Have You Got What It Takes?

Dr Ross McKenzie The Startup Business Outsourcing

Have you ever thought about what drives team performance?

The Blue Angels is the United States Navy’s flight demonstration squadron that was formed in 1946 and shows the best of the best when it comes to high performance. Obviously, their technical skills are indisputable, as is the aircraft they fly. However, in countless interviews, articles and books written about The Blue Angels, they re-affirm the criticality of their interpersonal relationship with each other as the ultimate success factor. How they work together as a team under pressure day in, day out, demonstrating the ultimate in high performance teams, is testament to this – now for over 70 years!

So, what about you and your business?

No doubt when you are recruiting, you are seeking the most capable applicants. Current experience levels, attitude, and interpersonal skills to fit in with your culture and, of course future potential, are all factors. In many ways, you are putting together a team which you are expecting to be high performing.

Now, what about with outsourcing? Do you think you need to take a similar approach?

At The Startup Business we believe you do need to do this. In fact, we believe it so much, we have placed the importance of this in our third practice of The Seven Practices Of Highly Effective OutsourcingTM as Create An Esprit De Corps.

Search For Candidates

Congratulations – you are now at the search stage of finding an outsourcing partner. Now what?

Well, before you just reach out to anybody, let’s just think about this for a moment.

If our objective is to establish a strategic outsourcing partnership, then wouldn’t you agree that it makes sense to ensure there is a match or alignment between your business and your outsourcing partners?

This is a very important factor, and that is why it is necessary to look at all the outsourcing partners in terms of their size or “tier”, because it is essential you align your business appropriately.

For example, if your business is in fact a major global corporation, it would just make sense to collaborate with a tier 1 outsourcing firm because they have the scale and resources to adequately serve your needs.

However, if you are a startup, you may aspire to, say, partnering with IBM, Accenture or even Amazon and Google but if they do not see the same potential in your business as you do, then you just will not get the attention or focus that you require in a partnering relationship.

Conversely, if you reach out to an independent contractor, you get the transactional skill (in traditional outsourcing) but not leveraging a broader thought leadership and capability to help you grow and scale.

The outsourcing firm on the other hand is seeking that next “big” account and, rightly or wrongly, that is generally where their attention will be, and if you are too small, you will be ignored.

So, while there are generalities, in many ways this sums up the dilemma in outsourcing.

So, what you need to do is to map your business to a specific outsourcing partner tiering level. While this is not a perfect science, it will start to have you focusing on the typical attributes of an outsourcing partner that is best suited to your needs. The exception to this is when you consider your business is in the process of growing rapidly, or you have a need for some specialised capability, in which cases you should be looking at the next tiering level above from what may be represented in this illustration.

When you have defined the tiering of your prospective outsourcing partner, you can then do a search (or have an advisor do a search on your behalf) to prepare a list of possible candidates to be your partner!

Screen & Short List

The second step is the screen & short list stage. Again, the level of detail you go into here is dependent on the scale of the opportunity in question. However, regardless of size, the principles remain the same.

This step can also be considered where the exchange of significant information takes place between your business and your list of potential outsourcing partners.

How you interpret the response will also vary in that you may have already identified some minimal requirements such as for the quantitative data – some thresholds to allow easy scoring.

Alternatively, you may have several of your colleagues independently review specific aspects and for them to provide their own scoring feedback.

The important thing to keep in mind is that this process is about determining whether or not they can do the job based on your criteria’. The objective of this step is to disqualify and make your list of prospective suppliers small – say down to two or three “candidates”.

The process is basically no different to recruiting an individual for your business!

Select Strategic Partner

While it is possible that during the screen and short list stage, you have already identified a preferred candidate, our third step is to formally select our strategic outsourcing partner. This is an important step and should not be rushed through, even for the smallest of engagements.

You want to be sure that not only can they do the job, but that there are synergies and an alignment between your business and theirs. In this step, you now want to drill down into your early questions, or you may want to review samples of their work, or even have conversations with their references – their own clients.

At this stage you may have also received some indicative pricing, however it is likely that your prospective outsourcing partners (if you are down to just two or three in the short list) may require more information from you. What this could mean is that they now need to do a due diligence on your business!

At The Startup Business, we help our clients to process this information using scoring tools that incorporate the ten criteria and the five perspectives. While a decision could then be taken on the total score derived, we still work with our clients across all the bands to ensure that when the final verdict of selecting the outsourcing partner is made, it is robust and meets the needs of all stakeholders for today and for tomorrow.

Whatever way you choose, make a decision based upon broad criteria and multiple perspectives and always think long term and what this possible decision might mean for your overall business strategy. That way, you can be assured of getting it right… well perhaps most of the time!

Secure The Relationship

Your final step to Create An Esprit De Corps, is to secure the relationship. This means contracting and signing a document of some sorts, but it is also much more than a piece of paper.

Securing the relationship is about setting expectations. Not only do you have expectations from your outsourcing partner, but they also will have expectations from you. So, having these early conversations about how you will work together, how you will communicate, manage risks, manage change, and manage disagreements is essential.

Equally, discussions around how you can leverage each other, build a relationship together and create more value than you could on your own, must take place.

It is these conversations that are the essence of securing the relationship.

While this does contain the legal jargon you would expect from a contract, our partnership agreement goes beyond that and looks to the future – this is something you may consider for your outsourcing relationships as well.

Now, it has to be realised at this stage you will not have covered everything. There will be risks you have not thought of, costs you had not considered, even processes you did not fully represent. These are yet to be, with your outsourcing partner further into the relationship.

Some of these things may cause tension as well. However, if you have followed and implemented Practice I, II and now III, the right intent should already be established, with good will demonstrated by you, your business and your outsourcing partner’s business, most of these issues will easily be overcome.

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