By now, you probably would have read about the controversy that luxury brand Dolce & Gabbana have been embroiled in this past week.  The designer label has experienced fierce backlash over an advertising campaign that depicted a Chinese woman struggling to eat traditional Italian food such as pizza, cannoli and spaghetti bolognese with an oversized pair of chopsticks.  To make matters worse, when negativity started to blowback on the fashion icon, one of its founders inflamed the situation by posting derogatory comments about the Chinese nation on social media, though he claimed his account was hacked and denied making the comments.

The Chinese public expressed their outrage by condemning the fashion icon on social media which swiftly led to a mass boycott of the brand as ecommerce sellers quickly removed their items for sale. The fashion powerhouse was also forced to abandon its marquee fashion event in Shanghai as models and celebrities began to boycott the show. In a desperate attempt to salvage some of its market presence in China, co-founders Dolce and Gabbana issued a heart-felt apology, asking for forgiveness over their “misunderstanding of Chinese Culture” and promising it will never happen again.

However resentment still lingers with one social media user responding “We don’t have to accept your apology.  Go and make money in other countries.  There’s none for you here in China.” With its reputation in tatters, one wonders if D&G will ever recover its market share in China, which already accounts for over 30% of the world’s luxury goods market and set to further grow by up to 22% this year.

Failure to understand cultural differences can sometimes lead to a harmless yet embarrassing cross-cultural situation that ends in a funny story that can be recounted at parties and social gatherings.  Other times it can lead to an enraged nation that ends in reputational ruin and financial disaster.

Cultural Intelligence is the key intelligence of our modern global world and an essential competency for leaders, managers and their teams.  Being able to not only identify cultural differences but also know how to engage and leverage these differences is crucial for a competitive advantage in our interconnected, global economy.

Are you and your team equipped to engage these types of challenges? We’re here to help.