Communication Failures in Outsourcing

It was Malcolm Gladwell who introduced me to Geert Hofstede’s concept of the Power Distance Index (PDI). After I read the chapter seven of Outliers I had to stop to catch the breath, it was just too exciting. Implication of PDI on cross-cultural communications is immense and it has direct relevance to outsourcing, and I’ve observed over the years. It’s something that you most likely dealt with as well. I did a bit of research and realized that I am far not the first to discover PDI’s impact on outsourcing, for example, this post offers great insights on PDI implications in the world of software development.

The idea behind PDI is quite simple, a perceived “distance” between a boss and an employee varies dramatically based on culture, biases, heritage, etc. The “distance” is defined as measure of how a person would generally react / respect / deal with a person of authority. The PDI is a measurement of that “distance”; it ranges from 1 to 120, the bigger the number the bigger the distance separating a boss and an employee. Small distance puts both boss and employee on very much the same floor of a corporate pyramid. As the distance grows the boss moves in a corner office or on the top floor, becomes master and commander, royalty and at some point a divine authority. While in cultures with small PDI an entry level employee can have a chat with CEO in a cafeteria, even just a single step in a corporate ladder can create master / slave relationship in cultures with high PDI.

In cultures with low PDI communications between a boss and an employee are quite different from countries with a high PDI. If you, an employee, are very much at the same level as your boss in terms of cultural hierarchy, you do not perceive any significant distance or differences with your boss and you tend to collaborate. A straight forward question gets a straight forward answer. If your boss is wrong you tend to have no qualms about pointing it out. And your boss expects you to. There are of course variations based on company settings and individual preference, someone might say to the boss “I respectfully disagree” and someone might use much less politically correct language. Moving up in PDI would convert collaboration into discussion akin to a military style of orders. Going higher in PDI changes a conversation into a dialog that for most of people from the Western world would be impossible to decipher as instead of a straight forward answer a response comes in a form of hints surrounded by layers of polite blabber, well, at least that is how people from low PDI cultures see it.

Interestingly enough high PDI doesn’t create too many communication issues between people from the same country. The traditions and unwritten rules of communications are well understood and do not present obstacles. Not always though, see some examples in Outliers, they are stunning and illustrate how high DPI drives catastrophic outcomes. And situation gets substantially worse when it comes to cross cultural communications, that’s where miscommunications and mutual frustration proliferate.

When we consider a typical IT outsourcing initiative in this country we face significant differences between buyer (boss) and supplier (service provider) – USA (40) vs. India (77) or China (80). It is not surprising that communication issues in all forms and shape plague the vast majority of outsourcing engagements. Even though I do not necessary agree with conclusions of The Real Reason Outsourcing Continues To Fail, blaming it all on PDI is an unjustified simplification, I believe PDI-related issues contribute a great deal to many of outsourcing engagements failures.

To minimize the damage that PDI difference can inflict on your engagement you need to deal with it on several levels:

  • Educating your staff, in particular local low-PDI employees.
  • Developing communication vehicles that inhibit PDI-related miscommunications.
  • Adjusting SDLC to minimize potential damage and inserting elements minimizing the impact.

That might be easier said than done, but there is no way around it. Left to themselves things tend to go from bad to worse.

2 thoughts on “Communication Failures in Outsourcing

  1. Great article! Communication can be extremely challenging at times even when you are in the same room but when you add thousands of miles and cultural barriers it can, at times, be nearly impossible.

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