“You’re the leader of a private sector company. Not a general in the army.” I’ve said these words to Western executives doing business in Iraq more than once. Too often, I see multinational corporation (MNC) leaders approach emerging markets like drill sergeants from old military movies—exercising performative military might rather than understanding local context. This lack of cultural intelligence damages projects, teams, and relationships.
I once witnessed an oil company representative yelling at workers in the Iraqi desert, threatening them to improve performance. Shouting only created stubborn resistance. Soon after, I read that the company’s contract was up for sale. They were abandoning Iraq entirely.
Western MNCs consistently struggle in emerging markets, with cultural misunderstandings leading to project failures and contract sales. My conclusion? Cultural intelligence isn’t a “nice to have.” For businesses that want to thrive in emerging markets, it’s a necessity that translates directly to the bottom line.
The Cost of Cultural Blindness
I have examined in depth how MNC leaders adapt in emerging markets like Iraq. Among the professionals I surveyed, one topic was repeatedly raised: the importance of understanding the local culture. Participants considered this critical for everything from skills development to company training. Cultural navigation dominated their concerns more than logistics, planning, and technical expertise combined.
The consequences of cultural blindness manifest as delayed projects, sold contracts, and reputational damage that close future opportunities. Meanwhile, those leaders who take the time to learn about and adapt to the foreign culture in which they operate tend to find greater success.
While my research focused on the Iraqi context, the results can be extrapolated to emerging markets at large. Foreign leaders who fail to learn about the local culture in which they operate risk isolating themselves, missing critical intelligence, and missing out on opportunities, ultimately leaving money on the table.
Cultural Intelligence as a Competitive Advantage
True cultural intelligence isn’t just a matter of surface-level awareness. I like to think of it as the capability to function effectively in diverse cultural settings—going beyond language or customs to truly understand the historical context that shapes a society’s mindset.
Small gestures of cultural understanding can create surprisingly significant business returns. Stronger local partnerships can provide market intelligence, for example. Deeper cultural understanding can also foster more positive relationships with the local workforce and even offer protection in riskier environments. In one project I managed, local workers called to warn me away from a site that was under threat of attack; their loyalty, earned through cultural respect, literally saved my life.
All of this adds up to more seamless business operations. I firmly believe that companies that invest in cultural education build a sustainable business advantage. When you demonstrate genuine respect for local culture, you earn respect in return, and that creates partnerships that competitors can’t easily replace.
Building Bridges Instead of Barriers
If you’re doing business in a foreign country, whether for a single meeting or a longer stay, I invite you to assess your approach. Are you prepared to learn about the customs and traditions of the region you are entering and adapt your behavior accordingly? Or are you going in with a show of proverbial military might, hoping to roll through like a tank and flatten anything in your way?
A command-and-control approach may seem easier at first, but I think it is ultimately less productive. You get what you give—I believe that is a fair way to describe the MNC experience in emerging markets. With an open mind and open eyes, it is possible to find success, but only if you’re willing to put in the cultural work first.