The Rage for Global Teams

In technology, teams are tops. And for the most innovative companies, U.S.-only teams are old hat. Global teams are the rage. Consider the following:

In Penang, Intel taps the talents of top Malaysian engineers, not only by hiring them as employees but also by helping them launch their own businesses-and then hiring the new firms as contractors who at times work alongside Intel’s own employees.Engineers from Colorado, Australia, Germany, India and Japan converge on a hotel in trendy Los Gatos, Calif. This isn’t a vacation but a rare face-off between members of a Hewlett-Packard software team. In Gemenos, France, a half-dozen French engineers at Gemplus, a leading supplier of smart cards, are managed by an American who speaks only enough French to converse with a waiter. His counterpart at Gemplus’ research lab in Redwood City, Calif., is a Frenchman who manages a group of Americans.

The spread of global teams is probably inevitable, given the ease and inexpensiveness of communications. It also helps that engineers and scientists around the world share the same basic education. Many multinationals, meanwhile, run worldwide training programs that further the trend toward a shared mentality among the world’s technical elite.

To be sure, there are plenty of barriers to global teamwork. Look at the life of Radha Basu, who manages Hewlett-Packard software teams that stretch across six countries and 15 time zones. Just communicating is a challenge. She tries to visit each piece of every team four times a year, flying more than 100,000 miles. She’s on the road so much that she frequently sends a single five-minute-long voice mail to hundreds of people.

Though all her business is conducted in English, this common language can obscure cultural differences. When talking to an engineer in Brazil about deadlines, she must realize that a due date of Monday may mean that code will arrive any time that week. “By contrast, when one of my engineers in Germany commits to a day,” she says, “he usually gives me a time of the day he’ll deliver.”

Jealousies across cultures can also undermine teamwork. In developing countries, engineers at some multinationals may resent their much-better-paid teammates in the United States and Europe. At one big disk-drive company, engineers in Thailand and Malaysia provide crucial process innovations that make mass production of new drives possible. Yet they fume privately that their American teammates consider them less creative and resist giving them more demanding assignments.

Not surprisingly, some companies eschew global teams altogether. Microsoft, for instance, keeps all its teams within its sprawling campus in Redmond, Wash. It only recently announced plans to open its first non-U.S. facility-and this will be a laboratory in “exotic” Cambridge, England.

Despite the inherent risks and difficulties of global teams, they are increasingly popular. The reason is simple: With demand red-hot for skilled engineers, companies have more incentive than ever to build their ranks abroad. After all, there are only so many code writers and hardware jocks that can be brought legally into the United States. Besides, it’s expensive to import foreign talent, and engineers in their native lands are usually a bargain (the exceptions: those in Western Europe and Japan). From Seoul to Singapore, engineers earn roughly one-third to one-half of their American counterparts. Indian or Russian engineers, meanwhile, are happy with a paycheck that is one-tenth of what a Yank gets.

“Discount” foreign engineers often are assigned to banal tasks such as teasing another model out of an aging hardware line or writing ancient COBOL code for so-called “legacy” software. But companies are increasingly making foreign engineers, even those from developing countries, equal members of far-flung technical teams.

While multinational companies say they can’t offer equal pay to top team members in the developing world, they can shower them with perks. In another unit of Hewlett-Packard, for instance, a star Malaysian engineer in Penang lives as if he were in Silicon Valley. He has a posh pad, a new car and trendy holidays such as a weekend of rock climbing. He also gets bonuses, stock options, special equipment at work and a high-powered ISDN line and a computer at home. The company even periodically flies him to see teammates in California. All this effort is expended simply to keep him happy on his own turf.

When global teams work, the results are impressive. Product cycles are cut in half; Ms. Basu says her teams either write code or test it an average of 22 hours a day. Different parts of the world, meanwhile, specialize in different techniques. They can also cater to the needs of customers in the region.

Such global teamwork isn’t going to win Ms. Basu a Nobel Peace Prize, but it is good business. Despite the inevitable headaches, bringing diverse people together is the future of innovation.