Global Mindset Provides Competitive Advantage

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Research proves the rapidly-rising importance of the Global Mindset.

A Global Mindset is critical for success in business and success as a leader and is the one skill you must master for competitive advantage today. One skill that applies across every industry and every marketplace. How do you, as a leader, and your organization rank in mastery of the Global Mindset? Do you know?

Mastery of the Global Mindset.

I’ve talked about this before. Data from the GMI Index study, research published by CultureWizard in December 2017 shows mastery of a Global Mindset drives competitive advantage in business. Among the most important findings from the GMI Index Study, are three, which underscore the rapidly-rising importance of intercultural skills:

  • More than 82 percent of respondents rated the international component of their companies’ business as “extremely significant.”
  • Nearly half (45 percent) spend more than half their time on international business activity.
  • Almost one-quarter (24 percent) spend more than 75 percent of their work time on global endeavors.

“The Global Mindset Index (GMI) demonstrates that companies which actively support their employees gaining a Global Mindset are far more likely to achieve their business objectives than those that don’t. With almost 1,400 participants representing global enterprises from every region of the world, the respondents indicated that their work involved significant interaction with others in the global arena,” writes Charlene Solomon, of CultureWizard.

What is Global Mindset?

According to the GMI Index Study, Global Mindset is defined as  “the ability to recognize and reflexively adjust to cultural signals so that your effectiveness is not compromised when dealing with people from different backgrounds.” According to Dr. Mansour Javidan, Garvin Distinguished Professor at Thunderbird School of Global Management at Arizona State University, essential elements of a Global Mindset include:

•   Intellectual capital: Global business savvy, cognitive complexity, cosmopolitan outlook

•   Psychological capital: Passion for diversity, a quest for adventure, self-assurance

•   Social capital: Intercultural empathy, interpersonal impact, diplomacy

“Leaders who have a high level of Global Mindset are more likely to succeed in working with people from other cultures, he writes, in an article for the Harvard Business Review. “Leaders with a strong stock of Global Mindset know about cultures and political and economic systems in other countries and understand how their global industry works,” he continues.

Of course, it’s important to point out that mindsets can apply to both individuals and organizations. Leaders who possess a Global Mindset can, and do, encourage their teams to adopt a Global Mindset. Companies that embrace Global Mindset tend to promote those employees who demonstrate mastery.

As the GMI Index Study points out, the same organizations are twice as likely to have highly motivated multicultural teams and tend to experience fewer of the cultural missteps, which can damage productivity and business relationships. In these instances, the company, and its stakeholders benefit from the adoption of the Global Mindset.

Globally-minded businesses have a competitive advantage over companies with a more narrow focus. These firms can develop products and services that meet the needs of customers and prospects located across the world. But competing in a global marketplace is only one of the reasons adopting the Global Mindset is so crucial today.

An organization that embraces Global Mindset can identify emerging opportunities earlier than its competitors. It benefits from having a more sophisticated understanding of the tradeoffs between global standardization and local adaption, faster and more effective new product introductions, and facilitates sharing best practices and activities across cultural boundaries.

The Global Mindset Inventory (GMI)

At this point, you may be wondering how to move forward in mastering the Global Mindset–for yourself as the leader, and for your team or organization. I work with clients located in countries across the globe. I recommend, and use, the Global Mindset Inventory, which is a psychometric assessment tool that measures and predicts performance in global leadership. Developed by the Thunderbird School of Global Management, the Global Mindset Inventory is a web-based survey consisting of seventy-six questions that measure your Global Mindset in three capitals and nine competencies.

After you take the GMI assessment, you will receive a scored report, documentation with feedback, and recommendations and suggestions to improve your Global Mindset. You can use the GMI tool for yourself as an individual and for your staff. You can also bring in a consultant to conduct a workshop to help you and your colleagues identify ways to master the Global Mindset.

As I have said in the past, the Global Mindset isn’t just about cross-cultural communication. It’s about understanding not only who, but also what and how to do business successfully across all borders, regions, and perspectives. And given the state of our world today and its burgeoning global marketplace, mastering the Global Mindset is not only vital–it is the one skill you must master for competitive advantage today and in the days to come.

Contact me for more information about mastering the Global Mindset. And join my online global leadership community for valuable tips and training on conducting business internationally.

A version of this post was first published on Inc.

Photo credit: Simone Busatto on Unsplash

Want to approach your workplace with more Global Savviness? Ask these 3 Essential Questions

When you take a vacation to a different country, you spend a lot of time researching the culture -everything from the food to cultural customs such as tipping in restaurants or conducting yourself at historic sites. So why shouldn’t you do the same when looking to expand your business?

As you look into market potential, labor costs and building codes, don’t ignore the cultural implications of doing business in that country. Research what cultural, ethical and legal differences exist, and come up with a strategy to navigate them. Building respectful, culturally appropriate relationships is crucial to the success of your new venture.

One idea: to help develop global savviness, find locals to be your guide. When searching for consultants, accountants or law firms in the new country, for example, look for firms that have previous experience helping foreign companies make a successful transition. Make contacts in expat business communities or look for government or economic agencies that specialize in international relations.

As you make these connections, there are three vital questions you should ask to ensure your business doesn’t run afoul of hidden traditions, considerations or business practices.

1.     How are contracts negotiated, structured and agreed upon?

Business laws and contract requirements vary wildly across the globe. Besides the differences in ethical, legal and structural requirements, there are often specific cultural conventions in play. For example, in some Latin American regions, a verbal commitment and a handshake is more important than the paper. In fact, too much emphasis on a paper contract could turn off potential business contacts because they view a verbal commitment as being more trustworthy. Finding the right legal representation in the country is key to handling this process correctly.

2.     What expectations do employees have about office culture?

In the US, cube farms are so plentiful, they have become a part of our culture (and our pop culture). However, cubes are not necessarily an accepted office setup in other countries. As I discussed in No Such Thing As Small Talk, 7 Keys to Understanding German Business Culture, in Germany, legally, employees must be able to look out a window. It’s also more common for Germans to work quietly at their tables so they don’t need the noise buffer of cubical walls. When they do have conversations, they’ll move to a meeting room or take a break in the coffee corner. (They don’t spend as much time speaking with others while working as we do here in America.) Ignoring these cultural differences can result in confusion and even foster aversion to cooperation.

3.     What are the unique HR considerations we need to consider?

So many cultural aspects affect your HR policies and procedures in a new country, from hiring practices and acceptable interview questions to the employee holiday calendar. In the US, we have guidelines about what you can and can’t ask during the application or interview process. But these restrictions don’t exist in other places. In India and some European countries, it’s common for applicants to submit photos and include things like age and marital status.

With some countries, radical cultural differences and cultural sensitivity plays an even bigger role in HR. In South Africa, healthcare plays a large factor. For instance, it’s common to have mandatory HIV testing for employees on the shop floor. And therefore, sadly, funerals are important affairs in South Africa. When an employee requests time off for a death, they can expect to have up to two weeks of leave.

Opening your organization to a global mindset unlocks endless possibilities for professional—and personal—enrichment. But global savviness does not happen overnight; it requires patience, an open mind and above all, respect for those around you.

Contact us for more answers to your questions about global expansion: info@lamsonconsulting.com