‘We, Inc.’ or Side Show? | Article

Why You Need an Intimate Communication Strategy In Your Outsourcing Relationship

ring masterCan circus elephants dance without stepping on each other’s peanuts? Peanuts can be used to coax giant pachyderms into unnatural activities — even ballet. Through peanuts, all the dancing elephants’ interests can be aligned. But without a communication strategy, they will step on each other’s peanuts when they try to dance together.

As elephant trainers and outsourcing experts know, both direct communication and positive reinforcement (the peanuts, or aligned interests) are mandatory for a long-term alliance and business success.

Failure to communicate intimately at all levels in an outsourcing relationship can mean the difference between graceful accomplishment of business objectives and, well, a three-ring circus. Outsourcing buyers and providers, like elephants, must learn to communicate at intimate levels when dancing together – a typically unnatural act – if they don’t want to step on each other’s peanuts.

Build Personal Relationships for Commitment

The outcomes of outsourcing initiatives reflect the parties’ commitment and shared visions. Both are enabled by a personalized approach in relationship management that extends well beyond the executive level.

A prime example of “going the extra mile” to establish harmonious relations is Harrah’s Entertainment, Inc., the Nevada-based hotel casino company. Harrah’s has successfully outsourced its call center to APAC Customer Services, headquartered in Deerfield, Illinois. According to Rick Naples, Harrah’s corporate vice president of Hotel Operations, the two enjoy “a lot of informal dialogue. It’s not unusual for their VP or CEO to call me and ask: ‘How have you been?’ “

They set aside one afternoon of their quarterly governance meetings for social time and get together at holidays or significant occasions for either organization. The invitations are relationship management oriented even though the setting may be a Cubs game.

Wayne Fell, president and CEO of Member Insurance Agency, Inc., headquartered in Illinois, says his company’s relationship with Trumbull, the Windsor, Connecticut-based provider, “just keeps getting better. As in any good relationship, you want to know each other personally.” Problems occur; but resolution is relatively easy, he believes, with good communication. In addition to their formal governance meetings, he meets informally with Trumbull’s senior executives several times a year.

Lack of chemistry can be a deal-breaker; so Simon & Schuster, the New York-based publishing operation of Viacom, Inc., had in mind communications and “long-haul chemistry” when it selected IT outsourcing provider, Lockheed Martin. Anne Mander, CIO, recalls, “There was, and is, an atmosphere of thoughtful helpfulness – on both sides. We believed in their technical capabilities, but we also liked them as human beings. There was never a sense that it’s ‘them’ and ‘us’.”

Build for Consensus

Outsourcing arrangements should be structured to create an environment where the two parties can confidently come together, lay out their challenge, describe how it impacts them, then decide how to resolve the challenge. Optimal outsourcing relationships are soundly built upon the consensus of understanding.

When Fred Vornbrock, vice president and program director for MountainTop Technologies, Inc., the Johnstown, Pennsylvania-based provider of distance learning services, talks about its outsourcing relationship with Lexington, Massachusetts-based LuxorMedia, LLC, he emphasizes the importance of effective communication.

“There were times we were both frustrated in learning to function as a group,” Vornbrock explains. “In the beginning, we did not clearly communicate timeframes and expectations. But we’d go back to the core of our relationship and say: ‘Do we trust each other and understand what we are trying to do’? We found that we absolutely do trust each other and were able to overcome issues we had from time to time because of lack of communication.”

A. Lou Whitley, HR Service Center manager for Edison International, the California-headquartered utility company, is pleased with the outsourcing relationship forged with Mellon HR Solutions LLC, headquartered in Pittsburgh, Pennsylvania. “I would advise people to never agree to an outsourcing relationship where you don’t meet, from day one, the folks that will be on your team. The focus and time we spent upfront on building our relationship, and the continued commitment to do so, makes it successful.”

Build Cultural Compatibility

Having the same mindsets is critical to success. If both parties develop and sustain a “partnership” mindset, they both succeed. If an adversarial mode develops and continues, outsourcing objectives are threatened.

Ed Drinkwine, life underwriting services director for American Family Insurance, headquartered in Madison, Wisconsin, highlights this point when discussing the insurer’s outsourced relationship with global service provider, Computer Sciences Corporation (CSC). “I cannot overemphasize the need to understand culture on both sides before you go into the relationship,” he comments. “Both parties need to communicate frequently to be certain they understand each organization’s vision and the vision of the project they are partnering on. If those key elements fall into place, they will achieve objectives.”

Buyers and providers need to discover cultural differences as early as possible to avoid the risk of wasting time because of ruffled feathers and “turf” issues. Both parties need to be able to communicate in a manner that demonstrates they collectively own something.

Building for a long-term outsourcing relationship demands the same discipline and fidelity as personal relationships. It also requires flexibility in resetting expectations about performance. Drinkwine observes: “You have to commit to spending time to talk about what’s right, what isn’t right, and what to do about it. Call frequently or send an email. As things surface, that’s when you talk about them. Don’t save stuff and wonder what it really means.”

Lessons from the Outsourcing Journal:

  • Create an integrated environment, which involves relationship building on a personal and corporate level.
  • If communication is focused on each other’s weaknesses instead of how to get the job done, it will become a troubled relationship.
  • Discover cultural and personal characteristics as early as possible.
  • Both parties need to clearly articulate and understand timeframes, expectations and the vision of each organization or project they partner on.

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