Offshore Deathtrap - Luis Derechin

Ian Altman 0:02

Ian, welcome to the same side selling podcast. I am your host. Ian Altman, I know it's always a shocker for our regular listeners that I'm the host, but yes, still the host. So if you've ever tried building an offshore or remote team. You know, it can either be a massive accelerator with great benefits or a train wreck. And today's guest has seen both sides of it. Luis direction is a guy I've known for years. I consider him a good friend. He's the author of the offshore dream death trap, a new book that exposes the seven hidden mistakes that cause many offshore projects to fail, and a practical framework for making them work. We'll start with the biggest traps that leaders fall into. Then we'll pivot to Luis's wisdom that he shares in the book using the systems and mindsets that separate the top performing teams from the rest. Luis, my friend. Welcome to the show,

Speaker 1 1:01

Ian, it is a pleasure, and, dare I say, an honor to be here. As you know, for years, I've been a fan of yours, of your show, of everything that you've accomplished with your book. I was one of the early purchasers. Don't know if you remember that way back in the day, so just having the opportunity to share stage with you again is an honor and privilege.

Ian Altman 1:22

Thank you. Thanks so much. And you said it was an honor. I was thinking. You thought it was someone else's show. So so let's start where many people struggle. So you call your book the offshore team death trap. What are the biggest mistakes that you see companies make when they try to build or manage offshore teams?

Speaker 1 1:43

That's very important question. So first, I think we have to step back a second and ask, why do people want to buy or form offshore teams? Right? Sure, because we have to understand the motivators behind that, of course. And the the main motivator typically are two, and it's a combination of the two. Number one, they the companies are having a hard time hiring the talent that they need, right? I mean, we're in talent wars, and really good talent is typically not readily available. You know, the unemployment rate, especially for tech, you know, positions and others in the States, it is in the very, very, very low single digits. So when you have mid market companies, startups, small companies, even some large companies, whenever they want to hire someone all of a sudden, they're having issues finding the talent and then convincing the talent. And then the second big motivator is if you can convince someone all of a sudden, it's going to cost you an arm and two legs, right? The days of an arm and a leg are gone. Now it's actually both legs. So because of that, people are companies have are extremely motivated in order to find the right talent and find the right affordable talent, right? And the I'm emphasizing the word affordable is they do it through going offshore, right? And what that means we'll get into a second by going elsewhere. And instead of just looking in the US, they tend to go offshore and then build those teams so availability and affordability, and if you can hire three people or four people for the price of one and they're more readily available, all of a sudden, business plans or growth plans, or the ability to deal with rapid growth for these companies become a real possibility, instead of fighting a war for talent, as is usually a case in the states traps, does that make sense?

Ian Altman 3:47

Absolutely so. And what I find is that for a lot of my clients, it's just what you're saying, which is, they've got demand, they need to hire people, but they can't find them. And if you're in the US market, and you're dealing in a space that has a 2% or 3% unemployment rate, you're kind of scraping the bottom of the barrel, and if you can get someone offshore, and guess what, they may have phenomenal credentials, they may have great experience, but they may be living in an environment where they don't have the benefit of a two or 3% unemployment rate, they may have a much higher unemployment rate, which means you can often get amazing talent at a more affordable price. And so that all sounds attractive, but I know that when people do that, sometimes they make some critical mistakes that you talk about these death traps that are in there. So once people identify, look, yeah, I'm not finding the talent I need, or I'm going to be overpaying for that talent, and I got to fill that gap. What are the mistakes that people make once they start to go down that path? Agreed?

Speaker 1 4:54

And again, I'll let you know the mistakes. I'll just throw out one statistic because you sort of mentioned it and what you saw. It so people realize, hey, you know, in order to keep up with growth, right, just be able to work my company into the size that it's growing, I need to hire offshore. So they go out and they do it. 27% success rate. That means that almost three quarters of all of these projects where people say, I'm going to go out and hire someone, because it's a great idea. I'm going to save money be able to hire more people. They go out, they try it, and all of a sudden they fall flat on their face. 73% of projects fail. So yeah, how can we go about avoiding failures? So first of all, to answer your question, because it seems as if I'm skirting it. I'm not. So there are seven typical pitfalls that people fall into. We've named them across 200 plus engagements that I've been a part of. You know, I started seeing these patterns. So what we did at my company and myself is we started to catalog these, and then, by cataloging them, categorize them in order to be able to respond to the question you're asking. So number one, we call it the talent mirage. And these are skills that look very solid on paper, but under real world pressure, they sort of fall by the wayside. How we solve those we'll get to a second. Number two, we call the cultural chasm. So people in the US and entrepreneurs or executives in the US assume that if they hire someone that has an English speaking resume and that the person can somewhat communicate in English, then they're going to solve all of the integration failures or onboarding failures, that that hiring someone from from a different country can have, not true. So that's a cultural chasm. Number three, the hidden cost spiral. So in executives, in order to be successful, go out and then they hire a company that is going to help them in doing this, in order to improve the possibility of success. And it turns out that these companies weren't transparent with their pricing. So there's a whole bunch of costs that are hidden. And little by little, costs got ramping up so the savings don't materialize. Number four management quicksand. So the fact that these people are working remotely and in another country, sometimes with big time zone differences, can create time sinks that may turn what executives meant to be an offshore role with as much management as local teams. It may end up creating the need, the necessity to have more management and the ability to grow is also stopped by that next the retention revolving door, which is constant turnover that may prevent the team from ever gelling. The next to last one is communication fog, right? The inability to communicate, whether for language, Time Zone, whatever reasons. And then all of these things lead to quality erosion. So as you look at this list, these are all things that seem easy enough where I could avoid them, but the reality Ian is that they sort of fall into these traps by not knowing the traps exist and making, you know, standard business decisions.

Ian Altman 8:20

It's interesting. In our business, we've embraced some offshore talent, and some of the things that we figured so early on, we use different platforms to try and find talent, and we'd engage people and realize they weren't skilled. One of the things that we move to is, first, we interview for culture fit to make sure that the people get along with our people and that, like, it's the kind of people they want to work with. It's the same thing you would do if it wasn't offshore, right? Like, are these people going to fit my team? And then what we typically do is we would hire people on a specific project that may have already been completed, but we don't care. It's like, Look, I just want to see, can they do this in the right timeframe, and it'll demonstrate their skills. And interestingly enough, you mentioned the time difference. We intentionally have some people on our team who are, in essence, completely opposite time zones to us, so that there are things that we do every month where we do a live coaching session each month, and we have people who produce that information right when it's done, and what it means is that we have teams who are in the same time zone, or relative same time zones, to us, who do some of the work. And by five o'clock in the evening, they've handed it off to a team that's overseas, let's say in Asia. They then do that work and hand it back, so that by the next morning, our clients are thinking, Man, I can't believe you guys did this like that quickly, overnight. It's like, well, you know, we worked for 14 hours. It's just you were thinking that 12 of that was off hours, and it actually was right in their wheelhouse. So it's actually, you know, if you can embrace this stuff properly, it really gives you an accelerator effect. But once again, I think it gets back. Back to those traps of you know that you're helping people identify because early on, I was totally oblivious to these things.

What you just said is sort of the prototypical use case. The big difference is you, as in everything that I know about you, for years, you just kept at it until you figured it out. The difference between that persistence that Ian Altman has versus what happens with most executives is they go out, they hire and the first time they're not successful, they may try it a second time, and instead of all the things that you just said, right? Well, we tried this, and then we figured out this platform, then we did this, and then we did this in order to solve your problem. Most people basically say offshore doesn't work, and then they put it in a drawer and never try it again, which is a consequence of, you know, again, if three quarters of all projects fail, you're going to try it once, twice, three times more than likely you're those three times are going to fail before you get to the fourth one. So your persistence paid off, but in most cases, it doesn't, and because it doesn't, people end up giving offshore a bad rap, right? People offshore won't work. I can't do this. It's too difficult, and then they scuttle it and then doing so what you just said is they don't figure out a way to work to actually create incredible benefits that US companies can have if they do this correctly. Couldn't agree with you

more, yeah, and it's interesting, because for us, you know, we have project management people who are this there to make sure that we know what people, whether they're domestic or offshore, it doesn't matter. It's like, what are the priorities? What are we getting done? Who's the go to person when it comes to this problem, this problem, this problem or that problem, so that no one's wondering who's going to do this. Because that cultural fit that you talk about is so incredibly powerful, because there are some parts of the world where we know we get people and they'll do exactly what we tell them to do, but they won't necessarily take initiative, because culturally, they don't know what they're allowed to and not allowed to take initiative on and when we communicate, look, we want you to try these things, and we're okay if you try this three times and you fail all three times, but you had a good strategy, we're okay with that. And all of a sudden they're like, really, yeah, oh, I tried this. Hey, I tried the second time. It actually worked, right? Okay, great. But I think too often it's almost like, I think people have a mindset that, like, okay, it's not going to work. So as soon as there's the slightest speed bump, they're like, See, I was right, this doesn't work. And what I want to shift to is, in the book, you talk about this remote framework and remote you have as an acronym also, but it sounds like that's kind of the antidote to these traps that that you laid out.

You're absolutely right. And again, kudos to you, because as we go through the acronym, the remote acronym, you will see how what you indicated that you were trying to do, or that you actually do, is a lot of these acronyms, and it's important, the framework that we were putting out there isn't so that, you know, people think that this is a special formula or secret sauce or something. These are, again, you know, so some things that are just pretty logical. But if people are aware, if executives or startup are aware of what they have to do, then they can increase their probabilities of success. We have a 95% success rate versus 27% just by following this framework. So hopefully these conditions will make sense. So right?

I'm trying to do the math 95% versus 27% Hold on, carry the one. Oh, yeah, that's a much better outcome. Yeah, I just want to make sure I was doing the math, right?

Yeah, just slightly better. Yeah, agreed. So remote is an acronym, as you indicated. R stands for rigorous talent selection, right? I'll go through this and just some examples. So exactly what you said. Ian, so we no longer just hire through LinkedIn platform or acquaintances without being absolutely rigorous about, you know, what kind of culture they have, what kind of knowledge they have, right? We bring them on on a project, even if it's finished. You just said it in order to try these people, test them out and before agreeing to full time employment or consultancy, we have to make sure that we're extremely rigorous about the talent we select. That's the first 1e. Expert, onboarding and integration. You also said it right. We have to talk to these people. We have to make sure they know what's expected. What can they do? What can't they do, right? How are we going to communicate when X, Y or Z happens? Right? What are they expected to do? So it's onboarding and then integrating them into your team with intentionality, right? Because a lot of companies figure, oh, they're there, they'll listen, and then they'll be able to onboard themselves. No, it has to be intentional. Know, M manage support and services, and by that we mean you have to treat individuals who are working remotely outside of your office as if they were working internally. You have to provide them with the support the support mechanisms, equipment, right? If it's a birthday, you wish them happy birthday. If there's a sickness, make sure you're checking in on these people right out of sight, out of mind. You have to be, again, intentional about making sure that they're not out of mind. And if they're part of your team, even if they're not close to you, right the way that you would someone working shoulder to shoulder with you, wish them a happy birthday, or see what's happening and death and whatnot. So provide the right levels of support. The O is optimized team performance. You indicated this as well. We have certain KPIs, certain ways to measure whether people are doing a good job, aren't doing a good job, feedback loop in order to bring them into the loop and make sure that they're working out, because you want to be able to identify as soon as they're not in order to correct it, sure T transparent cost plus pricing. If you work through an agency, if you work through a platform, you want to know how much the person that's doing the work is making. Oddly enough, it's incredible. Ian, you'd be surprised how many of these instances, the middleman, or a middleman ends up making more than the person doing the work, and then this person isn't motivated enough to keep doing it. Yeah. So if ever you're going to hire someone, have the conversation, even through an agency, you need to know how much a person's making and make sure that you and that person are aligned. You want to pay them more than this person has to make more money. It's not you want to pay them more, and the middleman takes the cut and gives these people no money, right? It's just alignment. So if you do the R, E, M, o, t correctly, then you'll get to the last E, which is enhanced scalability and growth, right? You do the first five correctly. Your company will what we said in the beginning. You'll be able to deal with your growth, with your goals, with everything, because now you have a really good, strong performing team.

Make sure absolutely and, and I love stories that kind of illustrate the shift. And I know you've worked with a lot of different organizations. Can you share an example of maybe a team or a client who was stuck, and then how applying your framework and using what you guys do, you're able to flip things around for them and generate that level of productivity and scale and result that they were looking for. If you want to get top results for your team, take a look at the same side selling Academy. Just visit sameside selling.com to learn more.

Sure, quick story comes to mind a software company out of the Pacific Northwest. We started working with them maybe five years ago. They had attempted to scale up a team. They were doing it directly. So, you know, they hired some individuals, and when I say directly again, they interviewed, they brought on people, and then their churn rates were just out of whack because they weren't onboarding them correctly, right? Their team thought, well, if these people, you know, are good enough to work here, then they don't need onboarding and whatnot. I mean, we could go through the components of death trap and literally check off which ones they were sort of falling into. Yeah. So to make it very long story short, we sort of tweaked their process where they were interviewing. But instead of just interviewing on paper, we would do it so that we would validate a lot of the skill sets. Then we would make sure that the resume read what the real skill sets were. After that, we instigated or instituted a testing much the way that you did. So let's bring these people onto a project, you know, quick project, because you don't want to have a multi day project of just going to try out people. So do that transparent pricing in that even though my company was involved, we made sure that the alignment was there, that this company knew exactly how much they are getting paid. And by the way, I have a secret for you. They were saving money even with us involved, because previously they thought they were paying these individuals more than they were actually paying them, right. So with us, we were able to pay them rates that were more in accordance to local rates, right? And still, they paid us a very small fee, and in order to do that and manage it So, long story short, after we instituted these changes, now they've been working with us for five years, and they have a great team, which is no longer the offshore team these individuals have. Have been sort of dovetailed into their existing team. So yes, they have offshore, they have onshore, they have local, they have all these teams, and now they don't call them the offshore team, because it's no longer a team. It's a bunch of individuals that have been integrated into company projects and company processes in a way that is absolutely natural.

Yeah, it's funny because for in our organization, because we use a combination of people who are in house employees, people who are offshore in different time zones, the reality is everyone's in Slack the same way. So someone doesn't say, Oh, let's see if so and so in Argentina can do this. Let's see. It's more like, hey, let's see if Gustavo is available to help with this. I wonder if Blair can take this on later. What's Erica doing? And it's like, you know, it's just becomes part of the team. And part of what we do is we try to, anytime we bring someone new on the team, we say, look, here's the team. These are the individual skills and areas of expertise that each person has. So when you run into a snag and it looks like and it's a UI issue, you know, you ask so and so, when it's a back end database issue, you reach out to this person, that person. And then, of course, we have project management tools like Jira, where we track everything that's going on, so that if someone's working overnight, of course, not overnight for their time zone, but for our time zone. When our team comes in who's in this time zone, they know it was done overnight, because it's all tracked through project management. So it makes it so that we actually get kind of like a 24 hour operational efficiency without having to have people around the clock in our time zone. I mean, it really works out

well, Ian, again, you once again prove the fact that you are way more advanced than most individuals that I meet that are trying to do this. You've been doing it for years. You're persistent in order to achieve success. Most US executives and companies won't do this, right, just because the lack of success makes them scuttle the project. But everything you just said, if you look at the acronym that we put together, and you think about everything that you do today, after years of experience, you've basically adopted the remote intelligence framework without even knowing it

existed Exactly. So let's make this actual and keep in mind that we made a ton of mistakes along the way, and if we had known about this, if it existed, then, you know, there we could have avoided years of delay and nightmares and the death trap. If we knew it, we just kind of figured out over time. And I'm stubborn. Some people call it persistent. My wife calls it stubborn and you know, so we getting to a decent place. But if someone's listening right now and thinking, wow, I might be in one or more of those traps, beyond reading the book, what's step one to fix it? And if someone's looking to build an offshore team the right way, what? What should they be thinking about?

Well, and I'll revert back to So step number one, if you've fallen in, or you feel you've fallen into these. So first one is, you should read the book, right? That's a no brainer. And the book is out there, and it's the digital version. We put it out there for 99 cents so that people don't think that we're making, you know, a ton of profit from this, because we're not right. I mean, you know this, 99 cents is nothing, and we put it out there to make this knowledge commonplace. After reading the book, you're wondering, what do I do? So like anything, like any multi step process, the first number one is you have to realize you have a problem. Because if you don't realize you have a problem, and all you do is, you know, blame someone else or blame offshore for the project, instead of realizing, hmm, the lack of success may have something to do with me, my processes, my company's willingness, or, you know, or the way we're doing this, instead of just blaming other people for it. So step number one, let like with any framework, is realize you have a problem, then step number two, read the book. If you don't want to read the book, then, you know, just logically, go through the pitfalls that I just stated. And then if people that you're hiring don't quite fit what you thought there was in the resume, then you're falling into the death trap, right? If I thought it was going to save X, and it turns out, I'm not saving X. And, you know, I'm spending way more than I thought, you're falling into the death trap. These are all logical. So it's a matter of realizing it, and then once you realize it, the antidote is one of two, and you just said it, stubbornness, slash persistence, right? We'll call you persistent. We'll let Dad mention stubbornness. So through persistence, you sort of figure it out that's going to take, sometimes weeks, sometimes months, sometimes years. That's fine, or you follow the playbook in the book and on the website, and we'll talk about the website and in a second. Yeah, there are some PDFs that you can download in order to do the analysis. Once you've done the analysis, let's figure out playbook, and then let's figure out sort of a chronograph, as far as Chronogram, I'm sorry, as far as how do we implement these changes or these processes in order

to be successful. Yeah, you know, I think it's just, it's diagnosing those gaps early and then designing the relationship to succeed. I find that in my business, it's not even necessarily hiring cheap talent. It's that for the same money I'd be spending locally if I could find the people I'm getting, people who are really high quality talent, just having to be located outside of the US, and there are critical elements to our team, they just happen to be elsewhere. And I think that's the great realization. I think that there's this desire often to oh, I can get really cheap people. It's like, well, what if you got people who were exceptional, and you were getting the top a players, but you were paying the same as, you know, a B player, like, that's to me, it's not so much. How do you get the how do you find the cheapest labor? It's like, where do you get the greatest return per invested dollar? If I can get someone who's a top level a player, but, you know, instead of paying, if I was going to hire someone who was a junior person, and maybe I'm going to pay the equivalent of, you know, $40 an hour, but I can get a top tier, experienced, a level player for about the same money. Why wouldn't I? And I think that's the thing that when I talk to people often, you know, I laugh because, like, well, I didn't get this person for $5 an hour. I'm like, okay, in today's global, interconnected world, the guy who's willing to take the job for $5 an hour may not be the guy you want to hire.

Absolutely So. Luis, this has been great. I love how you frame these offshore teams, not as just a cost saving tactic, but it's more like a strategic partnership and getting the right people at the right time that are going to fit with people's budget and strategy to help achieve the results. So where can people learn more about the offshore team death trap, and where can they connect with you?

Thank you. Ian, again, this has been great. The value that you create for entrepreneurs, through through your wisdom is incredible. So thank you for letting me share some of that knowledge with your audience. If people want to contact me, Louis and that's or, as Ian said, Luis, l, u, i s, directorn, D, E, R, E, C, H, I N on link. LinkedIn, the book offshore the offshore team Deathtrap is actually on Amazon, and there's a website offshore team deathtrap.com, that people can go to and then contact us, buy the book, download the PDFs. I look forward to seeing more people be successful first time out.

That's great, and we'll include the links in the show notes. And so, you know, make sure that you've ever struggled with remote teams, take a good, hard look at your systems, not just the people, and that right structure can really turn frustration to focus. I love Louise, how you tied this in, because it really ties in, well, with the whole same side selling mindset of finding that fit together. And just as a quick reminder for people, that remote acronym is rigorous talent selection, expert onboarding and integration. The M is managed support and services. The O for optimized team performance, T for transparent cost plus pricing, and E for enhanced scalability and growth. You do those things you just might avoid that offshore death trap and get great results instead. So thanks so much. We'll see you next week. And Luis, thank you again for joining me. Thank you. Ian, you

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