Given Today’s Fast Pace of Change, Examining the “Why” of Your Business Has Never Been More Critical
With tumultuous change crashing down on us every day, “nimbleness” in business offers a powerful strategic advantage. Having the readiness and ability to change quickly allows your firm’s strategic value to outdistance that of your competition. This article uses the story of a failing, but ultimately successful, $180 million offshore outsourcing project to demonstrate how a rigid organization can reap great benefits from a more “nimble” mentality.
Strategic Partnership – The Missing Link
A retail company and a technology service provider recently underwent a turbulent 18-month process to implement a transformational Human Resources (HR) outsourcing initiative. Each side was deeply entrenched in its own view. At its worst, the relationship suffered a contract-threatening standoff that was triggered by consistently sub-standard service levels that resulted in significant monthly financial penalties for the service provider. The relationship was headed towards attorney interventions.
How could this $180 million project be saved? The answer lay in creating a strategic partnership that after only six weeks from the start of the parties’ work achieved 100% service levels – a swift turnaround and a success story.
Separate Agendas Thwart Nimbleness
Significant turnover is all too common during outsourcing engagements, similar to the dynamic in downsizing companies. Employees must regroup when they see their colleagues let go and replaced by an outsourced firm halfway around the world. Resentment builds up, creating a greater desire for things to stay the same and sometimes an even greater resistance to change. Outsourcing and downsizing scenarios share this typical pattern.
After several changes in Project Management Office (PMO) leadership, the retailer selected a new HR Vice President to provide leadership for the turnaround. The service provider brought in the project’s third account executive to guide the account back on track. Both leaders realized there was a fundamental “missing link” that was preventing the client and the service provider from overcoming deeply rooted mistrust, frustrations, and an “us versus them” mentality.
Our job was to strategically align the PMO leadership and purposefully connect the offshore call center operations leads and governance team, all to provide a process for repairing an extremely ineffective relationship.
We noticed that both sides had begun the implementation work without first sorting through a host of issues, ranging from decision-making and context-setting for individuals new to the project, to the unattended-to emotional strains of having co-workers laid off.
When teams are able to clarify their purpose and the impact of the work, they can begin defining the essence of the work only they can do together. This helps teams strike a balance between critical results and key development needs. The process is something of a see-saw, making flexibility and pliability absolutely critical.
Forging a Truly Nimble Partnership
Utilizing our five-step process (see Figure 1), we took a structured approach to:
- Understand the critical needs of the retailer client and the service provider, including the $180 million already invested, the careers on the line and the $20 million-per-year losses forecast for the service provider.
- Gather input from stakeholders through a transparent interview and reporting process at multiple levels of the organization where the pain was most acute. We gathered and analyzed core qualitative data to see how all the pieces fit together intoone system.
- Facilitate strategic planning sessions to surface the most emotional of issues (including blame, frustration and denial) to then align around the team’s top strategic initiatives and create game plans to achieve sustainable change.
- Conduct progress checks to refine strategic work, address new issues, and build the strategic capability of the Executive and Leadership Team.
- Evaluate results and think together about the next level of work only the team can do.
Over the course our six-month engagement, we held a series of meetings to guide the parties through the systemic challenges and issues plaguing the business relationship and operational functions. We worked with various stakeholder constituencies throughout the process.
The initial mindset was focused on the task and how to improve each process, with little regard to the whole or the impact that the work had on others. Much time was spent in areas with little value, creating enormous frustration. By shifting the focus to the end state, always thinking with the end user in mind, the teams began to weigh the importance of issues. For example, the end user could be an employee picking up the phone to inquire if their paycheck would arrive in time for a mortgage closing. The team member responding to such a call was guided by the thought, “Will this issue make a difference to our end user?” This nimbleness in thinking quickly allowed major changes to occur.
Tips + Lessons Learned
- Being nimble requires far greater understanding of the whole system, the ability to handle complexity and the skill to capture the essence of a situation with simplicity — all while building and maintaining high trust levels.
- Use the “back of the napkin” test to distill the central take-aways for teams. If you can explain the core issues, opportunities or actions on the back of a napkin, you will be far ahead of the pack.
- Continually re-examine the impact of the work and results. Most teams meet weekly or bi–weekly, focusing on the day-to-day. Increase your nimbleness by scheduling monthly half-day meetings that focus only on the strategic work that only your team can do.
- Deal with the brutal facts head on, thinking through with your team the implications of those facts and then defining the most critical work that must come from your conclusions.
For most companies, the outsourcing experience covers a wide spectrum from positive (client achieves ROI goals) to negative (client terminates contract). Being flexible allows you to incorporate a strategic partnership approach into a holistic strategy. It’s proven critical to implement a strategic partnership process to prevent client / service provider misalignments, temper unrealistic expectations, and clarify assumptions.
Many leaders underestimate the relationships component of projects characterized by an “us versus them” mentality. This limits the business benefits and returns that a true strategic partnership will encourage throughout an outsourcing engagement. As with any critical initiative, leaders and their teams must be nimble and understand issues beyond the bottom line results.