Q: What do these three replies all have in common?
1. “We’ll do our best.”
2. “If that’s what you want.”
3. “Almost certainly.”
A: Coming from your Indian outsourcing vendor, they all mean “no.”
U.S. managers of offshore-outsourcing projects are discovering the hard way what anthropologists and diplomats have known for years: Two people speaking the same language are not necessarily communicating.
That’s because another serious barrier blocks communication: national and regional culture. As the example above illustrates, even how people answer “no” to a question can vary enormously. As a result, culture has emerged as a complex and potentially costly new issue for offshoring managers. “Cultural difference—and managing cultural differences—is one of the critical success factors for global sourcing,” says Debashish Sinha, managing director at neoIT, an offshore consulting firm in San Ramon, Calif. “These differences may seem innocuous, but they’re one of the biggest reasons why offshore projects fail.”
Sure, many second- and third-tier firms in India, China, and Eastern Europe possess technical skills galore. But all too often they lack the sophisticated and disciplined client-management skills many U.S. managers take for granted. In these cases, the U.S. manager must provide the missing relationship- and engagement-management skills and resources. This requirement is challenging, requires substantial commitments of both time and resources, and represents additional overhead that the U.S. manager may not have anticipated.
Ignoring the issue altogether is even riskier. U.S. managers may be tempted to adopt a stance of “I’m the paying customer, so why should I have to adapt to the culture? Let the customer adapt to mine.” Indeed, some offshore-outsourcing vendors are perfectly happy to support that attitude in their clients. But the reality is seldom that simple. And the costs of mismanaging the cultural side of offshore outsourcing can be great. Consider the following examples:
- Managers at Union Bank of California were told by an Indian outsourcing vendor that the knowledge-transfer portion of a project was “taking a bit more time than expected.” But deeper investigation by the U.S. project manager revealed a complete communication breakdown that threatened to derail the project.
- Deutsche Bank was told by a Singapore-based team that an outsourcing project needed more time. When U.S. managers probed deeper, asking how much more time was needed, they were told, “Well, we need to go back to the drawing board.” Total delay: nearly three months.
- A U.S. company working with ITAP International, a cultural consulting firm, was ready to break its contract with an Asian supplier. The U.S. managers complained that the supplier’s representatives perennially showed up at meetings unprepared, and that they never participated in the discussion. But what seemed like incompetence was actually a cultural difference. “I had to tell them that some Asian countries are cultures of silence,” recounts Cass Mercer Bing, president of ITAP’s Americas group, who worked on the account. “They value the pause.”
Unfortunately, there is no single systematic, one-size-fits-all approach to gaining intercultural competence. Global-sourcing managers need to mix and match training, offshore visits, help from consultants who specialize in cultural issues, and their own hard-won experience. Over time, a manager can develop a gut feel for when an apparently simple message is actually a cross-cultural misunderstanding waiting to happen.
What’s Behind It?
- Ignorance: Some managers don’t know that cultural differences can cause problems with their offshore vendors. It simply doesn’t occur to them.
- Provincialism: American managers may have limited overseas experience, and their knowledge of other countries and cultures may be slim. After all, only one in every five Americans currently holds a valid passport.
- Reluctance: Offshore vendors may not want to raise cultural issues with their U.S. clients. The overseas vendor believes it can resolve the differences itself.
- Manners: American managers may be reluctant to discuss cultural differences with their offshore vendors. They’re afraid of offending, or of simply saying the wrong thing
All these obstacles must be overcome by managers wishing to succeed offshore. In fact, culture was cited as a major challenge to offshoring by 11% of global communications managers surveyed by Deloitte Research last December. In the same survey, another 17% cited as a major challenge the related issue of foreign languages.
Yet, in a world that is rapidly adopting English as its common language for business and the Internet, culture remains a difficult issue to identify, let alone handle. Consider the following hypothetical dialogue between a U.S. manager (“Nancy”) and her Indian counterpart (“Vijay”), courtesy of Rita Terdiman, a Gartner consultant. Both speak English—but are they communicating?
Nancy: We’re going to have to schedule time for debugging on Saturday.
Vijay: I see.
Nancy: Can you come in on Saturday?
Vijay: Yes, I think so.
Nancy: That’s great.
Vijay: Yes. Saturday’s a special day, did you know?
Nancy: How do you mean?
Vijay: It’s my son’s birthday.
Nancy: How nice. I hope he enjoys it!
Vijay: Thank you. I appreciate your understanding.
Now, guess who will be staying home from the office on Saturday. (Hint: It’s not Nancy.)
But cultural differences run far deeper than the varied uses of the English language. At the very heart of different national and regional cultures lie profoundly different attitudes. These include ideas about the individual’s relation to the group, the nature of time, the uses of language, and much more. While this may seem like a “touchy-feely” topic better suited to the university lecture hall than a business meeting room, getting culture right is key to offshoring success.
