emotional intelligence, but are you familiar with cultural intelligence and its relevance to international business?

In an increasingly globalised and interconnected world, cultural intelligence has never been more important when communicating across borders; whether accessing new markets, building rapport with a global team, or working with international stakeholders.

Read on to learn about how investing in cultural intelligence can help your business.

What exactly is cultural intelligence?

Cultural intelligence, or CQ, refers to a person’s ability to adapt to different cultural contexts. More specifically, culturally intelligent people want to learn about other cultures, they are good at acquiring knowledge about others’ beliefs and cultural practices, and they make conscious adjustments to their behaviour to show respect to different cultures (Earley and Ang, 2003; Van Dyne, Ang and Koh, 2008, in Engle and Delohery, 2016).

At the heart of cultural intelligence, then, is the ability and willingness to adapt one’s approach to foster inclusion and communicate messages clearly to different audiences.

What’s the difference between cultural intelligence and cultural sensitivity?

Cultural sensitivity involves understanding and showing respect towards different cultures and the people who practise them. It’s about being inclusive and taking the time to learn about other people and creating a welcoming atmosphere.

Cultural intelligence, however, turns cultural sensitivity into action; it’s the ability to leverage cultural knowledge to adapt working environments to foster equal participation, and to develop business communications that are culturally relevant and impactful.

In this sense, cultural intelligence is more of a strategic business skill that involves operationalising cultural sensitivity to adapt company processes to new cultures and contexts.

What does cultural intelligence, or a lack thereof, look like in practice?

The classic application of cultural intelligence is when giving or receiving feedback. In some cultures, direct feedback is preferred because it is seen to be clearer, whereas in other cultures this may come across as excessively critical, abrupt or even rude. In this instance, culturally intelligent people would learn about the culture of the person due to receive feedback and tailor their approach accordingly to ensure that their message is clear, and their tone culturally appropriate.

When it comes to marketing and communications, cultural intelligence is essential when launching products in a new market. The approach that worked in one country may not work in another and, if severe enough, mistakes can cause irreparable reputational damage. Alternatively, the marketing campaign could simply fail if the message that you’re trying to convey didn’t land and wasn’t intelligible to the local audience.

Although a light-hearted example, I once sat down at a restaurant in the beautiful northern French city of Arras. I took one look at the menu and saw ‘One crunchy sir’ and ‘One crunchy madam’. I had to chuckle – the term was supposed to be a translation of croque monsieur and croque madame, both a kind of toastie with bechamel sauce, with the latter topped with a fried egg. Croque literally means to bite into something or to crunch, monsieur means sir and madame means madam. While the mistake in this example was largely inconsequential, if your company is naming a product or running a marketing campaign in a new country, for the campaign to succeed, it must be clear what the product is, and its name should be understandable and not awkwardly comedic.

The link between language and cultural intelligence

This brings us to the importance of applying cultural intelligence to linguistic decisions. When entering a new market, the words you use to name, describe and advertise your product or service need to be selected with care and consideration of local customs. This is especially the case where the language is different, but it’s also true for markets with a different variety of the same language, i.e. a British company entering the US market.

The risk of reputational damage and failure are too great to rely on subpar translations and awkward linguistic adaptation. That’s why we recommend that you entrust your projects to a qualified translation and localisation professional who understands the target market and can adapt your puns, slogans and descriptions to make them truly sing in your new market.

AI and cultural intelligence

AI struggles when it comes to cultural intelligence. It doesn’t know how concepts come across, or the implications of certain words in different contexts. Relying on it for cultural intelligence is a risky move.

This is underlined by a recent test by Country Navigator, where five AI products were asked how feedback should be given. Four out of five responded with the same SBI feedback framework, which is linked to Anglo-American feedback culture. This is despite feedback, and the way it’s given, differing significantly in other cultures around the world. The question then arises: how can there be just one framework that different AI products all suggest? Well, Country Navigator note that cultural bias is baked into standard AI tools and the answers they provide can never be completely culturally neutral.

The risk with AI, then, is that the cultural perspective that is most prevalent in the large language model (LLM) trumps every other perspective in its answers. With English dominating in online content, the responses provided by AI could very possibly turn into an echo chamber for native English-speaking audiences, regurgitating the perspectives that they already hold, to the detriment of cultural intelligence and diversity.

Using AI selectively and carefully is important to ensure that we remain aware of cultural differences and seek to develop our cultural intelligence, rather than leaning on a culturally biased AI-generated cultural code. In doing so, we can at once foster togetherness and maximise business opportunities around the world.