At the most basic level, the challenge with change management is that everyone knows it’s important, even that it’s make or break to the success of outsourcing engagements, but very few actually know what it is or how to do it. Even the most outsourcing-sophisticated organizations fall short in their change management activities.
Sourcing change management guru Deborah Kops defines change management as, “A structured approach to transitioning stakeholders – organizations, teams and individuals – from one business model to another that incorporates shared services and/or outsourcing to third-party providers. The goal of sourcing change management is to efficiently assist stakeholders to change their ways of working, first adopting, then embracing and expanding the new model in order to deliver a business case.”
In his book “Devil’s Dictionary of Global Sourcing,” outsourcing attorney William Bierce defines it this way: “Change Management, n. 1) pre-agreed protocol for unlocking a stable process, agreeing on modifying it (including corresponding impacts on scope of work, roles and responsibilities, service levels, terms and pricing), and re-freezing the new process; 2) service provider’s toll booth for minting new nickels and dimes; 3) bureaucracy, delay and conflict; 4) trigger for relationship governance and dispute management.”
While Mr. Bierce’s description sounds more like change control than change management (and the entries in his book are to a large extent intended to be hugely entertaining), the reality is that many people use the two terms synonymously. This may in part be because change management in outsourcing is all about getting stakeholders to rapidly comply with the change of control of the outsourced processes.
Some people think it’s pretty PowerPoint presentations and clever communiqués (or posters, mugs and mouse pads, as Kops quipped), but there really are several critical components that define successful outsourcing change management:
- You must have a highly strategic, fully-fledged change management plan, not a tactical program comprised of warm and fuzzy emails from HR or an occasional proclamation written by marketing and delivered by a senior executive. Face it — outsourcing causes significant disruption throughout the organization, and you need to get to the hearts and minds of all, especially those directly impacted, to guard against derailing forces. Additionally, the plan must be constructed and implemented in symmetry within the organization’s corporate context.
- Change management must start on Day One, during initial formulation of the sourcing strategy and business case. If you initiate change management when the transition plan is being developed, at transition or when preparations are being made for the announcement of the outsourcing engagement, you’re heading for a rough ride of resistance and rebellion.
- Every individual on the sourcing team – client organization and service provider members alike – is a change manager. And every team member must be equipped with the knowledge and capabilities to strategize, influence, resolve, listen, intervene and respond to any situation that may arise.
Change management isn’t easy or glamorous. It’s misunderstood, and all too often mismanaged. It’s highly complex, and requires specialized skills and capabilities. But it is an absolute imperative to outsourcing success.