Change management and communication: key enablers for outsourcing success
Several outsourcing surveys have shown that the adoption of outsourcing in companies is directly attributed to top-down support and investments made in communication and change management. While transition planning, vendor delivery capability and project management focus are important, change management and communications strategies are critical to keep employees motivated, gain support and achieve the desired outcomes.
Communication is critical to carry out meaningful change
Often a company or business unit that is considering outsourcing is faced with critical decisions that would impose significant change. Employees who might have demonstrated a strong sense of ownership in the past may resist the change, leading to morale and productivity issues. The human and emotional aspects of change can easily incline stakeholders to believe hype over facts. In most failed outsourcing initiatives, confusion, uncertainty and rumours caused disruption of operations. Existing vendors may feel insecure as they see confusion and uncertainty. The bigger issues can be external. If not managed well, negative publicity and loss of trust with clients and shareholders could impact the company’s business and valuation. The leaders therefore need to plan communications such that their benefits are clearly articulated for all target stakeholders.
Magnitude of change initiative
Every organisation is different and it is critical to drive such initiatives with foresight and awareness. Investments in change management and communication depend on the culture and maturity of target groups. Factors like size, scale, complexity, type of outsourcing and the extent of desired change should be additionally reviewed at the planning stage to determine investments. In domestic outsourcing deals employees can be transferred to the payroll of the provider. In large-scale offshore outsourcing initiatives, companies have to additionally plan employee displacements as due to the global nature of deals, transfer to provider payroll is not always an option.
Typical approach that can be customised
It is advised to keep the approach simple. A generic approach is outlined below but would need to be customised depending on the size, scale, beliefs and culture of target groups. Large-scale changes should be rolled out in phases. Learnings from previous phases (if applicable) should be factored into future phases.
Charter: senior executives define the charter which should consist of rationale, scope of change, type of change, target stakeholders and expected outcomes.
Planning: it is recommended to plan the initiative like a project. A cross-functional team consisting of executives, change management, communications, sourcing, and HR develops the change management plan. External consultants and PR firms can be leveraged if the company lacks the expertise. A change management plan captures the people, process and technology aspects of conducting outsourcing change in target groups:
- People – analysis and identification of stakeholders, change teams and governance.
- Process – as part of planning, change Intelligence is gathered using various collaboration mechanisms (e.g.: surveys, focus groups, questionnaires, interviews etc…). Analysis of this information provides insight into projected user impact and complexity of change, and helps determine the magnitude of change effort required. Other things defined at this stage (if applicable) include: (a) communication plans for different target groups; (b) content – outsourcing messages, FAQ, outsourcing and cultural trainings; (c) career coaching and mentoring programs; (d) implementation timelines for each target group; (e) outcome-tracking mechanisms.
Technology & Tools: what tools would be used to conduct surveys, collaborate and share information (websites, webcasts, share point etc…) and provide support.
Implementation: once the change management, communication plans and key messages are approved by the governance committee, the change team implements the plan.
Sustain and Measure: the change team reviews the impact and acceptance in target groups. Surveys and focus groups can also be conducted to determine the degree of success in achieving desired outcomes.
Best practices in change and communication management
Some of the best practices companies can implement are shared below:
- Determine early on in planning how the communication will be delivered. Assign a small team to manage consistent communications. If there is bad news for target groups, communicating it sandwiched between two pieces of good news can be a good strategy to share the positive aspects of change.
- Build trust by: (a) actively managing resistance and providing unambiguous answers to questions that cause most anxiety (e.g.: job-losses, redeployments, role-change, re-badging, knowledge drain, risk, cultural differences etc…); and (b) focusing on benefits and sharing examples to which audience can relate easily. If the benefits are received positively, some behavioural changes over time will help sustain and build momentum for more change.
- Build a FAQ file to address expected questions and expand that further if new questions come up in sessions.
- Solicit support, but do not try to convince as pushing too much might be received with scepticism.
- Map all current and future company projects and if possible share how change will impact them in future. Everyone is looking for an answer to “what will happen to me” as quickly as possible.
- Sustain the change by demonstrating top-down support and showcasing initial wins.
Outsourcing is often used as a strategic weapon by the C-level to create meaningful change. Your vendors will appreciate the change management support as it makes the transition easier for them. Companies planning to launch an outsourcing initiative or those already doing that can benefit by incorporating change management as one of the core components of their outsourcing strategy.