The Missing Ingredient to Success: Understanding the Culture of your Offshore Partner

Categories: Digital Strategy

by Matthew Wright, July 27, 2018

Offshoring is a Strategic Imperative…

Offshoring is not new.  In fact, in 2018, the vast majority of sizable organizations are well on their way up the maturity curve to outsourcing significant projects or pieces of their business to an offshore partner.  Given the savings – it’s no surprise.  But it’s also not a choice; these days it’s not a question of “whether you outsource”, but really “which projects do you choose to outsource?” and “how well you do execute them?”  Sadly, many organizations still struggle to achieve the same results with their offshore partners as compared to their onshore teams.

After spending more than 10 years managing various offshore partners from multiple countries for a multitude of clients, and now residing in Manila and personally managing RCG’s Offshore Delivery Organization, I’d like to share some fundamental AND advanced tips on making your next offshore project a success.

Stepping Back – What Is Offshoring, Really?

Before we begin, let’s step back for a minute and look at what you are actually doing when you begin an offshore project.  You are taking your process or project (or a piece of it) outside your organization and into a:

  1. Different external organization (if you are outsourcing)
  2. Different location
  3. Different time zone (except in the rare case that your partner will work US day shift)

…but there is something fundamentally missing in the above that is often overlooked:  By its very nature, your offshore partner is also located in a:

  1. Different Country, and staffed by people from a
  2. Different culture

(We’ll get to these last two in the “Next Level” section below).

Few Execute it Well: A Typical Scenario

For many, the struggle is real:  when you offshore, you are faced with more opportunities for mistakes, misunderstandings and ambiguity, and yet ironically you have less direct oversight of your teams and communication is more difficult!  That could be a recipe for disaster.  And despite these harsh realities I all-too-often see the following:

Client: “Give us 5 Java guys starting next Monday.  We need to complete the project in 8 weeks.  Make it happen!”

Our Team: “OK…it sounds like you have an urgent need….but let’s think it through.  For example:

  • What project? What are we doing?  Have we completed design?
  • Do you have any basis (beyond gut feel) that 5 “guys” can complete this project in 8 weeks? Where are your estimates?
  • Who’s doing what? e.g. What is the client scope versus ours?
  • Who’s doing testing? What type of testing?  Do we have data?
  • How are we connecting to your environment? What environments do you have?
  • What type of Java? Backend?  Frontend?  Any specific frameworks? Any other skills?  What level – junior, mid, senior, expert?
  • What shift are they working? Who’s managing them?  (I wouldn’t put a team of Harvard MBA’s in a room without a manager…why would you do the same with an offshore team?)
  • What is our communication plan? How often are we meeting?  With whom?  Who approves our work?  What are the criteria for approval?”

….and the list goes on.

Making Offshore Work – The Fundamentals

At a fundamental level, there are some basic truths in executing a successful offshore project.  A quick internet search will yield tons of advice.  But generally speaking, the more details you can think through BEFORE you begin the engagement, the better.  Because if you don’t think about this stuff in advance, when it comes up – and it will come up – you will have to deal with it then.  But at that point, it will be too late and your project will be delayed or derailed!  At a minimum, successful projects typically do the following:

  • Define clear objectives and requirements
  • Pick the right partner or team
  • Structure and staff the teams correctly
  • Set realistic expectations and estimates
  • Measure and track everything
  • Meet and communicate often and document all key items

And once the above has been sorted out, it should be reflected in your contract (SOW, LOE, LOU etc..) and agreed upon with your partner and team.  These are the basics…

 Making Offshore Work Well – The Next Level

Despite the above, all of the contracts, policies, planning, and oversight in the world are no substitute for truly understanding and trusting your partner.  Look up any self-help guide and you’ll see that experts tout that trust is based on relationships, transparency, consistency, lack of surprises etc…

Several years ago a colleague and I spent 10 months of our lives writing a contract and closing the deal on a huge dual-shore, custom Application Development project for a Fortune 500 company.  Countless meetings, revisions, and clarifications yielded a 40-page document with terms covering every nuance of every possible situation that could occur.  We played the “fundamentals” by the book and believed that everything was “nailed down”.

But…inevitably, things change.  People change.  New information presents itself, and if you’re not careful, the contract collects dust on a shelf.  But if you’re lucky – what does emerge throughout the journey is a relationship.  And the client and partner come to understand each other.  And trust is built.  What I’m suggesting is that this process should not be left to chance, but rather it should be a deliberate, conscious effort…from both parties.

How do you gain a deeper level of understanding and trust with your offshore partner BEFORE you conclude your first engagement?

 Consciously Build Relationships…

Planning and contracts are important, but ultimately…you work with people, not contracts.

We build relationships with our co-workers in our office, right?  And these relationships enable us to get more done, more quickly (and with more fulfillment).  Since it’s much more difficult to manage a team half-way around the world, it’s therefore MUCH more important to build and sustain relationships in the context of offshoring.

Building a relationship takes time, effort, and dedicated focus.  But bear in mind the last two differences in offshoring listed above; your partner is from a different country and different culture.  Here are some tips:

  1. Conduct on-site visits and meet with your teams in person as much as practically possible and/or
  2. Bring select team members onshore for a period to work with your staff onshore
  3. Communicate frequently and leverage rich media (e.g. video)
  4. Be authentic but culturally sensitive (more on that below) in your interactions
  5. Identify shared goals, values, and concerns, but welcome diversity of opinions and approaches
  6. Treat your partner with the same level of respect as your onshore colleagues
  7. Try to establish a more personal relationship and conduct activities together whenever possible
  8. Ask for what you want (be explicit) – don’t assume
  9. Make an effort to learn a bit about your partner’s country and culture

Understanding the Culture of Your Partner is Key…

What is so important about your partner’s culture?

Despite managing offshore projects for over 10 years, it wasn’t until I personally moved to The Philippines to directly work with my teams that the dime dropped.  When you live and work with your offshore partner 24/7 – in total immersion – you really get a sense of their culture: the differences, the similarities, and all of the nuances.  And now, after several years in Manila, I have:

  • Built relationships and established trust,
  • Learned to understand how and why my teams behave the way they do, and therefore
  • Enabled me to better predict human behavior

All of this allows me to direct my focus to areas that matter.  In other words, “I get it”.  And the clients, managers, and projects that also “get it” flourish as well.

“The soft stuff is the hard stuff”: In Theory…

All too often, cultural differences in an offshore partner are chalked up to “language barrier”, but in fact, there is so much more to the culture of a given people beyond their language.

Outside of the individual differences between all people, on a broad scale, one’s culture may be the biggest predictor of human behavior that we have, yet it is often overlooked in the context of offshoring your business.  In fact, the entirety of the field of Cultural Psychology is aimed at studying how cultures reflect and shape the psychological processes of their members [1].  These psychological processes are the foundation for human behavior.

To be clear, our goal is not to stereotype; every person is unique, and very often people will wittingly or unwittingly choose to vary from their cultural norms.  But the research is clear – culture is deeply rooted in a person’s 1.) A sense of self, 2.) Interactions, 3.) Institutions, and 4.) Ideas.  One of the most significant themes in cultural research in recent years has been cultural differences between East Asians and North Americans in attention, perception, and cognition [1].  “Differences” – one is not superior to the other.

“The Soft Stuff is the Hard Stuff:” Some Examples…

To summarize the culture of a given people is beyond the scope of this article – and even if it weren’t I’m certainly not qualified to do so.  However I will provide some examples below to illustrate my point, and I do encourage you to do your own research (I’ve included some tips below) to form your own cultural understanding of your partner.

First, some questions to get you in the right mindset of understanding the cultural impacts to your business:

  • How does your partner handle ambiguity?
  • Do they possess an individualistic or group culture?
  • How do they handle reward and punishment?
  • When they say “yes”…do they really mean “yes?”
  • What role does “respect” play in their society?
  • What is their level of commitment? How do you motivate them?

Thankfully, The Philippines already possesses a strong Western cultural affiliation.  The benefits of offshoring your business cannot be overstated.  The fact that the United States has had a presence here since the Spanish American War (1898) explains why the Philippines is the 4th largest English-speaking country in the world (there are more English-speakers in The Philippines than there are in England!!).  And Hollywood has done the rest by blasting American culture 24/7.  But nonetheless, there remains a native culture that is responsible for many values, beliefs, and behaviors that should be respected and understood.

Common themes in Filipino culture are sensitivity, reciprocity, and collectivity.  And professional recognition is highly regarded.  Some examples from “Management by Culture (Fine-Tuning Management to Filipino Culture)” from F. Landa Jocano [2] include:

  • Kapwa – “relating to and treating people as fellow human beings”…which translates into “not acting in an abrasive, brusque, and uncouth manner.”
  • Pakikisama – “to be supportive of, to be concerned about, and to go along with someone to achieve something good for the individual or group”. This manifests itself in a group not leaving a member behind.  People tend to form tight cliques and project teams stick together for multiple projects.  Think “loyalty”.
  • Pakikitungo – “to concede, to humble oneself, if necessary” which manifests itself in a person taking whatever action necessary to avoid conflict. Closely related is
  • Hiya – “shame, shyness” but can also relate to “politeness and compassion”

While it’s not necessary to remember the words, it is important to understand the concepts.  Not doing so can lead to difficulties and misunderstandings.  Observing these values typically leads to deeply loyal and motivated teams that go the extra mile when it counts!

In light of these cultural values, successful clients, teams, and managers typically practice the following with their Filipino offshore teams:

  • Practice sensitivity in their communication style
  • Conduct Team building or organize small offsite social events
  • Buy the teams dinner after significant accomplishments and milestones
  • Recognize the teams or team members for extra effort or accomplishment with “kudos” or small gifts
  • Visit the teams onsite on a regular basis

 “The Soft Stuff is the Hard Stuff:” In Practice…

If your offshore partner is worth their salt, then they are well aware of the cultural differences from their Western clients, and will likely already have training programs in place for their staff to more closely affiliate with their clients.  Afterall…you’re paying THEM to work for you, so you would expect them to make this effort.  However, in practice, relationships are always “2-way streets.”

What efforts can YOU undertake to understand your partner’s culture?  Here is some concrete advice:

  1. Take the time and put in the effort to build solid relationships with the leadership of your offshore partner; establish personal connections. They should be your cultural ambassador.
  2. Do your own research: There are plenty of sources of cultural knowledge, from travel guidebooks to travel blogs/vlogs, websites etc…
  3. Personally visit your offshore teams at their facilities. Don’t just drop in for a few days.  Schedule some time over a weekend to visit areas of your partner’s country (outside of the skyscrapers) to get a feel for where their people came from.
  4. Eat with your teams, try the local food (avoid the water and ice-cubes 😉 )
  5. Learn some of the local traditions and understand the holidays.
  6. Learn a bit about the history of the country.
  7. Learn a bit of the language. You would be surprised at the impact of addressing your teams with a few words of their local language.
  8. Share your experiences with your colleagues and those that have worked with your other members of your partner’s culture.

Conclusion…

So how do you execute and maintain a successful offshore project?

There’s a lot to it, but from what I’ve seen, the projects that follow the fundamentals of planning and contracting are typically successful.  But the ones that really “rock and roll” in the offshore model – the ones that really “get it” – take the time and put in the effort to build the relationships necessary to establish deep trust, which is crucial when your teams are working 7,000 miles away across the Pacific.  And rather than letting culture become a barrier, they understand it and leverage its strengths to achieve even greater success.  If you are currently involved in an offshore project or team or considering taking one on, I urge you to follow this approach.  You’ll find that your projects will run smoother, there are fewer surprises, and you may end up building relationships that last a lifetime.

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Sources:

  1. Wikipedia contributors. (2018, July 7). Cultural psychology. In Wikipedia, The Free Encyclopedia. Retrieved 03:34, July 27, 2018, from https://en.wikipedia.org/w/index.php?title=Cultural_psychology&oldid=849263224
  2. Jocano, F. Landa.  (2001). Management By Culture (Fine-Tuning Modern Management to Filipino Culture). Diliman, Quezon City 1101. PUNLAD Research House, Inc.

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