Q: Why communicate?

EGP: Communication is a vital component of any business change. Effective communication during a sourcing initiative can mean the difference between on the one hand a successful transition accompanied by positive internal and external perceptions of the organization, and on the other a raft of challenges including:

• Retention and motivation issues
• Sub-optimal knowledge transfer
• Bad press
• Damaged labor and community relations
• Long term reputational harm to the organization and the key players involved

The cost of recovery from these problems is measured in management time, work that has to be redone, difficult public relations and concessions to aggrieved stakeholders, including potential constraints on future strategic options.

Q: OK, so where do we start?

EGP: The first step is to identify all the stakeholders, who include all the individuals and groups who are impacted in some way by the proposed change. Examples are staff whose jobs will change or disappear, staff who work alongside those directly affected, business users of the services to be sourced, customers, regulators, the general public (potential customers and recruits), and shareholders. And one mustn't overlook the oft-forgotten group of stakeholders in the receiving location to include existing staff, new hires and the wider community.

Q: Once we know who our stakeholders are.. What do we say to them?

EGP: The key thing is to address whatever concerns people have and which, in the case of some stakeholders, could distract them from the day-to-day running of the business. People need to understand what is happening, why it is happening, and what if anything they need to do in response.

A communication approach therefore needs to have one consistent, coherent set of high-level key messages about the change, which can be tailored to the needs of individual stakeholders or groups. For example, a high-level message might be that the organization is seeking to set up an offshore processing centre to support its regional business, as part of a strategic progression from being a national or international entity to being truly global. For the receiving location, this strategic background might be followed by a reiteration of the organization's commitment to the location, and a focus on enhanced career and job opportunities. For the sending location, the strategic message might be accompanied by more information about whether jobs are likely to change or disappear, and what the organization plans to do to support staff displaced by the changes.

Q: When should we communicate?

EGP: The maxim 'Explain early, then explain as often as possible applies here. Managers are sometimes reluctant to begin a formal communication process because they feel they don't have anything of substance to say, for example because many decisions remain to be made about the shape, scope and timing of the changes.

It is important to remember that saying nothing is also a form of communication, and one that is most likely to be interpreted negatively, exacerbate anxieties, and create mistrust.

Q: How should we communicate?

EGP: In terms of media, use whatever channels already exist - intranet, email, team meetings, town halls, away-days. Especially at the start of a sourcing project, a steady flow of communication as part of the day to day running of the business is often more effective than a big production number that risks raising unrealistic expectations about how much information is going to be shared.

Whatever channels are used, it's important to establish a two-way dialogue. Getting - and acting on - feedback can build credibility for the initiative and provide valuable insights into the concerns and even the likely actions of certain stakeholders, allowing fast, on-target response from the project team and its sponsors.

Q: What are the common pitfalls with communication?

EGP: The most common one is underestimating the size of the win from effective communication. Time and money invested in pro-active, joined up communication is sometimes seen as unnecessary spend, whereas we find that clients who commit to making that investment achieve their objectives with fewer, if any, negative consequences than those who dismiss communication as a "touchy feely" optional extra.

Probably the second most common pitfall is to assume that 'We've told them - they just have to make it happen.' Management teams often spend months (occasionally years!) debating the merits of outsourcing or offshoring, then when the decision is made there is a brief announcement to launch the project and staff have to get used to the idea very quickly. People need time to assimilate change, and each individual has to go through that process individually and at their own speed. Questioning, debating, gathering information, and making judgments are all part of that process. Anything a project team can do to support people through the process and help them to come to a positive outcome will increase the likelihood of success for the overall sourcing initiative.

Other pitfalls include the following:

• Overlooking important stakeholder groups
• Not communicating bad news honestly
• Focusing on the 'high order' benefits such as improving the organization's longer term competitiveness before dealing with immediate staff concerns around redeployment and layoffs
• 'Telling' people rather than establishing a two-way conversation,
• Giving opposing messages to different constituencies based on their perceived interests (to management and shareholders: We're cutting costs! To staff and unions: This is not about cost-cutting! People have a knack of finding out about that kind of thing).

Communication is a powerful tool. Used well, it can more than justify its cost to a sourcing initiative. To go back to your initial question: Why communicate? Well - why wouldn't you?

About the Author

Elizabeth, a Senior Manager in Alsbridge's London office, specialises in programme and change management for organisations experiencing significant change such as post-merger integration, business restructuring, etc. She has experience in Investment and Retail Banking, Energy Utilities, Leisure, Consumer Products, and Manufacturing. Prior to joining Alsbridge, she worked with a Big 4 Accounting Firm on major restructuring engagements and has worked in the Finance and Telecoms sectors, delivering programme management and communications for mergers, outsourcing and shared service centre initiatives.