Friday, March 11, 2011

Outsourcing: Driving to success after signing

As the leader of the outsourcing initiative, after signing the Master Service Agree (MSA) you just want to “get to work”.  It makes perfect sense – to you.  However, consider for a moment what “get to work” means for your outsourcing partner.  Even if your partner is co-located geographically, the corporate culture, leadership model, decision-making processes and basic organizational structure are all likely to be very different.  These differences are even more pronounced when the partner is offshore. 

Realizing how that one phrase, “get to work” could be interpreted differently by both organizations, how do we get the newly formed unit to work together, ramp up quickly, enable knowledge transfer, ensure alignment of goals, encourage self-monitoring of milestones and ultimately hit the targets agreed upon in the MSA?  I recommend two must-do’s: 1) research and 2) alignment.
First, do your research to understand your partner.  Research on a Fortune 500 organization is relatively easy, companies are ranked based on many parameters including revenues, corporate governance, sustainability, equality, diversity and the like.  Discover where your partner organization is headquartered.  The Corruption Perceptions Index by Transparency International, an organization advocating for stricter implementation of the UN Convention against Corruption, is a good place to start for internationally headquartered organizations.  Once you understand this larger picture, dive deeper by connecting with cross-industry colleagues to gain an insider’s perspective.  Better yet, leverage the most-often missed pool of knowledge by canvasing your internal associates to understand your own enterprise-wide history with the partner.

Second, starting from this knowledge base, align with the partner on multiple levels: a) goals; b) structure; c) reporting relationships; and d) communication model to launch the initiative and see it through to completion. 
a)      Goal  - This may be common sensical first step, but surprisingly it is often missed.  The team lead’s role is to hold the team ABLE to achieve alignment, and drive the goal through the entire project. In order to achieve this, create shared ownership of the goal by enlisting key leaders within your partner organization to co-author components of the plan.  Research in the communication field, particularly by Charles R. Berger’s Uncertainty Reduction theory, demonstrate that a key component in a team dynamic is curiosity - resulting in strategic questioning that enables better planning and ultimate execution of that plan.   
b)      Structure -Striking the structural balance between partnered organizations is also a key to success.  When developing project teams that are working toward a common goal, the integrated team structure is vital.  Integrated structures can be best achieved with the extension team model— where the corporate team is paired as peers with the outsourced team. Led by one team leader, the members of the team are strategic collaborators on daily decisions, key portions of the plan are driven by team members from both organizations, and both tactical and strategic work is spread evenly amongst the team members.  This structure leverages the diversified ideas and experiences of the membership represented on the team.  In fact, diversified teams are proven to be more innovative, if managed well, and more productive overall, as Nancy J. Adler, of McGill University School of Business, reports in her insightful book International Dimensions of Organization Behavior

c)      Reporting relationships – Surprisingly few professionals know exactly how to define the matrix organizational structure, although it entered the business lingo back in the 1970’s.  The most common understanding of a matrix reporting structure is where the product structure is overlaid by the functional structure.  Think of this visually as a grid rather than a hierarchically organized organizational chart.  Typically, this means one professional has at least two different, direct reporting relationships where one manager is often co-located with the employee and the other functional manager is located remotely.  This basic structure, with increasing usage in globally distributed workforces, requires leaders to have extremely well-developed influencing skills.  Gone are the days when a leader has her team co-located, allowing for team lunches on Fridays and Monday huddles in the conference room.  More frequently now, that same manager has responsibility for people located in other geographies who may also have direct managers sitting with them.  The team lead’s primary task is to keep her project a priority for the remote team member by developing a strong alliance with her team member’s geographically-situated manager, using highly tuned influencing skills in order to keep her project on the top of the task list.
d)      Communication model – Integrated communication is only achieved through individual commitment.   You can build the best plan out there, but if your team isn’t personally committed to it, it will not work.  Research proves that the more frequent and varied the contact between team members, the higher the productivity.  In order to build this commitment, co-author the plan with your team, keep the lines of communication open, foster an atmosphere of discovery and curiosity amongst your team members and, most importantly, model the communicative behavior you are expecting from your team.