Do business leaders and HR departments pay sufficient attention to equipping people preparing for international assignments, as well as managers leading cross-cultural teams, with sound cross-cultural leadership skills? Research conducted at Dutch Neyenrode Business University suggests they don’t. And that’s a pity, the same research points out: costs related to failed international assignments are sky high, while the one secret ingredient that turns the odds in favor of success – developing the right cross-cultural mindset – is something that can be trained and coached.

In our fast-paced globalized economy, international assignments are on the rise. According to KPMG’s yearly survey of global assignment practices, companies generally make it easier for employees and their families to work and live abroad, both for short- and longer-term assignments. They also invest significant amounts of time and money to make expatriate assignment a success.

Unfortunately, says Dutch economist Matthias Spaink who recently presented the results of his PhD study on “Characteristics of Intercultural Competence among International Business Assignees”, many such international assignments fail. ‘Failure rates of expatriate assignments have been estimated anywhere in between 16 and 50 percent, with financial consequences ranging from $200,000 to $1.2 million’, according to Spaink. Failed cross-cultural assignments can be very painful for the expat and his or her family, returning home without a sense of accomplishment. And they are always painful for the company concerned, both in terms of direct costs and in terms of reputational damage.

‘So what went wrong?,’ the question then becomes. Neyenrode’s Spaink, himself a seasoned businessman, decided to dig into the subject. ‘I wanted to provide more insight in key factors determining intercultural competence among Western international assignees, so that Western multinational companies can improve their decision making on both selection and training/development of international assignees, ultimately leading to reduced failure costs related with failed international assignments.’

What does his research (click here for background information) tell us? What determines a person’s effectiveness in cross-cultural business situations?

People will be most successful in cross-cultural business situations, the study finds, if they possess, or develop, the following leadership characteristics:

• A curious mind;
• Explorer’s mentality;
• Emotional intelligence;
• The genuine will to understand what lies behind the habits, traditions and patterns of interaction that are different from one’s own (‘the curiosity and will to understand what’s different should be positive, open, and nonjudgmental,’ Spaink adds);
• A sense of humor (humor, even mixed with self-mockery, can take away a lot of tension);
• Strong self-identity (self-reflection and self-knowledge, combined with awareness of your own cultural identity and the way you perceive other cultures and differences).

 The key ingredient determining success in unfamiliar cultural settings is: MINDSET.

Sounds logical, right? And yet, companies pay very little attention to this aspect according to Spaink (which is in line with what I witness when supporting multinational companies and their leaders in improving cross-cultural effectiveness).

Not in the recruitment & selection process, where the focus is mainly on technical and functional competences.

Not in training & development processes. These traditionally focus on knowledge and skills as key elements of expat trainings. In fact, the development of attitudes is equally, if not more, important. Most importantly attitudes like “being open for the unexpected”, “strong self identity” and “seeking for diversity”.

In other words, preparing people by simply training the do’s and don’ts of cultural etiquette is not enough.

Cross-Cultural Booster Programs (find out more)

I see a huge potential for companies to increase their success in managing international expansions and assignments, and the cross-cultural challenges these bring. It is essential to pay more attention to stimulating people to develop an effective cross-cultural mindset. By incorporating this in the learning & development processes of the organization, by making it an important aspect of leadership development and team development programs. Not by focusing only on training, but by also putting in place on the job coaching and mentoring programs. And I mean coaching and mentoring in which the leaders of the organization play a central role.

Leaders who are able to support and coach their people and teams to deal effectively with cross-cultural challenges will boost the company’s success (read more here).

What are your thoughts? Do companies pay enough attention to developing cross-cultural competence? What is your experience?

Photo: Hey Paul/Flickr (Creative Commons)

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Aad is a global business advisor, change leader, executive team facilitator, leadership coach, and frequently asked keynote speaker. He is founder and managing partner at HRS Business Transformation Services where he works with senior executives and leadership teams globally in three key domains: ‘leading complex change’, ‘cross-cultural leadership’, and ‘post-merger integration’. Find out more about Aad and HRS’ services. If you would like to invite Aad to your organization contact us.