Managing multicultural project teams

Over the last few years, there has been a change in the way many major industrial capital projects are executed. The growth and development of rapid worldwide electronic communications has led to many projects being designed and developed in locations many thousands of miles away from the actual construction sites. In addition, there has been a trend by owner-operators to develop and establish such projects in partnership with other companies as joint ventures, often collaborating with local companies in the territory where the assets will be built. This has led to the rise of multicultural project teams, widely separated by geography with team members from different cultures and backgrounds working together to achieve a common objective.

Project management has developed greatly over the last 20 years, with a much greater understanding of the key factors that lead to project success. Project performance has been widely measured and benchmarked by various organisations, and the results have clearly shown that best project performance is achieved when the entire project team is fully integrated and aligned with project objectives. This is difficult enough to achieve where the team is situated in the same office located close to the construction site. But it is much more difficult for multicultural global projects that have a range of diverse companies involved, are widely separated geographically and that have very different organisational and regional cultures.

The lack of physical proximity is the first key factor. The geographical separation of a project team poses difficulties of communication. For factual information transfer, many of these communication problems have been resolved thanks to the development of rapid global information systems and telecommunications. However, many issues remain: the loss of face-to-face contact can lead to misunderstanding, and the loss of non-verbal signals – such as eye contact and body language – can make the development of mutual trust and confidence difficult to achieve. It is difficult to manage or supervise others without face-to-face contact or to negotiate or to build relationships. Time zones also present a difficulty: the ‘window’ for direct contact by phone or e-mail might be very short during the working day. Having said that, time zones can also have a positive effect in that it can enable round the clock working in some circumstances. An inherent problem with working in different world locations is the cost and time of travel. This is not just the direct cost of flights and accommodation, but also the reduced effectiveness of staff in lost time, recovery from jet lag, etc.

Another key issue affecting multicultural project teams is language. A project must have a common language to ensure a common understanding. In many situations, this means that non-native speakers are working in their second or third language with a consequential loss of effectiveness, as well as increased risk of mistakes or misunderstanding. In situations where interpreters or translators are required, this has the effect of significantly slowing down the whole communication process and is very costly. Even where team members of different nationalities speak the same language, there can be difficulties. Words in American English can have totally different meanings to English in the UK, whilst conventions and abbreviations can often be very different.

For the project manager of a multicultural project, there can be difficulties in assessing the skills and competencies of team players. Training and education standards and the relative value of qualifications can be very different in different parts of the world. Job methods vary and can be different because of specific local conditions such as working in heat, earthquake risk or local trade practices. Mobility can be a problem that affects competence: it can be difficult to find people who can work effectively away from their home environment.

Risk is present in all projects but becomes more pronounced in global projects where there are often new risks, particularly if the project is being built in a part of the world where security is an issue. In some countries, contract law is not well established and other local laws may not be well understood by other nationalities. Risks in communications and risks arising from misunderstandings and misinterpretation are much greater. There are also risks of an expatriate team ‘going native’ and becoming detached from the project and pursuing their own agenda rather than buying into the overall project objectives.

Financing of multicultural projects can be difficult. Variations in currency exchange rates as well as variable inflation rates in different countries can play havoc with project cost management. Getting funds for purchases can also be a problem if the local currency and economy are weak and there is a lack of hard currency. Some companies have difficulty with repatriating profits from work done in some parts of the world. There also tend to be more hidden costs associated with multicultural projects such as shipping and logistics costs, customs and import duties and agents fees.

Many contractors now use low-cost design centres for the completion of detailed or standardised design and this can result in a significant reduction in design costs due to the relatively low wage-rates in these countries. But these must be used with care since although the rates may be low, the productivity is often also low so the cost-savings are much less attractive than might be thought. Error rates also tend to be higher for work farmed out in this way. There can also be a backlash from staff if there are very different rates of pay for the same work, which can be seen as exploitative. Communications between the main project office and the low-cost design centre need to be of high quality if difficulties are to be avoided.

Cultural differences are usually significant when managing projects across different parts of the world. These differences can be different national characteristics, ethnic differences, differences of organisational culture or professional differences. These differences can lead to major divergence of working practice and can dramatically affect the project outcome. In some cultures, status and hierarchy are very important and can lead to a lack of empowerment of more junior staff. Different views of age and experience, revered in some cultures, or attitudes to women can lead to difficulties. Avoiding loss of face is a major factor in many cultures and must be taken into account when seeking out opinion. Decision-making can be very different too: some cultures make decisions by consensus, others make decisions in a more autocratic way. Religious observance varies around the world and can be very significant in getting a project complete. Setting aside time for religious observance during the working day might be necessary, including places for prayer. Many countries have religious festivals, fasts and feast days that are non-working days.

Organisational culture is important too. Project teams are usually drawn from several different companies, each with its own organisational culture. To work together effectively, there needs to be some degree of commonality of organisational culture. Most organisations have a cultural history and set ways of getting things done that can help or, in some cases, hinder a project. It is important to establish the organisational background and culture of all the parties involved in the project from the outset. Changing cultural behaviour can be done but needs the active commitment and involvement of all to make it work.

Leadership is more difficult but much more necessary in a multicultural team context. If management is getting the team to do what you want them to do, leadership is about getting the team to want to do what you want them to do. In this context, leadership is not so much about telling people what to do as leading by example and developing trust and confidence in the team to take the project forward. This kind of team leadership is not just accidental but can be developed and is a necessary skill for successful multicultural projects.

In many counties of the world, different ethical standards apply. This affects attitudes towards the law and, indeed, national laws can be very different in different territories. In some countries, bribery and corruption have become institutionalised and are the only means by which some local officials can earn a living. There may be undue preference given to local suppliers or contractors and planning laws and approvals can be very bureaucratic. In some countries, the government approval process can become the critical path on the project programme.

There are differences of standards in many countries that can extend to attitudes towards health and safety. Design standards can vary and local factors such as climate, topography and infrastructure can dramatically affect a project. Local customs can also be bewildering, especially for staff living overseas where there might be different attitudes towards gifts, entertainment and hours of work. The families of expatriate workers who accompany their spouses overseas can encounter many difficulties with standards of living, accommodation, security, education of children and language. All of which puts more strains and pressures on members of the project team.

Experience shows that, despite the many difficulties, these projects can be very successful. It is possible to get project teams from very different companies and diverse cultures to work together effectively. The task is to understand the secret of success so that more projects of this type can be delivered to the benefit of the project sponsors in a way that properly rewards the many companies and organisations involved in that delivery.