The new leader of “the free world” is a man who has made controversial statements in the past. How he will act once in office is anybody’s guess.

US President elect, Donald Trump has made many controversial statements about people, countries, and nations. He has indicated that he would act in the first 100 days of his presidency. Whether he is true to his word and deports millions of undocumented workers, dismantles NATO or builds a Big Wall, or not, will have ramifications for the Americans and the world. However, what is clear and factual is that a pattern is emerging around the western world: with this election, with Brexit, with the rise of Marine Le Pen in France, and Pauline Hanson’s One Nation in Australia.

  • A large majority of people are voicing their anti-establishment sentiments, ‘a rejection of the elites’
  • There is a resurgence in nationalism and Xenophobia
  • There is a mass anti-globalisation movement and a shift to increasing protectionism and Isolationism

This is not unique to the West. In the Philippines, India, and Thailand similar sentiments are playing out. These views are often based on feelings and not facts.   It is precisely these feelings of protectionism, nationalism and fear of ‘others’ that must be considered in assessing some of the impacts to offshoring and all cross border transactions.

The most direct impacts lie in how employees and customers express these feelings. Imagine a xenophobic customer who reaches a Philippine agent, Indian expatriates who are pulled out of the U.S or the US declining to participate in the Asia Pacific Co-operation forum (APEC), causing the collapse of deals between Australia and China or Indonesia.  All very real cultural clashes.

What will this mean to companies that are offshore, considering going offshore or are invested in joint ventures operating cross border? How should they respond?

From an offshoring and cross border investment perspective, while on the face of it, it seems that companies may need to reconsider their migration of jobs offshore given any potential imposition of penalties –  governments will likely take a more practical approach.  In addition, it is clearly too late for many companies to pull back – particularly after 10-20 years of offshoring and the setting up of pathways for global expansion.  The impact is likely to be different for different countries, e.g. it is harder to put a tariff on a piece of code coming in from India than a piece of machinery coming in from Shanghai. Either way, it can be assumed that companies need to tread more carefully.

Companies will likely react in a few ways:

  1. Halt all plans, stay in-country and increase use of Robotic Process Automation. [This approach only works for some processes].
  2. Accelerate any moves currently planned before any penalties are imposed pushing for faster start-ups of global business service centres and quick closing of deals that have been dragging on.
  3. Slow down offshoring and cross border deals to niche processes and markets.
  4. Stay the course and manage any issues as it occurs.

All approaches that continue to maintain or increase offshoring, will need to contend with attitudes that have now been given a licence to express themselves i.e. openly xenophobic, aggressive (now believing that they have the right and might of their government behind them).  Offshore employees may face customers who are more antagonistic, more aggressive and intolerant. Worse they will likely also face these same attitudes from their onshore counterparts (particularly if employees unfairly believe that these jobs should remain in country).

Companies, must prepare themselves for these seismic shifts. Rather than a global village, we are waking to a world that is more divisive, more insular and less global.

These ripples will affect East and West employee and customer interactions in many ways –  some cross-cultural dimensions will be more markedly affected than others. Western customers feeling marginalised may use their perceived sense of hierarchy to create a sense of control.  Eastern cultures in a service delivery function, who prefer a more harmonious, collective approach will need to adjust more quickly to conflict, catering to individualistic needs. If there is no cultural adjustment, this can manifest as irritation, customer complaints and negative NPS scores, as a result of call centre agents seemingly incapable of responding to Western customer expectations.  Similarly, Eastern employees attempts to build relationships with their Western counterparts may be rebuffed leading to acrimony and resentment. Direct constructive feedback provided by Western leaders may be too emotionally received by Eastern employees or incorrectly viewed as racism. Eastern deference could very well be met with Western condescension.

One could argue that while in many cases people’s innate humanity will resolve these issues amicably, with people increasingly voicing their latent discontent, cultural differences may present more of an overt barrier.

What can companies do to prepare?

  • Equip employees who regularly work with offshore and cross border counterparts to manage and engage employees of other cultures more effectively, given our current context.
    • This applies even more so to contact centre agents who might encounter aggression or conflict. Customers are less likely to be ‘promoters’ regardless of the service if they disagree with the notion of offshoring.
  • Strategically use the right expatriates in foreign countries who have high cross cultural competencies to deal effectively through this complexity. However, the long term plan should not be to expensively embed expatriates offshore, but rather to build global competencies in local staff to service foreign markets independently.
  • For new offshoring engagements, be proactive in setting up cross cultural, performance and change programs from the get go. Don’t wait for the negative impact to your NPS and productivity and then look for a band aid.

We agree with Don Watson’s view that this anti-establishment, anti-globalisation sentiment is not a periphery feeling.  The US election has shown us this, so has Australia’s Pauline Hanson supporters. Companies need to realise that it is their customers and their employees who are feeling marginalised and voting for change.

The next step lies in dealing with these culture clashes in a way that minimises damage to customers and staff in an unfolding journey ahead.

Div Pillay is a cross cultural expert and Co-Founder of MindTribes – a 2016 Telstra Business Award Finalist company that improves cross border performance by realigning people to the foreign cultures in which they work.

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