Leaders of foreign companies are sweating more than usual here in equatorial Singapore. The country’s Ministry of Manpower (M.O.M.) has been turning up the heat, demanding firms massively increase their local hires for senior management positions. Regulations are coming, they warn. More foreign hires will no longer be allowed.

Companies argue they can’t find enough locals with specific experience and locals argue they aren’t being given a chance to prove themselves. Singaporeans see a glass ceiling while foreign companies see talent that doesn’t seem to fit their needs.  Whatever your position on this complicated topic, the government appears to be raising the stakes. Foreign companies in several key industries are on notice.

One of the under-appreciated obstacles here in Singapore and across the planet is how cultural differences limit teams’ abilities to work together effectively. The companies that figure this out will win globally. The others will be pushed out or relegated to the side lines.

Government regulations or not, companies need to start taking this seriously.

Most foreign companies in Singapore (and all over the planet) have in fact been trying to hire more local talent. Why? Because it makes business sense. Local hires know the market better, they have stronger contacts and relationships and don’t incur the wildly expensive relocation investments.  Slowing economies encourage firms to speed up hiring locals because it’s more cost-efficient than expats. In some places, like Singapore, the government is trying to speed up this process.

So why hasn’t this been working?

Because companies haven’t been able to break though cultural barriers.

What is culture? In the most simplistic terms, (and I’m borrowing this from David Livermore who may have borrowed it from someone else) culture is the way things are done around here. When companies expand and open offices in other parts of the world, they bring in their culture – the way they do things. But in other parts of the world, the way things are done around here are different.

Most companies fail to properly define that culture gap. I’m a strong believer in this because I’ve seen (sometimes firsthand!) so many companies fail when expanding abroad. If your company can’t overcome this challenge, it will not be able to develop an effective cross cultural leadership team.  

What’s needed is a Leadership Roadmap – in this case, a Cross Cultural Leadership Roadmap. What does your leadership team look like today, what does it need to look like in, say, 2 years time, and what are the concrete steps that will get them there? Also, how will you know it’s working along the way?

This roadmap will be different than a hiring and training plan. Mostly because your last hiring and training plan didn’t work and that’s why Singapore’s M.O.M. is getting more aggressive! In fact, they’re going to want to see your plan and your progress. 

The first part of your Cross Cultural Leadership Roadmap needs to cover cultural challenges.

If you’re running a business, division or team from a different part of the world, how many times have you found yourself telling someone back at headquarters, “it’s just….different here”?

That answer never solves the problem.

“It’s just different here” isn’t measurable and it’s exponentially harder to fix a problem if it can’t be properly defined. If something can be measured, it’s much easier to analyse and put a plan in place to address it.

There’s good news: Cultural differences can be defined, measured and tracked. This is a great place to start both for foreign companies needing to understand local cultures and local employees who need to understand their foreign employers.

Second, know yourself and know your team. Personalities are the individual version of culture. It’s how I do things around here. This too can be defined, measured and tracked. Your behaviour is more likely to be misinterpreted in a cross cultural team. Rather than address the behaviour, companies tend to fall back to their comfort zone, in the case of Singapore, this means hiring expats similar to themselves. And we know what M.O.M. has to say about that.

Know yourself, know your teammates and then you can build a path forward.

When companies start scraping away the cultural confusion and miscommunication, only then can they begin this journey of developing a new kind of cross cultural leadership team.