The Seven Practices Of Highly Effective Outsourcing

The Startup Business Solutions OutsourcingWhat are the practices of highly effective outsourcing?

In other words, what do you need to do to ensure your outsourcing is successful regardless of whether you are a large corporate, or a startup entrepreneur?

You see whether you have been outsourcing for some time, or are considering using outsourcing as a strategy, wouldn’t it make sense to know what are the things you need to do in order to be successful?

Surprisingly however, very few outsourcing engagements can be said to be “best in class”. This is not just some wild statement, this is backed up by solid industry and academic research (get in touch with me if you want the specific studies).

So the first question you must ask yourself is “do you want to be mediocre or do you want to be great, to be excellent?”

For more than twenty-five years, I have worked in the outsourcing industry (yes you heard it – industry or profession) and I have observed some real disasters. However, every now and again, I do see some great work being done – real high performance taking place on a daily basis by teams working together achieving shared outcomes.

If one could generally accept the proposition in business we are all seeking high performance, then why is it that many outsourcing engagements are mediocre at best? Wouldn’t you agree that this is counter intuitive to the demands of business?

Yes or no?

You need to then ask yourself “why aren’t you getting what you want?”

This specific question took me on an academic journey over six years, where I basically researched this phenomenon in outsourcing.

Reviewing countless studies and papers, I also interviewed formally and informally hundreds of business executives and managers, established entrepreneurs and founders of startups from both sides of outsourcing to understand what are the success practices.

The outcome of all this is what I call The Seven Practices Of Highly Effective Outsourcing.

The Startup Business Seven Practices Of Highly Effective Outsourcing

Now to succinctly reduce years of study down to a few paragraphs is a challenge but I will give it a go…

Basically to achieve success in outsourcing, we must see it is a lifecycle – there is a birth, an adolescence, a mid-life (sometimes crisis too) and retirement (which can be renewal or… yes death). At each point in this outsourcing journey there are differing needs and approaches that need to be taken into account. The problem is however we do not always grow (or mature) at the same time – hence a disconnect in expectations and rapport between client and outsourcer.

Let me explain…

I can reflect on situations where my outsourcer was behaving as a teenager – not disciplined or structured (of course there are many teenage client firms as well!).

When I worked with outsourcing companies, there were times where my client was growing faster (maturing) than my organisation as their service provider – we could not keep up with their expectations!

I have also had experiences where my outsourcer was behaving like the new kid in town, telling us what they will do – yet after years of a substandard relationship all we were thinking of was to put them out of their delusion and misery.

Look, I know these analogies or metaphors, are of course simplistic, but I do think they work to get my core argument or premise across in that you need to have alignment and grow together if you are to achieve effective and successful outsourcing.

However, there is one exception to this.

The dynamics in outsourcing is such that the client often looks to the outsourcer for specific capabilities like a “big brother” or “big sister”. I mean I am sure you have all been around when this question is asked by the client…

“you must of done this a thousand time with other clients – what’s you experience or point of view – don’t wait for us to tell you?”

So while partnership is required, the outsourcer must be proactive through leadership.

Why Striving For Excellence In Global Outsourcing Is Key

The Startup Business Solutions OutsourcingIs it possible that Tom Peters and Robert Waterman’s business classic In Search Of Excellence, first published in 1982, is still relevant today in this global, digital and highly networked ecosystem?

Re-printed many times since and published in multiple languages, the book was based on their study of forty-three US based companies that were deemed as best-in-class.

In Search Of Excellence is regarded by some authorities as one of the greatest business books ever written.

For those of you who are not familiar with the book, Peters & Waterman’s core ideas came down to eight characteristics of excellent companies as having or being…

  1. bias for action,
  2. close to the customer,
  3. autonomy and entrepreneurship,
  4. productivity through people,
  5. hands-on values driven,
  6. stick to the knitting,
  7. simple form and lean staff
  8. simultaneous loose-tight properties

In regards to my question of relevance, I actually think these eight characteristics are more relevant today than they were thirty years ago.

Let me explain…

When I was researching my doctoral thesis that investigated the question of what drove excellence in global outsourcing, there were some overarching principles that Peters & Waterman identified that were similar to my own research findings.

In short, it was in many ways, having an aligned vision for excellence.

When a vision for excellence was present and importantly aligned across the client and the service provider organisations, then there was a higher likelihood that excellence was generally aspired to. Without this vision however, then mediocracy at best, was achieved within the outsourcing engagement.

Now of course there were other factors, but let me ask you these questions…

Do you today, in your business, understand what excellence is?

Do you have a vision for excellence, or a standard that you can look to?

Do you seek out to achieve excellence?

…and importantly do you share this vision with your partners and have the buy in from them to achieve it with you as well?

My view is that the concept of excellence, though acknowledged as something important and even placed in mission and values statements, is seldom expected as the way of doing things – the norm of the collective culture.

Yes of course all businesses have those great individuals that demonstrate excellence everyday – because that is part of their individual value system and identity – but what about the broader business and collective tribe? What about your extended relationships that transcend company structures, nationalities and cultures – what about excellence in your global outsourcing ecosystem?

You cannot expect excellence if you are not embracing it yourself and in today’s world where end-to-end customer value chains are made up of an extended ecosystem of multiple parties, the consequences to your customer’s experience can be catastrophic.

Sadly, I believe excellence in business is not being pursued to the level it should be. But I also believe that if it were to be, it could be a game changer for businesses large and small.

In global outsourcing there are numerous complexities, but at the end of the day, the human element, the manual interventions and customer experiences are the result of attitudes of individuals who are part of teams who work in departments as part of organisations.

To embrace excellence in our complex global outsourcing ecosystems today is about having that vision of what excellence is and working together in partnership to achieve it. Leadership is the conduit in initiating this vision.

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