Diversity Defines Our Global Economy. Do You Speak the Language?

Saatchi & Saatchi Asia-Pacific Regional CFO Johann Xavier gives his thoughts on the new form of globalization.

Johann Xavier is Chief Financial Officer for Saatchi & Saatchi's Asia-Pacific region. A Canadian of Sri Lankan descent, he is based in Singapore where he is a CFO in a region including 15 countries and 60 percent of the world’s population.

The basis of this article is a speech Johann gave to The Economist CFO Conference in March 2014 in London. This op-ed first appeared in Entrepreneur on 31 March.

The May 1983 Harvard Business Review carried a provocative article by Theodore Levitt titled “The Globalization of Markets,” which proposed that all goods and services provided by multinational corporations should be homogenized.

He wrote, "The global competitor will seek constantly to standardize his offering everywhere. He will digress from this standardization only after exhausting all possibilities to retain it, and he will push for reinstatement of standardization whenever digression and divergence have occurred. He will never assume that the customer is a king who knows his own wishes."

Today, there exists a new and more promising form of globalization, one based on cultural respect, sensitivity and inclusion. Diversity has passed from the legal obligation phase to enlightenment -- where being different is embraced as positive.

Economic power now comes from everywhere. New economies with aspirational middle classes and new elites have diversified the world in radical ways. In addition to BRICs (Brazil, Russia, India and China) we have MINTS (Mexico, Indonesia, Nigeria, Turkey) and CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa). The increase in purchasing power, health, housing and education standards, and access to technology, coupled with the rise of millennials, has fuelled new paradigms. Employees are highly mobile; consumers are widely diverse. The matrix of daily business may involve people from Shanghai, Mumbai and Dubai. Diversity is no longer about the West and the Rest.

Diversity encompasses more than ethnicity. Representation of women, recognition of gays, inclusion of people with disabilities and drawing on the contributions of introverts -- these are all documented as having a positive effect on a company's culture and performance.

Intercultural relations go to the heart of organizational effectiveness, enhanced productivity and innovation and optimal customer relationships. Premiums accrue to companies that are adaptive and inclusive. I call this new globalization “common sense.”

There are a set of desires that cut across cultures. People across the world have common everyday aspirations, whether it is keeping their teeth clean and bright, their shirts fresh and sharp. But rather than being served Levitt’s one-size fits all, workers and shoppers want their individuality recognized.  Every person has a unique microculture, something this era of Big Data is helping companies to understand.

There are steps to take for executives facing diverse workforces and consumer bases:

Cultural dexterity is learnable. Do not think that someone who successfully navigates intercultural relations does so because they are a “people person.” Everyone can and should be adept at interacting with people from other cultures. Do research. Be curious. Don’t make assumptions. For organizations, diversity works when there is commitment from the top, education programs and appointments made of people who are experienced at managing change across cultures.

Reach out and connect. Successful cultural operators can, like a skilled diplomat, relate to people of many persuasions. This does not mean burying your personality behind a mirror, but it does call on the full range of communication skills: being a good listener and observer, asking questions as well as showing empathy and reciprocity.

Make it personal. The process of building trust will be layered by your commitment to being collaborative rather than competitive, inspirational rather than authoritarian, inclusive rather than hierarchical and seeking relationships not just transactions.

Keep intercultural relations active. Japanese people practice kaizen (meaning “good change”), which refers to a process that involves everyone in the company. Every leader should encourage their colleagues to seek opportunities to diversify their company on a daily basis.

Tell stories. Stories are universal and through them you can express purpose and a point of view. The details of stories change with the times, but their essence remains the same. Cohesive messaging frames your presence.

When I was managing an acquisition in South Africa, I walked into a boardroom at the height of negotiations and – picture this – there were representatives from the Black  Economic Empowerment Commission, senior people who had lived through the apartheid era; an investor who was Jewish; my quintessentially American boss; a very French acquirer and the CEO who was a gay woman. Oy vey! My role was to bring everyone together and it drew on every ounce of my chameleon self. The deal was done, and it thrives to this day.

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