How can Middle East Leaders Turn Cultural Diversity into a Competitive Edge?

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For the first time in modern history, organizations are managing up to five generations in the same workplace, ranging from Traditionalists born before 1946 to Gen Z employees born after 1997. This unprecedented mix, coupled with an intense and increasing cultural diversity in teams, calls for managers to be navigators, rather than executors.

This is where the world can learn from how leaders in the Middle East manage and lead. ​GCC countries report exceptionally high percentages of non-citizen workers. 

MIT Sloan Management Review Middle East spoke to three managers and one organizational psychologist to understand what it takes to manage a multicultural team.  

What Makes ME Managers Different?

For Rajiv Nair, CHRO & MEA Exec Sponsor, Ramco Systems, managing teams in the UAE and wider GCC is unlike anywhere else because workplaces often bring together 10–30 nationalities under one roof. He suggests that managers must avoid over-identifying with any one nationality and focus on building a company-first mindset, using simple and clear language (often English) to facilitate easier communication.

​“Good managers adjust their style to suit each person. They use multiple channels—team meetings, one-on-ones, and written notes—to make sure everyone understands,” he adds.

For Farhan Bhatt, a Middle East-based business psychologist, multicultural teams can become the region’s greatest competitive advantage. They offer substantial advantages, starting with the fusion of diverse perspectives that fuels creativity and innovation, ultimately leading to greater profitability and market success. McKinsey reports that companies with high cultural diversity are 36% more profitable than those with lower diversity.

While managing culturally diverse teams draws on many of the same skills as leading any effective team, certain areas require extra attention. With this in mind, leaders and managers across the region share how they navigate multicultural dynamics, ensuring inclusion without turning their teams into a “melting pot” that kills individuality.

1. The Right Hiring Strategy

Hiring can make or break a company’s long-term strategy. A lot goes into finding the right person for a job. A wrong hire who exits quickly can set off a ripple of negative effects across the organization, ranging from financial losses and reduced productivity to weakened morale and reputational damage.

Things become more complicated when the cultural fit comes into play. 

In a multicultural team, managers must consider the core values they seek in a potential candidate. “Recruitment plays a big role. We focus on openness and the “essence of the person,” ensuring we hire people who can work inclusively across cultures. This balance of structured training, values, and people-centric hiring ensures our diversity remains a true strength,” shares Ettiene Van Der Watt, regional director (Middle East, Central Asia & Africa), Axis Communications.

​2. Conflict Resolution

Cultural diversity can increase a team’s agility and ability to adapt to change, paving the way for long-term benefits for the individual, team, and company. Organizations should position it as an advantage, which, Professor Fiona Robson, head of Edinburgh Business School and School of Social Sciences, Heriot-Watt University Dubai, says “can make some of the trickier conversations much easier.”  

​“With the Middle East being such a melting pot of cultures, managers quickly realise that many conflicts come down to different communication styles and values. The key is to recognise this, ensure people feel heard, and then gently guide them back to shared norms and company culture,” shares Sid Bhatia, Area VP & General Manager (Middle East, Turkey & Africa), Dataiku.

​3. Cultural Intelligence—a Growing Priority

An individual’s ability to function effectively in diverse cultural settings by adapting to different social behaviors and norms—cultural intelligence (CI)—has become a growing facet that managers are prioritizing now. Robson urges that onboarding processes should also emphasize the importance of having a culturally intelligent mindset.

​“Organisations could use the cultural intelligence framework to introduce and reinforce awareness, knowledge, and behaviours that enhance cultural intelligence. Where conflict occurs, managers should diffuse the situation by removing the personal element and focusing on the needs of the organisation. Adapting to cultural differences should become part of normal business,” Robson shares.  

A Journal of Information Systems Engineering and Management research article revealed that CI has a significant positive impact on employees’ perception of inclusiveness, knowledge sharing, and innovation behavior, along with a significant positive impact on work performance.

A leader plays a critical role in creating an environment at a workplace. When one is an inclusive leader, they are bound to impact with a multitude of benefits to your people and the organisation. When employees feel included, they’re more likely to be engaged, motivated, and committed to their work. 

​4. Develop a Team Identity

On the employees’ part, the first step should be to acknowledge the elephant in the room, which is the existence of diverse cultural backgrounds within the team. Familiarity among team members fosters better relationships and mutual understanding, enabling the team to effectively utilize one another’s strengths. Robson seconds it, “Holding team-building events is a good way to nurture relationships and help employees to understand how all their roles are important in enabling the organisation to meet its goals.”

​Initiative should also be taken on the managerial front. Watt notes that at Axis, managers rely on cultural awareness workshops, HR-led team building, and the DISC (dominance, influence, steadiness, conscientiousness) framework, a behavioral tool that explains how people communicate differently. “This helps colleagues see both their own style and others’, which is powerful in a team of 19+ nationalities,” he says. ​DISC helps leaders adjust their communication styles to fit different preferences.

​5. Non-monetary Motivators

Flexible leaves are one of the most effective non-monetary motivators to drive performance in hyper-diverse teams. “One example of inclusivity is our flexible leave approach. With nearly 20 nationalities, we recognize a wide range of cultural and religious observances, from Eid to Christmas to Diwali. HR also adapts working conditions during Ramadan, offering workshops and adjusted schedules to support employee well-being. These initiatives come directly from listening to employee feedback,” says Watt.

Nair cites three examples of employee benefits and policies his company introduced: flexible start and end times during Ramadan, optional work-from-home arrangements for employees with long commutes, and localized celebration of global milestones. “The most impactful non-monetary motivators in such teams revolve around recognition, career development, and a supportive work environment. These drivers align closely with cultural values like hospitality, respect for hierarchy, and the centrality of family,” he adds.

Additionally, a simple public acknowledgment of effort can carry huge weight, particularly when it resonates with someone’s sense of family or community pride. For Bhatia, recognition, purpose, and inclusion are powerful motivators, “sometimes even more than money.” Regional cultural values practiced by leaders, such as generosity and hospitality, wisdom and respect for age and experience, and connectedness, which emphasizes the importance of family, at their core, make people feel seen. “That’s when performance flourishes,” says Bhatia.

While multicultural teams often present challenging management dilemmas due to cultural differences creating significant obstacles to effective teamwork, the good news is that these challenges are entirely manageable. Success requires managers and team members to select the right strategy and avoid imposing approaches rooted in a single culture. This, in turn, can set an example for how managers can lead teams—multicultural or not.