I need to preface this post by saying that I believe that there are times in the life of every company that require significant change—transformational change. In fact, this type of change should be at the core of any organization that wants to innovate and even survive in today’s world. Sometimes this means cuts when the existing resource base does not fit into the new model. I do not believe in job security, nor should anybody in the workforce today—that is a dangerous mindset to adopt. However, the culture of a company is a driving factor contributing to the success of any organization. This is the angle, the starting point for the following observations about outsourcing models. I also need to qualify this as well by saying up front that these are my own personal observations, and I do not claim to be an expert in the study of corporate structure, culture or psychology.
Outsourcing as a corporate culture change strategy simply reveals a complete lack of innovation and creative vision. While some would argue that it is not a strategy relevant to changing the culture of an organization, it really is—self destructive, but it is. However, it is all too often overused or implemented incorrectly. It’s typically treated as low-hanging fruit for the bean counters and those driven purely by numbers. In these cases, it becomes all too easy to cut the fat and continue cutting through the muscle of the organization and into the bone. This is irrational and seems to indicate much bigger problems at the core that this model on its own cannot address.
There is a truth in that corporate culture starts at the very top and filters down through the organization. Implementing an outsourcing model to replace existing functions in an organization almost always means someone else loses their job. There is a saying that the strongest rats are the first to jump off a sinking ship, and that holds true with any organization implementing this model, and as these layoffs continue, fear permeates the culture of the organization made up of those who are still employed. This typically results in anger and ambivalence, jeopardizing business continuity.
Fear can make people do irrational things…When the “strongest rats” are gone, and those remaining are driven by fear, they tend to create work that gives the appearance of relevance and value, but is not driven by corporate objectives, rather those of self-preservation. And what about the major initiatives that were in process when the top talent left? Those tend to continue as well, business as usual…the only problem is that those who designed and drove these initiatives have left, and no qualified leadership in those positions remain, leaving the train running at full speed with no engineer. Compound this scenario with the fact that it’s not business as usual for those that remain, rather an environment of fear and duress, which is counterproductive to optimal performance and execution of business activities.
The problem with all of this is that adopting an outsourcing model seems to always neglect consideration of the costs associated with doing so, while simply focusing on all of the money that will be saved and the bottom line. But that is just smoke…where are the savings, and what will the bottom line actually look like after factoring in the drop in productivity and stability of the organization? There is so much more that can be added to this, but the point here is simple: adopting an outsourcing model has costs and implications that are seldom considered when making the decision to do so, all of which have a much longer lasting impact than the savings that are supposed to be realized by this approach.
These types of changes are usually presented under the guise of changing the corporate culture, attempting to rally the troops behind some grand transformational plan which implies that each employee—each person in the organization matters, and that they all add value. At the end of the day, it really isn’t culture change, it’s organizational change; let’s call it what it really is: reorganization. Changing and improving the corporate culture is not the objective, as it is pitched to the worker bees, rather replacing the existing culture with one from the outside.
