Ignore the impact on your employees. That was the message from Gartner Inc. analyst Diane Morello at the firm's annual Outsourcing Summit this week.
The economic argument that sounded so rational -- not to mention personally lucrative -- to the chief executive can ring very hollow for the rank and file whose jobs are on the line.
"Outsourcing spells turbulence for employees and their concerns need to be respected and honored," Morello said. "I've spoken to many companies about outsourcing and it is amazing how callously some of these decisions are made and put out to the organization."
Morello told the story of a CIO who called a meeting to announce the "good news" that the company was going to save money by outsourcing all application development to India. All of the developers in the room immediately rushed to their managers to ask the critical question: What did this mean for me? Unfortunately, the CIO had failed to inform the managers. "One way to ensure failure is to blindside the managers," Morello said.
A business leader also must communicate "with accountability," and that usually means in person, not by pushing the send button on an e-mail -- or deploying a deputy to do the dirty work.
How can "change leaders" manage and mitigate the effects of outsourcing?
A good first step is to know thyself. Morello recommended that business leaders take a hard look at their skills and go to people they trust to get feedback. Can they maintain the focus needed to achieve results? Are they adaptable? When the time comes to explaining the outsourcing decision to employees, can they communicate clearly without resorting to jargon?
"Success depends on the people there now," Morello said. "Use those people."
Successful change leaders know their audience. Morello described three types of people who need to be addressed when making outsourcing decisions: connectors, mavens and salesmen. Connectors are employees who know everybody and can spread information. Mavens collect information and know what is happening. Salesmen are the persuasive "enrollers" who can help sell the project.
People tend to react to change in stereotyped ways, Morello said. There are the early adopters or innovators who pull forward new ideas; the reluctant majority; and the resistant laggards, people who tend to dismiss new ideas as old hat or the latest fad. "They'll say, 'We did this 10 years ago' or, 'I'm not going to do this because I know by the time I do it, it will change,'" Morello said.
Most people are among the reluctant majority. Getting to the tipping point, Morello said, referring to the concept popularized by Malcolm Gladwell, requires having a sufficient number of early adopters and salesmen to move the project forward and perhaps isolating -- or even firing -- the laggards.
If an organization is likely to outsource, the business leaders should not delay the news so long that they appear heartless. "Treat people as you want to be treated. I have never seen an organization damaged for letting its people know too early."