For a curious mind, it’s thrilling when something unexpected happens. There’s something new to be probed and understood. So it was with our project to model the real-world economic impact of intercultural training.

After years exploring the available, relevant research and testing different approaches to the mathematical model, I expected diminishing returns from each addition research sprint. The law of diminishing returns is the observation which says the deeper you dive into a new thing, the less reward you get for each additional kick.

The opposite happened. As the model started to spit out results to our research questions, the answers became more interesting and more enlightening.

Here are three striking observations from this work so far.

1. The power of an intercultural lunch and learn

What is the gold standard training format for intercultural competence? A full 3-day module on a year-long leadership development programme, perhaps? A multi-year relationship with an inspirational coach? A multi-channel, multi-session blended learning programme, based on adaptive online learning tech? Yes, these promise impressive results for the learner. Gold standards indeed.

By comparison, a lunch-and-learn intercultural briefing, delivered to busy executives under heavy time pressure, seems like the poor cousin of those Gold Standard formats.

But wait, our training impact model is telling a different story. Based on a new analysis of the cost-side of the ROI equation, a rapid injection of new intercultural knowledge can generate excellent return on investment for organisations which use this method. While the absolute returns on a lunch and learn may be smaller than a full transformational intervention, the rate of return on investment is one of the best, and certainly a good pathway towards more ambitious forms of competence development.

2. An intimate training for 508 participants

The joy and the challenge of modelling intercultural competence are the network effects inside organisations. When a freshly-trained participant starts a collaboration with a colleague who has a low level of intercultural competence, some of the benefit of the training is enjoyed by the non-participant, who gains from more effecient interactions with the trained colleague, and potentially other benefits in achieving their mutual goals.

In this way, intercultural training can impact hundreds of non-participants, who are colleagues of participants. The number in the pool depends on the diversity of the organisation and the participants, the level of isolation of clusters of participants and other assumptions, such as the amount of outward-facing interactions. There can even be benefits of intercultural training for people of the same culture where differences are individual, not cultural.

When your training class attracts just an intimate (small) number of participants, keep in mind that potentially hundreds more who don’t attend will also benefit.

3. The trainer’s bill is a small part of the investment

You can charge the top-end of your price range for your time and provide a gourmet lunch for participants, perhaps with travel and comfortable accommodation, but still the trainer’s and logistical expenses are likely to be dwarfed by the cost of taking productive employees away from their core work tasks, while they participate in your training.

Line managers and anyone with profit and loss accountability knows this. There is some price sensitivity in the market for intercultural training, especially when the procurement department get involved (they are probably not at your meetings to learn about icebergs or onions …). However, what we can see from our model is the importance of looking at the impact side, when an organisation chooses a supplier or selects its own internal training methodology.

Squeezing the trainer’s bill down will have little effect on your return on investment rate. You can truly shift the needle on your return on investment by working together with the intercultural consultant to set the training up for success in achieving performance gains.

The CultureConnector intercultural training impact modelling tool is now available as an early-access programme for customers and contributors in the CultureConnector community.

Human Resources professionals are especially well-placed to bring solutions to CEOs looking to boost business through more efficient operations.

In the Argonaut team, we see a strong link between the PWC research and earlier research by the British Council into the business value of intercultural skills.

HR investment in cultural skills targets multiple benefits

The BC research found that HR people across different sectors were investing in intercultural skills in order to achieve more efficiency within teams.

HR people have known for a long time that cultural fit brings greater employee effectiveness, which saves costs and builds revenue in multiple ways.

HR designing intercultural interventions

Now there are increasingly robust methods for building intercultural skills and enabling organisations to achieve more of these business benefits.

This is an opportunity for HR. When a CEO is looking to make operational efficiencies, we know that this often translates into out-sourcing, lay-offs, job-cuts, down-sizing and other measures which can damage employee engagement the longer-term development of the organisation.

HR can bring an alternative which is a proven motor for revenue growth. With well-designed, targeted interventions, the benefits can appear quite rapidly in business bottom lines.

Culture impacts half the Top 8 agenda items for CEOs

And it’s not just in response to economic pressure that HR can bring intercultural solutions to drive revenue growth. PwC’s research shows a “Top Eight” of issues on the CEO agenda where intercultural skills can be the success factor unlocking business benefits in a least half of the categories.

In tough times as well as good times, HR professionals who know how to design high-impact intercultural interventions can be the revenue-boosting heroes of their organisation.

Sources

• PwC CEO Survey
• British Council, Booz Allen Hamilton, Ipsos study

• More about Elizabeth and her work on diversity in the workplace in Japan

How do you get buy-in for intercultural training in what could be the world’s toughest market?

I invest a lot of time in bringing down the barriers on a human-to-human level. For me, being based in Tokyo means doing business not only in Japanese, but also in a terminology that’s familiar to top execs. I work hard to see things from their point of view. And in practice, I make sure that I meet the decision-makers and influencers through projects, networking events and any forum outside of a traditional sales pitch. The five-point approach published on this site is a good way to capture the fundamental spirit of what I do.

What’s the core idea behind your work?

My current mission in life is to help the Japanese deal with their declining and aging population by embracing and integrating other cultures into Japanese culture. It’s fair to say that Japan is still a monoculture.

One of my key goals is to build recognition of diversity issues in Japanese board rooms. That recognition of diversity is growing, and slowly organisations are learning to walk the talk on diversity and inclusion. It’s not quick, but we are making progress.

How do you get started?

I have to give a little personal history, because it’s almost impossible to hit the ground running coming in as an outsider into Japan. Your personal connection with Japan is key. They prefer to deal with insiders and they look for people who have a deep understanding and long history with Japan. I have an Australian background and worked as a Diplomat for the Australian government’s trade commission. I worked in many Asian countries and my connection with Japan goes back 30 years. My role back then was to connect local companies with Australian companies, so I had to act as an Asia expert and a cultural interpreter.

It’s unlikely that a foreigner in Japan will ever be accepted as an insider. You may eventually qualify in the eyes of Japanese colleagues if you work for the company for 30 years, but becoming an insider is impossible for many foreigners. Your track record in Japan is your best hope of being chosen to join the inner circle.

In terms of getting a specific Board-level action started, one of my projects started with a conversation between me and a business leader about introducing CultureConnector into his organisation. I already knew the gentleman. Introducing technology, automation and reporting can really attract the attention of Boards in tech-loving Japan. You just need to connect the technology to their business goals.

Technology is part of the “getting your approach right” aspect of the five-point system for winning Board support.

Talking of the five-point system, what’s your experience of this in Japan…

…on ambition level?

You cannot push things too far, too fast in Japan, especially if that thing seems to come from the outside. The notorious case of the Olympus CEO shows how quickly ideas are squashed if “global” approaches are introduced too rapidly. Working as a board insider in Japan, I see this very clearly now. Learn to walk before you try to run.

…on getting your approach right?

As a foreigner in Japan, you’re only selected for certain roles, so you need to generate maximum advantage from the opportunities you get. The role of “cultural interpreter” may be vague and poorly-defined, but it is important and can get you a seat at the top table.

I’ve taken every chance to introduce the ideas of diversity and inclusion. The approach which is working best now in Japan is to frame culture as an aspect of management, as a management science. In fact, the term “diversity management” makes sense to people here. With a decreasing population, Japanese leaders accept the need to bring new sources of talent into the economy.

…on connecting with individual board members?

One of my many hats is as global research team leader for the Japan Diversity Network, an umbrella organisation for other associations which promote diversity, including some big companies. It’s rewarding to collaborate with so many energetic people who bring energy to the movement towards diversity in Japan.

There are some great high-profile examples here, such as the charismatic former CEO of food and snack-maker Calbee, who made huge progress in promoting gender-balance in the workplace.

…on the financial case?

Japanese boards are like boards in US and European in the sense that they want to see measurable results. They are looking for a connection with business goals and impact on financial performance.

If you manage to demonstrate the benefits in dollars and yen, then board members here are much more likely to sign up to “soft skills” initiatives. But the evidence base here in Japan is still weak and we need more longitudinal studies.

…on getting the timing right?

Few Japanese business leaders will invest their time and corporate resources into pre-empting the need for cultural competence. People here accept cultural training as necessary only when there is a specific business event that creates a “burning platform”

How to win board approval for your proposal

Five steps to preparing your proposal to board-level executives for intercultural training, with downloadable material.

How do you see the future of intercultural competence development in Japan?

Japan is starting from behind. But international comparisons are not useful here. Japan is in fact doing quite well, considering its unique history.

In Japan, we could say that diversity is gradually becoming accepted, but inclusion will be the greatest challenge. People here need to fully accept diversity in principle first before we move forward to inclusion strategies. Training has a role to play here.

You can appreciate the scale of the challenge when you realise that the Japanese believe that it is not really possible for outsiders to truly understand Japanese people.

Japanese organisations do respond to messaging from the top and fortunately I am seeing an increasing number of boards who “get” diversity as a path to future business success.