The need for cultural intelligence in the workplace

Today's workplaces are more multicultural than ever, with employees from many different places and backgrounds. In this article, we explore the significance of cultural intelligence in the workplace and its impact on productivity, innovation, and organisational success.

4 mins read
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12 Feb, 2025

​Cultural intelligence has increasingly become a topic of interest in management.

With teams comprising individuals from various cultural backgrounds, it’s only fair that managers strive to appreciate and understand differing cultural factors in their teams.

The proportion of people working abroad has been increasing over the past decade, making cultural diversity a key feature of the modern workplace. It’s wise for employers to remember that each employee has different perceptions and perspectives that can help elevate business success.

The ability to understand, communicate, and collaborate across cultural boundaries is essential for company growth and talent attraction.

What is cultural intelligence?

Cultural intelligence, or cultural quotient (CQ), is the ability to relate to and interact with other cultures effectively. It is a crucial skill for employees who work in diverse and global environments, as it helps them understand, communicate, and collaborate with people from different backgrounds, with different values and perspectives.

CQ has four main components according to professors P. Christopher Earley and Soon Ang. They are:

  • Drive (motivation): the ability to direct attention and energy toward learning about and functioning in cross-cultural situations

  • Knowledge (cognition): describes the wide scope of general knowledge individuals hold about cultures

  • Strategy (metacognition): refers to a person’s mental capability to acquire and evaluate cultural knowledge

  • Action (behaviour): the capability to put knowledge into practice and to demonstrate an extensive range of culturally appropriate verbal and non-verbal behaviours.

It’s important to remember that cultural intelligence can play a significant role in how employees evaluate your company culture. By bridging gaps related to traditions, customs, disciplines, and nationalities, you can influence greater awareness and understanding of cultural differences among your workforce. This will help with collaboration, increase productivity and enhance organisational reputation.

Why is it important in the workplace?

According to research published by School for CEOs, 76% of senior business leaders lack cultural intelligence – hindering their chances of creating a greater sense of belonging and inclusion within their teams.

Owing to its impact on team building and diversity of opinion, CQ is becoming an increasingly important skill in business. Here are some of the key reasons cultural intelligence is important in the workplace:

Enhances productivity and innovation

Cultural intelligence plays a pivotal role in enhancing productivity and driving innovation. When employees possess the ability to understand each other, they are more likely to work collaboratively and harmoniously, regardless of cultural differences.

This, in turn, creates a positive work environment, where individuals bring unique perspectives and ideas to the table – making them better equipped to solve complex problems by drawing from a wide range of experiences and viewpoints.

Creates effective communication and collaboration

One of the most significant benefits of cultural intelligence is its role in creating and maintaining effective workplace communication – especially in large organisations, where individual thoughts and opinions can easily be overlooked.

Individuals with high cultural intelligence are skilled at bridging communication gaps, mitigating misunderstandings, and building trust across the workplace. This is essential in a globalised economy, where businesses often engage with international partners, clients and stakeholders.

By leveraging CQ, employees can build stronger, more meaningful relationships with stakeholders from diverse backgrounds, leading to enhanced business outcomes, long-term partnerships and reduced risk of miscommunication.

Promotes customer relations

As business models grow and strategies expand beyond localised areas, businesses must cater to a diverse customer base. Cultural intelligence is instrumental in understanding and meeting the needs of different customers.

When teams understand diverse cultures and their requirements, they can deliver more personalised and culturally sensitive services, thereby enhancing customer satisfaction and loyalty. Cultural intelligence enables businesses to avoid misunderstandings and missteps that could jeopardise customer relations and lead to reputational damage.

Builds inclusive workplaces

With inclusion and diversity now a prominent part of internal business strategy, cultural intelligence is key to creating inclusive workplaces where all employees feel valued and respected.

By promoting a sense of belonging and understanding of others, organisations can create an environment that celebrates diversity and encourages individuals to bring their authentic selves to work. This supportive culture then leads to higher levels of employee satisfaction, engagement, productivity and retention.

Developing cultural intelligence

Improving cultural diversity in the workplace requires everyone, especially leaders responsible for strategy and innovation, to practice cultural intelligence.

Some of the ways to develop and encourage a multicultural mindset are:

  • Helping employees learn the basics of different cultures, such as values, beliefs, customs, and etiquette

  • Observing and reciprocating the physical cues and gestures of other cultures, such as eye contact, body language, and personal space

  • Practising empathy and curiosity when interacting with people from different backgrounds and viewpoints

  • Seeking feedback and learning from mistakes when engaging in cross-cultural situations

  • Providing opportunities for cultural exchange and collaboration, such as mentoring, training, and social events.

Looking to attract the best talent to your business, or considering a career change? Contact one of our specialist consultants today.

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Coaching for intersectional inclusion
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Coaching for intersectional inclusion

​​Everyone has multiple layers to their identity, and no one is one label. There are other aspects of their identities to consider, and no one should be put in a box. Many businesses, which celebrate Pride Month, for example, are perceived as not doing enough for people who are underrepresented in more than one way.

Recent research by Culture Amp in ‘The Workplace Diversity and Inclusion Report 2024’ found disabled women and black women are more doubtful of their employers’ equality, diversity, inclusion and belonging (EDI&B) efforts than any other group.

This is likely because women might feel their entire identity and additional barriers aren’t being considered, if they are part of more than one underrepresented group. Some employers’ initiatives provide a base-level overview of inclusion for women, but they might only explore the perspectives of white women, for example, or women in general, with no specific solutions explored for LGBTQ+, disabled or black women, for instance. Each may have very different experiences of what it means to be a woman.

Coaching people within your organisation can help leaders and employees gain a deeper understanding of intersectionality and why it’s important. We interviewed Mary-Clare Race, CEO of Talking Talent, for her insight and best-practice tips on all things coaching and inclusion.

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Q: What's the difference between coaching, mentoring, and other types of training, especially when it comes to equality, diversity, inclusion and belonging?

A: These terms are often used interchangeably in the world of talent development, but we see a clear distinction between them that is especially important when it comes to EDI&B.

In a training situation, the primary goal is typically to transfer knowledge from the facilitator to the participant, to raise their awareness and understanding of a particular topic or skill and provide them with practical tips on how to put that skill into action for themselves.

In a mentoring situation, there is also an element of knowledge transfer, but in a more personalised, relationship based, one-to-one situation where the mentee is paired up with a more experienced mentor who is there to provide them with support, advice and guidance.

Coaching takes the relationship-based approach one step further and focuses on supporting and facilitating the coachee to actively step in and facilitate their own outcomes. It is not about giving them the answer but rather supporting them to find their own answer, their own way forward.

At Talking Talent, we favour a coaching-led approach because it enables a deeper level of behavioural change. The coachee must be actively engaged and motivated to do the inner work on themselves and the coach is there to hold them to account. However, there is a role for all three approaches when it comes to solving EDI&B challenges and real power in combining all three.

Q: How can coaching help businesses become more inclusive and diverse?

A: If you look at what it takes to really move an organisation forward with their EDI&B strategy, we believe you've got to take a systemic approach and build inclusion into your culture and in how people behave every day.

There are several ways coaching can help with this:

Leadership behaviours: by working with a coach, leaders become more aware of their own biases, preferences and how their own identity shapes how they show up as a leader. The coach can help them develop the skills needed to foster a culture of inclusion and hold themselves and others accountable.

Developing talent: in many organisations there are pockets of talent who have been overlooked because of some aspect of their identity. Coaching-led programmes can support under-represented talent to thrive and overcome what may be holding them back so they can fulfil their true potential. And by offering coaching-led programmes that address the unique needs of underrepresented individuals, organisations demonstrate their commitment to supporting the needs of all their employees - thus driving retention and engagement levels up.

Improving culture: at the heart of culture change is the need to move behaviours forward at an organisational level. We believe coaching is the most powerful way to do this for an organisation - by helping individuals and groups develop the self-awareness, emotional intelligence and relational competency to work effectively in diverse teams and build inclusion into the culture.

Q: In your experience, why are diversity and inclusion initiatives so important to organisations and their talent attraction and retention?

A: In our industry, there's been significant backlash against EDI&B efforts, particularly in North America, and this sentiment seems to be growing globally. The issue often lies in viewing EDI&B initiatives as separate from core organisational culture. For me, EDI&B is about creating an environment where every individual, regardless of identity, can thrive and contribute fully. This isn't just about ticking boxes – it's critical for attracting and retaining talent, and crucial for overall business performance.

Ultimately, EDI&B isn't merely an add-on; it's integral to effective leadership and to building success at all levels of your organisation. It's about fostering authenticity, encouraging diverse perspectives, and empowering individuals to contribute their best work. These principles are essential for any business striving to maximise performance and leverage a diverse talent pool, regardless of their specific commitments or strategies. It's about creating a workplace culture where everyone can succeed and where the organisation benefits from the full potential of its people.

Q: Who should be coached in inclusion and diversity within an organisation? And why?

A: When considering who should be coached in inclusion and diversity within an organisation, it's crucial to view these efforts as integral to successful business practice. While not everyone needs individual coaching, it's essential to ensure all members of the organisation are engaged in the journey towards inclusivity.

For leadership teams, coaching can be particularly impactful in fostering a culture where inclusion is actively cultivated and practiced. Leaders can learn to demonstrate inclusive behaviours and set the tone for the entire organisation.

Additionally, focusing coaching efforts on groups that have historically faced barriers – such as women, marginalised ethnicities, or neurodivergent individuals – can be highly beneficial. By addressing systemic challenges these groups face, organisations can promote fairness and unlock their full potential.

Ultimately, the decision on who to coach should be informed by the organisation's current state and readiness for change. A tailored approach ensures that coaching initiatives align with strategic goals and create meaningful impact across the entire workforce.

Q: To what extent is intersectionality considered in your coaching and why is it important?

A: This is one of the reasons why coaching is so effective, because intersectionality is really about the need to recognise we are all more than a set of labels. We have a lot of different aspects of our identity that intersect. Our gender, race, age, sexuality, social background, neurodiversity etc. are all important elements to consider. And it's important to consider the unique experiences individuals have, particularly when they have one or more identities intersecting, and where there might have been barriers against people with those identities.

That's key in our coaching approach, because coaching allows you to meet the individual where they are. It's not so much that we are coaching people about intersectionality, but we're really considering the unique person that comes into the coaching experience.

And the risk of not doing that is you put people in a box, and it can be further disenfranchising for them because they're thinking, "Well, actually, I'm being given this opportunity as a woman, but it's not taking into account all of these other aspects of my identity that are intersecting with it and I am being required to leave that part behind."

By failing to consider intersectionality in a coaching situation you can, in fact, make the situation more difficult for the coachee.

Q: You’re teaching others to be inclusive, but how does your organisation ensure it's walking the walk, not just talking the talk?

A: It's something we're very passionate about obviously, we have our own DE&I council, which is chaired by myself as a CEO, in partnership with our Head of People, and HR.

We are actively looking at all aspects of our culture in terms of how we build inclusion, and how effective our leaders, policies and processes are. Do we feel that they're fair? Is there any way in which we're discriminating against certain groups? Whether that's in our recruitment processes or in how promotions happen or how opportunities are given within the business – and we make that very much a managerial responsibility.

We're also constantly looking at our own metrics and where we need to be rebalancing our employee profile. So, across all aspects of diversity, it's a big focus for us.

And we have a DE&I strategy and plan that we're working to with the support of a council which is made up of different members of our workforce.

Q: What advice would you give to those companies that maybe can't afford coaching services in EDI&B? What can they do themselves to make improvements?

A: For companies facing budget constraints and unable to invest in external coaching services for EDI&B, there are practical steps they can take to drive improvement internally.

Exploring alternative coaching methodologies can be effective; options like group coaching sessions or coaching circles, facilitated by peers, harness collective insights and promote shared learning.

Additionally, companies should leverage existing coaching resources and talent internally. Assess whether there are individuals within the organisation who possess coaching skills or can be trained in coaching as part of leadership development initiatives.

Talking Talent, for instance, has digital offerings that are coaching-led and digitally enabled, making them accessible and scalable for organisations looking to expand their impact globally.

By exploring these approaches, organisations can foster a culture of continuous improvement in inclusion and diversity without incurring significant external costs. These steps not only enhance organisational effectiveness but also contribute to a more inclusive workplace environment.

If you’re looking for a talented employee or a new opportunity, contact your nearest Reed office.

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