Chapter 3: Ten Imperatives for Leadership

Overview

To take advantage of the growing potential of transformational outsourcing, business leaders must change the way they think about and use outsourcing. First and foremost, senior executives must personally and visibly take charge of the initiative. CEOs may be unaccustomed to such an active role in outsourcing. However, they must stand at center stage at the outset of any transformational outsourcing initiative that works.

As a senior executive, you must be tired of hearing this particular drum beat. ‘‘Can’t my people do this on their own?’’ you might wonder. The short answer is no. And this answer comes from executives who have been through the experience. For example, some years back, one of the world’s top stock exchanges concluded it could not support the trading volumes it expected with a face-to-face bid and quote system. Following the ‘‘big bang’’ move from face-to-face trading to computerized quotes and phone calls, it had outsourced IT infrastructure and applications to streamline processes and improve reliability. Now the organization was ready to take on the challenge of transforming to fully computerized trading. Initially, the effort was championed by the CEO, but before he could move ahead, he was asked to resign over a different issue. His successor took up the charge. He lost his job fighting with the board to implement this radical change that would eliminate many of the exchange’s market makers. A third CEO put his shoulder to the same cause. Ultimately, it was under his guidance that the outsourcing provider implemented systems and processes that completely changed the basis of trading on the exchange.

If senior leadership remains uninvolved, transformational outsourcing will fail. What must leaders do to ensure that this kind of transformational initiative is a resounding success? I offer ten imperatives for transformational outsourcing leaders. These aren’t all the responsibilities that have to be executed superbly. These are the leaders’ personal critical success factors.