Nearshore Americas

7 Secrets to High Performing Captive Offshore Centers

Alsbridge While offshore centers have been around for decades, high performing offshore centers seem to be a rare commodity.

The following are 7 secrets to operating a high performing captive offshore center:

1) Strong sense of self – The offshore center must have a strong sense of self. Meaning, it must be structured in a way that allows the employees to view the center as a unique entity unto itself. If the center management and employees feel like they are solely a branch or arm of other organizations without some unifying theme or sense of belonging with the other managers/employees working for different branches, the organization will operate at a suboptimal level.

2) Clear line of sight – Successful captive offshore centers have a clear line of sight to higher level management in the parent organization and a strong mission sponsored by that management. Many failed offshore centers were set up at a level too low in the parent organization. Without higher level sponsorship, the needs of only a small part of the overall company tend to be met.

There needs to be strong linkages to the center but there should also be a balancing linkage to the client organization. Feeling a part of a client organization is a two-way street and clients appreciate when their offshore counterparts demonstrate a strong sense of ownership and teamwork with them. It tends to lead to more business and higher value work being done offshore.

3) Appreciation for the culture – Linked with the sense of belonging is a requirement that the head of the business unit of the offshore centers have a strong appreciation for other countries and cultures. Both the parent organization leader and expat manager seek to understand the best ways to blend the core values of the parent organization with the local culture.

Understanding and appreciating the culture unlocks potential for doing business in a way that presents opportunities to do things you may not have been able to do elsewhere.

4) Blended culture – The objective of understanding of the local culture should be to establish a blended culture. Similar to a joint venture, you want to “utilize the best and throw away the rest.” There must be unifying values across the company extending into the offshore centers. How those values are demonstrated in practice is what will vary from country to country.

It takes a conscious effort and training (with practice drills) for managers to encourage people to question decisions and the status quo.

5) Communication in the context of culture – If you are sending on expats, have them spend time with other expats and with people from the local country that have operated in both cultures. This is often much more valuable than any official cross-cultural training. Also, read cultural training documents from other companies in the offshore country to get a sense for what they think about your culture. You may be surprised and feel that many of the pointers given about your culture are not true. The same thing applies to the guides you will read about their country.

One that gets mentioned a lot in the context of Eastern culture compared to Western culture is time. Many Americans view coming late to meetings as disrespectful to the others that did show up in time for a meeting. If your clients are going to be American, I suggest training the local teams to understand and observe the cultural norms of the primary client country.

Another difference in more hierarchical societies, such as India or China, is that managers tend to be listened to without question. It takes a conscious effort and training (with practice drills) for managers to encourage people to question decisions and the status quo. This is an extremely important area and it is worth the extra time and effort.

6) Measures and balancing measures – While measures are important in any business and in any country, having at least one balancing measure for each primary measure is absolutely critical in most popular offshore country locations.

If a measure impacts an employee’s performance rating, promotion speed, and/or compensation you are going to see some extremely creative ways that people drive the measures to their benefit. That will not usually be to the mutual benefit of your company if you care about clients, quality, returns on orders, et cetera.

As an example, let’s say you want to improve time to close a call for a call-center agent. With only a “time to close” measure you will see customer satisfaction decrease dramatically. Why? Because the agent is going to everything possible to get the caller off the phone and they will even be closing the call on the system before they hang up.

My strong recommendation in offshore locations is to carefully think about each measure. The question to ask (and get others involved in brainstorming with you) is: what will happen to other team members, the quality of the system, the clients or potential clients, etc. after I put this measure in place? Then craft a measure to ensure that people don’t go overboard thereby doing harm to the other things you should care about.

7) Remember the basics – The points above are a representative sample of areas to be considered when setting up a captive organization in an offshore location. All of the normal good business practices still apply in addition to those mentioned above. The offshore captive centers that I have seen do well have thought about and put in practice methods to ensure they are following the points in this article.

Whether you are considering setting up a captive operation or would like to convert your offshore centers into high performing operations, Alsbridge’s consultants have the deep industry experience to help you through the process.

Ben Trowbridge is CEO and Founder of  Alsbridge Inc. Read our special interview with him on the effects of Cloud sourcing here.

Tarun George

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