This article was written by Ken Leaver who comes from a product & commercial background. He has founded multiple companies and held senior product positions at SEA tech companies like Lazada and Pomelo Fashion.
Ken runs his own agency that helps early stage companies execute faster and cheaper. Check out his linkedin at: https://www.linkedin.com/in/kenleaver/
Guest Author: Ken Leaver
I hear a lot of CEO’s talk about how they want their employees to spend more time at the office. They say things like “remote working doesn’t work.”
And I of course completely disagree. But that’s not even the point.
The point is that what they are saying is in my mind only slightly above being outright foolish.
For example, imagine the CEO of a company today saying something like “globalization doesn’t work.”
He’d literally be laughed at. That ship sailed 20-30 years ago.
And today’s topic will be me trying to convince you that ‘remote work’ is not any different.
Remember when ‘globalization’ was still a trend?
I remember being in college in upstate New York back in the late 1990’s and ‘globalization’ was the trend that everyone was talking about.
US companies were selling their products & services all around the world and domestic sales was becoming a smaller and smaller percentage of their business.
Plus companies were manufacturing more and more of their products in lower labor cost countries.
When you look at this today it seems obvious that this was going to happen.
There is literally nothing anyone could have done to stop it. Because countries were going to trade more with each other and take advantage of labor arbitrage.
It’s all part of this great system we call capitalism.
Globalization has evolved to include highly skilled, white collar jobs
These days very few people are talking about ‘moving their factories to China’. Why?
Well because they either did it decades ago or they are now moving their factories ‘from China’ now.
Why? Because Chinese manufacturing has rocketed up in cost. The average factory worker in China probably makes 5x or more than he did back 20 years ago.
Why is that? Well probably because most young people in China no longer want to work in a factory.
And since they were brought up with solid educations that were often better than what a student in the US would have gotten… they don’t have to.
Rather they’re working as computer programmers and other comfortable, well-paid, white collar jobs.
The same would be true of lots of countries like India, Pakistan, etc.
These highly skilled, white collar overseas workers are eating up jobs in places like the US
The last couple of years we have seen offshoring companies very aggressively growing. I am talking about companies that have a labor base in places like Pakistan and the Philippines who serve US and European customers.
And the jobs they perform are things like virtual assistants, marketing assistants, accountants, designers, engineers, etc
Solid white collar jobs.
The companies doing it go by names like Somewhere.com (earlier SupportShepherd), Growthassistant.com, Levy.company, and others.
They are targeting customers of all sizes and growing at rates that are often 100% year-on-year.
Why pay an American accountant $60k per year plus benefits when you can pay one in Pakstan $12k per year without benefits?
We’re talking about cost reduction ratios that start at 3x and can get as high as 10x.
To a US company that is struggling to maintain its margins it is simply a no brainer. And so more and more of them are jumping aboard.
To seamlessly make this work you need to be good at remote work
When you are a US company that hires a bunch of folks in a place like Pakistan to do a big chunk of your operations, what is going to happen?
I will tell you what is going to happen. You are going to realize very quickly that you cannot work in the same way. Because there is this whole problem of a 9 – 12 hour time difference.
And so doing physical meetings together becomes impossible and even doing calls together typically gets relegated to a window of a couple hours per day.
By definition you need to start working in a much more structured way in order to account for these differences.
A lot more needs to happen in written rather than verbal form and it needs to happen asynchronously.
These things are the foundations of ‘remote work’. And so companies that make this transition typically find it a lot easier for their own domestic employees to work remote because they’ve already had to make this structural shift.
It is the companies that have not really tapped offshore workers that have still not made this change. And these companies are becoming fewer and fewer because the competition out there is fierce and their margins are getting eroded.
Most likely by competitors who are making use of offshore workers.
You won’t be competitive if you don’t make this shift
So as you continue to watch this game play out in the coming years what you are going to see is that offshoring will very much become the ‘norm’. Just like globalization has.
And almost all companies will have already had to master remote work to make this new working arrangement as efficient as possible.
Which means that the managers that today are chanting “remote work doesn’t work” will have made an about-face and accepted that they were not able to stand in the way of ‘progress’. Progress trampled over them without breaking a sweat.
You don’t have to be a grand futurist to foresee that why I am saying is pretty much inevitable.
And when you finally accept it… you will also start to fully accept how this changes the game. In my view it completely changes what makes for a ‘good manager’.
The rules of “management” change a lot in my view
The people that are very structured and process-driven (like myself) will benefit greatly. I’m already lovin’ it for four years as it plays directly into my strengths, and I just further optimize it each year.
The people that are not very structured, who managed by ‘talking,’ and enjoyed just grabbing people for impromptu meetings will see their asset value tank quite a bit. As they are probably already feeling.
And in 20-30 years when we look back at this, it’s gonna all have seemed so inevitable and obvious that it had to happen.
Just remember that the next time someone exclaims “remote work sucks!”
And think to yourself the way i do… “buddy… you’re a dinosaur. You just don’t realize it yet.”
