Cultural Integration for offshore success

"Companies that are dissatisfied with offshoring are focused on only the cost," says AMR Research Inc. "They went into this relationship trying to get the cheapest price. To those that were satisfied, cost was important, but so was cultural fit."

For thousands of years, in response to contact with distant cultures, our cultures – how we negotiated business deals, what music we played, what we considered beautiful, how we built our houses and financed our commercial growth -- evolved slowly. Today, the pace of reciprocal adaptation has accelerated dramatically, thanks to radio, television, computers, satellite telecommunications, the Internet, and rapid modes of travel. Cultural influences are spreading across the planet as fast as the click of a mouse.

According to Gartner, “While the trend in outsourcing may be slowly inching toward long-term strategic success, far too many companies are still focused on short-term savings when they should be looking at outsourcing more strategically. As a result, they're setting themselves up for failure.” Companies engaged in global sourcing now realize that to succeed in offshore outsourcing they must acknowledge, nurture, and guide the processes of cultural exchange and integration. They can no longer afford to ignore cultural fit in their pursuit of cheap labor.

Taking another leaf from AMR’s report: "If you have a good partnership where everybody is taking a bit of the risk and a bit of the reward, you have a more flexible relationship and you're more likely to find success. If you set up the relationship so it's just focused on driving every penny out of it everything gets very restrictive and in the long run, it just doesn't work that well."

For some this might be a revelation; for others, it is a recapitulation of lessons learned through painful and expensive experience. In any event, those who recognize the truth of this intercultural dynamics will also recognize that a strategic long-term approach with sustained attention to appreciating and bridging cultural differences greatly enhances the benefits of offshore outsourcing.

We have noticed in the last few years that many of our customers have placed cultural fit among their top evaluation criteria for offshore partners. The reason is simple: the stronger the cultural integration the stronger will be communication; and with improved communication comes a marked improvement in business results.

What’s required to achieve cultural integration? It’s a huge challenge! Not only must I learn about your culture, but I must also think about how my culture might look through your eyes. It isn’t a project deliverable; it is a constantly unfolding process of personal, corporate, and societal growth.

Defining “culture” exhaustively may be difficult, but by describing three levels of culture we may have a better grasp of what we need to do to achieve cultural integration:

• Society
• Business
• Individual

Once we acquire awareness of several aspects at each level, we can modulate our own behavior, and through training we can more accurately interpret, without condemnation, the conduct of others.



Cultural integration means understanding the above elements as they pertain to both companies and geographies. Today, most organizations manage cultural integration through a set of training programs aimed at ‘customer-facing’ employees. While that is a good start, we believe the audience needs to be much broader.

Without going into details of how a company might design and execute their approach (since each company’s approach should be consistent with its own cultural style), here are a few key activities that should be addressed in offshore outsourcing relationships by both vendor and customer.

• Prepare all participants to acknowledge and accept other cultures and styles of living
• Obtain the services of consultants who have had experience working in the other company’s culture, who are skilled in sharing their experiences and cultural insights. Because of their professional focus, consultants are more likely to know which points are most difficult to grasp, and how best to present them.
• Ideally, training programs will address all levels (societal, business, and individual).
• As early in the engagement as possible, set up occasions for informal mixing between both companies’ participants. When people have shared meals, played games together, exchanged family photos, etc., they are much better prepared to work as one team pursuing common goals.
• Create various questionnaires (to be filled out by both supplier and customer teams) on their understanding and perceptions of key business activities. The analysis of this data will provide the information for business culture mapping and eventually alignment.
• Create roles for management of cultural integration and diversity, to drive the schedule for promoting cultural mapping and alignment between the supplier and customer.
• On a large scale, for example, Lenovo has a VP for culture integration and diversity who is responsible for global integration of the company’s workforce
• On a smaller scale, these roles can be assigned to senior managers as KRAs
• Identify and create risk assessment and risk mitigation strategies to address all cross-cultural risk factors

Let us look at a few anecdotes illustrating the need for sensitization for both parties

Nodding one’s head – horizontal, vertical and rotator movements of the head have different meanings in different parts of India. It is better to ask what someone means than assume that they mean “yes” or “no”.

Never say “No” –Many Indians don’t like to say “No” when asked “Can you do this?” Even if circumstances indicate that “No” is the best reply, some may so fear its possible consequences that they instead say nothing at all, or agree to conditions they actually oppose, or commit to work for which they are not qualified. Opportunities should be given to say no without fear or shame; it may be enough to indicate that saying “no” can have positive outcomes.

Breaking the bad news – Many Indians are hesitant to take the initiative in breaking bad news. Ensuring their regular participation in review meetings will enable them to appreciate the importance of delivering accurate reports of any problems as quickly as possible. At the same time, bad news should be treated as information only – the bearer of bad news should not be treated as its cause.

Enthusiastic greetings – Social touching, such as hugging or a quick kiss on the cheek, makes many Indians, particularly women, uncomfortable. Shaking hands is absolutely fine. Even in cultures where social touching is accepted, exceptionally enthusiastic people can make others uncomfortable. It is enough merely to bring this to everyone’s attention.

Long winded communication – Some Indians have a long-winded communication style, more evident in speech than in writing that can exhaust the patience of both Americans and Europeans. This can be addressed at the business level in terms of effective and efficient communication. At a personal level, though, there’s nothing to treat – it is simply a difference in styles of discourse. If both cultures can extend to each other both patience and appreciation, each will be more willing to closely meet other’s expectations.

There are many more examples of the differences that need to be worked out when two or three richly articulated cultures get together to achieve a common objective. Close attention in managing cultural differences will pay off in the long run, and act as a catalyst to forge long-lasting bonds within the structure of strategic relationships.

In our next article, we’ll take a closer look at the practical aspects of using cultural fit and cultural integration as criteria for vendor evaluation: What are the indicators that a vendor is ready to resolve cultural clashes without taking defensive postures? How can customer and vendor collaborate to sustain an environment that supports cultural integration?

Please do share your experiences and feedback with us (marketing@aztecsoft.com). We will reply to all comments, and are eager to benefit by your experience.

Sources

• “Culture Matters”, by Karine Schomer, President of Change Management Consulting & Training, LLC.
• “Outsourcing on the Verge of Cultural Evolution”, by Kate Evans-Correia