Cultural Intelligence: From Classrom to Board Room

CQ: FROM CLASSROOM CQ: FROM CLASSROOM TO BOARD ROOMTO BOARD ROOM

Guido GianassoGuido GianassoVP, Human CapitalVP, Human Capital

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Air Transport is the most global industry in the world.Air Transport is the most global industry in the world.

Its main characteristics:

Only the unpredictable is predictable Low Profitability Spectacular growth in Asia

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But until 2002 IATA was the reflection of the industry:the secretariat of international aviation conferences run by government owned entities

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IATA in 2001IATA in 2001Case for changeCase for change

Liberalization and economic deregulationLiberalization and economic deregulation Low cost carriersLow cost carriers …………..

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-15.0

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1996 1997 1998 1999 2000 2001 2002

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Global Commercial Airline Revenue GrowthGlobal Commercial Airline Revenue Growth

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Film: IATA TODAYIATA TODAY

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IATA is one of the most cultural diverse and IATA is one of the most cultural diverse and complex organizations…complex organizations…

120 nationalities in 70 offices Very strong matrix, project-based and network

based elements

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IATA challenges to lead the industry in the 21IATA challenges to lead the industry in the 21stst century century and successfully manage globalization, competition and successfully manage globalization, competition and growth in Asia and Africa:and growth in Asia and Africa:

Move from a “Ethnocentric” to a “Geocentric” cultureto run growing operations around the world

Bring diversity to the top of the organization

Find an alternative to the old “Expatriate-Colonial” or “Cultural Translator” approach with regard to operations in Asia, Africa and the Middle East

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GEOCENTRISM*: A World-Oriented ApproachGEOCENTRISM*: A World-Oriented Approach

The best men regardless of nationality are appointed to solve the company’s problems anywhere in the world

Collaborative effort between subsidiaries and headquarters to establish universal standards and permissible local variations

The Firm’s subsidiaries are neither satellites nor independent city states, but parts of a whole whose focus is on worldwide objectives as well as local objectives

*H.V. Perlmutter (1969), The Tortuous Evolution of the Multinational Corporation

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IATA Director Generals 1946-2002IATA Director Generals 1946-2002

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IATA IN 2002IATA IN 2002

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How to Move the Organization Forward ?How to Move the Organization Forward ?

1. Creating the sense of urgencysense of urgency within the Top Management Team

2. Articulating the visionvision, strategystrategy and ensuring ensuring buy-inbuy-in

3.3. AligningAligning HR processes and systems

4. Building a winning coalitionwinning coalition

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Creating the sense of urgency in Creating the sense of urgency in the Top Management Team..the Top Management Team..

Power Distance vs. IndividualismPower Distance vs. Individualism

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15

25

35

45

55

65

75

85

9510 30 50 70 90 110

Small LargePower Distance (PDI)

Col

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• Guatemala

• Costa Rica • Pakistan

• Ecuador• Venezuela

• Indonesia

•Singapore • China•Thailand• Hong Kong

• Romania• Mexico • Philippines• Russia• Arabs• Turkey

• Iran

• Japan • India

• Switzerland FR

• France• Belgium FR

• Canada Quebec

• Israel

• Finland• Germany

• Norway• Sweden

• Denmark• New Zealand

United States

• UK

• Brazil

Australia

Power Distance vs.Power Distance vs. IndividualismIndividualism

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65

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85

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10 30 50 70 90 110Small LargePower Distance (PDI)

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67% 62%41%

$

29% 34% 31%

3% 3%

27%

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Layers of Managerial values for Indian senior executivesLayers of Managerial values for Indian senior executives

LAYER LAYER ONEONE

Core Traditional Values:Core Traditional Values:

Deeply held robust and widely shared values

LAYER LAYER TWOTWO

Individual Managerial Values:Individual Managerial Values:

Work values ethical values and other such values anchored to the core tradition but also in the process of transition

LAYER LAYER THREETHREE

Situational Values:Situational Values:

Role dependant values contingent upon situational elements of macro-environmental policies and corporate culture

MARKET MARKET CULTURECULTURE

ECONOMIC ECONOMIC REFORMREFORM

S.R. Chatterjee; C.A.L. Pearson, Indian Managers in Transition: Orientations, Work Goals, Values Indian Managers in Transition: Orientations, Work Goals, Values and Ethicsand Ethics, in Management International Review, 40, 2000

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Articulating the vision, strategy and Articulating the vision, strategy and ensuring buy-in..ensuring buy-in..

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Articulating the StrategyArticulating the Strategy

Bring diversity into the Senior Management Team

Change the culture by introducing CQ among the organizational core values and align HR systems and processes

Develop a new generation of leaders able to operate successfully across cultural and geographical boundaries

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Cultural Intelligence (CQ)Cultural Intelligence (CQ)

The capability to work effectively in culturally diverse environments

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A partnership for research and A partnership for research and Leadership DevelopmentLeadership Development

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CQ and Performance in IATACQ and Performance in IATA

IATA IATA StrategyStrategy

IATA ValuesCore Competencies

People

Speed

Innovation

Change

Integrity

Teamwork with Cultural Intelligence

Results

Leadership

1. ManpowerPlanning / OrganizationDesign

2. Recruitment

3. Performance Assessment

4. Rewards

5. Development

Aligning HC Policies and SystemsAligning HC Policies and Systemsto IATA Strategyto IATA Strategy

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Building the winning coalitionBuilding the winning coalition

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IINTERCULTURALNTERCULTURALLLEADERSHIPEADERSHIPEENGAGEMENTNGAGEMENTAANDNDDDEVELOPMENTEVELOPMENT

Drive change in the industry and the organization Operate across geographical and cultural boundaries Bring added value to the business by working together on

real projects

Developing a new generation of IATA leaders able to:

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I - LEADI - LEAD

20 Change Agents20 Change Agents

(10 from high power-distance collectivistic cultures - 10 from low power-distance individualistic cultures) 100 Participants100 Participants

(10 cohorts – 10 projects) 7 Locations7 Locations

(Amman – Singapore – Miami - Montreal – Geneva – Johannesburg - Madrid)

Project TeamOpening Workshop

11-22 Oct

Project Team Closing Workshop

10-19 Jan 2011

I-LEAD Final Workshop

24-25 Jan 2011

I-LEAD Launch Workshop

20-23 Sept

20 Change Agents

•10 high power-distance/ collectivistic cultures

•10 low power-distance / individualistic cultures

In Singapore for 4 days

Pairs of Change Agents run local 2-day workshops and launch projects

Local teams meet for 1-day workshop

• Decision making and next steps

• Conduct team feedback

All Change Agents plus one team member meet in Montreux for 1 ½ days,

• Report results

• Share best practices

• Agree to next steps in driving change

11 - 13 WEEKS

Local Teams Complete

Project Work

I-LEAD 2010-2011 Process OverviewI-LEAD 2010-2011 Process Overview

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DriveDrive

KnowledgeKnowledge

StrategyStrategy

ActionAction

•Leader’s message

•Lectures on Culture

•Teaching Internal Teams

•Traveling / Visiting

•International Projects

•Managing Internal/External Stakeholders

•Leading Internal Teams

•Conducting Research

•CQ Self-Assessment & 360°

•Being Coached and Coaching

EXPERIENTIALEXPERIENTIAL

CQ DIMENSIONSCQ DIMENSIONS I-LEAD ACTIVITIESI-LEAD ACTIVITIES

DIDACTICDIDACTIC

SELF-SELF-AWARENESSAWARENESS

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Impact of I-LEAD on CQImpact of I-LEAD on CQ

QUESTIONS???QUESTIONS???