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POV

Introduction to Change

Welcome to my inaugural blog entry, which is designed to promote discussion about the challenges we all face in introducing change to organizations in order to enhance competitiveness.

The aim of this blog is to be a bit edgy and share with you the perceptions and perspectives that I've formed through the privilege of working with some of the brightest people in the consulting business and with some of the most ambitious companies in the world, across virtually all industries. This experience has cumulated in my position with TPI for the last 5+ years.

I hope that you'll engage in a hearty discussion of the factors you are experiencing in a world of changes to business support functions.

So, let's get started!

I was speaking at a conference recently in California on the topic of outsourcing contract structures and how they're changing as a result of lessons from first-generation agreements that are coming to term. I hadn't planned to take the approach that I did, but the audience led me to offer an observation that elicited quite a reaction. The audience was made up largely of corporate purchasing managers who were clearly sent to the conference by senior managers to learn about success in contract negotiations.

We went around the room and gathered topics that were top-of-mind, and it was clear that these folks were approaching their fact-finding with a view that outsourcing evaluations are largely formulaic processes. The attendees were looking to build their formulas.

I felt compelled to snap them out of this misconceived notion.

"Outsourcing is a political tool," I said. "It's used by senior management to introduce change to an organization when confidence is lost in other tools for change."

I worry that the rhetoric in many companies is focused on cost reduction, when the challenges that prompt outsourcing evaluations (all flavors of service delivery changes) are largely driven by the need for a disruptive event to shake up the status quo.

Examples include gaining access to new talent pools or new markets, reconfiguring cost models, or preparing for acquisitions, or divestitures.

Senior management most often looks outside for new service delivery models when they conclude that the internal organization isn't capable of delivering the necessary value related to the business strategy.

It's not about squeezing the working class, it's about competing in a global economy.

To the group in California, this got their attention. They thought we were going to dig into service provider evaluation models... instead we talked about categories of change that are driving senior executives to look for new delivery models.

I'd love to hear your views on this.