Few reasons why you should think twice before offshoring your operations?

Few reasons why you should think twice before offshoring your operations? by Bhavin Gandhi If you could hire 4-5 people in China for the same salary that you give to 1 employee in the US, why wouldn’t you offshore your work to China? Doesn’t it seem like a perfect plan to save some recurring operating costs? Trust me; it might not be as easy as you think. Apart from obvious major risks like language barriers, culture differences, and copyright infringement; there are various other risks that can make your offshore venture a failure. In this blog, I will put some light on some of those hidden issues. Increase in travel expenses: Most of the armature businesses will measure the success of their offshore project through the reduction in their recurring operating costs in the US. Often that performance metrics doesn't take the overhead costs, such as traveling, in to the consideration. Successful outsourcing requires significant face time during the launch phase to establish the rules of engagement and regularly thereafter to maintain the relationship. And these costs greatly increase as both the client and the offshore supplier make lengthy and expensive trips. High turnover: With more and more companies moving their workforce to India, China, and Brazil; the demand for offshore workers increases, so do their wages. Salaries in India, for example, are increasing by double digits almost every year. For some overseas locations in China, employee turnover is extremely high sometimes as much as 50%­ as employees are regularly recruited away from their current jobs. For a knowledge-based function such as software development, this high amount of turnover can be disastrous in the long run. Negative ROI: On an average, it takes approximately 3-5 years before one can see the same amount of productivity from their offshore team. Research has shown that although the advertised savings for offshoring were around 60-80%, actual savings of 0-20% were common and in many cases it was negative. Most of the businesses fail to consider the additional costs that are required to increase their management and training efforts, so that they can have the same level of quality in their end product. Of course, not everything is bad about offshoring. In my next blog post, I will discuss few ideas about……’why you should consider offshoring’. Until then, if you have any other ideas or comments about offshoring, then please feel free to share it here on my blog. Thanks – Bhavin Gandhi Bhavin Gandhi | June 11, 2012 at 12:58 PM | Tags: 21st century, Brazil, Change Management, China,Collaboration, Developing Countries, India, Leaders of Tomorrow, Leadership, Manage Change,Management, Manager's Guide, Offshore, Offshoring, Outsourcing | Categories: 21st Century,Leadership, Management | URL: http://wp.me/p103Cm-7Q

New hire’s guide to learn the culture of the company

My team is currently growing. We are hiring few new people at this time. And as we hire new people, I need to make sure that they get appropriate tools and training to come up to speed. Thus, I was creating an on-boarding plan for these new hires. My initial plan only contained specifics of what processes, technologies and tools that they need to learn. I didn’t have any idea about how to train them on our existing culture. And I thought of this blog. Following are few pointers, which might help you in learning the existing culture of your new company.

Policies: The organizational policies and procedures influence the projects that a company undertakes. The organizational procedures will determine how to implement new strategies and if the work environment will be formal or informal. For example: some organizations may allow employees to work anytime from 7.00am to 7.00pm, while other organizations may be very strict about their working hours. To get yourself acquainted with these policies, you should read all the possible policy documents at your disposal. HR department would be your best bet to find more information. Detailed oriented observation of your co-workers can also help you in learning unwritten policies.

Values: The values, beliefs and expectations of an organization have a major impact on the organizational culture. The organization’s strategic decision making choices, preferences, and approach will vary based on its values and beliefs. The criteria for the election of a project are determined by the organizational culture. For example: a competitive, ambitious and assertive organization will select projects with high risks, while a highly rigid and authoritarian origination might not take projects with high risks. Most of these values are derived from your company’s culture or your team’s culture. Your best bet would be observing your manager’s behavior and socialize with your colleague to get more information. Going out on lunch with your coworker can give you many valuable insights.

Management style: The management style of the organization is another factor that affects the organizational culture. Some managers follow a coaching style, while other managers follow a controlling style. After observing the management style of your organization, you can determine if your feedbacks will be valued or not? If the management is going to implement new strategies based on your feedback or not? As a new employee, I would recommend you to adapt to the management style of an organization. And once you properly understand your Manager’s management style, try to provide your feedback in the manner that he/she will understand.

I hope these tips will help you to learn the culture of your new company as soon as possible. Please feel free to comment on my blog, if you have any other suggestions regarding this subject. Thanks. – Bhavin Gandhi

How to manage cultural change within your organization?

In my last blog, I talked about few high-level tips to successfully change your organizational culture. As I help my client to divide this high-level vision of cultural change into smaller parts, I will simultaneously blog about my current experience. My client is a manufacturing company, who manufactures the same equipment from last several years. In order to change the organization's culture, existing employees need to unlearn the old values, assumptions, and behaviors before they can learn new ways of operations. I have provided following recommendations to manage this cultural change:

 

Provide training: Change in organizational culture will depend on individual's behavior changes. Thus, we need to provide extensive training to our employees to make them understand what is expected of them, and how to actually do that using new methodologies, and how they will be rewarded for their new behaviors. For example: provide training of differences in national cultures, provide training of new acquired standards such as 'six sigma', etc.

 

Change organizational structure: If your existing structure doesn't support your desired organizational culture then you need to change the physical structure of the organization to align it with the desired organizational culture. For example: flatten your organizational structure for quick responsiveness, add few verticals to incorporate new acquired divisions, etc.

 

Change reward system: Changing reward and recognition is the key aspect of the cultural change. By changing reward system, we can encourage desired behaviors in the organization to achieve the desired organizational culture. For example: provide extra bonuses for peak performer, provide salary raises based on the performance, etc.

 

Change your documents: In order to change organizational culture, we need to make sure that we document our new mission, vision, values, and processes. This will serve as a new guidelines for existing employees, while it can be also used as a reference for any new hires in the organization. For example: remove your posters of existing vision and replace it with the new vision, update your internal website with this information, change process documents with new guidelines, etc.

 

I hope, these tips will help you to successfully manage your organizational culture change. Please feel free to comment on my blog, if you have any other suggestions regarding organizational cultural change. Thanks. – Bhavin Gandhi

3 simple tips to successfully change your organizational culture

Recently, I was helping one of my client to develop a new line of product in their product portfolio. With the help of their existing equipments and resources, they could have come out with this new product very easily. In order to create this new product, they required a major shift in their existing culture. Maybe that was the major reason why this initiative hadn't worked for them.

Organizational culture is formed over years through historical events, employee's shared values, employee's shared beliefs, organization's leadership, etc. Normally, organizational culture grows over time, and most of the times people are comfortable with the existing culture. Thus, we can't expect an immediate change in the organizational culture. But we can progressively change organizational culture through following steps:

Understand your existing culture: Before any organization can change its culture, it must first understand the existing culture. There are various ways to perform cultural analysis of your organization. Few methods that I use for cultural analysis are: Schein's rubric and Hofstede’s cultural dimensions. Schein's rubric can be used for understanding the organizational culture of a smaller company, while Hofstede’s cultural dimensions can be used for understanding the culture of International organizations.

Develop cultural vision: After you are done with understanding your existing organizational culture, you need to develop a cultural vision for your organization. This is a crucial step, as you will be defining the strategic direction for your culture, and making sure that these cultural changes support your overall organizational goals. Envisioning culture artifacts, values and beliefs will help tremendously during this phase. For example: our new culture will have open door policy, tightened ethical standards, etc.

Change organization's behavior: In this stage, we need to change organization's behavior to create the desired organizational culture. We might not be able to change behavior of each and every individual, but we can make changes in the organizational structure and leadership to propagate these changes to an individual level. During this phase, we need to get full support from executives, and provide appropriate training to the employees to make this work. Communication is the key element for changing people's behavior. Thus, we need to provide various channels of feedback and performance metrics, through which we can measure success of these changes. For example: employees feedback sessions, employee satisfaction survey, rate of increase/decrease of productivity, etc.

I hope, these tips will help you to successfully change your organizational culture over time. Please feel free to comment on my blog, if you have any other suggestions regarding organizational cultural change. Thanks. – Bhavin Gandhi

3 Simple Tips to Effectively Manage Customer Expectations in a Project

Unfortunately, I have been a part of numerous projects, where customers change their expectations in the middle of the project. I am sure that you must have been a part of similar situation during your career. I might not have a perfect solution for this problem. But in this blog, I will provide you with 3 simple tips that will help you minimize any change in your project due to changes in customer expectations.



Identify what your customers don't need:

In my experience, I have always found a "NOT TO DO" list very helpful. The list of things you will not deliver sets boundaries for your project, and it provides a comprehensive basis for scoping discussions with your users and customers. To define a "NOT TO DO" list, you can ask various questions to your customers, such as: What is of the least value to you? What if we don't deliver this component? What will be an acceptable project? Trust me, this approach will go a long way in defining the actual scope of your project.



Communicate ONLY realistic expectations:

During my career, I have been a part of numerous projects where expectations were unrealistic. Manager/Client will over promise to their customers/stakeholders to gain their business/trust, and they fail to realize that they will lose their credibility when they can't stand up to their expectations. Thus, I would suggest you to carefully define the scope of your project. If you suspect any infeasible components in your project, then investigate those issues before promising anything to your customers. If your investigation shows that something expected by your customers is probably impossible, then communicate your findings with them. In this way, you will earn their trust and gain some credibility by involving them into decision making. After all, it is always better for projects to under promise and over deliver than to do the reverse.



Revisit requirements often:

Those days are gone, when we used to have rigid requirements for our projects, which hardly ever changed. Today's Project Management is a whole new game. Though our project might not change, the external environment will change, which will in turn change the requirements of the project. Thus, I would recommend you to implement a continuous feedback loop in your project management lifecycle, and revisit your requirements often. You can use various mechanisms to do this, such as: ongoing project discussions with your customers; demonstration of prototypes, pilots, mock-ups, and intermediate deliverables; feedback from testing; and other periodic customer interaction.

I hope, these tips will help you to manage changes in your project due to change in customer expectations. Let me know, if you have any other suggestions regarding the same. Thanks. – Bhavin Gandhi