138 - Values-Driven Approach in Recruiting an International Team with Sourcefit's Andy Schachtel

Welcome to Listening with Leaders. I'm Doug Noll, lawyer turned peacemaker. I teach executive leaders how to listen to emotions rather than words so that they can become the leaders everyone wants to follow. And I teach those same leaders how to be authentically present, available, and connected to their families despite being insanely busy. I have learned that we are 98% emotional and only 2% rational. Learning how to listen to emotions is, in my experience, the foundational skill of life. Stick around to the end of the show and I'll reveal how you can be on our next guest in 15 to 20 minutes. So let's get started.

Andy Shockell, welcome to Listening with Leaders. You are the president and CEO of SourceFit.com. Well, you're the president and CEO of SourceFit, which can be found at SourceFit.com., and we're all really interested to learn more about you. Welcome to the show.

Hi Doug, thanks for having me. Uh, it's a pleasure.

So you're, you're based in the Philippines. Tell us a little bit about you, and you're fluent Japanese and French, I would presume?

That's right.

Do you speak— what's, what's the language in the Philippines?

Uh, Tagalog. Uh, I do speak a bit, but really not, not well at all because everyone speaks such great English here. It's just, uh, it's kind of ridiculous for me to try to strike up a conversation with someone in Well, tell us a little bit about your backstory. Sure. So I guess in terms of my career, you know, I was born in the United States. I'm American, but I've had a career that's been quite internationally oriented. I began my career in traditional media, in advertising specifically. And since I had lived in Japan, I speak Japanese. I was doing projects for Japanese advertising agencies like Dentsu and Hakuhodo when they would go to the United States to film high-end TV commercials, or if they wanted to negotiate rights for something like Star Wars for Japanese ad campaigns, I would negotiate those for them. And so with the rise of the first mobile data services in the world in Japan in the early 2000s, uh, with Docomo, I thought there was an opportunity to license US media properties for mobile phones. And that was a really new technology. American rights holders weren't really familiar with it, of course. It didn't exist in the States yet, so it was difficult to interest them in licensing their properties for mobile phones. It took some time to kind of educate them. And by the time I was able to do some deals, Japan was already getting a bit complicated and saturated, but Europe was just opening up. So I was able to license things like HBO and Fox and some, and Condé Nast and others for the purpose of wallpapers and ringtones for the European market and then Vodafone's worldwide market. And so I kind of got some expertise in delivering this kind of content around the world on mobile phones. And at that time you had your flip phones and brick phones. There were so many different types of phones around at that time. So, yeah, so based on that, Vodafone asked me to build a social networking platform for them, which would be one of the world's first, well, the world's first kind of global social network based around mobile phones. And so it was a huge project and we were a small company, so I knew I needed to outsource. I couldn't find developers locally. So I first tried to outsource in India but had a lot of difficulties there because the partners we were working with weren't really transparent with us. A lot of people were turning over on my team, and I wasn't sure if it was because of us or because of them. Also, there's some design sensibility differences and user experience differences. So I happen to know some people in the Philippines, and they helped me to build a software development team there to build this application. And we built the team, and then we launched the application around the world for Vodafone, and it became one of the most popular destination sites in several countries. Around the world at that time. And then we built a customer service team and a content moderation team to service the application. And it went well for several years until the rise of the open internet on mobile with smartphones. And then you had Friendster and MySpace and eventually Facebook also competing with Vodafone. And so Vodafone decided eventually that they didn't really want to be in the space competing with those companies. So I had to kind of think of something new. I had this great team and so I decided to repurpose the team to some other clients and that's how SourceFit was born in 2009. And it's grown in the same way that that initial project did where clients will come to us with some kind of process that they're interested in outsourcing. Originally it was mostly oriented around software development, but over time we did a lot more customer service, back office like accounting, digital marketing, and we developed expertise in a pretty wide range of different areas. And so our initial value proposition was that we would create a team that would be just a seamless extension of our clients' onshore teams. They just happen to be sitting somewhere else, and we were trying to nurture that team to build value in that team on behalf of our clients. That's kind of our core business. But then we've also developed expertise to be able to allow us to do managed services. So if someone says, hey, just take care of my customer service, we'll meet certain SLAs and provide, you know, an end-to-end solution for clients in a number of different areas. So we've grown to about 1,600 people and we have offices in South Africa, Dominican Republic, Armenia, and our main office is in the Philippines. So that's kind of it in a nutshell.

Wow.

And your clients, are they also as international as your operations?

Yeah. So about 60% of our clients are US-based and then about 20% are Australian and the remainder are European and Asian.

How do people find you?

Primarily, well, traditionally through online, you know, just our search presence was our main driver and word of mouth. For many, many years until earlier this year. I started the first, my first inside sales team. And so I've been building that for about 6, 7 months now. So it's a kind of a different journey to establish something like that. But yeah, that's kind of the way forward for us, I think.

So you're American based in the Philippines with offices in South Africa, Armenia. There's a story. And Dominica, how did you choose these very different countries to be based in? They're not where you would think companies like this would be domiciled.

Yeah, I mean, each of them has their own kind of unique story about why I chose that particular place. But fundamentally, it has to be a place where, of course, costs are reasonable. And I try to find places where the costs are similar across the board. So if a client comes to us and they want to fill a certain role, that it's not going to be like, oh, if it's going to be here, it's going to be this cost, or if it's going to be there, it's going to be a completely different cost. So that's one of my, one of my main factors to consider. Another, for my first additional office was in Dominican Republic. And the reason for that was Spanish language to be able to service the Hispanic market in the United States for clients who wanted to be nearshore rather than offshore for time zone reasons. And then South Africa was just a place that's got great English. There's about 30% unemployment there currently. Are ready to work and they want jobs. It's gotten a little bit of a bad press, but we found it to be incredibly welcoming and the people to be very professional. The infrastructure is sound. We're based in Cape Town. And so that's been a wonderful addition for us. And then Armenia is for software developers. There's a lot of Russian-speaking developers who left Russia because of the war. And so it's a great resource for us to find high-end developers, which is something that's, you know, of course difficult to find anywhere. And a lot of US clients struggle to find people. So that was kind of the driver behind Armenia. And it's also a fantastic place to go and a fantastic place to set up a company. It's been very easy and the people are just so friendly and welcoming as well.

Wow.

I would never— I mean, what you said makes perfect sense, that Armenia being close to Russia would attract a lot of Russian developers who left Russia for obvious reasons and would be looking for work in Armenia, which I mean, is a tiny little country. I live in Fresno County, which has a very large Armenian population. But Fresno County, Armenia is actually about the same size as Fresno County, California. I mean, it's a tiny little country.

There's not that many other outsourcing companies there. You know, you have to kind of, kind of balance that as well. So for us, the available talent is, is especially in the, in the niche areas where we're looking is quite significant.

So you've been doing this since 2009. That's a long time. What is it that gets you up in the morning and gets you excited to go to work?

Well, I mean, you know, to be able to have, uh, I, first of all, I never thought I would be in the outsourcing business. It was really nothing that I would have, uh, you know, imagined for myself. I mean, I was in, uh, entertainment, commercial film production, uh, for many years, uh, media. Um, so I mean, I'm sure there's many other people with, you know, stories similar to mine where you're an entrepreneur and you're just kind of wading through the stream and looking for the next, you know, rock to land on and then something presents itself, an opportunity. And so for me, you know, what's really satisfying, of course, is to have built something of this scale and, you know, the company that's international and to have this many employees whose lives we can impact and then to be able to use this platform to be able to, you know, make a positive contribution to the various societies that we, that we're a part of, you know, especially the Philippines where our main base is, to be able to, you know, fulfill kind of the desires of our employees to make a contribution. So we do a lot of community outreach. We have a program where we feed 3,000 at-risk families. We also have a tree planting program. We've planted about 2,000 trees this year in the Sierra Madre Mountains, which are just east of Manila, and they're the ones that that protect Manila from the typhoons that come from the east, but they're being deforested at a fairly alarming rate. So it's like kind of just empowering people to do what they really want to do naturally anyway, just giving them a kind of a platform to be able to do it. So those kinds of things are really satisfying for me. And to be able to also, to, you know, our business itself, being able to work with entrepreneurs, because I couldn't have done what I did, you know, in terms of building that application for Vodafone if I hadn't been able to use outsource developers. First of all, people can't find talent in a wide range of different areas these days. And then a lot of times if you have a dream, you know, you have a startup or you have a new division that you want to launch or you have a new service, but the costs are prohibitive and then you just can't do it. So we help people to be able to do that and that's incredibly satisfying for me. I love hearing just like you, to hear stories of entrepreneurs and people trying to create something new. And I love to hear their story and to give them solutions that really mean something to them and are really effective.

How were you able to find people to run your management team? I mean, you obviously now you're international, you're in 4 locations spread all over the world. How do you, how, what was your philosophy for putting a team together that could execute on that?

Yeah, I think that certainly, you know, we're in the people business and so recruiting is bread and butter for what we do. So I kind of took the kind of lessons that we've learned over the years in recruiting our local teams here in the Philippines. And when I was able to begin to hire upper-level management to handle the international business, I kind of took those things to heart and I look for people with similar values to what we have as our core values and who also want to make a contribution beyond just simply doing their business every day, who want to connect with their colleagues and with the community around them. And I think if you kind of have a values-based approach with upper management, I think that even though people may have different kinds of personalities, like Your creative director may have a different type of personality than your head of sales, or they may be different types of people. But nevertheless, if they share kind of a core vision or a core idea for what they're trying to get out of their careers, I think that that dovetails nicely together to create a nice team.

How do you find— I mean, I'm just again thinking about how far-flung your empire is. How do you find yourself spending your time every day? What kinds of things are you working on? Yeah.

So now we're in a really, I'm just closing this week, I think, a round of financing, private equity financing for a minority stake in the company. And so that's taken a lot of my time. And as you can imagine, and it's your listeners, I'm sure those of them who have been involved in fundraising, it is really more than you can imagine, an all-encompassing endeavor and more details than you could ever imagine. So that's been taking a lot of my time. What I feel like I can contribute most to this company, I still do some content creation just because that's my background. And I think by creating content, it helps to set set a kind of theme or tone for the business, just in terms of my time, because that tends to be time-consuming. Otherwise, it's just meeting with our team and, you know, listening to their ideas and trying to get contributions from everyone to get us on a singular path towards where we want to be.

Do you have to deal with many brushfires?

Yeah, certainly. I mean, if you have, you know, over 1,000 employees, then definitely there's things that happen. And one kind of interesting thing that's happened recently that I've been dealing with is that for, well, March 2020, you know, over the course of one week, at that point we only had 800 employees. And over the course of a week, they all had to go work from home. And I wasn't sure if the company could survive, to be honest with you, because, you know, infrastructure in the Philippines with regard to work from home not necessarily on a par with what you might expect in the States. Internet service levels are not where they are in the States. So it was kind of a miracle. And I'm really extremely thankful that we were, we were able to service our clients and that the staff was all productive and we were able to grow during that time period. So we went primarily remote. I mean, we were, you know, 90% remote by the time the pandemic ended or by the time people started being able to come back into the office. And a lot of our clients were just happy with it. And then they didn't want to rock the boat by putting their employees back in the office. But there has been momentum over time to put people back in the office. And I think that that's picked up over the course of this year. So when you start having people back together again, then you start having the kind of issues that people have when they're together. And so whether it be conflict, issues of, say, sexual harassment, those types of really important and difficult issues to deal with as a large employer, we start to have to deal with them. I think that one thing that's happened, which I've just been talking about with our HR today, is I think that society has moved over the course of these 3 years, whereas people's behavior when they're together may not have evolved along similar similar lines. And so there's— it's as if someone's woken up, you know, from not caveman days, but like, you know, from some other time period, and they've awoken in another time period. And there's a— I think there's a period of adjustment that's going to have to happen.

Yeah, my sense is that a lot of people lost social skills. Their social skills declined precipitously over the 2-year shutdown because they weren't interacting with people.

I agree with you. I agree with you. And now we're seeing that when people come together again, we're seeing that. And there will be definitely an adjustment period, especially I'm sure HR people around the world are dealing with these kinds of issues.

Absolutely. Well, what, as you look back on all this, what do you think it's that is unique about you that you brought to the table that allowed all this to sort of evolve into the success that it is?

Yeah, I don't know if it's unique at all. But I think, I guess the combination of factors that have put me in this place now is that I feel fairly comfortable working in different cultures. And I know that, that part of what your mission is, is regarding conflict management. And, you know, that's just one example, is that different cultures handle conflict differently. And different cultures express anger differently. And so being able to navigate those differences is something that I've just learned, you know, over the course of— I've had companies in the States, Japan, the Netherlands, now Philippines, and then of course our other offices in other countries. And so managing people in different countries is a challenge. And I think that having lived in a number of different countries and being able to kind of delve deeply into some cultures and has enabled me to be somewhat successful in navigating those differences. So that's, I think, one thing. And I think just it can't go— I can't go without just mentioning as an entrepreneur, which I'm sure most entrepreneurs talk about, is just resilience. I mean, I've failed many more times than I've succeeded. It's just like, you know, that Michael Jordan commercial where he talks about how many, you know, winning, game-winning shots he's missed. But certainly it's been more challenges than successes.. But you just try to, you know, celebrate your successes and hopefully the sum of those over time will translate towards something that you can think about as an overall success. And that's for me, you know, what I kind of look for personally on a deeper level is when I look at my career and, you know, what I've done, will I be able to look back and say, hey, you know, we've contributed something and we've done something. So I think that's, yeah, that I think that those are the key components I would say if I had to identify If I could provide just a couple.

I was presenting at a conference down at Malibu, Pepperdine University, a couple weeks ago, and I was asked to talk to an academic class in cross-cultural conflict. And I was saying, what are the two biggest attributes you think are most important when you're dealing with in cross-cultural situations? And I said, number one, don't assume anything. Don't assume that you know anything. To approach everything with deep humility. Does that sound right?

Those are fantastic points and absolutely those would be key. Yeah, you can't really, yeah, you can't assume that you, you know, there may be a culture like the Philippines, for example, you walk around and there's Kentucky Fried Chicken, there's McDonald's, you know, things look very westernized and everyone speaks perfect English, but you know, they're not necessarily exactly the same in the way that, that you deal with them. For example, in the Philippines, you can't be as direct as you can be in the States when you're criticizing somebody. You have to do what I call is a poop sandwich, which is you have to, you know, say something nice, you know, then get to the kind of heart of your criticism, and at the end leave it with something nice. Because sensibilities are just— they're just more sensitive because the culture in general is much more conflict-averse than in the United States. And so Yeah, so that's what I would say. I, but I agree with you, those are great points.

Um, so this show is called Listening with Leaders, and as you know, you've probably done a little bit of due diligence on me. I'm all about listening and developing listening skills. How important has listening been in, in the development of your company, in your career?

Yeah, well, I would say, you know, just the, the points that you just raised in terms of don't assume that you know everything and, and approach things with humility that's about respecting the other person, you know, that you're dealing with and respect their culture, respect their background and the perspective that they're bringing to the interaction that they're having with you and their hopes, dreams, and goals that they are bringing, you know, to the interaction. And then if you, you know, can listen to them and then understand them, then you're you're going to be much better prepared to have positive outcome of whatever the interaction happens to be, whether you're negotiating with them for a deal or whether they're an employee, etc. But yes, it's vitally important to listen.

Have you run across bad listeners?

Certainly. I mean, I guess we all have. Yeah. And it's frustrating and especially when you're trying to achieve something that's very important to you and you have a lot at stake, a lot on the table, and you feel like people are not understanding where you're coming from, then yeah, it's not a good feeling. Certainly. Hmm.

One more question and I'll let you go. What's one thing about yourself, Andy, that we would never know about unless you revealed it to us?

Hmm, one thing that I— well, actually, you know, I'm not the most gregarious, or well, with people who I'm, you know, I trust, I would say that I am, but my outward face is not that of like an extrovert. So I would say that Yeah, I think people tell me that I'm very reserved. And so I would say that something that people who do business with me or my employees might not know is that I'm actually quite silly. And my kids would attest to that, that really, you know, I'm all about just playing games and creating imaginary worlds for them and that kind of thing. That's really what I am underneath. But I think that I'm quite guarded and maybe it's just my upbringing. I know my sister is the same way, but my outward face is quite controlled. But that's not really who I think of myself to be in my private life.

You strike me as a very thoughtful, person. I mean, I'm an introvert too. Introverts don't mean that, it doesn't mean that you're shy. It means that you do all your processing inside. You get your energy from in inside. Extroverts are people who process outside and they pull their energy from other people. And you, you strike me as being somebody who's more introverted in the sense that you being in a big crowd of people going to a big party is not something that gets you super excited.

Yeah, I would totally agree with you, you know, and then you just have to, you just kind of have to lift yourself up, you know, if you have to make speeches or, you know, interact with huge groups of people, but it's just something that's a challenge.

And exactly, it's not something you would do for fun or choice. I've got friends that they can hardly wait to get into a big party and work the room, right? There's nothing worse than I hate than being at a big party.

Yeah, yeah, definitely, definitely.

I get a sense that you're sort of, you have that in common with me.

Yeah, absolutely.

Well, Andy, this has been a great conversation. Thank you so much for your time today. I know my audience will Really appreciate all of your insights.

Thank you so much, Doug. It was a pleasure.

Doug Noll here. Thank you so much for listening to Listening with Leaders. If you are a successful executive leader who would like to be on this program, please visit podcast.dougnull.com/podcast. If you got something out of this interview, would you please share this episode on social media? Just do a quick screenshot with your phone and text it to a friend or post it on the socials. If you know someone that would be a great guest, tag them on the social media to let them know about the show and include the hashtag #ListeningWithLeaders. I love seeing your posts and guest suggestions. We are regularly putting out new episodes and content. To make sure you don't miss any episodes. Go ahead and subscribe. Your thumbs up ratings and reviews go a long way to help promote the show and mean a lot to me and my team. Want to know more? Go to my website, DougNoll.com, or follow me on LinkedIn, Facebook, and Instagram. That's @DouglasEnoll. Thanks for listening, and we'll see you on the next show.