Another cost of living report for 2010 has been released by Mercer. Based on over 200 goods and services, the report brings you factual price information from more than 290 cities around the world. The top of the list covers the well known players, Tokyo, Moscow, Geneva, and so forth. However, the - quite unexpected - number one is Luanda in Angola. More than the half of Luanda's population lives in poverty. Even standard services as safe drinking water are in short supply, this makes Luanda the most expensive city for expatriates.
Further reads:
http://finfacts.ie/costofliving.htm
http://www.guardian.co.uk/news/datablog/2010/jun/30/city-costs-living
http://www.mercer.com/costoflivingservices
Thursday, November 25, 2010
Saturday, September 18, 2010
Off topic: Oktoberfest in Munich
Today the Oktoberfest in Munich has started. It’s the biggest festival worldwide with more than 6 million visitors and a perfect mix of entertainment, eating and drinking. During the traditional opening ceremony in the “Schottenhammel” tent the mayor of Munich had the honor of tapping the first keg of Oktoberfest beer.
The festival takes place at Theresienwiese in the center of Munich. And guess where I am living? Right... Munich :) This year the Oktoberfest celebrates its 200th birthday and the whole world is celebrating with it (at least I do). The festival will last until October 4th, so don’t expect many posts within the next two weeks ;)
Links:
Official Website
Oktoberfest (Wikipedia)
The festival takes place at Theresienwiese in the center of Munich. And guess where I am living? Right... Munich :) This year the Oktoberfest celebrates its 200th birthday and the whole world is celebrating with it (at least I do). The festival will last until October 4th, so don’t expect many posts within the next two weeks ;)
Links:
Official Website
Oktoberfest (Wikipedia)
Saturday, September 11, 2010
Challenge India Part 2: How to handle specifications?
This article is a follow up to: Challenge India (for western cultures) Part1, section “specifications”
Work packages for external service providers are set down in specifications. A specification document is created by subject matter experts in the client company and passed to the service provider. After implementation the service provider hands over the deliverable to the client, expecting his acceptance.
Unfortunately that’s the way western companies handle their business relation with Indian vendors and even believe it really works this way. Eventually the companies realize that the deliverables are far from what was expected. If the specification was written on abstract level, the service provider team doesn’t know exactly what to do. But without demanding further information they start to work according their own interpretation; needless to say that the deliverable won’t match your expectation.
If the specification is written on a very detailed level, the service provider team follows each instruction without reconsidering if things make sense or not. In most cases the deliverable also won’t match your expectation. So how to write the “perfect” specification?
1) Let the service provider write the specification.
Give a rough guideline of the specification contents and the expected deliverables. Let the service provider write the specification in their own words with their understanding. Accompany the creation of the specification, ask for drafts on regular basis and clarify different views immediately.
2) Use an incremental approach.
If it takes 10 months to implement a deliverable, insist to get provisional results presented on regular basis, e.g. every 4-8 weeks. This ensures that misunderstandings are identified as soon as possible and corrective actions can be taken on the spot. Include the approach of iterative delivery cycles already in the specification document, i.e. what is presented when. Not at any time accept an approach with a single final deliverable only.
For sure, both points take more time in setting up the specification and lead to higher costs in the very beginning. But this additional effort will definitively save costs in subsequent project phases.
Work packages for external service providers are set down in specifications. A specification document is created by subject matter experts in the client company and passed to the service provider. After implementation the service provider hands over the deliverable to the client, expecting his acceptance.
Unfortunately that’s the way western companies handle their business relation with Indian vendors and even believe it really works this way. Eventually the companies realize that the deliverables are far from what was expected. If the specification was written on abstract level, the service provider team doesn’t know exactly what to do. But without demanding further information they start to work according their own interpretation; needless to say that the deliverable won’t match your expectation.
If the specification is written on a very detailed level, the service provider team follows each instruction without reconsidering if things make sense or not. In most cases the deliverable also won’t match your expectation. So how to write the “perfect” specification?
1) Let the service provider write the specification.
Give a rough guideline of the specification contents and the expected deliverables. Let the service provider write the specification in their own words with their understanding. Accompany the creation of the specification, ask for drafts on regular basis and clarify different views immediately.
2) Use an incremental approach.
If it takes 10 months to implement a deliverable, insist to get provisional results presented on regular basis, e.g. every 4-8 weeks. This ensures that misunderstandings are identified as soon as possible and corrective actions can be taken on the spot. Include the approach of iterative delivery cycles already in the specification document, i.e. what is presented when. Not at any time accept an approach with a single final deliverable only.
For sure, both points take more time in setting up the specification and lead to higher costs in the very beginning. But this additional effort will definitively save costs in subsequent project phases.
Sunday, August 29, 2010
What would happen if all countries dismiss their immigration restrictions?
Gallup released its Potential Net Migration Index (PNMI) for 2010. The index considers the estimated number of adults who would like to move permanently out of a country subtracted from the estimated number who would like to move into it, as a proportion of the total population. The index is a result out of 350,000 surveys conducted between 2007 and 2010 and reflects how much the population would increase if countries dismiss their immigration restrictions. The index finds Singapore, New Zealand, Saudi Arabia at the top, and Sierra Leone, Haiti, Zimbabwe at the bottom.
Read the whole story at: http://www.gallup.com/poll/142364/Migration-Triple-Populations-Wealthy-Nations.aspx
Read the whole story at: http://www.gallup.com/poll/142364/Migration-Triple-Populations-Wealthy-Nations.aspx
Friday, August 20, 2010
Keep hubs independent
Local sites are thousands of miles away from the company’s headquarters and hesitate to follow global processes. They have their own mode of operation and don’t see the need to align already established processes with harmonized global standards. These global standards are set by subject matter experts consolidated in centralized departments, called hubs.
MNC’s usually locate centralized hubs in the headquarters location of the company. This is a widely accepted approach with proven success in many companies. However, I strongly suggest to build hubs also at branch locations. E.g. Microsoft’s headquarters is in Redmond (WA) but their hubs for search technology are in Munich and Shanghai. The major benefit of this approach is that local hubs increase the acceptance of global standards within the whole company.
Local sites rather follow global processes set by a hub physically located on their site compared to a headquarters hub. Furthermore, once a local hub is established, other branches will follow this approach. They try to harmonize companywide processes and build a hub on their own location.
The good thing is that the acceptance of global harmonization is severely increased in companies implementing headquarters and site hubs. However, global managers have to take care for one important thing in the whole story: The local sites will try to influence “their” hub; means prioritizing their own site requests ahead of other sites or standardization driven by headquarters. If the rest of the company realizes that the “centralized” hub is influenced by local factors, the hub’s acceptance will decrease dramatically.
Never let local forces spoil your global organization.
MNC’s usually locate centralized hubs in the headquarters location of the company. This is a widely accepted approach with proven success in many companies. However, I strongly suggest to build hubs also at branch locations. E.g. Microsoft’s headquarters is in Redmond (WA) but their hubs for search technology are in Munich and Shanghai. The major benefit of this approach is that local hubs increase the acceptance of global standards within the whole company.
Local sites rather follow global processes set by a hub physically located on their site compared to a headquarters hub. Furthermore, once a local hub is established, other branches will follow this approach. They try to harmonize companywide processes and build a hub on their own location.
The good thing is that the acceptance of global harmonization is severely increased in companies implementing headquarters and site hubs. However, global managers have to take care for one important thing in the whole story: The local sites will try to influence “their” hub; means prioritizing their own site requests ahead of other sites or standardization driven by headquarters. If the rest of the company realizes that the “centralized” hub is influenced by local factors, the hub’s acceptance will decrease dramatically.
Never let local forces spoil your global organization.
Friday, August 6, 2010
Friendly reminder: Unleash your passion!
Richard St. John, author and speaker, makes a long story short and summarized his 8 secrets of success in 3 minutes: http://www.youtube.com/watch?v=Y6bbMQXQ180. Following my blog gives you the impression that I definitively agree Richard’s number one secret of success: Passion. Passionate people are that what success is all about. Doing a job you’re not passionate about is working for money, pursuing your passion leads to success; your personal success and the success of the company you’re working for. Find your passion and realize it!
Monday, July 19, 2010
Challenge India (for western cultures) Part1
No doubt, the evaluation of outsourcing and offshoring locations brings you in touch with India. Mumbai, Chennai, or Bangalore are emerging cities offering services for any kind of business processes. Low labour costs, strong technical expertise, and good English skills are the pulling factors making India an attractive place. However, dealing with the Indian subcontinent can be a challenging task especially for people from a western culture. Here are the 3 most challenging issues when doing projects with Indian contractors:
Feedback
In India weaknesses and failures are not admitted in public; it might result in losing face. So before someone admits a failure he tries to cloud it with vague statements. Therefore the client can’t expect an early warning if a milestone is not achieved. Western cultures treat a deadline as given, so 5th of September means 5th of September and not 6th, 7th or 15th. From Indian perspective time is stretchable; they see a few days delay still as delivery in time. Together with the Indian "optimistic" style of planning this brings projects into trouble.
Specifications
Projects start with user requirements usually written down in a specification document. If the specification is written on abstract level, people don't know exactly what to do. Without demanding further information they start to work according their own interpretation. If it's written too detailed, people follow each instruction without reconsidering if things make sense or not. The first presentation of an interim deliverable (and I hope you have interim deliverables in your project) ends up with an unpleasant surprise for the client.
Contracts and agreements
In western cultures contracts are final after signed by both parties. An agreed fixed price is a fixed price. In India a fixed price is often treated as guideline, a point of reference. It is considered normal to renegotiate or to charge extra cost during the contract period of validity. The major issue is that during contract negotiation, the Indian party fully agrees to the fixed terms without mentioning the possibility of extra charges. On the other hand, the western counterpart does not even think on upcoming extra charges after signing; they take the approval of the Indian counterpart as fixed agreement. And as soon the Indian party starts the first attempt to renegotiate the price, the clash is inevitable.
Feedback, specifications, and contracts; 3 Indian challenges. In the next “Challenge India” articles I will advise how to deal with these challenges and make projects with Indian contractors a success story.
Feedback
In India weaknesses and failures are not admitted in public; it might result in losing face. So before someone admits a failure he tries to cloud it with vague statements. Therefore the client can’t expect an early warning if a milestone is not achieved. Western cultures treat a deadline as given, so 5th of September means 5th of September and not 6th, 7th or 15th. From Indian perspective time is stretchable; they see a few days delay still as delivery in time. Together with the Indian "optimistic" style of planning this brings projects into trouble.
Specifications
Projects start with user requirements usually written down in a specification document. If the specification is written on abstract level, people don't know exactly what to do. Without demanding further information they start to work according their own interpretation. If it's written too detailed, people follow each instruction without reconsidering if things make sense or not. The first presentation of an interim deliverable (and I hope you have interim deliverables in your project) ends up with an unpleasant surprise for the client.
Contracts and agreements
In western cultures contracts are final after signed by both parties. An agreed fixed price is a fixed price. In India a fixed price is often treated as guideline, a point of reference. It is considered normal to renegotiate or to charge extra cost during the contract period of validity. The major issue is that during contract negotiation, the Indian party fully agrees to the fixed terms without mentioning the possibility of extra charges. On the other hand, the western counterpart does not even think on upcoming extra charges after signing; they take the approval of the Indian counterpart as fixed agreement. And as soon the Indian party starts the first attempt to renegotiate the price, the clash is inevitable.
Feedback, specifications, and contracts; 3 Indian challenges. In the next “Challenge India” articles I will advise how to deal with these challenges and make projects with Indian contractors a success story.
Monday, July 5, 2010
Benefits of global organizations
My blog might give you the impression that I advocate global organizations. Hmmm..., I think you are right ;) I am writing about global teams, the challenges they face, and share proposals to improve their effectiveness. “But why?” you might ask. Here are the 3 most important benefits of global organizations:
Quality improvement
Standardized processes are easier to monitor, quality issues can be identified on the spot. Team members use best practice sharing to ensure all sites have the same know-how. Once processes are harmonized and know-how is spread, Operations can be setup as 24h / “follow the sun” support without additional labour costs.
Costs reduction
The processes on all locations are harmonized; duplicate structures are identified and eliminated. This generates synergies and reduces costs. Furthermore companies gain transparency with a global chart of accounts. All departments in a global organization are posted with the same accounting rules.
Speed increase
In fast-paced environments processes change on regular basis. A harmonized process needs to be changed once, with immediate effect on the whole company. Furthermore MNC’s save time in re-use of documents, software applications, and other project deliverables.
If you think “sounds nice, but in my company it’s not possible,...”, then please remember, the benefits are due in EFFECTIVE global organizations only. If your organization is not yet that effective, I suggest to follow the blog, take some of my advices, and share your experience with me. I’m sure my blog is an interesting read for professionals and managers working in a global environment.
And a final word: changing to a global setup doesn’t pay back in 6 or 12 months. Usually it takes at least 2 years until global organizations are effective.
Quality improvement
Standardized processes are easier to monitor, quality issues can be identified on the spot. Team members use best practice sharing to ensure all sites have the same know-how. Once processes are harmonized and know-how is spread, Operations can be setup as 24h / “follow the sun” support without additional labour costs.
Costs reduction
The processes on all locations are harmonized; duplicate structures are identified and eliminated. This generates synergies and reduces costs. Furthermore companies gain transparency with a global chart of accounts. All departments in a global organization are posted with the same accounting rules.
Speed increase
In fast-paced environments processes change on regular basis. A harmonized process needs to be changed once, with immediate effect on the whole company. Furthermore MNC’s save time in re-use of documents, software applications, and other project deliverables.
If you think “sounds nice, but in my company it’s not possible,...”, then please remember, the benefits are due in EFFECTIVE global organizations only. If your organization is not yet that effective, I suggest to follow the blog, take some of my advices, and share your experience with me. I’m sure my blog is an interesting read for professionals and managers working in a global environment.
And a final word: changing to a global setup doesn’t pay back in 6 or 12 months. Usually it takes at least 2 years until global organizations are effective.
Sunday, July 4, 2010
Off topic: Germany vs. Argentina 4:0
My passion is cultural diversity, to establish relationships across cultures. However, during soccer World Cup my intercultural focus shifts from diversity to Germany only ;)
Yesterday Germany send the Argentina team back home with an outstanding 4:0, the week before England was gone with 4:1. (Including a somehow "delicate" goal disallowed by the referee. At least the German complaining about Wembley 1966 will stop now)
Yesterday Germany send the Argentina team back home with an outstanding 4:0, the week before England was gone with 4:1. (Including a somehow "delicate" goal disallowed by the referee. At least the German complaining about Wembley 1966 will stop now)
Monday, June 7, 2010
What are global organizations?
The marketing team is located in Singapore, the IT in Bangalore, and headquarter is based in London. Call it global organization? Sure, you can. This is one type of global organization; the departments are acting from different continents, but the functional responsibility is clearly assigned to one site. The challenges for a team lead, project manager, or business analyst are the interfaces between the different departments. This type of global organization has external interfaces which are cross functional and cross cultural.
However, there is another type of global organization. For example, an IT department responsible for the company accounting software. The project is managed in London, the database software developed in Mumbai, and the user interface configured in Hong Kong. Additionally the accounting rules are adapted according regulatory rules by the local operation teams in each country. All functions are needed to generate one product, the global accounting software, and all functions are reconciled in one IT department. So you still have the external interfaces to Finance, Accounting, Sales, and every other department using the software, but additionally you have internal interfaces within the department. E.g. the database developer in Mumbai needs support from an interface programmer in Hong Kong and vice versa. As this kind of global organization has internal and external interfaces, it is much more difficult to manage compared to organizations with external interfaces only.
When I write about global organizations, I reference to organizations with
The biggest challenges in my career were the alignment of internal interfaces; to make worldwide teams with different backgrounds, interests and goals, pulling in the same direction.
However, there is another type of global organization. For example, an IT department responsible for the company accounting software. The project is managed in London, the database software developed in Mumbai, and the user interface configured in Hong Kong. Additionally the accounting rules are adapted according regulatory rules by the local operation teams in each country. All functions are needed to generate one product, the global accounting software, and all functions are reconciled in one IT department. So you still have the external interfaces to Finance, Accounting, Sales, and every other department using the software, but additionally you have internal interfaces within the department. E.g. the database developer in Mumbai needs support from an interface programmer in Hong Kong and vice versa. As this kind of global organization has internal and external interfaces, it is much more difficult to manage compared to organizations with external interfaces only.
When I write about global organizations, I reference to organizations with
- internal and external interfaces
- cross functional and cross cultural interfaces
The biggest challenges in my career were the alignment of internal interfaces; to make worldwide teams with different backgrounds, interests and goals, pulling in the same direction.
Tuesday, June 1, 2010
Welcome to Michael's blog
Organizations in multinational companies pretend to be global. In reality they are not aligned, losing performance, and do not cooperate. This blog supports you in working with global organizations and how to make them more effective. It focuses on the cooperation between South East Asian and European cultures.
Global organizations and intercultural management, two subjects tied together and are most important in today’s business life. I managed international projects in Asia and Europe, projects which further developed the global position of the company I am working with. Cultural diversity was the most essential factor in all projects. Team members from Singapore, Taiwan, India, China, Germany, Portugal... joined my challenge. I saw projects succeeding, I saw projects failing, and most important, I saw projects turning around.
Happy reading!
Global organizations and intercultural management, two subjects tied together and are most important in today’s business life. I managed international projects in Asia and Europe, projects which further developed the global position of the company I am working with. Cultural diversity was the most essential factor in all projects. Team members from Singapore, Taiwan, India, China, Germany, Portugal... joined my challenge. I saw projects succeeding, I saw projects failing, and most important, I saw projects turning around.
- What does it take to make projects turn around?
- How to keep the team’s performance on high level?
- Whom to involve to successfully achieving milestones?
Happy reading!
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