The Competitive Advantage of Cultural Intelligence

The Competitive Advantage of Cultural Intelligence

by Felicity Menzies

Customers, employees and suppliers are no longer constrained by geography. New consumer markets offer opportunities for growth. Businesses can arbitrage talent and suppliers around the world.

Also, workplace diversity can drive market outperformance. The successful integration of diverse perspectives fosters innovation and creativity. Inclusive workplaces attract and energise top global talent. A diverse workforce can better understand and respond to the needs of varied customers. And employee diversity can increase access to new suppliers and other stakeholders.


Many organisations are not flexible enough to succeed across diverse markets. Even established businesses are stumbling in their global ambitions. Domestic success does not guarantee international success.

And despite efforts to build diverse workforces, companies are failing to create inclusive workplaces. Without inclusion, the strategic value of workforce diversity is low. Diversity may even be problematic.

Diversity increases the complexity of business. But few organisations have a workforce with the skills needed to manage this complexity.


Cultural Intelligence is the capability to manage cultural diversity: the set of knowledge, skills and abilities needed to recognise, understand, reflect on and adapt to cultural differences.

Individuals with high Cultural Intelligence (CQ) display four critical competencies. CQ Drive is a willingness to work with diverse othersCQ Knowledge is an understanding of culture and cultural differences. CQ Strategy is an ability to flex mentally and take alternative perspectives. CQ Action is an ability to flex verbal and non-verbal behaviour.

Cultural Intelligence helps organisations better manage diversity in their markets and workforces. Companies with leaders and workers who have high Cultural Intelligence are more agile. These organisations can quickly adapt processes, products and services to capture new opportunities and respond to change across diverse markets.

Cultural Intelligence also promotes successful intercultural relations, both inside and outside the organisation. This improves business performance via enhanced innovation, increased workforce engagement and more effective partnering.

Ang, S., & Van Dyne, L. (2008). Conceptualization of cultural intelligence: Definition, distinctiveness, and nomological network. In S. Ang & L. Van Dyne (Eds.), Handbook of Cultural Intelligence: Theory, Measurement, and Applications (pp. 3-15). Armonk, NY: M. E. Sharpe.

Felicity Menzies is CEO and Principal Consultant at Include-Empower.Com, a diversity and inclusion consultancy with expertise in inclusive leadership, unconscious bias, cultural intelligence and inclusion, gender equity, empowering diverse talent. Felicity is an accredited facilitator with the Cultural Intelligence Centre and the author of A World of Difference. Felicity has over 15 years of experience working with and managing diverse workforces in blue chip companies and is a Fellow of Chartered Accountants of Australia and New Zealand. Felicity also holds a Bachelor of Commerce and a Bachelor of Arts in Psychology.