Australia: Why Cross-Cultural Leadership Is Essential For Asian Century Success

CEO & Partner John W.H. Denton was a panel participant at the recent 'In the Zone 2012 – The Geography of Global Prosperity' conference held at The University of Western Australia.

John took part in a discussion on 'Cross-cultural leadership and literacy in the twenty-first century'. Moderated by Geoff Elliott, Business Editor, The Australian; John was joined by panel members Dr Matt Barney, Vice President and Director, Infosys Leadership Institute, India and Professor Krishna Sen, Dean of Arts, University of Western Australia.

LITERACY IS HARD TO DEFINE, AND CAN BE APPROACHED FROM MANY WAYS

  • An ability to speak the language; a knowledge of the history, customs and culture; a lengthy period of time in the country on the ground; and an ability to get something done in the country are all good examples of 'literacy' (and there are others!)
  • And there can be a myriad different combinations of these types of 'literacy' occurring in cross-cultural or transnational environments

I'LL TRY AND SIMPLIFY THIS BY TALKING MORE ABOUT THE CAPABILITIES I THINK ARE NECESSARY TO BUILD ANY TYPE OF 'LITERACY', AND I'LL FOCUS MAINLY ON THE BUSINESS SECTOR

  • We need to build national and Asia-relevant capabilities throughout our society, be it in business, the public sector, though our educational institutions and across the community
  • We need to build the sorts of institutions that can provide a range of capabilities, because even if we could define what we thought 'literacy' was now, it would be different in a decade's time
  • So while I won't be brave enough to come up with a single answer for 'literacy', what I will do is give you my viewpoint on literacy as it pertains to business and diplomacy right now

BOTH CROSS-CULTURAL LEADERSHIP AND LITERACY ARE BUILT ON TRUST, AND RELATIONSHIPS

  • If we are to live in an 'Asian Century', we need to acknowledge the different ways different countries think about trust and relationships
  • In an Asian context, notions of trust and relationships have developed under differing systems of law and governance from ours, and in many cases trust and relationships play roles we leave to the legal system in Australia (a good example is around contract enforcement)
  • But there are also many cultural elements – concepts of gift exchange, ideas of power, understanding the role of the spiritual life but are but three quick examples – that are seminal to building trust and relationships in the region
  • I think all of us here would have at least one example of committing a social faux pas in a cross-cultural environment!
  • People often try to reduce the argument to '...we are all really the same'. I disagree I think it's actually really important to understand the differences as the essence of cultural understanding

TRUST AND RELATIONSHIPS COME FROM ENGAGEMENT, AND FROM GREATER CONTACT

  • As a part of talking about literacy, I'll also talk about engagement, and about ways we can engage better
  • Each context is different, and it's hard to give generalizable principles that cover cross-cultural interactions
  • But greater knowledge – of each other, of different environments, of different ways of working, of different ways of thinking, of different national ambitions – will always make us better at working in cross-cultural environments

WHILE AUSTRALIA WILL FIND BECOMING MORE 'LITERATE' IN OTHER CULTURES CHALLENGING, IT HAS SOME ADVANTAGES TO BUILD ON

  • We already have a lot of shared relationships through trade and investment - obviously
  • But also we have many assets - almost a third of Australians are overseas born for example, and around 10 per cent of Australians are of Asian origin
  • And many Asian business people, diplomats, military leaders and policymakers are and were educated in Australia
  • Not to mention the constant and visible impacts of immigration on our society, our culture, our entertainment and even our food
  • So there is a level of familiarity, which can be used to build trust and opens doors

YET THERE'S MUCH MORE WE COULD BE DOING TO IMPROVE OUR CROSS-CULTURAL LEADERSHIP AND LITERACY

  • We have made some investments in building Asian literacy over the years, but these assets are no longer adequate to the task: for example, our ranks of linguists, historians and area specialists have dwindled in some areas
  • And even if we bolster our ranks in one specific area, Asia remains one region but many countries – we need capabilities that can work across different environments, cultures, financial systems and legislative bodies
  • So we need programs not just for any one single area, but frameworks that make collaboration and interaction across many cultures easier and better

PART OF THESE SHIFTS WILL NEED TO COME FROM OUR EXISTING INSTITUTIONS

  • This is one of many reasons I'm really glad to be here today at UWA, which of course has not only an Asian Studies program and a program examining many of the major countries of the region, but has also just added a specialist program in Korean
  • But we need our institutions to continue to reinvest themselves and to build greater capabilities. And our institutions must learn to work together
  • To pick language as an example if you want to study Korean, you should be able to have access to that capability not only through primary school, but through high school, university and then your workplace. Support for this 'institutionally' should encompass this range. It does not at the moment

MOST CROSS-CULTURAL SHIFTS WILL RELY ON THE MANY TALENTS OF OUR PEOPLE

  • We've got a highly skilled, hard-working and creative population
  • We've got the intellectual property frameworks and traditions to allow us to make the most of all this talent
  • And we've got world-class schools and world-leading research institutions in education, health, environmental management, science and design

CROSS-CULTURAL LEADERSHIP AND LITERACY WILL BEGIN MUCH MORE AT THE GRASSROOTS AND LOCAL LEVELS THAN EVER BEFORE

  • But we'll need to make the most of our population — more than a quarter of whom were born overseas — and our large diaspora
  • As I said earlier, familiarity can help to build social, business, and, cultural networks
  • And there are an enormous amount of unanticipated benefits that can flow from more contact and 'connectivity'
  • A wide range of groups — from businesses, to unions, to community groups, to even sports teams — can enjoy stronger informal relationships through the region this should be encouraged

BUT BECAUSE THE LONG TERM BENEFITS OF THESE INTERACTIONS ARE OFTEN OVERLOOKED

  • We are well aware of the benefits of having greater knowledge of other cultures, groups and people for our cross-cultural management
  • But I think we sometimes miss the long-term benefits of good cross-cultural interactions
  • There are many long-term unanticipated benefits that come from having engagement across different levels of society – for example today's students, tourists or friends can be tomorrow's cultural or business partners
  • And the benefits from these partnerships can spread across lifetimes. They generate good will!

BENEFITS WILL ONLY INCREASE AS OUR REGION BECOMES A GREATER SOURCE OF IDEAS, EXPERTISE AND TECHNOLOGY FOR AUSTRALIA. AND THIS INVOLVES A MIND SET SHIFT IN AUSTRALIA

  • A major benefit of the Asian Century for Australia will be our ability to work together with Asia to make the most of their new ideas
  • India, for example, has been greatly successful at not only producing exceptional publications of scientific papers, but it has also had success opening up new markets for high technology through 'frugal innovation' (such as water filters using silver that need no electricity or moving parts)
  • Ideas such as this could be a boon to Indian society and potentially to Australian investors, inventors and instructors – but getting access to these sorts of ideas requires, by definition, a high level of cross-cultural literacy and leadership- openness, curiosity and engagement. Anachronistic thinking is dangerous

WHILE WE NEED TO ENGAGE MORE WITH OUR EXTERNAL ENVIRONMENT, WE NEED TO KEEP PLAYING TO OUR STRENGTHS AS WELL

  • Our governance systems, our highly-developed rule of law, our free media, our robust multicultural society and even our cricket team are role models to many in the region
  • And I think they will only continue to be role models as the Asian middle class grows, which it will enormously
  • There are expected to be around 3 trillion middle class people in the countries in the Asian Century (excluding the US), 10 times that of every other region in the world except for Europe, and 5 times as many as Europe
  • And keeping our own house in order, and reinforcing the things we already do well will be the best way to make us more attractive to our neighbours as they become more middle-class
  • Attracting the best and brightest here, whether it be to study, visit or live, will greatly increase cross-cultural literacy – because it gives us a greater incentive to learn more about them

USING OUR OTHER NATURAL ADVANTAGES CAN HELP WITH CROSS-CULTURAL LITERACY TOO

  • We have an advantage over the northern hemisphere in that we have a proximity advantage and we work in largely the same time zone
  • As this conference so aptly notes, 60 per cent of the world's population lives in the same time zone as Australia's west coast
  • Time zone similarities will particularly benefit services sectors, such as financial, legal and consulting services
  • But they will also help people-to-people contact, and they will help build familiarity, which helps build trust

GREATER INVESTMENT IN BOTH DIRECTIONS WOULD BE OF GREAT BENEFIT, BUT REQUIRES REGIONAL RECALIBRATION

  • At present we trade heavily and invest scarcely in the region we live in – recent estimates have it that 50% of our trade is with Asia, but only 5% of our investment is
  • And this pattern is the same for most Asian countries as well – in the region as a whole, far greater progress has been made with free trade than with the transfer of funds, or with investment
  • Investment brings a different array of challenges for cross-cultural management, but it can also bring great rewards and build lasting relationships, both now and in the future
  • We need to ensure that possible investors in Australia are kept feeling as welcome as possible, and we need to encourage more Australians to go out and invest in Asia

ALL OF THESE SHIFTS INVOLVE MANAGING CHANGE, AND THAT IS WHAT I CONSIDER LEADERSHIP

  • I think that conferences like this, and the recent policy documents like the Asian Century White Paper show us that we are heading in the right direction
  • We have to keep leading, and keep managing, in order to continue going in this right direction together.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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