What’s the best way to recruit for overseas growth?
Our recent roundtable discussion tackled the key issues of global growth. Here’s how our entrepreneurs dealt with the issue of hiring talent
The battle for talent on these shores is enough to occupy the minds of most CEOs. But faced with the challenge of recruiting a team to advance your overseas ambitions, what are the rules of combat that work best?
Boots on the ground in new markets or run operations from home while clocking up air miles? Outsourcing projects to teams outside the UK is common enough for domestic growth, but is it the preferred way to build resource with an international flavour?
In our second feature resulting from our Santander-sponsored roundtable discussion we asked the owner-managers of companies with turnovers of £5m to £20m where they find the talent for international growth (you can read more about them here).
And how did they build a ‘beachhead’ to manage their operations in new territories?
How do you manage an overseas team and is local expertise essential?
Serial entrepreneur Jazz Gandhum is unequivocal; you need somebody who knows the culture to manage an overseas team. The founder of e-Careers, an e-learning platform launched in 2002 has 100 employees working in R&D in Mumbai, India, plus 15 elsewhere.
Now working across 20 countries and growing fast, with more than 50% year-on-year growth, he persuaded a “very close friend” to move to India to oversee operations. “If you get it right it’s priceless, if you don’t it’s calamitous,” he says. “There are issues and problems, but I can now employ 100 people for the price I’d pay to get 12 here.”
His tri-cultural friend, with Indian, American and Saudi heritage brings the ideal cocktail of understanding western business culture while being able to communicate with local talent.
Beyond that, Gandhum has sought to ensure his Mumbai development team are valued. “Having the right team with the right drive and motivation, such as stock options, helps to ensure you can trust them. That’s really been the sole reason for our success,” he says. “If we didn’t have that we wouldn’t be where we are today.”
Ben Whitaker, co-founder of Masabi, an app enabling train passengers to buy and display tickets on their mobiles concurs, describing Gandhum’s set up as the “magical combination”. All too often, he says, cultural differences lead easily to misunderstandings. “If you had somebody local who’d never worked in the West you’d have the communication issue, it’s best if you have someone with a foot in both worlds to act as management interpreter.”
Instilling company culture and values
A solution, adds Dale Lovell, chief digital officer of native advertising specialist Adyoulike, which operates in the UK, France, Middle East, Germany, Spain and Italy, is to indoctrinate country managers long before handing over any control in an overseas market.
“London is an international city but lots of other places will only be serviced by locals – French for the French, Germans for the Germans,” he says. “We’ve hired country managers in Italy, Spain and Germany. Those team members were based in London for 12 months and trained in our company culture. We then help them establish themselves in those markets before going to that country and setting up an office.”
Even the United States requires special treatment. Gandhum found to his cost that despite having an office in Texas it proved hard to penetrate the local market and he says it even goes as far as requiring someone from the state in question to do your bidding. “In US it has to be Texans selling to Texans, Californians to Californians.”
Hiring an international growth CEO
With deals for the train lines in huge American cities such as Boston, San Diego and New York, Whitaker recognised his shortcomings when it came to running a sales team in the US. With Masabi known as a serious player in the transit market, he sought to replace himself with a growth stage CEO and resorted to a multinational recruitment consultancy “because it’s far easier to get that wrong than right”. The process took Masabi over a year to conclude.
“Officially I was the CEO, however I’m an engineer by trade and as an engineer I love to make, but when the business is growing into a multinational business it’s really about managing managers, international partnerships, remote sales teams and service activity.
“I don’t have experience of how salespeople work. They’re coin-operated machines whose basic emotional drives differ so far from mine I couldn’t really interpret what they behave like. When you are the entrepreneur you always wear many hats. As the business is getting bigger you’ve got to figure out which ones you wear really well and which ones you’d be better to hand onto someone else more expert at wearing it to let the business thrive.”
How can you manage outsourced teams overseas successfully?
Beyond setting up an overseas office, our roundtable guests have been quick to utilise talent in foreign lands to support international growth too. And unsurprisingly perhaps cultural misunderstandings extend to managing an outsourced team.
Even sending a simple email can cause confusion, as Adyoulike’s Lovell has discovered to his cost. “I sometimes find they don’t get the British way of sending an email – what I call a ‘thank you sandwich’,” he says.
“The emails start something like ‘thanks for your feedback’ and then the point to address is in the middle line, with a sign-off of ‘many thanks’. Culturally a lot of countries don’t understand that. They’ll think ‘he’s quite happy’. It depends on the recipient whether they hear the message they want or the message you wanted to deliver.”
Knowing what to outsource – and what to keep
Whitaker warns against outsourcing anything that isn’t commoditised and easily understood. “Get some database or graphics work done and by all means do it anywhere in the world with those talents, but if it’s core product or innovation it’s got to be in-house.”
The process of research and development – building, testing, de-snagging – is key to learning. If you outsource bigger projects overseas you’ll find that only the big pieces of feedback will filter all the way back through to your core team, Whitaker adds. “To get better you need to know the little stuff. I worked for a carbon fibre components manufacturer for Rally cars and saw this issue of not receiving tweaks and manufacturing gripes first hand. You should only outsource stuff that no longer needs to get better.”
Guy Mucklow, CEO of cloud-based address management service PCA Predict, agrees and says the same is true of the operational side of the business as it is the production side, where close collaboration is essential.
His business, which has more than half of the address validation market tied up for UK e-commerce, has been building its international presence recently via a white label deal with Canada Post and plans for a US office in the New York area.
Whitaker advises flying a remote sales team in regularly to be with the domestic development team or the risk is “you evaporate all that core learning”.
Connecting with international teams
Another aspect of successfully managing outsourced talent is finding commonalities. For e-Careers’, Gandhum looked East to outsource voiceover skills for the company’s e-learning programmes and found himself surprised at what he found.
“I’ve been out to Serbia and Lithuania and the voice skills are great. Their English is great. I didn’t realise until somebody said you’ve got to go over and talk to these people,” he recalls. “We had a lunch and spent an hour talking about Only Fools and Horses. You’re sitting in Belgrade talking about voiceovers for online education and whether the chandelier episode is the best.”
Gandhum suggests too many British entrepreneurs have a “mental block about these places”. He adds: “In the next three or four years opportunities are there for British companies to take advantage of the economy, the people, and we’re not as far apart from them as we think we are.”
Whitaker has had a similarly positive experience in Estonia where he says the talent level is very high and very entrepreneurial. Pointing to a culture where you vote digitally and the banks are run by the younger generation, he says “as an engineering culture we’ve absolutely loved it”.
The cost vs talent conundrum
Beware the temptation of ‘cheap labour’ though, as Search Office Space (SOS) founder Richard Smith warns. With offices in the UK, North America and Asia as well as two other ventures – So Recruit and room booking platform MeetingRooms.com – he outsourced some development work. “I learnt a bit of a lesson in terms of outsourcing to software engineers outside the UK,” he says.
“The upside was that it was much more economical. The downside was that it was much more difficult to manage them. I learnt the hard way, which slowed our initial progress, so the saving I thought I had was probably not real. But you need to fail sometimes to learn how to succeed later.”
With so much often lost in translation, Masabi’s Whitaker offers two tips for outsourcing. “One. When you’ve just given someone a brief on a project, whatever their culture is, get them to read it back to you. If your remote lead cannot read it back to you and explain in their own words what they’ve understood then they didn’t get it, so repeat until they can. The other one is always plan to have demonstrable status checkpoints throughout the project – if they can’t show you a checkpoint, then assume it isn’t done. Between those two you reduce the main unnecessary sources of cultural misunderstanding from those who don’t want to disappoint you, mean well, and are not trying to fool you. Unless you’re from their culture you cannot know what is meant when they say everything is ‘OK’.”
This feature is the second of a three-part series following a roundtable discussion sponsored by Santander on international growth. You can read the first article – Should you take your fast-growth business global – or find out more about Santander’s Breakthrough International programme here.