Marching Two by Two

With 20 plus years of outsourcing experience under our belts, over 10 of which are specific to the sourcing of business processes, one would think that we know enough about the implications of such soft factors as culture and organization on sourcing success. When will we shift our focus from 'can this (outsourcing) marriage be saved?' to 'is this the right match in the first place?' And why?

Indulge me in a very personal analogy. My grandparents' marriage was arranged. He was a quiet, bookish, scholarly type with almost no family and little ambition; she was the headstrong eldest daughter of a dominating and successful patriarch. Great grandfather was impressed with his future son-in-law's erudition; granddad was awed by her dowry and deep blue eyes; and despite her pleas to be allowed to marry another whose temperament was more suited to hers, the match was struck. Fast forward six children and forty years later, they barely talked.

What does this have to do with outsourcing? The lack of success of my grandparents' marriage underscores the importance of propinquity in any relationship, defined in this case as an affinity of nature or similarity. A very useful term that goes beyond the oft used word 'chemistry,' propinquity -- or similarity -- is a criterion that should be tops in the lexicon of outsourcing buyers, providers and advisors, yet few are even familiar with the definition, not to mention able to incorporate it into the selection process. Let's be honest, when organizations look at the world the same way, have similar ways of working, solve problems and treat their employees in the same way, to name just a few examples, the chances of a successful working relationship are so much better.

How can solving for propinquity result in a better outsourcing relationship? What are just a few of the similarities between buyer and provider, which are critical to success.

Quality If the prevailing approach to decision making is through the rigorous implementation of performance management tools and techniques, the answer is simple -- work with a provider who virtually breathes Six Sigma and Lean. The emphasis on quality methodologies in some companies is akin to religious fervor -- they are followed assiduously and represent the process through which corporate decisions are made. As a result, for any conclusion to be deemed valid, most observations or constructs must be communicated through their problem solving rigor. Here, speaking the same quality language is mandatory. Conversely, matching a buyer or provider devotee for whom Six Sigma discipline is either anathema or not a normative part of decision support with its opposite on the spectrum can result in relationship dissonance.

Empowerment If the day-to-day client manager must escalate every decision two to three levels up, a provider that empowers its counterpart -- often the first line of management -- with substantial decision making power is probably not the right partner. The imbalance of power will upset each company's approach to hierarchy, generally resulting in rework, delays, second-guessing and unnecessary escalations. During the sourcing process, it is critical to understand where decision-making authority is held in respective buyer/provider hierarchies to ensure that interactions and decisions are made at the same level. This helps to ensure both a smooth transition and a good steady-state working relationship.

Value ascribed to the employee buyer and provider duos that place a similar value on their employees tend to work together more successfully than those who differ on fundamental HR approaches. If the buyer's view of the employee is of a commodity in a supply chain, while the provider regards his employees as a core asset , or conversely, the working relationship is bound to suffer. In this case, the buyer will regard not only the provider's team -- but also the provider -- as fungible, not as a true business partner. The provider's employees will not align their allegiance to the client, resulting in high attrition and lower performance.

Approach to deployment Some buyer organizations make change by blowing up their business models while others put their proverbial toes in the water by 'trialing and learning,' starting small with a proof of concept, then adding additional processes and geographies as the level of comfort with outsourcing increases. Similarly, some provider organizations are geared up to evolve delivery starting with a pilot and helping the client ease into the change, while others'scale and style only permits a 'big bang' approach to transition. Smart buyers do their research to ensure that the provider's deployment pace can match their appetite for, and pace of, deployment, ensuring that there is not a 'bait and switch' driven by economics and resourcing post the contract award, when the provider suddenly pushes to move faster.

Agility Some organizations can turn on a dime, adapting to change quickly, while others are accustomed to pondering the implications of every aspect of markets or operations. Propinquity is key here; a provider who is ready to take action paired with a buyer who has to underwrite and socialize every prospective move will express relationship stress.

Are there factors where propinquity is not a predictor of a successful outsourcing relationship? One comes to mind -- strength of culture. Pairing a buyer-provider combo, each with strong, almost iconic cultures built up through years of reinforcement, is generally a recipe for a tumultuous relationship. Two similar 'my way or the highway' approaches to problem solving can cause automatic shut down, resulting in a lack of understanding of each others' needs and concerns.

Noah understood the concept of propinquity when he paired up animals on the Ark. Do you?