If you run a growing company in any industry, odds are you’re looking at adding additional locations. The new location may be a satellite sales office, and additional retail outlet, or even an off-shore development office. Through a combination of growth and M&A activity each of my last two start-ups ended up with multiple development and sales offices spread around the world. I thought I’d take a few minutes to talk through some of the hurdles of timezones, process required, and the importance of people.
The relative cheapness of travel, the ubiquity of video conferencing, and the power of the Internet have all served to remove the obstacle of distance, and, to some extent, time. However, they can’t erase time-zones. Having an office on each of the US coasts isn’t a terribly big deal. In a typical ten hour work day, you’d have seven hours of overlap — plenty of time for communicating and collaborating. But if you’re a Silicon Valley company that’s outsourcing to Bellarus, or a Boston-based start-up looking at an operation in India things get pretty interesting, pretty quickly.
Really, it all boils down to communication. Depending on the functions you’re planning on putting in each office, you can have radically different communication requirements. If you have a VP of Sales sitting in Palo Alto, and a Middle-East territory manager sitting in Tel Aviv, then they can have an inconveniently timed conference call once per week without too much suffering. But if you have a development office in Bangalore, Mountain View, and Boston, then you probably have to have product managers, engineering leads, QA resources, and maybe others talking on a daily basis. 7AM in Mountain View is 10AM in Boston, and 7:30PM in Bangalore. OK, Boston is fine. But your California resources are both starting early in the morning, and being pushed into the heart of rush-hour if they’re going to come into the office. And your Bangalore resources are at the office until 8:30PM every day.
Of course, communication can be facilitated by process. And with the right processes in place, multiple offices can harmonise and raise in symphonic crescendo. For example, if you have engineering offices 12 hours apart, then each team can complete its work and hand off to the next team so you get follow-the-sun development. But the weight of the process is very important. At one particular small company (around 100 people, between $10 and $20 million in revenue), a large customer required us to be ISO 9000 certified in order to win their business. Thankfully, we talked them out of that requirement — ISO certification for a company that small could mean death by process. Processes that work great for a $100 million dollar company aren’t sufficient for a $1 billion one, and are onerous for a $10 million one. Think very carefully about what processes you’ll need when you add an additional office — and always add enough, but just barely.
And last but certainly not least — people. I already wrote about the importance of a great manager if you’re going to successfully off-shore. But even for multiple offices in the same country, or same city, the quality of your managers and the temperament of your staff is critical. Are the two offices competitive? Or complimentary? How will the morale of the existing team be affected by the addition of the new office? Do you have the right staff to deal with any time-zone issues that are involved? Ultimately, successful business is about successful people, and culture is key. Ensuring that the company’s culture is promulgated in the new office is a critical, and oft-overlooked task.
So, when you go to add a new office, no matter what size business you are:
- Make sure you have a plan to effectively nurture your corporate culture in the new office
- Make sure you have great managers at each location
- Make sure you spend time thinking about process, and that you add just the right amount
- And think about time-zones; the requirements for process dictated by them; and the impact they’ll have on your all-so-important people.
Happy “life, the universe, and everything” day!
Chris