November 29, 2017
Mike O’Hagan – How Mike Utilised his Outsourced Workers in the Philippines
November 29, 2017
In this podcast, Derek is joined by Mike O’Hagan once again, owner of MiniMovers, a moving company. In the discussion, Mike will talk about his growth and outsourcing through his business and specific strategies and very openly talked about where his business was when he took the decision to come over to the Philippines.
- Mike shares his primary business and what he learned over the years about outsourcing in terms of MiniMovers and how it expanded.
- The journey that got an initial win because Mike came over to the Philippines.
- Mike states that they wanted to hire people that can think and they had to go and teach them how to be movers-removalist in another country so that they could sell the product and that was a big challenge that they’ve overcome.
- The industry evolves originally with structured processes and overseas workers doing very low-end jobs where they don’t have to think and just follow the process.
- A few years ago it’s a big push to do home-based workers and if you look quietly most of it disappeared and the reason it disappeared was that they found out that larger groups of home-based workers had lesser output compared to in-house employees.
- There are 1.2 million Filipinos currently working in the Philippines for western businesses out of that 1.2 million, 75% of them are working for American companies.
Derek: Hi and welcome to another episode of the Outsource Accelerator podcast. My name is Derek Gallimore and today I’m joined by Mike O’Hagan again. This is number Episode 84 so if you wanna get in touch with Mike then go to our show notes at outsourceaccelerator.com/84
We last spoke to Mike O’Hagan in Episode 72 so if you wanna catch up on his back story then go and have a listen to that episode today we talked to Mike about his growth and outsourcing through his business and specific strategies that he talked with his pretty significantly sized business and so he talks very candidly about this and very openly about where his business was when he took the decision to come over to the Philippines so I am sure you will learn a huge amount from this episode and as I said if you wanna get in touch with Mike or know any more about him go to our show notes on outsourceaccelerator.com/84. Enjoy.
Derek: Welcome back, so today I’m joined by Mike O’Hagan again. Hi Mike.
Derek: Today I wanted to dig a little bit deeper into Mike’s journey in the Philippines with outsourcing with his primary business and what he learned over those years now. So, Mike, can you give us a quick construction I suppose into your initial journey with outsourcing in terms of MiniMovers and how it expanded.
Mike: Well, I step back in the MiniMovers in 2010-2011 with red ink, we’re running at a loss we had all sort of problem so I had to turn around real quick, we were running out of cash and we look like we were going to collapse so I ask my Filipino PA to go forth and find somewhere on setting up here. She discovered that this thing that we now know as staff leasing or co-managed space essentially that means you can hire a desk with the computer and the company supplies legally today for employment. They helped with the recruitment and in the HR issues and basically you’re worker working for you that you’ve selected, you set the wages, you have done that and waiting for you to tell them what to do and that’s how we started we interviewed a group. The original tension was that we would only bring 5 jobs here that they were going to be an administration that didn’t happen it became more and more as we got into it as we found that the advantages for doing it. We started with plain administration back office process just general process remember the first thing we wrote that was their employment process. We have a couple of hundred people 2 to 3 hundred people a week applying for job in Australia, they need to be sorted through every application they need to be read, they need to be decided who we want to talk to them, not talk to them, we gotta go back to respond to them. That’s just a simple process that could be done online, that is the first process we brought up. Accounts receivable, Accounts payable of course they were pretty easy we did that. We were going up right in here for about 6 months and I made a decision one day that I would have a play with voice that we have telesales and we’d bring voice up so I made a decision that we would start training out Filipinos to sell Minimovers on the phone it is an interesting exercise.
Derek: Well that makes sense. So you got administrative work done first and that’s very common, isn’t it? It’s the easy win and in this way, people feel comfortable and then the next stage is the sales but you know that’s that’s kind of Filipinos dealing with colloquial Australians and maybe then a big step so. Were you nervous? Did you have positive hopes?
Mike: We were very nervous about it. It was economics that was forcing us to do something in a desperate but we would try sales. We’ve been shut down for good 25 years we had a 7 day a week call centre and they we’re running at a loss and the industrial relations system in Australia suddenly started forcing us to pay overtime rates on the weekend and we simply quite simply couldn’t afford it and that exact bit that we decided we do would just hire weekend people to do that but right from day one after we train them to put them on the phones they out converted on average the australian call center so it didn’t take us long to evolve them and change it out and actually get it to work better. There’s whole lot of tricks training them to do it and that’s the sort of things I teach them nowadays I actually have a lot of Australians coming up here and I show them what to do what not do from my experiences, but one of the issues we had was the very, look the average Filipino knows the same about Australia is what the average Australian knows about the Philippines, we had something to do with each other in the war somewhere up in Asia it’s a whole lot of islands and that’s it. The average Filipino couldn’t even tell you where Australia is on the map they know about kangaroos and that’s about it and to put them into a sales situation selling removals was challenged they had no idea what our houses were they didn’t know what a high set house, a low set of front yard, a backyard, pool table, piano, tool shed and they are very americanized they walk down sidewalks they had no idea what a footpath is so we had to overcome all those issues which we did, we persisted we taught ourselves to do it and the payoff has been enormous. Absolutely enormous.
Derek: So with your journey you got an initial win because you came over here and the backend accounts they would easily transfer and you are saving a lot of money so then you tried to you tried expansion into voice, you found that there were more nuances there and you had to do more training but it was still successful and then you got great results, is that right? so you were running two offices side by side in Australia and Filipino office?
Mike: Yeah, we had a call center in Australia and call center in the Philippines, so we could pitch them we could pitch the numbers directly against each other so our technology such as we can see at conversion rates by every product we sell down on tax, so we can see that they were clearly out doing it. Listen, there’s also about evolving in the industry too this industry evolve originally with structured processes and overseas workers doing very low end jobs where they don’t have to think just follow process, if you look at it carefully we were leading edge involving into getting people to think we wanted to hire people that can think and we had to go and teach them how to be movers removalist in another country so that they could sell the product and that was a big challenge and we’ve overcome but as i’ve said there’s a lot of tricks to it but we’ve now got if I like to say think as working for us who really understand what their doing and that team is now driving the changes going to the future, the test technology build up here so we didn’t transfer processes up I think that’s a big track I think people talk about transferring processes we didn’t, we actually transferred the knowledge and any processes we have we actually rebuilt them here, so it’s about transferring the knowledge, getting them into the groove so they could become very productive and then build process around that afterwards.
Derek: And as you saying like people take for granted the knowledge they know in the inherent knowledge they have so if it’s a different country, you know people travel to work differently the environment is different and the nuances of culture is different, the languages subtly different and even the moving industry there’s a lot to be told than that. You taught all of that and then did you start with scripting sales and have you moved more pre-thinking now, or how did you go with that? These are different methodologies.
Mike: Yes, nowadays we don’t have any call centers in Australia left at all, sadly. We actually have 2 call centers in the Philippines and we actually have them on different sale systems. We have 1 on structured groups which are the way we always did it and we’ve now got a team that does what we call a dot portal conversational selling and we’re pitching those against each other and developing it but the end of the story is that we have the Filipino team have taken the initiative of what we’re doing, the management on the side of the Filipino team are now driving future productivity gains and changes from within from here and we’re doing that within a team environment is why they it’s interesting to know that a few years ago it’s a big push to do home based workers and if you look quietly most of it disappeared and the reason it disappeared because the bigger company found larger groups of home based workers didn’t work very well they still need to sit together and have coffee in the morning they still need to go to common office space to share and develop tastic knowledge so when somebody makes a mistake everybody else sees it we know not to do that. When we have a win you’ll see it and do the win that group running and driving a business still vitally important which is why we still have workers in office space.
Derek: The group learning is huge isn’t it and i think that applies in the Philippines but also in Silicon Valley and everywhere. I think it’s over-romanticized that working from home thing is just you don’t get good results do you? and you don’t get as good a progression operational learning.
Mike: There’s a lot of companies that big noting themselves 4, 5, 6 years ago about home based level very quietly shut it down and move away. I’ve talked to them, those management people inside and I know for a fact that they just won’t able to get the productivity gains, there’s a thing called tacit knowledge which is kind of how SME’s grow, we don’t grow from structured processes, we grow from tastic knowledge, we grow from a group of people sharing it, focused on it and it all together having experiences which is continually improving the business. That’s how the reality and how you do it we managed to evolve this offshoring industry, outsourcing industry from the big corporates doing it 20 years ago to structured processes of outsourcing say 6 7 8 years ago into thinkers now and knowledge workers what they call KPO’s of today where you’re getting teams here who can think and work can do the same stuff.
Derek: It’s getting a lot more dynamic isn’t because as you’ve said in the beginning of outsourcing 20-25 years ago it was on the big conglomerate and they were able to delineate a process and dedicate a hundred people to a very high repetitive low kind of skilled work, where is now it’s been democratized it’s more SME’s in the space and it’s about getting good generalist, getting people thinking on their feet, getting people working autonomously and for that you need a upskill but you getting a lot better results from that.
Mike: I run business learning towards here so I have a lot of old countries Americans and English and Australians and Kiwis coming up here and going through. Just lately I’ve been doing a lot of work with a startups who are building online platforms or apps and a lot of them, so many of them are focused on the technology and just building the technology when reality is they need to build a business and there are lot of spaces here catering for this sort of thing where you go in somewhere between 6 and 15 workers there will be 2 or 3 devs doing development work they’ll be 2 or 3 in marketing and generating the leads and doing the marketing and maybe a webbie and that sort of thing they’ll be 1 or 2 administration handling the money and in making sure that’s happening they’ll be a customer support team doing 24/7 customer support run their app whatever it is and you know if you’re going to be build an online platform you got to be able to roll it out you got to be able to run a sales process now a days which is lead gen which is contacting the leads putting them on the final, running them thru to do that right and the ramp that up quickly, you need a large team and we all need to build this things fast because they have very short use nowadays you know very very short. And I’m seeing a lots of people coming here building their entire team in the Philippines is affordable, it’s a cash flow that can bootstrap the business they don’t have to go off barring in large amount of money, it’s working, it’s a beautiful solution.
Derek: It’s amazing isn’t it when you just have a greater affordability it gives you the opportunity to try new things to do things better to market more thoroughly to sell more to have more lead gen and it really does open up opportunities for either grown or an established business.
Mike: Brings us back to Minimovers when I first came here I thought i was going to have 5 people got in this suddenly worked it all out and now i’ve got 45 people because we have simply taken of the tangent and build a whole lot of stuff we could have never dreamt of because the low wages and smarter people.
Derek: And it’s funny the reason why you started your telesales was because of the cost of you couldn’t maintain them on the weekend the reason why I first came here is because I had a hospitality company and very early on and realised I needed 24/7 staff cover and that was completely commercially unviable in the UK where is you come to the Philippines and not only is working 24/7 shifts socially acceptable, it is super affordable and you know it’s almost maybe the same in Australia but in the UK, people you could not drag someone into work over a 24 hours shift they you know sort of night shift where is here is very normalized isn’t it because of different time zones and they’re covering the US time zone, it’s so normal here.
Mike: There’s 1.2 million Filipinos currently working in the philippines for western businesses of that 1.2 million, 75% of them are working for American companies, now that means that 75% of them are starting work at ten o’clock at night and finishing at five o’clock in the morning it’s easy to get 24 hours service people here that completely used to it.
Derek: It’s normalized isn’t it and actually there’s a huge part of the society that actually enjoy working over the night shift because they can avoid traffic that can spend time with their family during the day so quite normalized.
Mike: As with everywhere there’s a loading because of overwork they earn more money and they’re used to it and that’s completely normal so that’s 24/7 same different language I have a lot of business friends coming up here and they discovered that they can develop their product into different languages spanish is very easy to get here and various other languages and you can really easily ramp up. If you’re in Australia and you want to sell to America this is the place to come because these guys are more American than we are, that’s very easy to get Philippine to sell to American and build a platform that they can hit the states very very easy there’s a lot of advantage coming to the Philippines.
Derek: Yeah I know that’s absolutely correct and we’ll wrap up now. That is a good point that you make, I also preach that if you set up in the Philippines and you’re effectively in international business already and then it makes it even easier to branch out into different markets so you’re not just stuck on Australia, you can easily branch out to the US, UK because you have an international hub. Exciting. So thanks, Mike.
Mike: Thank you.
Derek: Okay, that was Mike, and if you want to get in touch with Mike then go to outsourceaccelerator.com/84 for his contact details and full information and also show note. And if you want to ask if there’s anything you want to know about Outsource Accelerator or anything we do or just have a question then email us at firstname.lastname@example.org. See you next time.