by Esteban Herrera

How to excel at outsourcing

Aug 18, 2015

When we outsource, we like to think we are buying and selling technical solutions, but really we are buying and selling human ones. Companies that can remember the golden rule will get the most out of their sourcing relationships.

After reading one of my recent posts, a friend, who happens to also be a client, reminded me that outsourcing success depends on two things: the buyer has to be willing to put in the effort, and the right people have to be in place to make the relationship work. I wish more clients understood this. People like me have been saying it until we are collectively blue in the face, yet many outsourcing relationships still struggle because outsourcing buyers don’t do their part.

The underlying problem is that the relationship feels unnatural. Clients ask “Why should I pay a service provider millions of dollars and then bend over backwards to manage them? Why can’t they do it right without my help?”

Here is the little-known secret about this business: outsourcing—at its most fundamental level—is a human endeavor. Like all other relationships, it is a product of our ability to communicate and deliver on our promises. While the industry obsesses about speeds and feeds, staffing levels, service levels, accuracy, exit clauses and indemnity, what we should all really be talking about is the human behavior that makes a healthy partnership work (or not).

In essence, we are applying the 80-20 rule—in reverse! We pay attention to the objective factors, which are easy to measure and apply, while we shy away from working on the human part of the equation because it is so difficult to quantify. As a result, we end up focusing on merely 20 percent of what we need to be doing to make the relationship successful.

Most of us already understand how this principle works in other parts of our lives. A pleasant smile and some friendly chit-chat with the flight attendant are more likely to get you that free drink; we all know the restaurant server pays special attention to the table that says “please” and “thank you.” Most of us were taught this simple rule when growing up: treat others how you would like to be treated. So why do so few of us apply it in our outsourcing relationships?

Here are a few reasons:

  1. The amount of money changing hands raises expectations. I can forgive my $25/week gardener for less than perfect work much more easily than I can forgive my $25 million/year service provider.
  2. We have a lingering aversion to outsourcing. We remember the time when it was our friends who were displaced by service providers. We have natural antibodies to the “outsiders” that took over.
  3. We are conditioned to be skeptical of other cultures. Xenophobia isn’t limited to other parts of the world. It can also apply to corporate cultures. Anyone will tell you that working with Accenture is different than working with IBM, even if the individuals on the team share the very same cultural background!
  4. Change is difficult. I know, dear reader. I can hear your collective “duh.” But if we all know this simple truth, why don’t we cut ourselves and our service providers some slack? Outsourcing relationships involve change processes that can take years. Whether we like it or not, chances are it will be hard for everyone involved.

The good news is that, with each subsequent generation of outsourcing, #2 through #4 will get easier. The bad news is that, as an industry, we are deluded into thinking we buy and sell technical or functional solutions, when the fact is we are buying and selling human ones. The best advice I can give clients is to pick the team they want to work with for the next few years. All the rest will fall into place if you have the right relationship.

Having established the humanness of outsourcing, I will address in my next post what buyers can do to increase their chances of success in this very emotional, political and subjective industry. Until then, I challenge you to practice exceptional kindness with your client and/or service provider and see if things don’t get better almost immediately!