Outsourcing Each Other's Kids

Outsourcing is nothing new, but recent outsourcing is different, both in the nature of the activities we're outsourcing, and where the sources are. No longer do we outsource only manufacturing; no longer are the source countries all industrial powerhouses. Today we're outsourcing thought work, too, and the source countries — India, the countries of the former Soviet Union, and Eastern Europe, for the most part — have large numbers of people who can think.

Outsourcing now threatens the jobs of engineers, scientists, doctors, technicians, and decision-makers — people who are much closer in demographic type to the people who make the outsourcing decision. As decision makers, we're now outsourcing the jobs of one another's friends and relatives.

Since what we're doing might have a direct and negative impact on our lives, it pays to examine it more closely than most of us have done so far. Here are just a few issues that any outsourcing plan should address.

Bright flight

People whose jobs haven't been outsourced might believe that they haven't been outsourced yet. Since the brightest of these always have alternatives, they might depart preemptively, and you could end up losing people whose jobs you had no intention of eliminating. Retention costs money, and losing good people costs even more. How much?

Uncontrolled transfer of insights

If your supplier develops an innovation or acquires an insight, will you ever become aware of it? Can that innovation or insight propagate to your competitors? If it did, in violation of your contract, how would you know?

Routine miscommunications

Outsourcing now threatens
the jobs of those
in the same demographic
as the decision-makers

Cultural and language differences, and less effective person-to-person relationships, can lead to increased incidence of miscommunications. Although both parties to a communication might feel that they understand, they often have strikingly different understandings. Colossal errors are possible. How often will they happen? How much will they cost?

Delays

Healthy in-house teams can deliver results more quickly than outside vendors can. For instance, when the vendor resides in a time zone 10 to 12 hours away, a typical round trip communication by voicemail or email can take a day or more. What's the cost of these and the dozens of other similar delay phenomena? What's the cost of a six-month extension of time-to-market?

Forced "progress"

Suppliers provide lower prices not only through lower wages, but also by spreading costs across multiple clients. As they gather more clients, the heterogeneity of their client base increases. Unless the supplier can encourage technology homogeneity among its clients, sharing costs becomes more difficult. Could you be compelled to upgrade systems against your will? What would be the cost of forced progress?

Failing to include all costs in your financial projections can lead to performance below what you've promised. And then your employer might encourage you to consider outsourcing not only your friends and relatives, but yourself.  Top    Next Issue

Much is available in the business press about outsourcing and offshoring. A recent accessible example is by Scott Thurm: "Lesson in India: Not Every Job Translates Overseas," The Wall Street Journal, March 3, 2004, p A1.

For an overview of some novel retention tactics, see "Retention," Point Lookout for February 7, 2007.

Are your projects always (or almost always) late and over budget? Are your project teams plagued by turnover, burnout, and high defect rates? Turn your culture around. Read 52 Tips for Leaders of Project-Oriented Organizations, filled with tips and techniques for organizational leaders. Order Now!

Your comments are welcome

About Point Lookout

Thank you for reading this article. I hope you enjoyed it and found it useful, and that you'll consider recommending it to a friend.

Point Lookout is a free weekly email newsletter. Browse the archive of past issues. Subscribe for free.

Support Point Lookout by joining the Friends of Point Lookout, as an individual or as an organization.

Do you face a complex interpersonal situation? Send it in, anonymously if you like, and I'll give you my two cents.

Related articles

More articles on Organizational Change:

Letting Go of the Status Quo: the Debate

Before we can change, we must want to change, or at least accept that we must change. And somewhere in there, we must let go of some part of what is now in place — the status quo. In organizations, the decision to let go involves debate.

When Change Is Hard: II

When organizational change is difficult, we sometimes blame poor leadership or "resistance." But even when we believe we have good leadership and the most cooperative populations, we can still encounter trouble. Why is change so hard so often?

Reactance and Micromanagement

When we feel that our freedom at work is threatened, we sometimes experience urges to do what is forbidden, or to not do what is required. This phenomenon — called reactance — might explain some of the dynamics of micromanagement.

The Restructuring-Fear Cycle: I

When enterprises restructure, reorganize, downsize, outsource, spin off, relocate, lay off, or make other adjustments, they usually focus on financial health. Often ignored is the fear these changes create in the minds of employees. Sadly, that fear can lead to the need for further restructuring.

Deciding to Change: Trusting

When organizations change by choice, people who are included in the decision process understand the issues. Whether they agree with the decision or not, they participate in the decision in some way. But not everyone is included in the process. What about those who are excluded?

See also Organizational Change and Virtual and Global Teams for more related articles.

Forthcoming issues of Point Lookout

Coming April 25: Narcissistic Behavior at Work: VI

Narcissistic behavior at work distorts decisions, disrupts relationships, and generates toxic conflict. These consequences limit the ability of the organization to achieve its goals. In this part of our series we examine the effects of exploiting others for personal ends. Available here and by RSS on April 25.

And on May 2: Narcissistic Behavior at Work: VII

Narcissistic behavior at work prevents trusting relationships from developing. It also disrupts existing relationships, and generates toxic conflict. One class of behaviors that's especially threatening to relationships is disregard for the feelings of others. In this part of our series we examine the effects of that disregard. Available here and by RSS on May 2.

Coaching services

I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenHiaHyNGSWFaKMYvwner@ChacEyMSdpeCtkDmoXVroCanyon.com or (650) 787-6475, or toll-free in the continental US at (866) 378-5470.

Get the ebook!

Past issues of Point Lookout are available in six ebooks:

• Get 2001-2 in Geese Don't Land on Twigs (PDF, USD 11.95)
• Get 2003-4 in Why Dogs Wag (PDF, USD 11.95)
• Get 2005-6 in Loopy Things We Do (PDF, USD 11.95)
• Get 2007-8 in Things We Believe That Maybe Aren't So True (PDF, USD 11.95)
• Get 2009-10 in The Questions Not Asked (PDF, USD 11.95)
• Get all of the first twelve years (2001-2012) in The Collected Issues of Point Lookout (PDF, USD 28.99)

Are you a writer, editor or publisher on deadline? Are you looking for an article that will get people talking and get compliments flying your way? You can have 500 words in your inbox in one hour. License any article from this Web site. More info

Public seminars

The Power Affect: How We Express Our Personal Power

Many people who possess real organizational power have a characteristic demeanor. It's the way they project their presence. I call this the power affect. Some people — call them power pretenders — adopt the power affect well before they attain significant organizational power. Unfortunately for their colleagues, and for their organizations, power pretenders can attain organizational power out of proportion to their merit or abilities. Understanding the power affect is therefore important for anyone who aims to attain power, or anyone who works with power pretenders. Read more about this program.

• A recording of a program presented 6:00 PM June 29 (Eastern Time), Monthly Webinar, Technobility Webinar Series. You can earn 1.0 Category 'A' PDU by viewing this program. View this program now.