Since the financial crisis of 2008, the United States had offshored over 2.4 million jobs. It has become a usual and popular business practice, demonstrated by some 300,000 positions moved abroad annually even now.
Companies have many reasons to follow this trend: It lets them decentralize their operations and focus on their core business fully. Most importantly, it is perceived as a fundamental cost-cutting tool; 57% of companies see the cost efficiency as the main reason for offshoring. Sometimes this manifests through better financial conditions in the target destinations, such as tax benefits or financial incentives. But in most of the cases, it is driven by the desire to employ cheap, foreign labor.
How does this predisposition form the employer-employee dynamics? Companies that adopt a “profit-first” lense sacrifice important milestones of the employment relationship. Promoting company values and loyalty is side-lined and foreign workers become more likely to suffer from poor treatment.
Farrukh Mahboob, the Founder & CEO at VisionX & PackageX, New York-based AI solutions companies with operations in Pakistan, has been preaching a different philosophy towards his foreign workforce. Farrukh says that preventing alienation and uplifting every single individual fosters diversity and creates a win-win situation for both employers and employees. He sees the development of human capital and talent as the primary concern of each business.
StartupBeat spoke with Farrukh more in-depth about his management philosophy in an interview below, which has been edited for length and clarity.
StartupBeat: I understand you chose Pakistan because you wanted to economically enhance the lives of workers around the world. For businesses searching for their next or first international location, what countries or parts of the world would you recommend?
FM: I’ve worked and lived in six countries across four continents over the past 16 years in addition to spending a good part of my life in Pakistan. It’s always best to start from the position of your own strength. You might have a greater knowledge and understanding of the society, local dynamics, and the language along with the personal and professional network. Pakistan hence became the obvious first choice, and that is just the beginning. We have a strong team of 70 individuals managed on the ground by my Co-Founder & Managing Director.
Our client base and product deployment stretches over 28 countries. We have undergone an organic growth in the span of fewer than two years that allowed us to build up a global workforce in China and Europe, besides our US Headquarters in New York, where I am stationed, and our Chief Operating Officer works out of the Bay Area.
The long term strategic goal of VisionX and PackageX is to enable a global technology innovation and delivery ecosystem – we follow the best talent and weigh the elements of right leaders and partners in each country that align with our mission, vision, and operating philosophy.
Pakistan is strategically located with a population of 220 million. The literacy rate is as high as 87% and half is fluent in English. The technology and startup scene is building up fast with multiple incubation centers emerging rapidly. Likewise, the curriculum refresh and R&D activities at the leading technology universities are aligned with the global market and industry needs. The millennial and generation-z cohorts in Pakistan are as hungry for cutting-edge innovations as in any developed country. We see that as an opportunity for us: not only to connect global demand and supply for economic uplifting, but also to act as a platform for these demographic segments and unlock their dreams while maximizing their abilities.
At the end of the day, this world needs individuals who are self-aware, motivated, and ready to push themselves out of their comfort zone to level-up and be an active part of the society that thrives on mutual respect, trust, care, and passion to change the face of the world.
Long story short, any country with such ingredients is a valid choice. The key is for the business and startup founders to be willing enough to stand up and drive this global change, instead of looking at some countries only to outsource labor-intensive and non-creative work. It requires a new approach to create, build, nurture, and integrate global societies, industries, and markets. I call us a “mindset company” first.
With the right mindset, you can do wonders while sitting anywhere in the world. It is the main step towards the borderless future.
StartupBeat: How important is the cultural similarity to the success of an international country expansion? And what can be done to close the gap between large cultural differences?
FM: Prioritizing culture remains the most critical factor of any startup or an enterprise. It is however two-fold. The first aspect is establishing core values and the operating philosophy of the Founder and C-suite. These global values stay mission-driven and align well with the country-level variations. The second aspect is to understand the culture of the markets, industry, and the customers we serve. Harmonizing culture across regions is challenging. We must partly retain the integrity of the local culture as long as the crux of our core values is followed each day. Connecting these two eventually defines who we are and fortifies the sense of community.
A couple of things to consider here include:
- Enable a system of knowing and understanding each member of the global team and developing various cohorts feeding into global talent and performance management.
- Provide a best-in-class workplace consistent with US standards along with opportunities to engage, learn and grow to build an effective community.
- Hire for single skill-set across geographies to enable cross-cultural pollination.
- Offer on-job training, international assignments, and participation in the company-wide events for collaboration, knowledge sharing, and connecting at a personal level.
- Mandate customer-level understanding before the start of the new engagements to understand customers’ business, culture, and even the vocabulary these use.
- Organize communication coaching activities with a due focus on emotional intelligence.
- Organize travels of the executive(s) to the international sites every quarter.
StartupBeat: Do you find there is less unity between teams scattered across different countries and time zones? If so, how can a company mitigate these issues?
FM: Working remotely across diverse teams is a skill that we all must get comfortable with. It does get challenging at times due to various time-zones, and cultural differences. We live in a digital world that is up 24×7. The global workforce model with its inherent challenges is, however, the only way for businesses to go international. No way in the world, will we have the luxury of having all the talent in one city or a country. My philosophy is to go where the best talent lives, make them aware of what they are getting into with clear articulation of ups and downs. Nothing great comes easy, and the startup life demands a lot more with high rewards.
One of the critical areas we are optimizing is the task and progress logging every day. As an example, when our teams in Pakistan are ending their workday, the team in the US is starting theirs. They can do digital hand-offs to keep the momentum going. Besides enabling robust and agile development processes, what helps is including daily stand-ups via Zoom, collaboration on Slack, and tracking via Trello or JIRA. Companies across the globe generally struggle with these issues and we certainly see a lot of space for improvement here.
StartupBeat: What advice do you have for CEOs that are considering utilizing international talent for their business?
FM: As I mentioned above, this is the only way for you to scale and go-big. You must stay closely involved in the early part of the setup and establish mechanisms for the daily pulse available to you with actionable insights. At the same time keeping the leaders on the ground is a strong advantage. A simple principle of Jeff Bezos on staying customer obsessed makes a big difference.
At the personal level, setting the foundation right along with empowerment and delegation is working out well for me. I also recommend traveling to all the sites periodically and allocate time to connect with the team members on the ground. People expect to hear from you more often, and that works as jet fuel for growth.
Disclosure: This article includes a client of an ESPACIO portfolio company