Monday, October 27, 2008

PM Lessons from the Front – International Projects In Underdeveloped / Emerging Regions

A friend recently completed development of a new office in one of the former Soviet republics. The country is now independent and younger generations are extremely entrepreneurial, and the workers are talented. This particular company was using a firm there to provide programming services and liked the product so well they decided to buy the company. That’s when the fun began. They learned lessons that will be valuable to anyone leading projects in emerging regions. You will find their experiences to be very educational.

“Class A Building” has more than one interpretation: The building the company was located in was billed as “Class A” but seemed to be everything but. It was a Soviet era building that the owner had thrown multiple colors of paint on, and the ‘hood’ wasn’t that great. Employees insisted on leaving the facility before dark, and even during the day had to navigate through a perimeter of intimidating types. Needless to say, building systems were far from dependable. They were finally successful in finding a suitable new building using the following strategies.

  • They focused first on finding a Landlord they were willing to work with, then looked only at those properties
  • They insisted on buildings that housed other multi-national firms on the assumption that those would have better standards and that the firms could band together to leverage the Landlord when needed
  • They didn’t back down in the face of last minute gamesmanship

It’s a dangerous business environment out there: As you would expect, multiple business challenges arose. A complex legal system contributed to confusion and misunderstanding, and several parties engaged on the project tried to use the tenant’s supposed naiveté against them. Business ethics that we take for granted were in short supply. They expected to be tested on deal points, and they were. They did not anticipate the level of opportunism they would find. In one example, the Landlord put forward multiple contracts at the lease signing, some of which were obviously tax dodges. When the tenant refused to sign with any but the approved entity an attempt was made to significantly change deal points. Only when they stood their ground (read, got up and walked out) did the deal come together on acceptable terms.

Cultural differences show up in unexpected ways: This was an office for about a hundred staff members. Before the new project was built they had been working in incubator space that was barely habitable, in a poor building in a dangerous neighborhood. You would think that a design for a modern and well equipped office in a new building would be met with enthusiasm. Not so. In fact, there was a staff revolt. What was the source of all this angst? In the old space, as crummy as it was, each one of them had their back to a wall. No one was left vulnerable by having people sitting behind them or able to walk behind them. Naturally, the project was completely re-designed to satisfy this “unusual” requirement.

Look for creative risk management solutions: In the end, this group decided to transition the entire staff to Independent Contractor status. This strategy saved taxes for both the company and the workers, allowed the workers to maintain their entrepreneurial spirit, and provided a buffer for the company name and reputation.

These are only a few of the tales from the dark side of this PM’s experience on the project. However, even these are enough to make the point. When working off shore the rules are different. Make sure you understand the written ones and the unwritten ones, accommodate culture early rather than late, and stand your ground when needed.

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