European Company Formation – The Right Company Formation Team Makes All The Difference

Business owners tend to start looking into company formation in Europe after successfully running one or more businesses. Through the day-in, day-out grind of handling their company, they meet other businessmen and women that extol the many virtues European company formation offer. Very few rookie business owners attempt this the first time out, and that means that those looking to branch out and establish a presence in Europe are business savvy already. It could also mean they are sick and tired of paying exorbitant fees, penalties and taxes with money they have busted their rump to make. The U.S. is probably one of the most costly countries to incorporate a business, and this logically tends to get business owners small and large alike looking for better legal answers.

Whether starting a brand new corporation, moving a company that has already been running for several years, or just developing a “virtual office” in Europe, the benefits are many, but the licensing requirements differ from country to country. So you as the concerned business owner trying to decide which country will best suit the needs of your European L.L.C or offshore trust has a lot to consider. That is why it is absolutely crucial for you to deal with a Company Formation Professional that has access to trained lawyers and business contacts in each of the European countries designated for its business speciality.

Some European countries are better as tax havens, but require operations to be running for a required period of time, and some are more friendly to established companies than start-ups. Do you know which is the best for your company’s bottom line and your peace of mind, should you ever undergo a fiduciary audit? A proven leader in the field of international business law and tax lawyers local to the country you incorporate in have that specific knowledge. Many company formation specialists can even handle telephone and mail forwarding. Your customers dial an international number and your office extension in your United States office building rings. They send mail to a European address and it reaches you, with return mail then rerouted and processed to show your address in France or Spain. These are just a few of the elementary jobs a trained and seasoned European company formation specialist can offer.

You have worked hard all your life to create this amazing business you have. Why let it get eaten up by harsh tax rates and crooked regulators? You have the ability with a simple phone call to ask any and every question you have, and get a better picture of just what is involved to give you the European business solution that fits your business best. An ethical company formation firm will always give you a free consultation, and can be counted on for the highest level of discretion where your affairs are concerned. Don’t waste another day, pick up the phone and dial Open A European Company today, and rest easy tonight.

Get Paid For Listening – The Power of Communication in Business – A Story

Recently, a friend recited to me a beautiful story. A Story richer in meaning then most I have read or heard. It is a story of a girl, her father and a certain old man. In retrospect, the moral of the story could probably be the source of the wisdom that saved Toyota, the world’s largest automobile manufacturer, when it recently faced its biggest threat yet….a sticky accelerator.

Effective communication entails good listening: A story

There was a girl, who like it is the case with most daughters, held a special place in her father’s life. Naturally so, they spent a lot of time together. The father of the girl being a good parent, always took effort to make time spent with his daughter as wholesome as he could.

Since the girl was not yet at that age where awkward conversations on her menstrual flows would have dominated the conversations, her father chose to use the long periods of time they spent together, to pass on lessons that he considered to have held him in good stead through out his life.

The lesson on the art of communicating

Among many other things, the girl’s father chose to stress to his daughter, the art of listening.

So it came to be that the little girl acquired extraordinary listening skills. Even at an early age, her friends would frequently marvel at how she could clearly remember conversations that they had ages ago. The little girl got so good at listening, that she could effortlessly recite both past and present conversations with an exactness that was astounding as it was envious.

What was the point of all this listening?

It happened that an old man, lived next door to the girl and her father. Every morning, the old man and the girl’s father would converse over the short picket fence that the two shared for hours on end. This ritual had been an event that doted the entire existence of the little girl. As a consequence of its routine nature, it had become hardly noticeable to the girl. In fact, if you were to ask her, the conversations mattered little to her. To our little listener, all that was just mundane adult talk.

As the girl grew up, she became better at her unique gift, it soon caught the attention of her teachers, strangers and inevitably her father. The girl, on her part, saw no better use for her gift in listening, save for it being a means by which she could amuse friends and foes alike. To her, it was just another thing.

However, her father had other plans. He decided to task the girl further. After making it known to her how much she had made him proud, he asked one more thing of her: To start listening to what the old man said.

The father also made it a point to make it clear to his daughter that the task would only be completed when she knew what those morning conversations were all about.

In doing this, he (the father) explained to her (the girl) that he appreciated how much she could remember and subsequently recite, but he still required more from her. For her to accomplish this extra bit, all she had to do was to listen to the old man.

The moral of story

Time passed and the girl indulged herself in her new task. Finally, after a while, her father came to her and asked her if she had found out what it is that the conversations the he and the old man usually had were about.

Instead of the usual recital the girl would have normally performed, she had this to say, “The old man talks of many things. Most, are about his many the many regrets of his life.”

At this juncture, father looked at his daughter and had equally fewer words, ” Now go forth my daughter and listen to the birds, listen to rocks…..listen to the universe.”

Role of communication in Business and the workplace

Communication serves as a medium upon which business transactions occur. It enables market needs to be assessed, products to be subsequently developed, distributed & marketed and disputes arising from business transactions to be settled. The sum product of which is that communication is the paper upon which business deals are struck.

In today’s globalized economy, communication is of particular importance. This is principally because companies increasingly need to understand new clients and work in cultural environments that different from those in their home countries.

Quite often, cultural and language differences come in the way of communication. For example, a common expression like a smile may be easily mis-interpreted in some parts of the world. While it is commonplace to think of a smile as a sign of happiness, in most African cultures, a smile may be an indication of embarrassment. This is especially so if the person smiling appears recoiled, facing the ground or perspires in otherwise ambient conditions.When a similar breakdown in communication occurs in the workplace, the concerned organization faces the danger of failing to meet its objectives.

On a lighter note it is said that in earlier times, exposure of the teeth, as as one does when smiling, indicated aggressiveness; a fact that early explorers realized too late on encountering indigenous tribes.

Eye contact is another example, while eye contact is desirable in American culture; in Japan, insisting on eye contact may be seen by the other party as impolite and deemed an intrusion of personal space.

On Communication courses: Effective Communication is best learned when both taught and experienced

The importance of effective Communication in business is stressed in many of the lecture rooms where future CEO s, CFO s, MD s and Company Presidents are nurtured. Communication studies is also an integral part of MBA courses and is also offered as a stand alone course in many business schools, colleges and universities.

On the other hand, it is an open secret that Business coaching, the in vogue phenomenon in Small & Medium Enterprises development, is entirely dependent on good communication.

The signs could not have been anymore obvious, this apparent “obsession” with communication in the spheres of business training, highlights the axle- rod- like kind of importance of communication in any form of business including even Online trading portals.

Now that we have appreciated the gravity of this issue, I will not turn this article into another rant or attempt make it some pathetic semblance of a classroom; but in keeping in with the manner of my start, I will profile, regurgitate and contextualize the thoughts of more esteemed individuals. The thoughts of leaders drawn from across the board who at some point cared to speak on this diverse and critical subject.

My wisdom for this unusual approach, stems from recognition that the situation at hand is far from the expected. In spite of the range of communication theories developed in the recent past, effective communication still remains an elusive condition. A condition, that we have seen to be an absolute must for starting, growing and succeeding in business.

This approach should not be seen as a mockery of formal training regimes, as it in essence heavily borrows from such tried and tested programs. In addition, it is my view that communication theories dispensed in business schools and in training workshops (aimed at developing human resource), offer the student the added advantage of acquisition of a deeper understanding of the subject area. This deeper understanding, equips learners with more flexible communication and interpersonal skills.

However, it is of note that most of these training opportunities are offered at a premium. This makes them largely inaccessible to most would be entrepreneurs and business owners.

Communication Etiquette

Q:What is communication etiquette?

As a matter of necessity rather than a form reprieve; entrepreneurs can utilize simple, easily understood and accessible tools to improve their communication skills. An area where improvements can be made in order to ensure profitability in business is communication etiquette. The key in understanding etiquette lies in understanding what effective communication entails. Viewing it in this light, any behavior or act that stands in the way of communication is then considered to be uncouth. To enable us put this in perspective, we need to consider the words of a man who is acclaimed for his prowess in the trade of communication. Irish literary Critic, Playwright and Essayist- George Bernard Shaw. I

“The single biggest problem in communication is the illusion that it has taken place.” George Bernard Shaw- Winner of the 1925 Nobel Prize for Literature, image via Wikipedia

A: George Bernard Shaw’s articulations enable us to crystallize the “Etiquette” in business communication into four guiding self- explanatory principles that must be considered when communicating:

* What is being communicated i.e the Message.

* When to say it i.e the Time.

* How to say i.e the Form of communication medium.

* Whom to say it to i.e characterization of the Recipient.

The what, the when, the how and the whom-so to say are the guiding beacons that should be sought by any business owner groping in the darkness of ineffective communication.

Practising these four principles entails being a good listener.

Why good listening equals success in business

According a theory fronted by a scholar in the field of communications, Hayakawa, the quality of communication is directly influenced by the quality of listening. The listening referred to here involves more than simply hearing the sounds of words and maintaining a polite silence while at it, or the perfect recital of words like the girl in the story above did. It involves actively pursuing the meanings intended by the conveyor of the message, with the sole aim of attempting to interpret the message from the perspective of the conveyor of the message (refer to story end).

An apt allegory for this would be found in the common saying ” to wear someone else shoes ” only that this time you would have to walk in them as elaborated in Hayakawa’s description of what listening should entail below:

” Listening means trying to see the problem the way the speaker sees it – which
means not sympathy, which is feeling for him, but empathy, which is experiencing
with him. Listening requires entering actively and imaginatively into the other
fellow’s situation and trying to understand a frame of reference (life experiences)
different from your own.”

This approach to listening is rooted in the premise that a word may hold different means to different people in lieu of their life different life experiences. A common example cited to illustrate the power this knowledge holds in conducting business is the hilarious fiasco that the entry of a leading European confectionery company into American markets turned into. The company had chosen the unfortunate name- “Zit” which in American urban language refers to a pimple, the kind that troubles teenagers.

Here, the company failed to listen and thus failed its first hurdle. This is because communication in business begins at the point when the business is christened. By failing to listen by considering the different life experiences of this new market (American Market), the company did not consider the what, when, how and whom principles mentioned above. The result was catastrophic to say the least, a confectionery company ended up sending out the wrong message to the market- that of a quirky dermatological condition instead of the joy that confectioneries are associated with.

How then can an entrepreneur learn to listen thus improve communication between him/her and his business contacts?

Tip One: Be aware of cultural differences to effectively communicate in business


-Recognize that the conveyor of the message holds different perspectives and belief systems from your own.
-Avoid making rush conclusions based on your own spontaneous perceptions and prejudices.

Tip Two: To achieve success in your business by employing effective communication-Empathize


-Make a point of seeking the meaning as it is to the conveyor.
-Ignore your own belief systems and step into the shoes of the speaker and wear their lenses.
-Tactfully ask clarifying questions and avoid being obnoxious while at it.
-Sputter the conversation with periods where you, in subtle ways, repeat (just like the girl in the story) what the conveyor of the message has already communicated. This should always be inter- mixed with seeking clarification from the second party on whether they agree with your interpretation of the matter.

Tip Three: Have Courage: Learn from “Courage the Cowardly Dog”

To summarize it all, the words of one of the world’s most famous leaders- Britain’s wartime prime minister, Winston Churchill

“Courage is what it takes to stand up and speak; courage is also what it takes to sit down and listen.”

Fans of this cartoon network show, know “courage” well. If you don’t this is an opportunity to practice what we have already considered to entail good communication. Get your son/daughter, younger brother/sister, younger niece/ nephew, basically anyone who you know watches the show including adult acquaintances and listen as they introduce you to courage.

All the same, Courage is a complex, anxious and freaky looking dog character who lives with his master Eustace and his master’s wife Muriel in a desolated farm house. Their home is frequently stalked by danger which comes in the form of various devious characters and beasts possessing eerie powers.

Courage despite being a rather cowardly dog, quite often saves his masters from demise. Somehow, he is the only member of the family who is knowledgeable of the haunted nature of their house. He’s unable to talk (remember he is a Dog!) and is easily startled, but he always manages to overcome these handicaps and warn, sometimes ferry his masters to safety whenever the unwelcome visitors drop by.

Likewise, in learning to communicate well, and also to provide a platform for tips 1 & 2 to apply, courage on the part of the listener (entrepreneur?, Business owner?) is important. This is because according to some schools of thought, the listener Hayakawa’s model is in danger of being influenced by the belief systems of the conveyor of the message. This influence becomes negative when it erodes gains that the listener had earlier made as the individual may lose their own principles (that they have developed over many years).

Tip Four:Understanding body language to effectively communicate and boost your business


– Consider the SOFTEN approach.

“Use non-verbal communication to SOFTEN the hard-line position of others: S = Smile, O = Open Posture, F = Forward Lean, T = Touch, E = Eye Contact, N = Nod.”

As a norm borne out of routine, most entrepreneurs are like the general populace, are one tracked. This means that they recognize, interpret and utilize only one form of communication- verbal communication. This is because most people fail to visually recognize an accompanying form of language; the language of body language, a form of non – verbal communication.

Personal space, pacing, position, posture, para-language, facial expression, gesture, touch, locomotion, eye contact, adornment, context and physiological responses like sweating and flushing of the cheeks, are some of the different categories of non- verbal communication.

All these forms of non verbal communication are vital tools to the discerning business owner. How? You might ask. Hopefully thoughtful consideration the following examples of everyday business scenarios might help,

Scenario 1: When making that deal, How shifty are the eyes of the the other party?

Scenario 2: When hiring that much needed labor,how much of eye contact occurs?

While you ponder on the possible subtle messages that can be picked by carefully analyzing the body language of the second parties in the scenarios above, it should be noted that body language is a constellation of symbols. These symbols only communicate (bear meaning, when collectively viewed rather than when they are analyzed in isolation, just like as it is the case with verbal forms of communication. The bottom-line is that any particular body gesture should be interpreted in the context of the whole. This is because any one particular gesture may have many meanings and can thus be easily mis-interpreted when analyzed singularly.

Tip Five: Join the band wagon- Neuro Linguistic programing (NLP), the new front in Communication

You have probably heard of Derren Brown, a famous television host, illusionist and entertainer, who is among the range of celebrities that front, utilize and nature this pragmatic form of thinking. It has even been claimed in some circles that the allure of one of Tv’s favorite babes- Marylin Monroe comes down to NLP.

what is Neuro-linguistic programming (NLP)?

Neuro linguistic programming explains the interaction of human perception organs (the Neurological system e.g brain, nerves, eyes, ears), language (and societal norms) and belief systems ( social rules which represent the programming aspect). NLP explains how these factors collude to construct reality for any given individual.
To illustrate this further, it is worth considering the description of the tenets of NLP by one of the pioneers of this field Richard Bandler

“You want to become competent at whatever you do. That does not mean to get phobics, who shake in their boots while their blood pressure blows through the roof, to believe,”This is not fear.”

The object is to get them to stay calm and alert, and to stay in their own lane, and to drive across the bridge, which remains standing.
Ask yourself; “Can we build better?” To build those things we have to be able to suspend whatever belief system we already have. Keep it out of the way…

Those things get very, very personal. We’re talking about basic beliefs regarding human capability. Here’s the only truth about that. Nobody knows.”

This statement by Richard Bandler encompasses the original constructs of NLP. It urges individuals to be aware of the interactions between their Neurological system, language and societal programming in order to fully understand their own perceptions of things i.e their reality.

In NLP it is believed that by understanding these interactions, individuals can be able to alter one of the course of how they behave when they encounter a given stimulus. It therefore gives individuals the ability to control their natural spontaneous response to challenging situations and chose to behave in a manner that is more appropriate and beneficial.

For instance, public speaking posses an insurmountable challenge to many. Palpitations, drenching perspiration and un-explained tacyponea are all common observe-ables in most individuals when asked to address a public platform. The triggering event for the un-wanted chain of events (sweating, palpitations etc) in this case is easily identifiable as public speaking! From this point then it becomes possible to avert it by reconstructing our reality as far as public speaking is concerned and stop perceiving it as a noxious situation but as an opportunity.

That may sound a little confusing but the scope of NLP is beyond this article but numerous sources of information on the subject can be readily available on the Internet such as the Derren Brown videos on You Tube. It is worth checking them out as NLP. This is more so when you consider that NLP was developed as an attempt at finding ways in which individuals can become more successful by studying and learning from the lives of highly successful individuals.

Developed in 1970 America, NLP has been in use since then and based on scores of evidence, has been shown to be an accurate body of knowledge. Recently, Individuals and business leaders have begun taking courses on mastering the stipulations of NLP and subsequently utilizing them for a range of needs.

For instance, NLP has been found to be of much relevance in the communication studies, scholars like Dimmick have identified the importance of the prepositions that NLP in communicating. This is because it has been shown to enable the user understand reality as it is to the conveyor of the message. This as we have already seen, enables good listening and communication.

Using Effective Communication In Advertising your Business

One of the pillars of effective advertising is the pristine application of the concept of anchoring. Anchoring is a concept grounded in NLP, it involves persuasion of individuals into performing an action of your own interest, by exploiting a person’s prior experience of an event/ symbol (such as the use of images and other audio- visual media recognizable to a particular market to trigger the market into the action that the seller desires).

For instance, colors hold symbolic meanings; green usually denotes the earth, nature, life, environmental conservation and more recently green energy. A product aiming to appeal to environmentally conscious individuals may opt to have green as the color of its packaging. This may also explain why green is the colour a commonly used for the recycling logos found on the packages of many household items.

Another common use of anchoring in advertising is using catchy phrases that bear certain meaning to people of a given cultural identity to sell a product. An example that easily comes to mind is the phrase “catch a big Mac” used in advertising burgers of a leading fast food franchise.

Effective Communication: The case of the Toyota Car Recall

Recently, the world’s largest car manufacturer had to perform a recall on several of its popular brands following worldwide reports of a defective acceleration pedal that posed a hazard to its customers. It should be noted that in business, the possibility of product recall is always real even in settings where quality control measures are well organized and high manufacturing standards are adhered to. This should awake us to the fact that the Toyota situation is in no way unique to Toyota.

According to a report published in 2003 by the British Retail Consortium, these events (product recalls)usually occur without warning and in occurring, they present serious challenges to the reputation of a company and its brand. This puts the future profits of the company at risk as the brand as elementary business informs us that a brand is the primary way via which companies communicate with their focus markets.

According to the same British Retail Consortium report, communication is central in handling a product recall. The step critical in ensuring a successful product recall process is the setting up of an information management system. This system should be easily accessible even from remote locations. The information system should enable fast gathering of crucial information such as serial numbers, make, batch numbers and the distribution area of the defective product.

The response team during a product recall, should be furnished with proper channels of communication to ensure smooth running of the process. A good information management system also enables the affected company to control the information accessible to the public. This allows the company room to minimize damage to its brand and other prevent the effects spilling over to unaffected products that they it could also be producing.

A good information management system enables tracing of products. Product tracing in a recall, starts with investigating the origin of the raw materials used in manufacturing the product through its distribution chain and ending at its consumption.

Toyota managed to emerge from this fall back as testified by their recently released financial results which showed a strong run emanating into a profit of 2billion US dollars; an amount similar to what the recall process had cost the corporation whose home is in Detroit’s sister city in Japan- Toyota. On top of this, Toyota suffered a 16million US dollar fine for poor management of one aspect of communication. Despite its efforts, including its president Toyoda’s tearful defense of his company in front of a senate committee, Toyota still stood guilty for failing to suffice regulatory authorities with information of a possible break in its quality chain leading to deaths in America. Such, is the cost of mis-communication.

How is this helpful to a small business owner?

Product recalls have been used here as a marker for the range of draw backs that a company can suffer during operations. Entrepreneurs can pick this example and extrapolate its lessons whenever their company has to resolve a dispute with a customer, supplier and even regulatory body.

Online Business is the business of effectiveness in communication

In the words of the entrepreneur turned mogul, world icon, role model, philanthropist and self- confessed nerd turned “most popular kid in the playground”; the world’s most successful entrepreneur- Bill Gates:

“I think it’s fair to say that personal computers have become the most empowering tool we’ve ever created. They’re tools of communication, they’re tools of creativity, and they can be shaped by their user”………

“I’m a great believer that any tool that enhances communication has profound effects in terms of how people can learn from each other, and how they can achieve the kind of freedoms that they’re interested in.”

Online Content producers can utilize communication skills in increasing their audience and subsequently their revenue from traffic tied portals like Google AdSense and yahoo ads. Those attached to Online publishing portals (where freelancers, bloggers and Online writers find a home to write while earning money) like Triond, Bukisa, e- How articles, Helium and Obuolo should consider mastering communicating online as it at the heart of their trade. In similar fashion to the instances discussed earlier, their success in the cyberspace and resoluteness of their brand in the crowded blogosphere is dependent on how well the master communication.

SEO is communicating with search engines

It may surprise many that the much talked about Search Engine Optimization techniques are nothing more than ways in which Online publishers can communicate effectively with search engines.

The other popular technique employed in Online business to increase site traffic, the sharing of articles on social networking platforms like Stumble Upon, Facebook and Digg; rely on quality communication between members of those social networks, Internet users and providers of Online goods and products.

Mao Tse-tung on listening and communicating:

In wrapping up this rather lengthy subject it is worth musing on the words of the founding father of modern China Mao Tse-tung:

“We should never pretend to know what we don’t know, we should not feel ashamed to ask and learn from people below, and we should listen carefully to the views of the cadres at the lowest levels. Be a pupil before you become a teacher; learn from the cadres at the lower levels before you issue orders.”
-Mao Tse-tung

Arab Youth Leaders, DaimlerChrysler Launch the ’07 Arab European Internship Exchange

The Young Arab Leaders (YAL) and opulent carmaker DaimlerChrysler (DC) announced recently the partaking of 10 students from various Arab countries in the Arab European Internship Exchange and of the 20 professional youths in the Top Talent programs.

Initiated by YAL and DC, the three to six month in-house internship program will bring together 10 chosen students from the Arab world to Germany. This will be conducted so that they will be able to experience practical work as well as manage heterogeneity in the context of Arabian and European businesses.

The 10 selected students, who are called ‘interns’, will be given a particular insight into sales, marketing, finance and controlling, information technology, purchasing, logistics and quality assurance.

The Chairman of the Young Arab Leaders, Saeed Al Muntafiq, said that the Arab European Internship Exchange program gives an opportunity to Arab students to experience and witness how huge organizations operate in the international scene (markets).

Meanwhile, the Top Talent program will be comprised of several key areas including management of cultures, market research, international business and production management of the industrial value chain. It has 2 modules. The first will be held in Stuttgart Germany and will be followed by six month virtual team cooperation between the Germany and Arab young professionals. And the second module will be held in January 2008 at The American University in Dubai.

Saeed Al Muntafiq added that the young professionals would comprehend how to manage heterogeneity in different contexts and boost reliable networks through intensive work on common tasks. And this is because of the intensive networking between future junior managers from the Arab and European countries.

A member of the Board of Management of DaimlerChrysler, Ruediger Grube, said that their company’s support with YAL depicts that DaimlerChrysler is fully dedicated to guide the development of the young generation in the Arab Region. He added that the Internship Exchange Program and the Top Talent Camp are stepping stones for the business sector to experience global business challenges in the Arab European scenario and to further strengthen the relationship between the Arab and the European worlds.

About The Arab European Internship Exchange

Initiated by Young Arab Leaders (YAL) and DaimlerChrysler (DC), the Arab European Internship Exchange is an initiative by Young Arab Leaders (YAL) and established to advocate good relationships between Arab students and managers from multinational companies based in Europe. It emphasizes on knowledge exchange in areas of entrepreneurship, leadership development and education.

The YAL and the DC believes that students can benefit largely from networking to help shape the future of their national economies
through intensifying relations between future junior managers from the Arab region and experienced European managers.

About Young Arab Leaders

The Young Arab Leaders is a network of Arab men and women who have experienced the power of action in their own lives, reached different levels of success for their age, are optimistic and can foresee a prosperous Arab future despite today’s difficulties. They are now in prominent positions of responsibility and are set for extraordinary achievement. They believe that their efforts and struggles today can affect their communities, countries and the region as a whole.

About DaimlerChrysler

A German car corporation DaimlerChrysler AG is the fifth largest car manufacturer in the world. DaimlerChrysler produces and supplies trucks and provides financial services through its DaimlerChrysler Financial Services arm. It also owns a big time stake in aerospace group EADS.

The company was established in 1998 after Daimler-Benz’s merging with Chrysler Corporation USA. It manufactures automobiles under the brands Dodge, Chrysler, Jeep, Smart, Maybach, GEM, and Mercedes-Benz.

DaimlerChrysler produces cars and trucks under the brand names Chrysler, Dodge, Jeep, Mercedes-Benz, Smart, Maybach, and GEM. The company also provides parts and accessories that are sold under the brand name Mopar.

Eagle, maker of Eagle oxygen sensor, is among its defunct marques. Other defunct brands include Barreiros, Commer, DeSoto, Fargo, Hillman, Humber, Imperial, Karrier, Plymouth, Simca, Sunbeam, Singer, and Valiant.

Outsourcing Leaders Speak Up

Offshore Outsourcing is an emotional subject these days and many senior managers are uncomfortable talking openly about their company’s projects for fear of being labeled unpatriotic job killers. One fellow from California told me that when he accepted a posting to run his company’s offshore facility in Philippines, a number of co-workers came to his office to let him know he was “tearing apart the very fabric of our nation.”

Even big-talking CEO’s, who can usually be counted upon to hype their company’s cost reduction strategies, are often remarkably silent about offshore outsourcing. They seem to put the subject on a similar level as pornography – they all want to sneak a peek at it but none want to admit to do so.

Happily, there are some who will talk about their experiences with Offshore Outsourcing and their comments are useful for the rest of us. Most seem optimistic and think the future of offshore outsourcing is bright. Nevertheless, no one should be misled that running an outsourcing facility in a developing country is a Sunday afternoon picnic. There are serious frustrations that must be contended with.

Charles Phelps is the Texan who runs the large Manila-based design engineering center of Fluor Daniel, one of the world’s largest engineering companies. The facility has been in Philippines for many years and is now able to develop complete engineering designs for large facilities in the oil & gas and manufacturing sectors. Charlie speaks highly of his Filipino employees. He says, “Our clients are always impressed when they visit our office. They see the smiles, the friendly atmosphere, the positive attitude of our team and immediately are impressed.”

Charlie became rather testy with me when I referred his center as a “back-office operation.” He said something to the effect of, “Richard, don’t you ever call us ‘back-office.’ We are a ‘Global Service Partner’ within Fluor’s world-wide operations and leading edge in our areas of focus.”

He also presented an interesting slant to the job loss worries at some US companies. Charlie believes employees at Fluor feel their jobs depend on offshore engineering design groups like his in Manila. Without Filipino engineers, their project bids would not be competitive in today’s global market.

Neil Elias started the Manila-based Business Processing facility of AIG, the world’s largest insurance company, from scratch a few years ago. He has good things to say about the quality and quantity applicants available for his processing work – all of whom are university graduates. He says his employees have a “real desire for training and a service orientation.” As well, Neil says government, schools and industry are all working together to make it a success.

John Standring is the talk of Manila these days for turning around the outsourced IT operation of Safeway, the mammoth supermarket chain. When John came, it was common knowledge among the local industry that the operation was a poor performer. After being extracted from a third party provider, the center lost its first General Manager just 5 months later. John’s turn-around results are said to have been dramatic and faster than most people here anticipated. He seems to enjoy talking on and on about his success but concedes that it was really just a matter of putting the right people in the right positions. John says the people you can hire in Philippines are not much different from those you can hire in the US or Canada.

Klaas Brouwer is Vice President of Global Technology for NASDAQ-listed Innodata Isogen, Inc. The company’s 5,000+ offshore employees provide high-end content and knowledge management services to US and European clients. Klaas is based in Manila but oversees operations for all facilities worldwide. When I asked him what advantages he has by operating offshore, he says it’s “the people.” For once, this fast-talking Dutchman had to be prodded for details about this. He said that people in western countries will work late to finish a job for the first week but you get a lot of long faces if you ask them to do this again for a second week. In Philippines, people work until the job is done, however long it takes.

Then there is the qualification availability. Klaas mentions that positions occupied by basic college graduates back in Europe are being taken by lawyers and doctors in his current company. He also talked about his people being loyal, friendly, trusting, on and on.

Salary costs are probably the only significant positive that business leaders are not overly keen to boast about. It is no secret, however, that these offshore employees who are so admired by their employers are available for a few hundred dollars per month. Despite the bashfulness, we can be sure that this factor warms the heart of many a CEO back in the home office.

But we all know that you don’t get something for nothing. There are plenty of problems operating offshore facilities and we should be aware of a few of them.

All offshore managers say there is a strong deficiency of management talent. In developing countries, it is not always easy to hire managers off the street who are capable of performing at international levels. And since outsourcing is such a new industry and growth rates in employment have been so astounding, it is understandable that there hasn’t been time to develop enough quality managers. As the industry continues to thrive, this predicament will only get worse.

Another increasing concern of senior managers is that their qualified staff are being hired away by overseas companies. Japan, Singapore and Saudi Arabia are examples of countries that are aggressively pursuing Filipinos and Indians. While writing this report, I received a distressed email asking for assistance, “They are going to try to hire away from me 20 of my top designers and ship them up to Japan after some language training. This will hurt me big. You know this company?” This threat is a currently an ongoing concern for those employing technical people and indications are that other skill sets could soon be impacted.

Another interesting challenge that most senior managers contend with has to do with perceptions of their company’s US and European teams that their operations are job killers. The result, the managers feel, is vastly increased scrutiny of offshore performance, and even a reluctance to work with the offshore operation. In turn, the offshore managers say they are forced to drive quality of Philippine and Indian output “above that of the work being performed in developed countries.”

Of course, there are a lot more challenges than the few discussed above. But, these are said to be manageable and more than outweighed by the advantages of working offshore.

International Executive Search in Southeast Asia

Chalre Associates is an Executive Search partner to multinational corporations throughout the Asia Pacific region but with specific focus in Singapore, Philippines, Indonesia, Thailand, Vietnam, and Malaysia.  Our purpose is to enhance these organizations by identifying, attracting and developing outstanding people.

Richard Mills CFA