A growing opportunity to close the cultural gap

By Stephen Pritchard

Indian outsourcing companies now have a large share of the US and UK IT (information technology) services markets, but Indian and Asian companies have found it harder to make headway in northern and central Europe. The reasons are as likely to be cultural as technical. Indian IT services companies can provide large numbers of skilled graduates with good English. However, far fewer Indian graduates speak good German, and Indian businesses are less experienced in the culture and business practices of mainland Europe.

‘If you look at outsourcing companies in India or Malaysia, they have gained their experience from dealing with UK or US businesses’, suggests Simon Evans, a managing consultant in the IT group at PA Consulting in London. ‘US companies operate in a really very different way to the way German companies operate. There is a huge cultural learning curve for the Indian or Malaysian company to go through, even if they can learn the language.

This cultural gap and growing pressure on companies in Germany in particular to cut costs, present an opportunity for eastern European contractors. When it comes to IT skills in depth, India still has the edge, and IT services companies in Poland, Hungary and Czech Republic cannot compete on cost alone with India, Malaysia or China. However, the high standard of general education in eastern Europe, and a healthy supply of graduates with both languages and business experience, means that the region is attracting interest both among the large outsourcing providers, and among their customers.

In Latvia, for example, there is a significant pool of experienced IT professionals – particularly in research institutes – and IT graduates, says Valdis Lokenbahs, President of DATI Group, the country’s largest IT services provider to the western market. Latvia’s location is an advantage in itself and on opportunity to combine eastern and western business cultures, he says. Its IT experts can also work in several European languages. ‘In the European market, language skills are an issue, in particular in tasks where employees deal directly with customers,’ agree Marty Cole, global head of outsourcing at Accenture, the IT consultancy. ‘Business process outsourcing – the outsourcing of administrative and IT tasks – is growing fast.’ Accenture has a business process outsourcing centre in Prague, in the Czech Republic, where staff work in multiple languages to support customers.

Such multilingual call centers and support locations are not new: IT companies have run centralized helpdesks in Europe to locations such as Ireland and the Netherlands, there are now new support locations in eastern Europe. These new offices have more than just a cost advantage: they provide business continuity services that enable a business to continue its operations as normal even if it suffers problems such as a big computer system crash. These offices are well placed to serve the emerging eastern markets, including Russia. This is important, as acting as a lower cost alternative to Irish or Dutch operations will not be enough to establish countries such as Hungary or the Czech Republic as significant players in IT services.

From the Financial Times

Leadership

TOUGH LESSONS ON LEADERSHIP

By Herminia Ibarra

It has become generally accepted that our organizations need better leadership if they are to survive and prosper in these difficult times. Well-led companies know that leaders are made, not born, and invest in the development of their future managers. But, in spite of the energy devoted to leadership development, the return on investment rarely comes up to the hopes and expectations of participating executives of company sponsors. As ever, the question is “Can leadership be learned?”

Most of us can agree on basic definitions. Simply stated, leaders are people who:

· Establish a new direction or goal for a group;

· Gain the support, cooperation and commitment of those they need to move in that new direction;

· Motivate them to overcome obstacles in the way of the company`s goals.

Consider the experience of a manager called Anne. After a steady rise through the functional ranks in logistics and distribution, Anne found herself unable to handle a proposal foe a radical reorganization that came from outside her division. Accustomed to planning for annual improvements in her basic business strategy, she failed to notice changing priorities in the wider market.

Although she had built a loyal, high-performing team, she had few networks outside her group to help her anticipate the new demands. Worse, she was assessed by her boss as lacking the broader business picture. Frustrated, Anne thought about leaving.

Let us examine Anne`s situation more closely. No longer able simply to rely on her technical skills, Anne needed to acquire the ability to think creatively and consider a broader range of forces in finding a new strategy for the group. As a leader, she is expected to identify new trends and spot new opportunities in the business environment.

She is also expected to recognize new partners and find new ways of bringing them on board. But, for Anne, working through networks was political activity – in her view, relying on who you know rather than what you know – and she had always rejected “time-washing on politics”. She failed to recognize the importance of building and using networks that cut across managerial levels and divisions.

To be successful at the next level Anne had to change her perspective on what was important and accordingly what she would spend her time doing. Letting go of old ways of thinking can be a terrifying proposition. The leadership transition, therefore, can provoke deep self-questioning: Who am I? Who do I want to become? What do I like t do? Do I have what it takes to learn a different way of operating? Is it me? Is it worth it?

Leadership

She’s the Boss

Business was invented by men and to a certain extent it is still “a boy game”. Less than 20% of the managers in most European companies are women, with fewer still in senior positions.

Yet in Britain one in three new businesses are started up by women and according to John Naisbitt and Patricia Auburdene, authors of ‘Megatrends 2000’, since 1980 the number of self-employed women has increased twice as fast as the number of self-employed men.

The Glass Ceiling Syndrome

Is it just a case of women whose career progress has been blocked by their male colleagues – the so-called ‘glass ceiling syndrome’ – being forced to set up their own businesses? Or do women share specific management qualities which somehow serve them better in self-employment? As many as 40% of start-ups fold within their first two years, but the failure rate of those run by women is substantially lower than that. It’s hardly surprising, therefore, that though male bosses tend to be reluctant to promote women, male bank managers seem only too happy to finance their businesses.

The Roddick Phenomenon

Anita Roddick, founder of the Body Shop Empire, is the perfect example of the female entrepreneur with her company growing from zero to £470 million in its first fifteen years. Perhaps the secret of her success was caution. Rather than push ahead with the purchasing of new shops, Roddick got herself into franchising – the cheapest way to expand a business whilst keeping overheads down. Caution, forward planning and tight budgeting seem to be more female characteristics than male. They are also the blueprint for success when launching a new company.

More Sensitive

When women join an existing company, it’s a different story. Less ruthlessly individualistic in their approach to business, women are more sensitive to the feelings of the group or team in which they work. They are generally more cooperative than competitive, less assertive, less prepared to lead from the front. Though they usually manage their time better than men and may even work harder, they are much less likely than their male counterparts to take risks. And, above all, it is risk-taking that makes corporate high fliers. As one male director put it: “I’m not paid to make the right decisions. I’m just paid to make decisions”.

Better Communicators

It’s an overgeneralization, of course, but it remains true that men will more readily take the initiative than women. The female style of management leans towards consensus and conciliation. Women seem to be better communicators than men – both more articulate and better listeners. And perhaps it is women’s capacity to listen which makes them particularly effective in people-oriented areas of business. In any mixed group of business people the ones doing most of the talking will almost certainly be the men. But perhaps only the women will really be listening.

The New Achievers

And, so companies change from large hierarchical structures to smaller more flexible organizations, the communication skills and supportive approach of women are likely to become more valued. It was predominantly men who profited from ‘the materialistic 80s’, the age of the achiever. But it will be women who achieve the most in ‘the caring 90s’ and beyond.

Employment / Competition