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’Til Death You Do Part?

’Til Death You Do Part?
Damian Scallon
  • On November 4, 2014
  • http://theoutsourcingconundrum.com/

It was an uneventful Thursday afternoon until the phone rang.  On the other end was a plant manager from an assembly plant in Ohio, one of my customers.  Within a few minutes, I was in the car and heading north for a four-hour drive to visit his plant and discuss his concerns.  I had known Herb, the plant manager, for at least a decade.  He was not a man who cried wolf, nor did he call very often.  He was currently responsible for the launch of a key product at his newly renovated plant and things were not going well, including our performance as his inside-outsourcing service provider.

We had over 200 people in his plant providing a wide variety of facility management services, and we were not living up to expectations.

On the drive up, I touched based with our site management team as well as the regional manager for the area.  None of them could understand why Herb would have an issue.  Their collective opinion was that we doing “OK.”

That night I toured the plant, observing the delivery of our services, in preparation for my meeting at 9 the next morning.  My management team was accurate; we were doing okay.  But we did not brand ourselves as the “OK Service Company.”  We branded ourselves as the “Premier Service Company.”

Promptly at 9 a.m., I was escorted into Herb’s conference room adjacent to his office, and a few minutes later he joined me.  Herb was not one for a lot a pleasantries, which is not to say he wasn’t pleasant – he was actually a great guy and good customer – but he had a plant to launch, and at this point I was not part of the solution, but rather part of the problem.

Closing the door, he asked me, “Do you know why one out of two relationships ends in divorce?”  I had known Herb long enough to know this was a rhetorical question, so I sat quietly and waited.  He continued, “They do not take the time to redefine why they decided to hook up in the first place, or they hooked up for the wrong reason.”  Turning to me, he asked, “Which are we?”

Opening the cap on a bottle of water, I responded, “It cannot be the latter, as we have been together for over ten years.”

“Right” he said, “so let’s redefine our relationship by redefining what I need.  You are here because I need you to lead the improvement of my facility, and not allow the failures of my team to be the excuses for you to miss that target.  Have you walked my plant?”

“Yes,” I responded, “last night.”

“And?” Herb prompted.

“You are right.  We are only doing OK.”

Herb stated, “We need this plant to be world class, in every aspect of its operation, including yours.”

Within 15 minutes the meeting was over, and I headed to our offices inside the plant for a debrief with our on-site management team.  On the walk over, I recalled the numerous times I faced discussions like these with customers due to the fact we became complacent and flaunted our past successes.

I chose to kick off the meeting the same way Herb did: “Tell me why one out of two relationships ends up in some form of divorce.”

The site manager spoke up, stating, “I ended up divorced because I was tired of being taken for granted.”  Others on the team contributed, all touching on similar traits of boredom, lack of attention, financial issues, and, of course, a lack of affection.

“Well, that is exactly how Herb feels right now.  He feels like we have abandoned him when he needs us most.  We are taking our position here for granted, and we have stopped putting in that extra effort, which Herb admired.”

The site manager said he was puzzled, and that working around Herb and his team was like walking a maze everyday.  The others murmured in support of their on-site boss.  “It is not a maze, but rather a labyrinth,” I stated.  “So, what’s the difference?” the third shift manager asked.  “Unlike a maze, a labyrinth has a path – a way in and a way out.”  Grabbing a marker and heading to the whiteboard, I stated,  “At this plant, the path starts with understanding why our customer has chosen to outsource to us in the first place.  We need to clearly define their need.”

Define The Need:  why is the customer outsourcing, and why are we uniquely positioned to fill that need?

We all agreed that when we started providing our maintenance services to the old production system, our customer’s number-one need was to keep the line maintained, up, and running.

We then discussed the second point on the path through the labyrinth, which is to fully understand the scope of services.  We needed to define the scope by outlining exactly what was needed to be done and how often.

Define the Scope: what are the key activities and tasks required, and what is the frequency for each activity and task?

The discussion moved forward into the third step on the path:  the need to operate to a defined cost, and for the customer to feel the price they were charged was offset by the value of service we were providing.

Define the Value: what is the actual cost to provide the services, and what is the value to the customer’s product when these services are provided extremely well?

After some debate and discussion, we agreed that we previously provided a ton of value by restoring an old production system and improving production throughput.  We also agreed that with the addition of the new production system, we were no longer viewed as providing the same level of value.  We also finally agreed that we were not the cheapest provider of inside-outsourcing services, and to warrant our price we had to provide a lot of value.

The heated discussion led to the next step on the labyrinth: Define the Expectations.

Define Expectations:  how does our customer measure success, and how do we stack up against those measures versus our competitors?

The discussion that followed was short and humbling.  We no longer knew how our customer was measuring success.  We only knew they were no longer happy.  We also reaffirmed that we had lost our edge against our competition because we took the provision of value for granted, and failed to keep pushing the envelope.  In short, we finally stated the obvious: we had become complacent.

While a fresh pot of coffee brewed, we sat and talked about the coincidence between the relationship with our customer and our other relationships either at home, with friends, with suppliers and so on.  Herb’s point became clearer.  If we did not desire to end up divorced, we needed to keep the relationship with our customer fresh.  To do this, we needed to continually redefine the need.

Redefine the Need: understand the new need of our customer, and realign ourselves to this new need.

Our third shift manager spoke up.  “If we redefine the need, doesn’t that mean we start all over?”  The group debated the impact of this one small step on the entire model we used to deliver our services.  It was unanimously agreed that once we understood the need, we would need to revisit:

Define the Scope – to investigate if the scope of our services aligns with our customer’s new needs.
Define the Value – to investigate how and where we provide value.
Define the Expectations – to investigate how our customer will measure success, and to align our processes and people to deliver on those measures.

Although our customer was not particularly happy with us at this time, we had performed well in the past and built up a reasonable amount of credit.  This credit gave us the support of the customer, and a window of opportunity to re-align ourselves with our customer.

We decided to add a Strategic Operating Plan to our arsenal of tools to document our re-alignment and new direction, as well as communicate the plan to both our customer and our internal team. Our on-site team’s past track record was partly because we explained “why” what we did was important.  Our work was not overly glamorous.  It was dirty hard work, so it was critical the team understood that there was a real purpose behind each activity and task, and that those activities and tasks improved the final product.

The management team committed to meeting with all of our customers in the plant to understand what was going well, where we were dropping the ball, and where we could add value.  The same discussions were had with our broader internal team.  We agreed to complete our Strategic Operating Plan within a month for review by the plant manager and his team.

The following morning, I met with Herb again at 9 a.m., and followed up with him on our internal discussions.  As stated, I had known Herb for a long time so the report I provided to him was candid and accurate.  Herb knew we were capable and held a good track record.  He took the time to refresh my memory on how important it was for an inside-outsourcing service provider to not lose sight of the true purpose for why we were given the opportunity in the first place, and how important it was to continually revisit that purpose in order to keep the relationship in sync.  We agreed that the Strategic Operating Plan would be a great tool to prevent us from losing sight of the purpose in the future.

Shaking hands we noted that we would see each other at the end of the month to review the Strategic Operating Plan, and that his team would work with us to help everyone be successful.

In a previous article ‘The 3Ps of Inside-Outsourcing’, I talked about the need for alignment between Purpose, Process and People.  In this true story, I outlined components within Purpose. In the follow-up article, we pick up with Herb as he reviews our Strategic Operating Plan, and review how we aligned our processes: read more here

This article was first published in Outsource #37 (Autumn 2014)


About the Author

Damian Scallon 150Damian Scallon is currently a consultant with Pathway Guidance in Cincinnati, Ohio and is finishing a book called The Outsourcing Conundrum.

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