Fifteen years ago, the question would have seemed like overkill. An outsourcing executive likely worked for EDS, ADP, or a handful of their competitors. But the reengineering of the Global Fortune 2000 during the past 15 years resulted in a large increase in outsourcing. In fact, if the 1990s were the Internet era, this decade may well be the era of outsourcing.
As outsourcing evolved from a small niche into a major sector of the economy, the outsourcing executive has developed along with it. There is a historical precedent. The role of corporate executive, for example, is less than 150 years old. Technological revolutions in transportation (railroads), communication (telegraph), and manufacturing (mass production) led to the creation and rapid growth of giant corporations. These required a new class of professional managers who were salaried employees rather than owners.
What should outsourcing executives do to position themselves for career success in outsourcing? For starters, they should measure their skills and experience against the critical success factors for managing outsourcing businesses:
- Sell and Execute — The billion dollar Fortune 50 outsourcing deals make the headlines. But selling these ‘whales’ is not enough. The ability to manage engagements as well as sell them is the difference between a rainmaker with a vice president title and a well-rounded executive.
- Be Strategic — Outsourcing, like every other segment of the economy, is being assaulted with multiple waves of commoditization, and its ugly cousin, eroding margins. The ability to diagnose and solve customers’ business challenges and raise the bar on your firm’s value proposition is a great career buffer against industry changes.
- But Not TOO Strategic — Disciplined visionaries understand — and frequently remind themselves — that creativity and discipline do not conflict. As Peter Drucker wrote in Innovation and Entrepreneurship, successful entrepreneurial activity is almost universally the product of systemic innovation rather than raw creativity. This is a critical factor in outsourcing.
- Innovate Profitably — The ability to sell and negotiate engagements which simultaneously have high customer ROI and remain profitable to the supplier is critical. The deal must be viable financially for both parties. A professional who can innovate in a practical manner and profitably deliver those solutions will always be in great demand.
- Understand Possibilities and Limitations of Technology — Tech-savvy outsourcing executives are sophisticated about what technology can and can’t do. Most great solutions automate the bulk of the rote work in a business process, leaving people to do more high-level work.
- Network, Network, Network — Most executives don’t like to network. They prefer to put their heads down and be productive in their current role.
Bill Russell once said of his Boston Celtics coach Red Auerbach, winner of nine National Basketball Association championships, that he wouldn’t want to go into battle against him. Red was creative enough to figure out how to beat you, but no more. The rest of his energy went into executing the plan.
For example, the classic “killer app,” the spreadsheet, was not sold as an automated replacement for human financial analysts. Rather, it addressed the reality that financial analysts spent 80% of their time entering numbers into a mechanical calculator and only 20% doing analysis. The spreadsheet reversed that ratio.
Yet networking is absolutely essential for an executive in today’s dynamic outsourcing industry. Can anyone reading this article guarantee that they do not anticipate considering other employers in the next two years?
One of the best networkers I know is an executive in the financial services industry. “Jon” is fearfully competent at his job. He also collects smart, ambitious people into his network, connects them with each other, and does them favors when he can. His peers go out of their way to help him – how could they not?
Ultimately, outsourcing requires disciplined, creative executives who can build and operate profitable firms in the face of these challenges. They must be businesspeople first, executives who can diagnose a client’s business and deliver solutions. They must be neither pure strategists nor software delivery executives.
Lessons from the Outsourcing Journal:
- Try to build your career with well-rounded experience in selling and delivering value to customers.
- Balance strategic thinking with practical action.
- Successful outsourcing is about managing business functions not technological innovation.
- Network continuously because having great skills is not enough.
About the Author: Isaac Cheifetz is an executive search consultant who helps companies hire senior outsourcing and shared-services executives. His Web site is www.opentechnologies.com.