In today’s business environment, companies are taking advantage of not just globalised markets, but globalised manpower – with many striving to seek cost and talent efficiencies by offshoring and outsourcing and employing inpatriates from overseas.

In many instances, traditional project management teams have given way to virtual teams with people working interstate, across a continent, or across a number of countries rather than within the confines of a single office space.

And there are distinct benefits to these changing work environments. Above and beyond the aforementioned budget and manpower benefits, there’s local market knowledge, as well as access to valuable relationships and business networks, plus operational effectiveness across time zones.

But, in their haste, a lot of companies fail to take into account how cultural differences in communication and business practices can significantly impact – and to some extent highjack – many of these upsides.

For example, I lived in South East Asia for many years, and although it took some time, I eventually came to enjoy the challenge of deciphering the multi-layers of communication that is simply a part of the culture. The richness and depth of the communication makes it unique, if not complicated! And then, when I moved to Australia, it took me considerable time again to get used to the directness of my colleagues and my peers. Sometimes I was a little affronted, and at other times confused, and at other times I found that this directness was completely refreshing. So, if you consider these experiences in the context of global teams working together, although often not able to see each other as they talk and work, it’s easy to see how miscommunication can so readily occur.

Culture plays an important role too. How often do projects depend on deadlines? Imagine how irritating it would be trying to keep a particular venture on track if other colleagues and stakeholders consider deadlines  and milestones to be less important than other factors of the process, and then fail to meet them?

Needless to say, the consequences of these cultural misunderstandings can be costly, and when global dynamics come into play, skilled cross cultural management is a vital ingredient for success.

There are obvious direct implications of projects that ‘go off the rails’ – the most obvious is financial, but the indirect implications can be even more damaging, especially when talented, motivated individuals become frustrated, disengaged and unable to work together.

In corporate spheres, a lot of people are currently talking about ‘diversity’ and in particular ‘cultural diversity’. Recent research from  McKinsey’s indicates that diversity, including cultural diversity, should increase profitability. Of course, for this to be the case, these diverse teams need to overcome initial cultural challenges. The key question is how this can be done, and there is no single, nor simple, answer.

The important first step is for all parties to recognise that there are cultural differences, and secondly, to put these differences into context so they can be appreciated for the value they can bring to the team as a whole. Getting to this point early in the amalgamation of cross-cultural employee groups sets the foundations for a team ethic built on empathy and respect. And once this has been achieved, project teams can begin to focus on their similarities, such as working together to achieve a common goal.

With cultural diversity becoming such an area of interest, it is not hard to find research and information and case studies which can help business to understand the delicate nuances involved in cross cultural management and what needs to be done, not just to make teams work, but to leverage diversity as a way of achieving the best outcomes in terms of both people and profit.

Transcultural leader Carlos Ghosn who successfully united Renault and Nissan and make huge gains in profitability, used techniques such as introducing 100 key words into the ‘workplace vocabulary’ that could be easily understood by both the French and Japanese staff and didn’t necessarily favour either. It was a simple strategy which paid big long-term gains in helping employees to cross some basic communication barriers.

Every organisation, every circumstance, is different. For help understanding your own cross cultural management issues and identifying strengths and weaknesses, talk to us.