Culture Risk with Offshore Teams

I’ve come to believe that one of the keys to running a business is correctly identifying where the risk is. Many startups fail because they thought the risk was on the technical side (Could we build this?) only to later find out that the risk was actually on the market side (Would anybody buy this?). 

Every venture is different. For some the risk might be on the product side, on the market side, on the capital side, on the recruiting side, etc. 

So I was interested the other day when I was meeting with a client who has used offshore software development firms in the past and he said “With offshoring, most people think the risk is on the technical side, but the risk is actually on the culture side”. He went on to explain that a software development team in Appistan might have the technical chops but they just don’t understand how to do agile methodology working in cooperation with a remote team, or they didn’t understand the Silicon Valley work ethic, or they didn’t understand how to mesh with an American client’s sprint cycles, or their standards for code quality were different, etc.  

I hadn’t heard it described that way before – with offshoring the risk is on the culture side – but it totally rang true to me. At Tivix, probably 25% of our new-client inquiries come from someone who has had a bad experience offshoring and they are contacting us specifically because we’re a Silicon Valley company. And the stories that they tell about how the project went wrong are seldom on the technical side; they are usually related to culture and process. 

Tivix, of course, has offices in Poland and in London, so there is an “offshore” component to our operations, but we’ve worked very hard to have a unified culture within the company. We fly members of the Poland team over to work in the San Francisco office regularly, and vice versa. We spend a lot of time together in both the physical and virtual worlds, and we are all well-steeped in the same technologies, methodologies, and approaches to agile development. Perhaps most importantly, we always staff projects with a mix of Tivix team members from our various geographies. So a six-month long client project might have Tivix engineers from SF, NY, Poland, and the UK, all working on it together on that one project. That’s a pretty good way to make sure there’s always cross-cultural knowledge sharing going on at Tivix. 

Correctly identifying risk is a key component to a successful business. And we’ve spent a lot of time mitigating culture risk at Tivix (even though we didn’t necessarily know that that’s what we were doing!).