how to reduce value leakage and meet all of your outsourcing goals
Research (see work done by the IACCM) suggests that outsourcing arrangements leak value to the tune of as much as 40% or more. In monetary terms this can equate to eye watering amounts that run into millions of dollars. While there are many potential causes of value leaking from outsourcing arrangements there is one that should be the first on the list to be addressed â communication.Â
Communication is the enabler in outsourcing arrangements. I suspect that if you are taking the trouble to read this article, youâll be experiencing the frustrations of ineffective communication and some, or all, of the following issues occur in your business:
1. Everyone speaks the same language, say English, but it is not their first language and often the message is âlost in translationâ.
2. We communicate mainly in writing â emails or messages / posts using online tools like SharePoint, Messenger or Slack) – and often the messages are misunderstood.
3. When we communicate verbally it is often remotely by phone and it is difficult to hear clearly or to get clear visual clues that help us understand the other person.
4. We rarely meet face to face and when we do, we are often discussing problems, which creates a negative atmosphere.
5. We have people from many different corporate and social cultures who communicate and behave in different ways.
6. We simply have people who are technically very skilled but are not very good at explaining themselves.
7. We have a lot of people who do not listen well.
8. In stressful times people can easily come into conflict, sometimes over quite small things. Stress is often built into the workload with very tight deadlines, service level requirements and so conflict is commonplace.
9. There is always the risk that the relationship between different groups can become strained, and sometimes can break out into real conflict.Â
The list above paints a culture that is not fun to work in. This impacts on productivity levels â not just a little either, it can decimate productivity levels. It can and does lead to more absenteeism. It does lead to more people leaving to find better environments in which to work. It stifles innovation. Innovation is fuelled by communication and without it innovation stalls.
If the case for effective communication is so persuasive why is it that ineffective communication is more the rule than the exception?
There are 3 main causes:
1. A little like driving a car, most of us think we are a lot better at communicating than we actually are and so donât believe we need to invest time and energy improving our skill set.Â
2. For most people it is a difficult skill to learn and to consistently do well â particularly in testing circumstances, e.g. communicating remotely, with people we donât know well, with people from different cultures. For this reason many people avoid learning how to communicate and are often resistant to it.
3. The quality of communication is not monitored and measured effectively and as we all know what doesnât get measured doesnât get managed, and what doesnât get managed usually doesnât happen.
The Solution
Hereâs some steps to take if you hold the budget for an outsourcing arrangement.
1. Get someone independent to carry out a review.
You need to know (a) where communication isnât working (b) what behaviours contribute to poor communication (c) where communication is working well (d) what behaviours contribute to effective communication (e) what is the tangible impact of ineffective communication (time delays, increased costs, reduced productivity etc).
2. Define what good communication behaviour
looks like and get the buy-in from key stakeholders from all the parties to the outsourcing arrangement to make it happen.
3. Donât simply deliver a training course.
It can help a little but usually the effect will wear off all too quickly. Set up a change programme that has resource to train the basic skills, a monitoring and measuring mechanism to provide performance data and resource that can provide ongoing coaching support.
The major challenge is winning the support from all parties to set up the budgets necessary to make this happen. It works best when an independent company is commissioned by all the outsourcing parties, each party pays equally and so has a shared commitment to making it work. Communication is a two-way activity, and any initiative to improve it must be shared equally between the parties.
It is always difficult to win budget for anything. The return on this investment though will achieve returns many times over if it effectively addresses the ills of poor communication. If you really want to do something about the value that is leaking from your outsourcing arrangements, particularly ones that involve distributed teams working in multiple locations across the world, then it is worth looking at very hard. It is the enabling solution that can act as the catalyst for your arrangement to meet all its goals and then some!
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If you want to discuss training Strategic Sourcing Professionals in your organisation call Chris Halward at RQV Learning on +44 (0)7879815122 or email him at chrish@rqvlearning.online
Programmes can be tailored to meet your needs either as an open or in-house programme covering one or more of the  Strategic Soucing topics
