Outsourcing & Company Culture

By Megan Castleman

I recently attended a seminar on using outsourcing as a strategic business tool and it provoked some thought. It is oftentimes a fiscally sound decision to outsource certain business operations or even as a short-term, cost-effective way to manage implementing important initiatives where long-term human capital would not be needed. However, I had to think of the potential effect on what I believe to be one of the most important aspects of any business – culture. Is it possible to outsource certain functions while minimizing impactful effects to company culture? I believe the answer is yes when great care is taken in selecting the right outsourcing firm while ensuring you have the right internal personnel providing oversight of the outsourced function.

–         Determine the “Why”: Understand why you need to outsource a particular function. Do you lack internal staff with the necessary expertise? Is this a one-off project that you need additional human capital resources for implementation but not for long-term maintenance? Is it more cost-effective to outsource than to pursue an internal hire? You should be come to the table with a clear understanding of the “whys” behind your decision.

–         Define your Needs: Before even starting the process of finding an outsourcing provider, you should clearly define the scope of the function for which you need outsourced assistance. For example, you need to add human capital at the executive level and have decided to use a firm like Acumen Executive Search to help. You should have a basic understanding of the job description, experience and educational requirements, and timing. A good outsource provider will be able to fine tune these details but having this basic information to start the process is essential.

–         Interview: Any outsource provider should be interviewed as thoroughly as a potential internal hire and should be able to clearly articulate its mission, core values, culture and unique value proposition. If they are not able to do so or if what they are proposing doesn’t align with your own mission, core values, and culture, then they likely are not a good fit.

–         Do your research: The internet is a treasure trove of information, both good and bad, and a great place to start your research on outsource providers. The arrival of job engines such as Glassdoor and Indeed have provided a resource for employees to post, anonymously if they choose, the good, bad and ugly of working for a certain firm. You can get a good feel for what employees think about working there and, if they are not happy, you probably won’t be either. At the very least, you can address reoccurring issues with the stakeholders to understand their awareness of these issues and how they are addressing them. You should also read any testimonials on the provider’s website and realize you can, and should, request references. This is especially key when working with providers lacking a presence on job boards. Remember, you want honest, transparent feedback to ensure the provider is the right fit.

–         Assign Appropriate Oversight: An internal staff or leadership member who has a deep understanding of all of the above points should be assigned to manage the outsource relationship. This person should be knowledgeable and empowered to make key decisions, including ending the relationship if it is not working out.

In short, outsourcing, when managed correctly, can be an invaluable tool to accomplish business initiatives in a more cost-effective, timely, strategically advantageous, and culturally sensitive manner.

 

The Leader’s Guide to Corporate Culture

Harvard Business Review wrote an excellent article “The Leader’s Guide to Corporate Culture” to help define your organization’s culture and shape it to fit your strategy.

Many leaders often don’t understand culture, ignoring it or handing it off to HR. That can often lead to their plans for their company being derailed. Align culture with strategy and leadership and it drives your organization forward. You can hire and retain great employees, improve morale, and increase profits.

To learn more about culture and how you can use it to shape your organization, read this informative article.