Economic recessions have typically been times when organizations scale back their global expansion. Not this time. The economic downturn is spurring companies to become more international.

Executives from every region recognize that the greatest opportunities for growth exist beyond domestic borders.

In fact, a recent report by the Economist Intelligence Unit,  reported that 90% of executives surveyed predict their company’s number of overseas clients will increase in the next three years .

77% believe they will have an operational presence in more countries than they do today. Yet the same group of respondents agree that misunderstandings rooted in cultural differences are the biggest obstacle to effective expansion across borders.

Many organizations are responding to this challenge is by assessing their team’s cultural intelligence, or CQ. As many readers know, CQ assessments measure four capabilities:

CQ Drive: the interest, drive, and motivation to adapt cross-culturally

CQ Knowledge: the understanding of cultural similarities and differences

CQ Strategy: the ability to plan and be aware in light of culturally diverse situations

CQ Action: the flexibility to adapt one’s behavior when needed in a cross-cultural situation

 But simply taking an inventory of one’s strengths and weaknesses in these areas does little by itself. What’s the significance of scoring “high” in CQ Drive and low in another area?

Research reveals some interesting answers to the “So What” question.

[Click here to download a pdf of the above graphs. And visit here for the research article  in Management and Organization Review about the results of CQ.]

Culturally intelligent teams are more productive and innovative and they build a positive reputation for themselves and their organization. They naturally possess a broader knowledge of current world trends and thus their decisions and day-to-day operations are based upon a stronger grasp of relevant issues.

90% of the senior executives surveyed by the Economist Intelligence Unit believe increased cultural intelligence among  personnel will improve profits and revenues. Nandita Gurja of Infosys in India says, “We are a global company. We simply cannot progress without the knowledge and experience to deal with other cultures.”

Expanding internationally brings a number of risks, including legal liabilities, unpredictable situations, and an increased complexity to your operations. But when handled by a culturally intelligent team, it offers the brightest opportunity for growth and innovation in this economically volatile climate.

[More information about CQ Assessments available here.]