Outsourcing for Radical Change: A Bold Approach to Enterprise Transformation

Rating:
Summary: A New Tool Not To Be Missed
Review: Imagine your CEO came to you and said, "unless we dramatically lower our costs, improve our products, build a stronger customer base, change our image, and add professional capabilities, and do all of this in 24 months, we have no value left." Totally crushed by the seemingly impossible nature of the task, you emerge from the encounter only to meet a seasoned management consultant who approaches you and says, "I have a tool that will accomplish exactly what your CEO wants to do, and this tool has an 85% success rate." Sound pretty incredible? You bet! Worth listening to? Absolutely. Then you should read Jane Linder's path breaking book, "Outsourcing for Radical Change: A Bold Approach to Enterprise Transformation."

Unlike so many management books with pretentious claims that leave the reader wondering, "how would that actually work in the real world," Ms. Linder, to her credit, leaves little to the reader's imagination. The book is filled with example after example, and draws on an immense body of domestic and international data and case examples to support her arguments. What I especially liked about the book was that it not only addressed the questions and issues of C-level management, but it was very grounded in operations and implementation issues -- how do you make transformational outsourcing work for you, day-in and day-out and what are the implementation issues and traps to watch out for? I also appreciated the book's focus on how transformational outsourcing can be successfully applied in both the private and public sector. For those of you who thought you knew what outsourcing is all about, or who are looking new and radical ways to achieve breakthrough results, I highly recommend reading this book.

Rating:
Summary: Great Insights and Case Studies
Review: The topic of outsourcing has been around for almost forty years. For the first three decades outsourcing has been practiced or approached from a task-by-task perspective (e.g., payroll outsourcing to PayChex or ADP).

It is only in the last decade (starting with IT outsourcing by Kodak to IBM) that outsourcing is slow but surely taking center-stage as a business tool for transforming complex organizations.

In this book, the author systematically delves into the management decisions that shape transformation outsourcing. I found the framework presented in this book quite useful in organizing my thinking. The case studies were both interesting and thought provoking.

Highly recommend this book for consultants and managers who are dealing with complex outsourcing decisions.

Dr. Ravi Kalakota
Author of Offshore Outsourcing: Business Models, ROI and Best Practices.

Rating:
Summary: A Must-Read for Sr. Execs and Idea-focused Practitioners
Review: When I first saw this book I wondered two things. First, how is the author's notion of "transformational outsourcing" any different than the time-tested, well-understood practice of handing over back-office or "non-core" business functions to a company that can perform them more cheaply. Second, why should a business leader should care?

I was surprised to learn from the author - a former Harvard Business School Prof and now a strategy research lead at Accenture - that most executives have fuzzy ideas about just what outsourcing means. Perhaps that's because there has not been a definitive outsourcing text or guru. Core Competency had Hamel and his groundbreaking Harvard Business Review article on the subject. Competitive Strategy had Porter and his opus on the topic. Disruptive Technology had Christensen and his best-selling, "Innovator's Dilemma." Dare I say that outsourcing, one of today's most popular and controversial management tools, finally has its own definitive book and guru.

Provocative, entertaining, and well-researched, Dr. Linder's brand of outsourcing has done for many firms what Bill Parcells' brand coaching has done for football teams: It creates big change fast. Parcells has taken three different NFL teams from sustained losses to playoff slots within two years of taking over as coach. Using detailed case studies of leading companies (Thomas Cook, National Savings & Investments, to name a few), Linder describes the Parcells-like influence a well-crafted transformation program can have on your organization.

But the devil is in the details, like how to execute a transformational outsourcing strategy...Linder's attention to execution and detail is precisely why executives should pay attention to the book. In my experience and research, CEOs have focused on outsourcing only insofar as it calls upon them to make four high-level calculations: determine whether the activity to outsource is core to the business; evaluate the financial impact of outsourcing; assess the non-financial costs and advantages of outsourcing; choose an outsourcing partner. But transformational outsourcing can't be done with a CEO at 30,000 feet.

Leaders need to get down into the trenches, and not leave all the dirty details of execution to middle management. Linder describes ten practical imperatives for CEOs to follow when implementing a transformational outsourcing initiative:

-Make the hard call
-Design a good business model, not a good deal
-Own the negotiation
-Allocate two full days a week of your won time for the foreseeable future
-Orchestrate a dynamic transition
-Create momentum
-Manage the relationship as if it were Chinese handcuffs
-Engineer a commitment to performance
-Face forward
-Recognize that you will underestimate the task, and plan accordingly

As these steps suggest, the book offers new wrinkles to the classic work of John Kotter (author of "Leading Change"), while also laying the theoretical and practical groundwork for a novel approach to improving business results. I recommend the book to practitioners, academics, anyone interested in the current outsourcing debate...and especially senior executives.