Monthly Archives: March 2019


In this last post in this series I cover a few of the ‘other issues’ we would look at in a typical China cultural awareness training programme we deliver to a client. The issues outlined below should never form the core of a China cultural awareness programme, but they are areas which people are interested in and which usually provoke a number of interesting questions.

The Communist Party

There is no point worrying over the apparent contradiction of a country which exhibits a rampant capitalistic approach but which, at the same time, is ruled by an autocratic Communist Party. This apparent contradiction seems to excite people in the West far more than it does most Chinese people who are mostly concerned with going about their daily business and in maintaining social order. Maintaining good social order is a primary concern of Confucian philosophy, the government and most of the population of China – many of whom lived through the excesses and turmoil of the Cultural Revolution. (When you investigate it, the history of China is littered with examples of the disastrous effects of the breakdown of civil order).

The Communist Party is in power and looks set to remain in power for the foreseeable future and therefore must be recognised in that light and its influence understood. There are many books written on influence of the CP but some key points to bear in mind are:

  • The Party maintains an interest in many private companies or ‘new economic organisations’ as they are called, and many companies contain what are referred to as ‘Party cells’ which usually consist of three Party members.
  • Many owners of private organisations openly welcome the existence of such cells as they feel it puts them in a good position when interacting with local and national authorities or when pitching for government tenders.
  • It is difficult to get figures on how many private companies have such ‘cells’ operating within their organisation, but it is generally viewed that the number is increasing rather than falling.
  • This means that in any business meeting in China (or with a delegation from China) you might, or might not, have official party members present – it is unlikely that you will ever know.
  • Something like 80 – 90% of the richest 1000 people in China were Communist Party members.
  • Ironically, many people join the Communist Party as they see it as a pathway to wealth.

Women in Business in China

Officially, women have the same rights as men in the workplace and the party has promoted this sense of equality over the past thirty years or so. However, traditional Confucian thinking does not fit easily with the idea of gender equality and, therefore, it is still possible (but not definite) that foreign business women will be viewed less favourably as business partners than male colleagues.

Major obstacles remain which prevent Chinese women from moving into higher management. These obstacles are probably mainly cultural, resulting from traditional values and received ideas about the place that women and men occupy in the family and in the wider society. There is a body of evidence that the importance and number of women in senior leadership roles has been growing over the past few years and this trend could be driven by a combination of modernisation within the country and demographics (China has a shrinking population and needs good-quality, qualified workers).

Foreign businesswomen will be treated with respect and courtesy. They may find that, within a delegation, the Chinese defer to male colleagues regardless of the actual seniority of the Western party – the Chinese assumption being that the male will naturally be the decision-maker. Although this may be irritating, it is best not to show that irritation in public.

Corruption

In his outgoing speech, former President Hu Jintao stated that endemic corruption (and incompetence) were threatening the stability of the State and the current Chinese leadership have made this issue an absolute priority. However, getting the Communist Party to tackle corruption is a monumental challenge especially as many Party members are numbered amongst the country’s very richest people.

Corruption amongst government officials – both national and local – is widespread and could be said to reflect the worst impacts of the Guanxi system. People in Guanxi relationships often find it simply impossible to refuse a bribe for fear of offending the giver -and breaking down this age-old culture will be difficult. The government has frequent crack-downs on bureaucratic corruption but China is vast and difficult to govern (the police are themselves seen as massively corrupt). The famous traditional Chinese proverb, ‘Heaven is high, and the Emperor is far away’ points to both the historical nature of corruption and the inability of the centre to control such a huge land mass and population.

There is a feeling that Western companies are more likely to be targeted for investigation than local Chinese competitors and, therefore, Western companies operating in the China market need to be ever vigilant.

Keith Warburton

Keith Warburton, Global Business Culture CEO

Entertaining

Business entertaining is a crucial element of Chinese business culture and should not be immediately associated with corruption. Entertaining is part of the relationship-building process and should not be thought of as a bore or as an irrelevancy. The quality of the entertainment provided reflects the seriousness of your intent to enter a long-lasting relationship and conversely, the lack of quality entertainment can be read as a lack of serious intent.

Budgetary considerations come into play here and, whilst Western business visitors to China are usually royally feted by their Chinese contacts, it is sometimes difficult for Westerners to reflect the same quality of entertainment when the Chinese counterparts repay the visit. This lack of reciprocal entertainment can often be confusing for Chinese counterparties and can lead to a loss of face for senior delegates.

If you are invited to a banquet in China, prepare yourself for a meal to remember. The banquet can consist of up to thirty dishes being served over a long period of time and it is therefore wise to pace yourself. Try to eat a little of each dish rather than sticking to the one you recognize. It is traditional to leave some food on your plate — if you finish everything, this can be taken as a sign that you are still hungry.

Banquets and entertaining in general can involve the consumption of large volumes of alcohol and this can be quite a challenge. You may feel compelled to involve yourself in the lengthy round of formal toasts which often accompany every course of a banquet, but it is perfectly acceptable to give an excuse for not being able to join in – saying you cannot drink for health reasons is probably the best option.

Do not be overly worried about the complexities of seating arrangements as these are a subtle art-form probably best left to your Chinese colleagues or local advisors to organize.
The seating arrangements at a banquet relate to perceptions of hierarchy and status. If you are invited, you will be shown where to sit. However, if you are the host it is probably best to get some local advice on the best seating plan if you want to avoid insulting anybody.

Gift-giving

It is important to state that gift-giving in China is a very separate issue from bribery. Small gifts are very often given and received as this is considered an integral part of the relationship-building cycle.

It is probably good to speak to your central BD team if you have any questions about which gifts are appropriate, but a few simple rules would be:

  • Gifts should be wrapped
  • Never give anything sharp
  • Do not give timepieces
  • Gifts will often be initially refused as a gesture of politeness

Conclusion

The advice in this series of posts is meant as a brief introduction to the complexities of Chinese business culture and, as such, cannot be comprehensive and all-encompassing. We go into all these areas in more detail and relate them to your specific business needs in the China cultural awareness training courses we deliver for our clients.

The best advice is to be open-minded and patient when working in China or with the Chinese. Recognise that any frustrations and confusion you may feel are probably mirrored on the Chinese side – they find your approach equally confusing.

If you would like to have a conversation about how our China cultural awareness training programmes might help your business work more effectively in China, please contact us.

In this final blog in our series on global outsourcing we focus on some key internal areas of consideration which are critical but, in our experience, either overlooked or addressed poorly.

Why Talent and Human Resource Management is Key During the Global Outsourcing Process.

Once the decision is taken to embark on a transformational programme such as Global Outsourcing, and everyone from C-level to team member has understood the importance and risk of the programme and their specific role in the project, we enter the phase of execution. At this juncture, the impact of the plans on the teams and the human challenges they present will become magnified and, if not planned for and managed well, can derail even the most carefully thought-out of projects. Getting these elements right is critical and, if not managed with focus and agility on a daily basis, will represent potentially the biggest headache for the project leadership.

Key issues to consider at this stage are:

  • Secondments: It is clear that global outsourcing programmes will cause a certain level of individual and team stress, often merely through fear and mistrust of the unknown. These challenges can be reduced through implementing cultural awareness and mentoring training but additionally, and critical to the success of the programme, is the development of a secondment plan – sending people to and from the chosen outsourcing entity. This not only facilitates process transfer but will also facilitate the development of the necessary cross-company relationships, cultural awareness and basic trust in the partnership – a trust which is so often missing at the outset such projects.
     
    Central to the success of any good secondment plan is buy-in from senior leadership and team members who will need to offer up their best people to be 100% committed to the programme – whilst at the same time maintaining the delivery or service levels of the current environment. It will require a great deal of “hands-on” flexibility and agility from the project team to adapt the secondment plan to the real-life requirements of the programme as it evolves.

    It is also really important to choose secondment candidates carefully – not only do they need to be process experts but simultaneously have to be ambassadors for the company, the programme and, in addition, need to be culturally aware. This combination of skills is a rarity in most companies and finding this combination in an often “threatening” change environment can be difficult.

  • Attrition/Retention: Most carefully planned projects will usually have a workstream on managing attrition in the “home” environment – however it is important to think about this in the outsourced/offshored environment as well. Often, due to language or differing management styles or simply a set of cultural blockages, people will decide this programme is not for them and move on – particularly if the local labour market is tight. If the focus on attrition is “undercooked” then it can be a major cause of programme failure due, not just to a lack of resources, but can also potentially lead to spiralling programme costs with extra training, additional secondments and added replacement resources all required both at home and in the new environment.
     
    Keith Warburton

    Keith Warburton, Global Business Culture CEO

    An area of specific focus should be potential attrition of key skillsets in the “home” environment (which long term may be a desired outcome) but attention to retaining these key skillsets in the transition phase is fundamental to the delivery of the programme due to the criticality of process knowledge as a success factor for the project. Keeping on top of this is hugely important and specific HR programmes to hold on to these key skillsets through reward schemes and the structured management of each individual involved will be necessary.

    It is also extremely important to have retention plans for key leaders in the organisation, some of whom may feel disenchanted and at risk – and even the project leadership which is 100% focussed on delivering a successful programme may well have some concerns for their own future despite the fact they are leading a high impact programme such as this. Once again, specifically tailored career pathing and/or reward schemes are important here and special care will be needed if the individual leading the project has already been identified as a C level leader of the future or is critical to the client base.

  • Outplacement: During the project execution phase there will normally already be a plan for a certain level of workforce reduction in the “home” environment. This, as we have said before, will create a level of uncertainty and fear which is understandable and has to be managed well if it is not to derail the project. A key element to managing this risk well is a carefully designed outplacement programme for those concerned. Teams will want to understand how they or their colleagues will be treated, and a well thought-through outplacement programme is essential to keep people as motivated as possible. Additionally, it will help to avoid workplace conflicts both on an individual basis and at the team level. Wherever possible, additional individual and/or team mentoring from an external source is advised to help people accept the consequences of the programme – even if the individuals concerned are not directly affected.

Pack and Ship

Once your project to outsource, offshore or centralise work is underway you will face the task of packing and shipping the selected work. The ability of your organisation to handle this will depend upon the experience in the organisation, the mood around the specific offshoring initiative and the strategies that you put in place to support this phase. Assuming that you have made good decisions about what work to move then this phase is essentially a case of describing what you do in sufficient detail to train new people and providing the correct equipment and infrastructure for them to deliver a service at least as good as todays.

Here are a few of the factors to consider in this phase:

  • How are levels of service currently measured? If there are not robust and accepted metrics in place that describe the current level of service, then you will not be able to make comparisons once the work is shipped. As you pack the work to ship make sure these are in place, accepted and communicated as the baseline before the move.
  • How well do you transfer knowledge to people in new roles or who are new to your organisation? Your ability to define the work, train people and give them access to on-going support will depend upon what systems you currently have in place for knowledge transfer and training. With a move, you have the added challenge of needing to work across geographies and perhaps, company boundaries if third parties are involved. Detailed documentation, effective training and ongoing access to knowledge are key to success. This may also require you to establish new on-line collaboration and learning tools.
  • To what extent do existing teams and functions trust each other? When this is at its best then work can flow without friction through an organisation. Once you pack up work and ship it how can you ensure that there are steps in place to build trust between the new contact points? Solutions such as rotational moves of leaders can go a long way to help build trust between teams.
  • When you ship work it will take some time to unpack and for services to be fully functional. During this period, you need a parallel approach to ensure there is no disruption to the business and this needs to be as short as possible to avoid unnecessary costs.

There are many more things to consider when it comes to packing up the work and shipping it. By being broad in your thinking and systematic in your approach you can ensure a good result for this move and create a capability for future moves.

Project Management

When embarking upon offshoring, outsourcing or centralisation of work there will be multiple projects and workstreams to manage with high degrees of interdependency. An approach to project management that balances rigor with outcomes and is supported by strong communication will be key to the success of your overall programme. If you don’t already have these skills in-house then acquisition of them should be a key consideration as part of your processes for selecting partners to work with on your programme.

Some factors to consider in your approach to project management:

  • Strong beginnings and strong endings to projects ensure that what happens in the middle happens well. A clear and simple objective for each project along with the right team and clear scope will help build success. Being prepared to have succinct and open management review of projects can ensure that the approach to project management can evolve and improve based on experience gained.
  • Project teams may involve staff from partners as well as your own teams. Developing a common language and understanding of the approach to projects is important to minimise the risk of failures.
  • How can you strike a balance between team size and autonomy versus the need to ensure the overall programme is on track? Small teams with a well-formed objective can be very agile and adapt to change quickly. They need to be able to do so within a framework that will ensure their results are aligned to the overall programme.
  • The nature of this work can be very challenging for teams and individuals. This makes it a great opportunity to develop people in your organisation by providing them with stretching assignments and giving them support to develop their skills. You can use these projects as a way to develop high potential people in your organisation for future roles.
  • How to find a balance for progress reporting and governance? Too much and it won’t get used, too little and teams and stakeholders will lose direction. It is vital to build a culture of transparency so that any issues can be spotted very early and success acknowledged as it is achieved. Steering groups have a key role to play in ensuring they guide, challenge and encourage teams while being ready to make tough calls when needed.

There are many other aspects to consider – the detail will be important, and it will depend on the context in which your projects are happening. We would love to talk to you about how you can prepare this aspect of your programme.

We hope this series of blog posts on key aspects of global outsourcing have been helpful. If we can be of any further assistance, please contact us.

In this series of blogs, I am focusing on some of the key areas we look at when running China cultural awareness training programmes for our clients. Of course, you can’t go into the same level of detail in a post such as this, but it hopefully gives a flavour of what we would cover and what might help your colleagues interface more effectively into China.

In this piece I’m looking at a whole series of issues such as meeting styles, decision-making, long-term thinking and communicating in China.

Meetings Styles:

In any meeting situation, it is important to show respect to those to whom respect is due – this is one of the ways in which you can show yourself to be honourable and in turn worthy of respect. Respect should be shown to age, seniority, party membership, the history and traditions of China, political sensitivities, the company, the region……. the list is almost endless. Stand up when a senior person enters the room, offer the ‘seat of honour’ (furthest from the door) and be attentive even if the key person’s English is weak.

Business cards are always exchanged on first meeting a new contact. Cards are held in both hands when exchanging them and then inspecteded in detail. You should have your card printed in Chinese on the reverse and always offer it Chinese-side up (as it’s obviously easier for the Chinese to read Chinese). Treat the card with great respect as the card is the man.

Handshaking is normal in China, but a Chinese handshake tends to be soft and lingering. As it is considered impolite to look people straight in the eye, it is customary to look down, lowering the eyes as a mark of respect.

Meetings are circular and you are likely to find yourself involved in a whole series of meetings rather than just one big meeting at which all major issues are disclosed and assessed. Meetings are more about building relationships and exchanging information and it is rare for a decision to be made within the meeting. Decisions will be made elsewhere in consensus-style discussions, which involve all the relevant people (including possibly a Party member). As a result of this approach to meetings and their serial nature, patience is very definitely a virtue. Impatience will achieve nothing other than delaying things even more.

Decision-making Styles:

Decision-making processes are lengthy in China as they usually focus on the complexity of an issue and people want to be sure that every single angle is considered before coming to any conclusion. This process very often involves revisiting issues already covered at the beginning and starting the thinking process and the whole chain of discussions again. In meetings you can find issues being revisited which you thought had been settled long ago. The Chinese want to be sure every aspect of an issue has been analysed in depth and then re-analysed. This approach can often lead to frustration for Western counterparties.

The Chinese are holistic thinkers. This allows them to view an issue at once in all of its complexity. Westerners tend to be more linear in their thinking and use a more processed approach to tackling a problem. This usually involves a beginning, a middle and an end.

China is a collectivistic culture which leads to a consensus building decision-making approach. Westerners view this approach as inefficient and too slow. It is usually slow but not necessarily inefficient. Again, as in many aspects of doing business in China, patience is not a virtue – it is a necessity.

Keith Warburton

Keith Warburton, Global Business Culture CEO

Long-term Attitudes:

All of the above Chinese characteristics point to a business culture that is long-term in outlook. Relationships take time to nurture and develop, decision-making is hierarchical and consensual, senior leaders tend to be older and people develop Guanxi relationships which brings life-long obligations. China is also an ancient civilization and the Chinese think in millennia not decades or single years.

Thus, taking a long-term perspective when working in the China market is an absolute imperative. Be patient and expect things to take longer to come to fruition. Plan on making several relationship-building trips before you see any tangible progress made or deals won. (This is not always the case but any ‘quick wins’ are best seen as an exception rather than the rule).

Always emphasise your long-term commitment to any Chinese counterparty, their organization and to China itself. Try to work out why working with you would be good for China and the development of China – this may seem irrelevant to you, but it definitely is not to the Chinese.

Communication in China:

Mandarin is the official language of China, but it is not universally spoken or understood. Chinese should be seen as a family of languages – a little like the Romance languages of Europe. There are ten major languages in China which include Mandarin, Cantonese, Shanghaiese, Fukienese, Hokkien, Hakka and Chin Chow. On top of these there are dozens of minority languages, some of which are spoken by millions of people.

A major difference between the Romance languages of Europe and the Chinese family of languages is that there is just one writing system for all major Chinese languages. This means that the Chinese can read other Chinese languages without being able to speak them – the written language therefore becomes a unifying national and cultural factor. Indeed, it could be said that it is this common writing system which has held the Chinese people together over thousands of years. (The current writing system was standardised in the 3rd century BC and has remained virtually the same ever since).

Although English language levels are rapidly improving in China, it can be difficult to do business in many parts of China without the aid of a translator. English language levels are very patchy and, although a layer of fluent English speakers exists, the layer is quite thin, and levels fall away very quickly. Communicating in China can, therefore, be a slow, laborious activity and fraught with constant dangers in terms of misunderstanding and mistranslation. Don’t assume comprehension. Cover the same ground several times and constantly check for understanding.

One of the reasons that communication can be such a problem in China is that along with many other Asians, the Chinese find it extremely difficult to say ‘no’. Saying ‘no’ causes both embarrassment and loss of face and it is therefore better to agree with things in a less than direct manner. Thus, anything other than an unequivocal ‘yes’ probably means ‘no’. Be very wary of phrases such as ‘Yes, but it might be difficult’ and ‘Yes, probably’.

It is also difficult to deliver bad news and this is often done through the use of an intermediary who can soften the blow and try to preserve as much good will within the relationship as possible.

The Chinese have a reputation for ‘impassiveness’ and this is largely based on Western misinterpretation of Chinese body language. The Chinese use a very limited amount of visual body language and Westerners often interpret this rigidity as a lack of responsiveness and emotion. Lack of overt body language does not mean that the Chinese do not show their reactions – it is more that Westerners are not skilled at reading it across the cultural divide.

All these issues point to the need to be very thoughtful in your use of language in China. Do not assume they have always understood what you have said (even when they tell you that they have) and never be afraid to go over things several times. The Chinese will very often go over issues many times – even when speaking in Chinese amongst themselves.

When speaking or writing English to the Chinese:

  • Watch your speed – it is difficult to speak slowly over long periods of time but beware of starting off at a slower pace only to speed up when you start to get interested in what you are saying.
  • Use a limited amount of vocabulary – don’t feel the need to be overly eloquent. Using the same vocabulary over and over again is helpful to weaker non-native speakers who have a limited vocabulary.
  • Avoid colloquialisms – everyday phrases such as ‘back you to the hilt’ or ‘throwing a curve-ball’ are confusing. Non-native speakers either know them or they don’t. It is very difficult to try to work out their meaning, especially in a meeting when the speaker is quickly on to the next point.
  • Ask open questions – the Chinese rarely tell you when they haven’t understood what you are saying so it is important to ask a series of open questions throughout meetings to check for understanding.
  • Keep written materials as short as possible – it can take a Chinese reader many times longer to read a page of writing in English than it takes you. The more complex and long the written material, the more the need for the safety net of a translation. Anything that goes for translation lengthens the timeframe and adds to the risk of confusion.

If you would like to have a conversation about how our China cultural awareness training programmes might help your business work more effectively in China, please contact us.

Much of the training and advisory work we do at Global Business Culture is focused on making global outsourcing projects work more effectively. We run many cultural awareness training and global virtual team programmes for clients who have embarked on a large-scale offshoring arrangement only to find that getting people to work efficiently across the barriers of time, culture, geography and language is very challenging.

Here are a few of our thoughts on what you need to factor into the process:

Virtual Teams and Global Outsourcing

Transitioning work from one country to another inevitably results in teams needing to work in an increasingly virtual environment. Tasks that used to be undertaken in one location are now passed on to another country to be performed by colleagues from a different cultural background who often have a different first language.

Working across the barriers of time zones, culture, language and technology will almost inevitably throw up a range of new and challenging situations which are going to require people to reassess the way they perform key tasks. Teams will be re-constituted, and tasks reassigned. Leaders will be asked to manage people who are located thousands of miles away, who they don’t know and probably (from a cultural perspective) don’t understand.

The issues of virtual working are not ‘soft’, and they are not peripheral to the process – they lie at the heart of how successfully you can make any outsourcing project work. If you can make virtual teams as effective as co-located teams, then half the battle is won – however if your virtual teams become malfunctioning the results can be enormously damaging and very costly.

Senior leaders need to recognise the critical nature of virtual team working and the need to give people the knowledge and skills to operate effectively in such a challenging environment. Emphasis should be placed on the following areas:

  • Developing virtual leadership skills: Just because somebody has successfully managed a team in their home location does not mean they automatically understand the dynamics of virtual team working. Virtual team leadership demands a whole new set of skills and also requires people to develop new levels of global cultural fluency and awareness.
  • Agreeing team protocols: Multi-cultural virtual teams will be made up of people with different cultural backgrounds and different corporate experiences. They will bring their own assumptions about ‘how things work’. Everybody will have a different expectation around what a good meeting looks like or how decisions should be taken. Global virtual teams need to establish agreed team protocols and they need to do this right at the outset of the project. Fail to address this issue and you automatically build-in inefficiencies.
  • Improving communication skills: Different countries have very differing views around how to communicate effectively. Each team member might have a different view about how they want to communicate with the leader. Some cultures like instructions to be given in great detail; others like to be given an objective. Consistent, clear and comprehensive inter-team communication is a must if the team is to function to full capacity.
  • Great technology: Global virtual teams rely on the use of technology in almost every situation – you cannot shout to a team member in another country. This complete technological dependency means that your technology has to be good and it has to be robust, but it also means that all team members need to be comfortable using it. Outsourcing projects often introduce people to new technologies but training on these new technologies is often overlooked because there are so many other things happening at the same time. Appoint technology champions and make them accountable.

If you fail to address these issues you will regret it down the outsourcing line. Getting this right requires time, training and budget – so factor those things into you plans from the start to avoid any unpleasant surprises.

Keith Warburton

Keith Warburton, Global Business Culture CEO

Cultural Awareness – a Key Ingredient of Global Outsourcing Success

Increasingly, outsourcing projects happen cross-border which inevitably results in an increased amount of cross-cultural interaction. Any international shared-service centre environment must inevitably involve a high level of complex, multi-cultural interaction and, if the bulk of your off-shore development or back office processing is India, you are likely to encounter inter-cultural challenges.

How culturally fluent are your home teams prior to any transition activities? What have you done to ensure that your new outsourced resource has a good understanding of the cultural expectations of your home teams – and more importantly of your clients? Are you even aware of what some of the key cultural challenges you are likely to encounter might be or do you prefer to pretend that everything will be fine?

In our experience, managing global cultural complexity is one of the key difficulties any major cross-border outsourcing project is likely to face. These challenges are both strategic and interpersonal but all of them can have a dramatic impact on the overall effectiveness of your operation:

  • Aligning structures: How will you structure your organisation in the new territory? This is a key strategic decision when opening a captive in another country and can also have a significant bearing if using a third-party provider. Many Western operations want to recreate their own flat systems around the world but this can cause chaos if your chosen outsource destination is a rigidly hierarchical country such as India. Get this decision wrong at the outset and you will live with the consequences for years.
  • Leadership style: If you have people in the home teams’ leading team members in the outsourced destination then you are very, very likely to have a clash of leadership styles. Leadership is geographically conditional – what is good leadership style in one country is often viewed as poor leadership in another. Both leaders and team members need to understand these dynamics and adapt their approaches accordingly.
  • Cultural bias: Home teams are prone to equate ‘different’ with ‘wrong’. If colleagues in an outsourced destination have an approach to any specific task which is different from how it is normally performed ‘at home’, the new approach is often felt to inferior (even if it is, in fact, better). All parties need to learn to shed their natural unconscious bias and develop very high levels of objectivity when appraising the work done by new overseas colleagues.
  • Effective communication: Communication is difficult enough within single-country organisations but is obviously much more complicated across cultures and language groups. Add the necessity for almost all communication to be driven through technology of one form or another and you have the perfect recipe for confusion and misunderstanding. Focus on effective communication is essential from the outset.

Global cultural differences challenge you in a way that is complex and often concealed. Our experience is that many organisations only become fully aware of cross-cultural challenges at the point when things are starting to go badly wrong and starting to impact negatively on a host of critical metrics.

Managing Distributed Processes

As you move work, you might find you have different parts of a process in different locations. It is always best to keep work hand-offs and feedback loops between different people in a process simple and tightly connected. Think about how the best relay teams in athletics succeed. The baton hand-offs are as important as the individual performances between hand-offs. With a change such as off-shoring you will have changed the context in which this happens for some people and they will need to develop the skills to manage a distributed process.

Here are a few considerations to bear in mind. They are important when you have a single location structure, even more so when work is distributed.

Who is the end-to-end owner of the process? Developing this role and the skills it requires are vital to bring together the different people in the process especially when there is change or improvement happening. The owner needs to have a grasp on how things are running today, a future vision of how the process should evolve and the ability to influence across functions, countries and partner organisations.

If the work hand-offs have changed then you may need to re-define what good looks like in the new context. This would cover aspects such as metrics, communication and escalation procedures and support to help implement these changes. Having people with the skills to facilitate the design of the new situation will be important.

With a distributed process and team, you might need to re-think how collaboration takes place. How will teams share simple visual performance data? How will teams carry out regular progress meetings to ensure the team is connected and working on the right topics?

When you move to a distributed process, leaders will face new challenges. It’s often the case that leaders who are already strong at delegating effectively will thrive in a distributed process. Leaders who get too involved in the work of their teams may need time and support to adjust.

Managing Attrition in Outsourcing

The decision to outsource work to another geographic location is often predicated on the expectation of large potential cost savings and access to scalable talent pools. Whilst both goals are achievable, they can be severely impacted on by high levels of attrition at the outsourced destination (and even at home). Without wanting to sound alarmist, your approach to managing attrition could make or break your plan in the medium to long-term.

All the evidence shows that rates of attrition are higher in the outsourcing world than in other areas of business and there are a number of factors which contribute to these disappointing statistics:

  • Competition for talent in the outsource market
  • Lack of promotional opportunities because of flat corporate structures
  • Wage inflation in-country and an unwillingness to keep pace with this
  • The nature of the work which is outsourced – which is often quite boring
  • Recruiting overly qualified staff for mundane tasks
  • Lack of a sense of inclusion within outsourced teams
  • Outsourced partners moving their own staff around as new clients are onboarded (you wanted their best people but so does everybody else).

Any outsourcing project needs to have the management of attrition at its core. It might sound pessimistic to start the process by assuming that many of the people you recruit will leave but unfortunately experience proves that is exactly what happens.

Ask yourselves a series of basic questions:

  • What is the cost of attrition to my business and how might that offset any cost benefits you are expecting (include in this calculation recruitment, training, opportunity cost, impact on clients and the home teams etc.)?
  • At what level of attrition do I lose any cost savings I am expecting from the transition process?
  • Why would people want to work for us?
  • Why would they want to stay long-term once they have joined?
  • What is the clear career path I can show new joiners?
  • What incentives can I offer to make retention more likely (things other than cash often go a long way)?
  • How will we manage at a distance and promote an atmosphere of inclusion?

Unfortunately, attrition is often treated as a HR issue and fingers are pointed if attrition rates are high. The management of attrition is a whole organisation priority and senior leaders need a laser-like focus on this throughout the lifetime of the project. If fingers are to be pointed over this issue, then they should be firmly pointed at senior leaders.

We have helped dozens of organisations rise to the challenges outlined above which are inherent in any cross-border outsourcing project and would love to talk to you about how we can help your organisation become more culturally fluent.