Cultural intelligence in global finance

Garreth Hanley:
This is INTHEBLACK, a leadership, strategy and business podcast, brought to you by CPA Australia.

Tahn Sharpe:
Welcome to INTHEBLACK. I'm Tahn Sharpe, editor of INTHEBLACK magazine at CPA Australia.

In today's episode, we're talking about cultural intelligence, which is all about the ability to understand and work effectively across different cultural contexts. It combines awareness, empathy, and behavioural flexibility, and if done right, allows professionals to really build trust and navigate lots of diverse perspectives.

In global business, which we'll focus on today, it's a key skill for making informed decisions, fostering collaboration, and sustaining long-term cross-border relationships.

To help us understand cultural intelligence, I have with me Charlotta Öberg, who has supported thousands of professionals to thrive in multicultural and international contexts in various roles across several continents, including her current one as programme director for Asialink, which helps promote and develop in building professional relationships with Asian nations.

Welcome to INTHEBLACK, Charlotta.

Charlotta Öberg:
Thank you so much, Tahn.

Tahn Sharpe:
Now you're from Sweden, but you've worked across 10 countries. Can you explain how travel has shaped your understanding of cultural intelligence in leadership?

Charlotta Öberg:
Certainly. So travel, isn't it the great eye-opener? You go out there, you make discoveries, you make mistakes, you learn what you didn't know you didn't know, and that's a fantastic start for cultural intelligence and that can lead into culturally intelligent leadership. But it's certainly not one big leap. It's certainly many small steps. So you know how you go in as perhaps a young traveller.

You go out into the world and you might be wearing the wrong clothes when you go to sacred sites or you might be making the wrong greetings. You might be confused, do I kiss? Do I bow? Do I shake hands? You might pat the head of a Thai child and then you learn you shouldn't. You realise in the moment and you learn that that's something that is sacred. Touching the head of a person is sort of lowering them symbolically.

Such things are fascinating. They can be fun, they can be awkward, but it's low cost in terms of risk and impact. But it's a great start of cultural intelligence. And so the real big leap usually comes when people go beyond travel. So the in-depth heads-on engagement with culture that happens when you really immerse yourself and you go outside of your comfort zone to really work something out with another.

That is the real game changer for leaders. So I think if you can take the curiosity and joy of travel and then put that in as a mindset when you engage in business across cultures, then you're off to a good start. Then you add skills, cultural intelligence, the pieces that you mentioned in your introduction and then you're really doing it. Then you're really doing culturally intelligent leadership.

Tahn Sharpe:
Okay. The travel analogy really kind of puts that into perspective. If you follow on from that and talk about the world that sort of INTHEBLACK operates in, how do you define cultural intelligence in the context of the accounting and finance professions where precision and trust are really paramount?

Charlotta Öberg:
Yeah, so cultural intelligence for your listeners in a basic way, it is about being able to read cultural clues. It's about assessing their impact and then being able to act in new ways that bridge those cultural gaps. So as you have said, just even there in your question, when the human engagement is about trust, as I know it is specifically in financial services, then the cultural conditioning that we all have becomes a real... It could be a real asset, but often it's a real challenge.

So in financial services, what I've seen working across cultures in your sector and helping other people do so well, it is about how the services that you deliver are perceived. It's really about the engagement, the frontline engagement piece that you do with clients. Obviously you don't just deliver the numbers, you deliver their analysis, you recommend courses of action and understanding how they land in a different cultural setting. That is the key.

So it is about how you frame things, even though of course in financial services you may feel that or you would be right to say that there is a common language around finance where minds can meet. Everyone is immersed and also beholden to their own cultural context. So building trust, yeah, it's an intensely human activity, but how that's done that is different.

So when we talk about the relationship, if we just get detailed on that for a moment, when I say build a relationship, do your listeners think, yeah, I do that. I do a LinkedIn look and then I spend the first five minutes in a meeting just establishing a few things that I've noticed. That's a way of building a relationship in a task focused culture that really values getting stuff done fast. Or do you build a relationship over a series of meetings?

It's the first meeting only about building relationships. Maybe you'll carefully map common connections, maybe you would talk about the years of engagement between organisations. Are you talking about a web of connections that you might have inside and outside of your field? Are you even getting a bit more personal? So you don't just establish your professional credentials, you also talk about family and interests in life. Those are some culturally different ways of building the relationship.

Tahn Sharpe:
It's interesting that you touch on building relationships as a function of all of this, and I guess that's a good segue to the Asialink leaders programme, Charlotta. Perhaps you can tell us about that and maybe the cultural blind spots that participants most commonly discover about themselves.

Charlotta Öberg:
The Asialink leaders programme that I'm fortunate enough to head up is our flagship programme for developing Asia capability, and it brings in 50 people from across sectors who are absolutely incredible, often very experienced, mid to senior level leaders who want to pursue engagement with Asia, with parts of Asia. So as they do that, even though you're experienced and ambitious, it does not make you immune to missing out on these cultural clues because we just don't always know how we've been culturally conditioned until we meet someone who's been culturally conditioned differently.

And as I have worked with hundreds of leaders from our programme over the years, here's what I see most commonly that they uncover about themselves as they go through the programme. And it's basically two things. It's hierarchy and it's communication and how that differs in their engagement with Asia.

So hierarchy, that's because Australia is an outlier in our region. In terms of hierarchy, Australia has this wonderful cultural concept that we sometimes call the tall poppy syndrome, where we navigate hierarchy just with a little less respect, shall I say, than our Asian counterparts tend to do. You can hear I'm generalising here. Of course, Australia is one of the most multicultural nations in the western world as well as being home to the oldest continuous cultures. But as a dominant kind of cultural style, we really value egalitarianism. So leaders know things like don't get too big for your boots.

They know that they will be sort of cut down if they act too much like the big boss. People who are followers, they know that they can pitch in and come in with opinion, and that's often valued and called initiative. That sort of thing, as you engage across cultures, for most part Australia with Asia, that's not going to work because hierarchy is paramount. In Asian cultural contexts, status and respecting status is key. And how do we do that? Well, absolutely doing the opposite to what we do in Australia. We maintain formality, we keep to hierarchy lines. We get senior people to engage with senior people.

In meetings with mixed levels of hierarchy, we don't have junior people speak up and come up with great ideas or answer in front of their bosses. We have them take direction even though maybe lots of the work would be done afterwards. And so that kind of action would look like disrespect to hierarchy and of course loss of face for everyone involved.

So that sort of thing that can happen across cultures, it's a misalignment of sorts and you often uncover this when you see in the room as a sort of sense of discomfort on either side really when things aren't what we had expected. So for me, when people uncover that with hierarchy and realise they have to communicate differently, that's really valuable moments if you're open to learning from them. And from there comes of course a new way of engaging across cultures.

Tahn Sharpe:
That's a fascinating example that you mentioned, the tall poppy syndrome that we do have in Australia in the way that we look at hierarchy. And it's probably exacerbated by the fact that we also have another dynamic where we cheer the underdog until they get to a certain level and then we kind of tear them down as a tall poppy.

And you mentioned that in some Asian countries, that's looked upon completely differently. You wouldn't ever do that. Is it completely idiosyncratic, that kind of dynamic that we have, this underdog tall poppy duality?

Charlotta Öberg:
Interesting that you would ask that because I actually come from a culture that has an even stronger tall poppy syndrome. So we're not alone in Australia. Being Swedish, I have exactly that same egalitarian sort of bent in terms of cultural conditioning. But we are in a minority. So whenever we engage across the world, chances are that we'll engage with people who are used to more valuing hierarchy.

So to be more respectful to hierarchy, to be more careful, not to transgress hierarchy borders, speak up, take initiative, that's what we would call it in an egalitarian culture. But you wouldn't want to be doing that in a way that then would be seen as challenging hierarchy. And that's when we come into other cultural concepts like face and communication.

Tahn Sharpe:
I see. And what are some of the practical ways that finance professionals can build cultural agility when working across Asia Pacific markets in particular?

Charlotta Öberg:
I would say that there are three key things that finance professionals can do. And the first one is quite easy and quite fun. It goes back to the traveller mindset. It is to be relentlessly observant, to pick up cultural clues, continue to be curious, and notice that when you do things and you don't get the reactions or the response that you are used to, you notice that and you don't make everything cultural, but you ask, could it be a cultural factor in here? So that's sort of a start. That's the cultural awareness piece. But as we go into cultural intelligence, you need to do more than that.

So number two is to equip yourself with some cultural literacy. And what I mean by that is just like you have financial literacy, just like you have expertise in your field. So culture, the field of cross-cultural management has a lot to offer for finance professionals. You can get across different tools and really helpful frameworks. I would encourage everyone to go and look at cultural dimensions, which are really sets of parameters on which cultures differ.

So if you're interested and curious, there are tools like GlobeSmart, which you pay for, which I'm not advertising here at all. I'm just mentioning that as one tool. So you can also use tools that are free and cheap. You just Google cultural dimensions and up they come. It's not so important at an early level that you get the best tool. It's more important that you equip yourself with words to describe what might be different. And I'm talking here not so much about surface level actions and habits, but I'm talking about deep cultural values that drive our behaviour.

So if you get that, you're much better able at spotting your blind spots and finding out when something isn't quite what you would hope for when something goes a bit wrong, whether culture is a factor or not.

Tahn Sharpe:
Yes. And I imagine it's important for people who not only work in a cross-border fashion, but have people that they work with right here in Australia domestically who are from other cultures.

Charlotta Öberg:
Absolutely. I mean, we are one of the most multicultural nations in the western world, so there's a lot to observe and learn. And that comes to my third tip, which is get yourself a cultural mentor in your field, in your sector among your members. There is a great cultural diversity pool. And so if you can get yourself a cultural mentor that can help you decipher what's going on, you can learn as you go.

Tahn Sharpe:
Can you share a moment from your consulting work where cultural intelligence directly influenced a business outcome?

Charlotta Öberg:
I can, and I'm going to give you a sort of general idea of where it often happens, and I think the people listening might be able to put this into context and maybe have seen something like this before. Often when we are engaging to work out a deal, to work with our clients to work out a deal, could be anything from mergers and acquisitions to a sales situation, partnership situation, we have a conversation that's ongoing, a negotiation if you will, where we're trying to progress things.

The typical situation that comes, especially between Australia and Asia, is Australians reaching out to confirm that we are in a good place to move forward, saying things like, "Will this be ready do you think by the deadline? Or are you happy to pursue this?" And getting answers like, "Yes, that might be possible," or, "Yes, I think so," or, "Yes, maybe we'll give it some time." And getting a bit stuck thinking there's a yes there, but we're not getting anywhere.

The number one mistake that happens is we overestimate the amount of agreement on the other side and underestimate or undervalue what they're really trying to say, which is there's a bit of a problem here. And so a typical situation that was a sort of a tactile situational context, but typically we tend to not read our counterpart's signals and walk back to understand more about what their priorities and needs are. So that happens quite easily across cultures. But I'm happy to give you a bit of, I guess a generalised scenario that happened with one of my clients recently.

Tahn Sharpe:
Please.

Charlotta Öberg:
I had an Australian organisation that was acquired by a Singaporean organisation and they were working with us to better understand how to engage with these new owners. And here was the situation that led them to us. They'd just been acquired, the Singaporean CEO comes out to meet with them. They had very valuable specific knowledge that they were keen to continue to deliver on in this new ownership structure. So they were ready to pitch, they were receiving this delegation with the CEO, and they were sitting on the other side of the table and they were ready to go and tell them all about what they could do and know.

Also, spotting that there might be just a chance that they could be closed down or sold off in pieces if this wasn't going well. So in come the Singaporean CEO, they sit down, she starts telling them a few of the big initiatives that she has on her plate, and they start responding with such ambition and vision and detail. What is happening there is of course, they're assuming that this meeting is for discussion and for pitching.

What is at her end and her team's end, it is not, it is a first step to share with them what they, who are in a senior role, envisage for the future. So their coming back wasn't seen as a great contribution. It was seen as a challenge, as being difficult to work with, as not quite respecting the new arrangements in the new hierarchy. When the CEO walked out of there, the Australian team thought they'd done well, and they were sort of quietly high-fiving saying, "I think we showed them what we could do."

When the Singaporean team walked out of there, as they found out later, they said, "These people seem difficult to work with. We should perhaps consider outsourcing to the Philippines." And so from there, they worked backwards together with cultural understanding to make sure that the decision wasn't clouded by cultural misunderstandings. In fact, they found that it had been, and they found new ways of engagement and all is well. But that's one example of what can happen when you're, as you have said, blind spots get in the way.

Tahn Sharpe:
Right. And I guess that goes back to the second point. There's hierarchy and there's communications, and they're the two sort of focal issues that we need to look at here. Now you would've come across culturally intelligent leaders in your work.

And if you think of those leaders in particular, Charlotta, could you tell us how they navigate ambiguity and high stakes decisions and all those things differently to others?

Charlotta Öberg:
Yeah, certainly I do. And you know Tahn, there is a whole field of researchers trying to look at what do culturally intelligent leaders do? Is there a particular type, is there a particular skill? Is there a particular strength that they use? And the answer is not quite what you'd expect. It isn't this one thing that they do. It's actually three things that they have in common. It's a process that they take.

And the number one process is they constantly ask themselves what is different here? And they ask themselves that in the context of culture as well as the context of culture, anything from regulations to rules. So when they ask themselves that question, what they're doing is actually disrupting their own cultural autopilot and they become very conscious of how they're thinking and how others are thinking.

So that's number one, and that's number one in cultural intelligence, using your cultural literacy to help you with that. Number two is they go, "Well, what is the impact of this difference?" Because culturally intelligent leaders, they don't get stuck on the difference. Differences are not a problem if you are aware of them and if you manage them well. So it's like any other business engagement, it's just that culture is this hard to spot thing for most people who haven't had a chance to develop their cultural capability. And the third question they then ask themselves when they're assessed, what might be different and what's the impact is what should we do about this?

And the answer to that is multifold. But a culturally intelligent leader goes, "I have an opportunity here to connect my world with the other world." So what is it that needs to happen here? What does the situation need? And sometimes it isn't a behavioural adjustment. You might change the way you go about things like the Australian team and this Singaporean team then did in my example. Sometimes it is about a different way of interacting across systems.

And for your members, one of the things that I think is really fascinating is the exchange of information and how that flows differently in terms of both the hierarchy levels. So in egalitarian cultures, you will have information flowing quite freely. In hierarchical levels, you've got to absolutely engage on just your level and then push it upwards, things like that. Changing how the systems are aligned is something that culturally intelligent leaders are always looking for, these big wins that they can have when they're analysing the situation and deciding on the course of action.

Tahn Sharpe:
So if I'm a professional and I'm going into say, an unfamiliar market, just say an Australian executive who's pushing into an Asian market and dealing more so with Asian partners as well as trying to sort of uplift and display my cultural intelligence, I may also want to say, "Hey, look, this is my authentic self." So I guess the question before us then is how do you balance that authenticity with cultural adaptability?

Charlotta Öberg:
I love that. That is the million dollar question Tahn, because sometimes the way that we prefer to engage, the way that we have deep values and reasons for engaging doesn't actually work across cultures. And I'm going to give an example here because you have to consider whether your authentic self is about that value or it's about an action associated to that value.

Let me give you a very swift example. I, being brought up in Sweden and now living in Australia as a dual citizen, I have that very strong bent towards gender equality. When I interact across cultures with some of my Asian counterparts, genders and the way we deal across genders is quite different. It's not that one gender is necessarily valued more highly than the other.

It's just the rules are different for how genders interact. So my deep value of being respected as a woman in business across cultures, that is something that you said that's part of the authentic self. That's a non-negotiable for me, not just for myself, but for my team. How that happens though, that can be different across cultures. So if I insist on shaking hands, for example, as a sign of respect, then I'm going to get into trouble quite quickly because handshakes is certainly not a universal greeting, and in some cultures, shaking hands across genders is not valued.

It's actually seen as counter-respectful to touch someone from the different gender that you don't know very well. So I have to let go of some of the things that I thought was important in terms of signs of respect, but I have to keep looking and keep insisting on being respected perhaps in a different way by being heard, by being engaged with in terms of being invited to speak or being listened to when I do speak.

And in fact, I have never had an issue with that, but I have sometimes had to explain the way we prefer to interact from Australia and have had to enlist the support of someone from the other side to explain that to their team.

Tahn Sharpe:
Yes, I imagine... You're quite right that that would be a real consideration for yourself being from Sweden because it's a very liberal and progressive society, and probably right on the extreme end of that spectrum, I guess. For someone in accounting or finance, our audience looking to elevate their Asia capability, what mindset shifts or habits would you recommend, Charlotta?

Charlotta Öberg:
There are so many great ways to do this. First of all, cultural intelligence and cultural intelligence leadership. That is a learned skill. So that's good news because you can develop this skill if you set your mind to it. So I would suggest a couple of things. You have already remarked on the fact that here in Australia, we've got many cultures, oldest continuous cultures on Earth, multicultural Australia, many opportunities to engage and learn from that.

I would say that you should immerse yourself. You should not just do the formal learning. I've suggested a few resources, you can take cultural training courses, you can join programmes like the one that I head up. But I would say that you should also immerse yourself in culturally different environments. And do you have so many opportunities to do that? You can join business chambers, you can go to events.

That could even be cultural events. You can simply speak to people and engage with people who have a really different culture than you. And you don't necessarily need to do that, and go in there with the, I'm trying to learn about your culture mindset. You're going in there just to engage and notice what's different and notice when you can pick up. So start with what you have in common and then learn what is different.

The last thing I would say is get yourself that cultural mentor, someone that can help you decipher difference. Because while theory and frameworks, which we have [inaudible 00:23:45] in our work at Asialink and Asialink Business, of course it's an enabler. It helps you learn from every situation, but it does not replace direct experience. So I would say go out there and continuously give yourself opportunities to engage across cultures. That's my big tip.

Tahn Sharpe:
Great. So immerse yourself and find yourself a cultural mentor. Two great tips there. Well, tack så mycket Charlotta, for all those wonderful insights, it's certainly a fascinating area and one that poses a challenge I think, for so many professionals.

Charlotta Öberg:
Thank you so much for this opportunity, Tahn, and I wish your members all the best with working across cultures in their important field.

Tahn Sharpe:
Wonderful. For all our listeners eager to learn more, please check out the show notes for links to the full report and additional resources from Asialink and CPA Australia. Don't forget to subscribe to INTHEBLACK and share this episode with your colleagues and friends in the business community. Until next time, thanks for listening.

Garreth Hanley:
To find out more about our other podcasts, check out the show notes for this episode. And we hope you can join us again next time for another episode of INTHEBLACK.