Financial Decisions are Cultural Decisions
What Cultural Dexterity is and how it can improve our financial decisions
There are many pitfalls to using data to make decisions, but a common one is extrapolating from a small sample of information and applying it to a larger group. This works well in some circumstances, but the problem is that it depends on who you talk to.
It’s easy to get tunnel vision when working with data — so much so that you might not even realize when you’re cherry-picking information or looking at things in an overly narrow (or even biased) way. The key is to listen carefully and try to understand what people want their future lives to look like, not just what they’ve done in the past or what other people have done.
In politics, pundits often use historical data as a basis for making predictions about the future, but most people don’t want history to repeat itself. And yet basing decisions too much on historical data can make people less able to hear how people want their future lives to be.
Financial services companies also have a similar problem: They often use historical data as a benchmark for recommendations today, then use equations to assess future outcomes; however, this can lead them down the wrong path because it doesn’t consider that clients’ needs may change over time or that they might have different cultural values than others.
That’s why cultural dexterity is a necessary skill in today’s society.
What is cultural dexterity?
Developed in 2011 by Lance Berger and Dorothy Berger, cultural dexterity describes the business skills of collaborating and communicating across multiple levels of diversity.
Culture is more than just a collective way of evaluating people and things, as it has many nuances with regard to financial decision-making — nuances that are often overlooked.
Globally, we all share a desire to earn income and build wealth that will last from one generation to the next. Every culture is unique — even within itself there may be common themes or similarities, but each experience is influenced uniquely by its environment.
Cultural dexterity barriers.
The biggest barrier to cultural dexterity is our own unconscious biases, which can inform and shape our interactions with others. A culture’s unique values and norms are often invisible to outsiders because they’re so deeply embedded in the day-to-day lives of the people who live there. When we don’t see these differences, we make assumptions about what other people think and feel — and whether or not they value the same things that we do.
In order to have cultural awareness, you must first be aware that different cultures exist! Many people have grown up in homogeneous environments where everyone looks like them (or very similar), talks like them (or very similar), and holds some or all of the same beliefs as them (or very similar).
Without exposure to diverse groups of people at home or at school during childhood development stages, it can be difficult for adults later on in life to develop awareness about other cultures — after all, it takes practice seeing differences between groups before those differences become obvious enough for us not just recognize them but also understand why they matter.
It’s easy for one person from culture A to interact with another person from culture B without realizing that those two individuals might actually hold different values.
The difference are about something important like money management or raising children; this makes it hard for two individuals from different backgrounds who don’t know each other well enough yet consider themselves “friends” — even though their perspectives are fundamentally different from one another — because they don’t realize how much information they are missing out on while interacting with each other under false pretenses as equals
How do I increase cultural dexterity in my life or organization?
There are many ways to increase cultural dexterity in your organization, but it all starts with you.
- Get to know other cultures and become more aware of your own culture.
- Learn about the cultures of your employees and customers.
- Be open to new ideas. Be willing to change how you do things if that’s what is needed for a more inclusive workplace culture.
- Be open to feedback from others on how they perceive your behavior, how their experience with you differs from their assumptions, or any issues that may have come up because of cultural differences (like miscommunication or bias).
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George Blount coaches individuals to navigate and react to economic change and financial stress in their lives. Organize your financial life, nurture your money mindset, and learn what to know about money concepts. Learn more at https://georgeblount.com/
