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Cultural intelligence and its effect on business success

Aotearoa New Zealand’s population is diverse in a multitude of important and impactful ways – ethnicity, gender, sexuality, culture, language. But is this diversity respected, or even reflected, in our businesses?

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Over the last decade or so, New Zealand business has witnessed several significant shifts. Recent trends, particularly since the onset of the pandemic, include hybrid working, expanded leave options, and flexitime policies in the workplace, with an increasing focus on organisational culture and the wellbeing of employees. But one such trend which is integral to business success in the long run may not be getting the attention it deserves — the incorporation of diversity and culture into our everyday work-lives.

Why is diversity important?

Statistics New Zealand predicts that the population of New Zealand will become more ethnically diverse over the next two decades. With 68.5% of the population employed*, this increased diversity will be reflected in workplaces throughout New Zealand, amplifying the need for cultural intelligence as employees with diverse needs are recruited.

So, what is cultural intelligence? And how does that work in an organisation?

The Superdiversity Institute, based in Auckland, specialises in the research and analysis of key superdiversity trends and their implications for Government, business and NGO’s. Cultural intelligence or ‘CQ’ is central to their work in building cultural capability.

Mai Chen, former Adjunct Professor of Law at the University of Auckland, and current Chair of the Superdiversity Institute, tells us that while businesses have talked about ESG (Environmental Social and Governance) for years, they really need to think about what the S means.

“CQ is the ability to cross and connect cultural divides, and to thrive there. ‘Culture’ in this context means all the intersecting dimensions that can shape our identities – including, but not limited to, age, gender identity, disability, ethnicity, nationality, language, religion and sexual orientation or identity.”

“It has not always been clear that ‘social’ imperatives include cultural considerations.”

“The reality is that businesses that fail to put a proper cultural framework on ESG will compromise their ability to relate to culturally diverse staff and customers and this will detrimentally impact their bottom line.”

What does the inclusion of cultural considerations look like?

In August 2022, the Superdiversity Institute released ‘Cultural Capability and Business Success’, a report which profiles business leaders who incorporate cultural capability and make it a ‘cornerstone of their success.’

One such leader is Rob Hennin, the CEO of nib New Zealand. nib provides over 245,000 Kiwis with health insurance, and employees around 200 staff. Rob has been at the helm since 2013.

Rob and nib have been working to improve their cultural frameworks since 2017. Strategy-wise the company has created frameworks to grow cultural intelligence, establishing a Diversity and Inclusion Policy and Action Plan and Te Honoga, their Māori Relationship Plan. These two tools work alongside policies such as a wider range of employee leave (e.g., gender affirmation leave, grandparent leave, Māori cultural leave), opportunities for staff Te Reo courses and a partnership with Ngāti Whātua Ōrākei (which provides hapū members with free universal health insurance, tailored benefits like traditional healing and mental health cover, as well as internships and recruitment at nib for iwi members).

Investing in these frameworks has clearly had an impact: in the 2021 nib CQTick Audit©, 99% of employees agreed that nib values diversity, and makes people from other cultures feel included and comfortable.

Additionally, in their latest CQ survey, they report that employee’s understanding of the importance of cultural sensitivity is at 100%, up from 85.9% in 2017, and staff’s self-assessment of being able to work effectively with people of other cultures is also at 100%, up from 93.95% in 2017.

“We want people to bring their whole selves to work,” Rob explains. “If we had people feeling they can’t do that because there’s something about the working environment that is limiting for them, that’s not only sad but we’re missing the opportunities that diversity brings.”

“If you want to distinguish yourself in the marketplace, culture matters – to your customers and to your employees. It matters every single day. We’ve got to recognise the diversity we have, and align with the marketplace we have, and if we aren’t good at it, we won’t be successful.”

Rob also emphasises his own personal cultural intelligence learning – strengthening his understanding of Te Tiriti O Waitangi, Te Reo Māori and Tikanga Māori for example.

“I do genuinely believe it’s the right thing to do – to focus on somebody’s culture, and respect it, and learn about it.”

Rob believes that cultural intelligence is the way forward for business. “Diversity initiatives can seem scary, but there are a lot of other things which are also scary that people have no problem diving into – new product development, a big budget for the next year.”

Rob tells us, for him, a good first step was measurement. “Measure where the company and the staff are with diversity, in their actions and how they feel. And then think about what you want to concentrate on.”

“You can’t do everything – most companies have limited resources and capabilities. Measure, start where you need to, and reassess along the way.”

Rob and nib want to focus on accessibility and neurodiversity as the next part of their cultural intelligence training and frameworks. One in five working-age people in New Zealand have some form of disability, and in 2023, nib will be providing Accessibility Confident recruitment training for leaders, to support the recruitment and retention of employees with accessibility needs and neurodiversity.


* Statistics New Zealand (2022), Employment Rate, Statistics New Zealand https://www.stats.govt.nz/indicators/employment-rate

31 October 2022