Tag Archives: Cultural Issues


It’s probably not a great idea to start a post by appearing to insult most of our clients…

… So I’d better quickly explain what I mean by calling you WEIRD.

Joseph Henrich, Steven J Heine and Ara Norenzayan issued a research paper a few years ago showing that most behavioural science theory is built upon research that examines an intensely narrow sample of human variation – disproportionately biased towards US university undergraduates and that this has skewed the findings of a great deal of research when you try to make it fit a culturally diverse world. Their definition of the sample base was that they were quite simply WEIRD

Western
Educated
Industrialised
Rational
Democratic

I think that all of this seems very likely to be true but I think that you can take the hypothesis way beyond the fields of behavioural science into the world of politics and it also seems incredibly true in the world of commerce.

I spend my days working with (mainly) western companies who are international in nature and who struggle with the complexities of interacting across the boundaries of global culture, time zones and geography. We help them understand how significantly and deeply cultural differences can impact on the effectiveness and efficiencies of their global operations. The longer I work in this field the more I come to realise that this WEIRD issue is at the heart of a lot of the dilemmas our clients face.

I have come to realise that (either consciously or subconsciously) people who are WEIRD in North America and Europe look around the world and think that the rest of the world is also WEIRD or, if they are not, would really like to become WEIRD at some stage in their ‘evolution’. The problem is that probably 80% of the world (by population) actually are not WEIRD and have no desire to become so. In fact the 80% of the world’s population who are not WEIRD look back at North America and Europe and think ‘those guys are seriously WEIRD’.

Where are most global compliance policies driven from? Europe and North America on the whole. We are moving around the world trying to apply WEIRD policies, processes and ethics into an un-WEIRD world and people simply just ‘don’t get’ what we are talking about. Our core values and beliefs are simply an irrelevance to people in many parts of the world.

A very good, very topical example of this would be the reaction of the majority of Russians to Vladimir Putin’s close association with the recent Panama leaks which highlight tax evasion amongst the rich and powerful. A BBC reporter, when interviewing ‘the man in the street’ in Russia was greeted with this reaction. “People high up have always had accounts like these and they always will. Putin can’t keep an eye on everyone.” In other words – it doesn’t matter and I don’t care. Contrast that with the reactions to the news that the Icelandic Prime Minister, Sigurður Ingi Jóhannsson, was associated with the scandal or that David Cameron’s father had been named.

I’m not saying that I disagree with the ethical and commercial standpoints espoused by the WEIRD – I’m WEIRD myself – it’s more about getting people in the WEIRD countries to recognise that the ‘universal’ truths that they see as ‘self-evident’ are only ‘self-evident’ to a very small minority of the people on the planet. The starting point should be that ‘there may very possibly be a fundamental disagreement on this issue’ rather than am assumption that everybody, everywhere will ‘get it’.

It will be interesting to see, as China and India evolve as global super-powers, whether these WEIRD ideas will prevail globally or be eclipsed by other philosophies and approaches. Any thoughts from my WEIRD (and non-WEIRD) contacts?

For more information on how Global Business Culture can help you become more globally savvy contact me at keith@globalbusinessculture.com

Over the years I’ve been involved in a number of major projects where U.S. or European companies have looked to transition work from their home countries to outsourced facilities in India.  The drivers behind these projects have been many and varied, but I suppose that cost reduction is always a major component of any such decision.  Personally, I’ve always thought there are a number of advantages above and beyond cost arbitrage but for many clients that’s their starting point.

If your main motivation for going through the transition process is cost then it stands to reason that you have to make the transition work efficiently or any imagined cost savings can be quickly eroded through well-documented problems such as high attrition rates and client dissatisfaction.  Cultural issues play a huge role in creating disconnects between the home teams and the India-based teams – but cultural issues are not the only challenge.

Another area which is fraught with difficulty is in the partner selection process.  Lots of clients have got a year or two down the line only to question their original choice of partner but are then loath to jump ship and go through the pain of transition for a second time – better the devil you know etc.

Based on our experience at Global Business Culture here are five issues you need to consider when selecting an outsourced partner in India.  The list is not exhaustive but it’s a good starting point:

The Tender Process: A western-led tender process will only get you so far in India.  I’ve seen situations where the responses to tender have led clients to the wrong supplier, in the wrong location, staffed by the wrong people.  ‘Do you have experience of the banking/insurance/automotive/pharma sectors?’    The answer will be ‘yes’.  People move company and position all the time in India and employees pick up experience across a wide range of sectors – but that knowledge can be quite superficial.

You need to effectively pre-qualify your tender short-list and the best way to do that is on the ground.  Start with a long list and whittle this down until you have three or four bona fide contenders and then, and only then, get on a plane and spend time with each of the candidates.  It should be as much about chemistry as it is about commercials.

Management Capability: I cannot stress how it is important to assess the management capabilities of an outsource partner.  The India offshore business has grown exponentially over the past decade or so but management capability has not necessarily been able to keep pace with that growth.  It is not a question of education or technical ability; it is more an issue of commercial experience and acumen.  Many Western clients who transition work to India are looking for people who can operate with a knowledge of home country market conditions and – even more difficult – an understanding of home country cultural expectations.

This is a tall order and those two demands can be very difficult to meet.  Don’t expect too much at the outset and be prepared to invest in training people to make up the skills and knowledge gap.

Attrition rates: How does your potential partner manage its attrition rates?  Attrition rates are notoriously high in the offshore industry in India and this can cause you serious difficulties on an ongoing basis.  Attrition leads to knowledge and skills seepage and massive recruitment and re-training costs (which can eat away at any cost arbitrage you were looking to harvest.)

Try to get some accurate figures on attrition from any potential partners and don’t just look at the numbers, look at the trends over a few years.  Ask your partners how they manage this issue, what policies and processes they have in place to address the challenge. If they just brush it off as irrelevant, be very wary. When we talk to home teams, lack of continuity of contact in India is often cited as the biggest headache.

Size: Should you team up with a large, well-established player in the market who has size, scalability and well-tested procedures, or with a smaller outfit who are growing and hungry? With a larger player, you might end up being a small fish in a very large pond and feel you are of little importance whereas a smaller partner may see you as strategically vital but lack the sophistication you are looking for.

You need to balance these conflicting arguments and find a solution that you are comfortable with in the short and medium term.  Again, it has to be about chemistry as well as commercials.

Price: If you are going through the whole process as a cost-reducing exercise then this obviously becomes a key factor in the final decision-making process.

But just a few words of caution, which come from experience. If you drive too hard a bargain, people will resent it. You are shedding people back home (this is resented at home) and you are squeezing the pips of your new partner (this is equally resented in India). The whole process can become pretty sour very quickly and you end up with massively resentful workers in two locations.

In addition, your India partner often becomes critical to the well-being of your global business.  In fact, the better your partner performs, the more critical they become as you invest even more heavily in them in terms of time and emotion.  What are you going to do if they turn around and say, ‘we can’t support this level of work anymore at the price we are charging?’  You may find they have you over a barrel.

The deal must be fair from the outset – that’s what will bring the cost savings in the long run.

For more information on this, contact me at keith@globalbusinessculture.com

Lots of organisations seem to face huge capability gaps when it comes to successfully implementing global strategy.  The strategy may be fine as a concept but individuals within companies very often lack a sufficiently global mindset to allow them to implement the strategy successfully – and that’s when things can go badly wrong.

Many of the problems related to any corporate globalisation process are caused by a lack of global cultural fluency which leads people to take the same approach to everything, every time, everywhere – they embrace a ‘once size fits all’ mentality.  In the multi-faceted, complex global world we all work in today, this s approach just doesn’t work – perhaps it worked twenty years ago when the big global players ruled the world but the world has since become a much more level playing field these days and a ‘one size fits all’ approach is quickly rejected just about everywhere.

So what should companies and individuals within those organisations do?

  1. Recognise and accept how little you actually know about other countries and other markets. There is no shame in recognising that ‘you don’t know what you don’t know.’  If you start with the assumption that there are a multitude of unknowns and then accept that it is your responsibility to do some initial research on those unknowns, things will probably work out better.
  2. You also need to accept that you take a significant level of cultural bias into every cross-border transaction. Your background makes you see things in a specific way – but your Chinese counterparty probably looks at the same situation and sees something completely different.
  3. Build into your thinking that ‘just because things are different’ in another country it doesn’t necessarily mean that they are wrong – they might be wrong but a different approach might actually be better than the way you do it ‘back home’. This sounds simplistic but it is very often a difficult message for people to take on board.
  4. Think about the impact of every decision for every location. A centrally determined policy is usually biased towards the country it originate from (usually where the Head Office is.)  You want to move towards a flatter structure?  Great – but how do you make that work in a country where hierarchy is not only the norm but seen as the way in which the whole world (both business and private) is and always has been shaped?  A message from head office or a town hall meeting is not going to change a mindset 4000 years in the making! (Indeed is town hall meeting a good thing in the first place in certain countries?)
  5. Accept that a good idea is a good idea – regardless of where it started. Not all good ideas start with you or in your country.  The sign of a truly mature global company is when you begin to hear people in the centre talking about the things they can learn from the outside (other countries.)  Not all good ideas start in your head office – but equally not all ideas which come out of head office are bad.

What I am really saying here is that knowledge is the key.

People in your organisation (and not just a few at the top or in the ‘international function’) need to be more aware of the impact that international culture has on every facet of business, they need to be given the specific knowledge necessary to work their way around a complex global environment and then they need to apply that knowledge and awareness f0r the benefit of the business.

One thing is certain – cultural fluency within an organisation never happens by accident.  It needs careful planning, training and targeted interventions.

 

 

Over the years we have worked on scores of projects involving outsourcing projects to India and our brief is always the same – to try to make the interface between the India outsourced operation and the home teams in the West work more effectively. I have come to recognise a pattern with regard to where things tend to go wrong and therefore the things that need closest attention. You may think that how you structure the performance metrics, for example, is not a cultural issue but it most definitely is.

The issues highlighted below are not in any particular order but all play a major role in reducing cross-border efficiencies. Some of these areas of interest are inter-personnel and can be significantly improved through quality, targeted training; other areas are more strategic and need to be addressed as such at the most senior levels of an organisation.

  • Corporate structure:India is a hierarchical society. There’s no getting away from that – it just is and will be for the foreseeable future. The fact that society at large is hierarchical means that the Indian mindset within the business environment is also hierarchical. This is neither a good thing nor a bad thing – it is just the reality of the situation. The problem is that lots of Western companies want to introduce a much flatter structure into their Indian operations. Why? Is it because flatter is better or that we feel the need to have the same approach everywhere around the world?

Indians are, on the whole, aspirational. They want to progress within the organisation and they want to progress quickly. This progress is often measured not just in added responsibility or increased money (although they are important) but also through job title. If you develop a flat structure you give people nowhere to go – other than out of the door (see attrition below).

Before starting your outsourced operation you really need to think long and hard about corporate structure. If you suffer from high attrition rates you need to analyse if your corporate structure is partly to blame. Are you going to impose a standardized, Western approach or will you adapt your approach to ensure best fit for the territory?

  • Metrics:This is a perennial problem. We measure everything and punish if the metrics are not met. The standards are always (understandably) high but when I challenge the ‘home’ teams as to whether these metrics were always met when the work was done back home, the answer is usually that they weren’t even measured back in the day.

The problems accruing from this are threefold:

  1. The home teams lose confidence in the India teams because they are perceived as failing to meet their KPI’s on a regular basis.
  2. The India teams see failure to meet the metrics as detrimental to their chances of moving ahead with their careers. If I can’t hit my targets, do I have a future here?
  3. The result of this is that the two sides spend lots of time arguing about whether or not the metrics have in fact been hit – almost ensuring that next month’s metrics will also be missed.

It is so important that the metrics you set the teams in India have some kind of resonance with the needs of the home team. Metrics are often quantitative and the complaints of the home teams are usually qualitative. If you set quantity as the metric – that’s what you get. Lots more thought generally needs to be put into this area. Honestly, I have never worked on an outsourcing project where this dissonance hasn’t been a major source of frustration.

  • Attrition rates: These are notoriously high in India in the BPO and KPO environments. This becomes a real problem when you need to build in-depth corporate, client or product knowledge within the Indian teams. If people leave on a regular basis – you constantly have to train new people and this can result in poorer service and increased costs.

So why are attrition rates so high? There are lots of reasons but some of the key factors are:

  • Aspiration – people want o progress and they want to do so quickly. If I can’t find that progression with this organisation because it has a flat structure, I can go next door and they’ll give me the promotion/salary hike/ job title I’m looking for.
  • Boring work – let’s face it, we often sell the off-shoring model to the home teams by telling them we are moving all the boring, repetitive work to India. Well not surprisingly your highly educated, ambitious, enthusiastic colleagues in India also find this boring work of little interest. So they move looking for a more stimulating environment.
  • Feeling like a commodity – Indians like to have a close, familial relationship with co-workers but very often they are just seen as a commodity at the end of an email delivering a product. This is not conducive to developing a one team approach where people feel valued.

There are other reasons in addition to these and you really need to have policies and processes in place to counter this trend – and I firmly believe that the home teams need to take a leading role in addressing this. It can’t be simply left to leadership in India because so many of the problems tend to originate outside the country.

  • Using initiative – the most consistent issue that comes up when talking to home teams about the challenges they face when working with co-workers in India is that they do not show any initiative. This complaint comes up every single time I work on these projects. On the other hand, I get lots of complaints in India about the incredibly poor instructions they receive from the US or the UK.

So what’s going on here?

Again it’s complex and deeply cultural in origin. As already stated, India is hierarchical and as a result Indian leadership style tends to be more authoritarian in nature. Leaders are expected to give direct and precise instructions and followers are expected to do what they have been told to do. Instructional style in the West is more subtle and indirect. People in the West are familiar with being given vague goals and left alone to work out how to achieve those goals.

The result of this is that Indians often receive only partial instructions by western colleagues and they then do precisely what has been asked of them – but this will frequently fall short of what the home teams actually wanted to be done. Lots and lots of work need to be done on this to iron out a misunderstanding on both sides. Fail to address this issue and you are guaranteed to be building in inefficiencies.

  • Over-assumptions– the home teams just often assume that their Indian colleagues will somehow automatically understand the way things work in the West, what client expectations are in the USA, how a product line fits into a wider supply chain etc. Why should they be able to do that if they’ve never been to the States or have no previous knowledge of your industry?

The average age of workers in the BPO and KPO industries in India is very low – maybe around 24 years old. Your team in India are probably very technically capable, talented and enthusiastic but they are not necessarily commercially astute. How can they be a 24? Imagine if 80% of the people back home were 24 – you’d probably be lacking commercial acumen there as well.

Don’t just train people on technical, process and product issues. Look at their commercial development as well.

The comments above are not meant as a criticism of either the home team or the Indian mentality– they are simply issues I have come across on a consistent basis over the past 15 years working on these matters in the US, Europe and India.

If you are interested in discussing how you can improve efficiency and performance in these type scenarios please contact me at keith@globalbusinessculture.com

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