Sizing Up the Strategic Challenge

Because this book is about a management tool, we end up looking at strategic questions from the inside out. That is, we ask, ‘‘Where can executives use this tool to accomplish what they want?’’ You will want to do the analysis from the other direction, asking, ‘‘What are my company’s strategic imperatives, and how can I address them?’’ You will want to compare various approaches and use the one that makes the most sense in your situation. As Charlie Feld, chairman and CEO of the Feld Group, says, ‘‘Run the other way if you hear executives say ‘I believe in outsourcing,’ or ‘I don’t believe in outsourcing,’ for that matter. Choosing the right management approach should be thoughtful and appropriate as opposed to a matter of religion.’’

With these caveats in mind, let’s review four ways in which organizations use outsourcing to transform. We will look at how each taps different benefits and takes a different strategic course (see Exhibits 4.2 and 4.3).

1. Out-of-nowhere companies start up rapidly.

2. Crouching tigers clear the path to growth.

3. Fallen angels catalyze broad cultural change.

4. Born-again companies achieve radical renewal.

   
   Exhibit 4.2: Organizations use outsourcing in four ways.

   
   Exhibit 4.3: The four types of transformational outsourcing differ on key characteristics.