by Esteban Herrera

An open letter to outsourcing service providers

Sep 08, 2015
Innovation Outsourcing

An honest take on what's happening in service provision and why it's got me worried.

Dear Service Providers,

I’m worried about you. I realize that, as an industry, you keep growing, and you have bazillions of employees. You invest heavily in enterprise technology, and you often know what you are talking about, even if you are not the best at articulating it. You work very hard to win new business, and you are good at expanding your presence once you do. Many of you even genuinely care about your clients’ success.

And yet, I am deeply concerned for your future as a whole. And that means I am concerned for mine, since without you, I don’t get a paycheck. It has been more than 12 years since I was in your shoes, so I am not going to tell you how to run your business, but I am going to tell you what it looks like from this jaded advisors’ point of view:

  • You all sound alike. For the love of capitalism and all that we hold dear, please differentiate! I know it’s difficult. I know your pitches are nuanced, but trust me, only you can find that nuance. Your new challenge is to express competence in a way that gets noticed. Sitting through service provider presentations is like going down the cereal aisle with my son: all the choices look the same, and I just want him to pick one so we can get out of there.
  • You have forgotten the golden rule. Ours is still a human business. Many of you owe your successful ascent to mastering the art of the business relationship: putting genuinely likeable, smart, committed people in front of clients. Where have all those people gone?
  • You are overconfident. Did you know that more than 50 percent of incumbent business is now changing hands?  Well, now you do. Acting like incumbency gives you leverage is a losing proposition. You need to build a culture in which all of your employees behave as if every day they go to work is a chance to win the business again.
  • Your buyer is changing. If you stick to a technical sale, you can expect to keep being pushed down the organizational pyramid. But if you build relationships with the new buyer, you very well may multiply your business. Lead with the vertical knowledge you’ve been investing in for at least a decade instead of bits and bytes, and watch your business soar!
  • You don’t always do what you say. Every time you miss a commitment to a client you tarnish your brand. That one point of margin you saved on Account XYZ could cost you upwards of $10 million in new business. Your senior executives are not adequately managing reputational risk. And—trust me—it‘s costing you millions in revenue—not to mention bonuses.
  • You need to take some risk. Sometimes you sound more like actuaries than service providers. For crying out loud, you are the experts! Show us your expertise by taking some risk. Once you gain the trust of your clients, they will expect you to lead them on the digital journey, which will require different thinking and may feel uncomfortable. If you play it too safe, the trust you worked to gain will quickly erode, and your clients will look to a competitor within a matter of months.
  • Quit treating your people like robots. Let them create robots instead! Science proves that smart people are most productive when they have autonomy, mastery and purpose. Instead of asking them to repeat a task until they become automatons, why not ask them to harness their passion to change the world?

I realize I may be overgeneralizing. Many of you achieve admirable accomplishments for your clients every day. But, as an industry, this is how you look. You can do better. You must do better. I hope you will join me in a dialogue about how we can change the course of our industry.