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Are you striking the right balance?

Are you on the "outsource / insource / shared services / offshore / backshore / centralise / decentralise" merry-go-round again?

*language warning - I'm frustrated and it shows*

I’ve had more conversations these last few weeks about the shitshoring* that is currently happening across many organisations within Australia (and I’m sure the globe). I’m surprised, as we are in an environment of such ambiguity and uncertainty, when the economic reality is that for most organisations, cost is king.

So many conversations….

And the common theme that has run through them all is “we need to save money”.

I get it. I really do. Sustainable business outcomes are reliant on efficient and effective processes and a productive workforce.

What I don’t get then, is the fixation on saving money through headcount, but no fixation on planning and actually understanding how the hell reducing headcount on its own, will save money. It feels very scattergunned and reactive, with little to no thought on what your business needs to keep delivering and how you can build a profitable business strategically (sustainably). Nope, just headcount for an expected short-term saving.

Here’s the thing: in the long run, it will cost you money.

Focusing purely on the number of headcount is short-sighted and it bugs me no end. I feel like I have a flat spot from beating my head against a brick wall trying to explain that a strategic and sustainable approach is required, not a one-trick pony tactical method. So many times I’ve seen it come apart at the seams. And yet, it’s still happening.

Did you know that every 4th to 6th company backshores its activities two to five years after offshoring, and 80% of some country backshoring activities are flagged as “corrections to managerial decisions”. (1)

Here’s an example of a managerial decision:

lift and shift – move this role to that team because they do the same work. Do they? Really? How do you know? FFS people! Just stop it.

Ultimately, it will cost you money.

  • You will still have shit processes.

  • You will still have shit systems.

  • You will still have non-standardised work.

  • You will still have capability gaps.

  • You will still have the same delivery systems and no real change.

You will be back on the bloody merry-go-round again. But with a difference.

Without the people you need.

What you won’t have are the people who have the tacit knowledge of your business.

  • The ones who know the unwritten work instructions.

  • The unwritten processes.

  • The knowledge of how to get shit done when no-one else does.

  • The knowledge of what was agreed ten years ago but is nowhere to be found because the systems were upgraded and no-one is sure where it was saved or whether it was actually needed anyway at the time.

  • The once in a blue moon activity that everyone has forgotten about until it’s blue moon time.

The people who know those things. You won’t have them.

What you also won’t have are the people who go the extra mile. Give the discretionary effort.

  • The “let’s just work an extra hour to get this done because so-and-so is waiting on it and we don’t want to let them down” person.

  • The “who else is going to do it because I can’t ask Jan, she’s already under the pump” person.

  • The “it’s end of month and we need to get this data together manually” person.

  • The people who are proud of their organisation and want to show others they are proud of it.

  • The people who care, not just about themselves, but about the business and the people they work with – their community.

You won’t have them.

Instead what you will have are

  • the “I get paid by the ticket” people and

  • the “that’s not standardised so I can’t do it” people and

  • the “I don’t know, I’ve never done it before, so-and-so used to do it so we didn’t need to learn” people and

  • the “it’s not in our work instructions” people and

  • the “keep your head down” people and the “don’t disagree” people.

  • The people who are too scared to make any suggestions or use their initiative in case they are next on the list (you know "the list").

That’s who you will have.

And the ones you used to have? They’ll be with your competitor, because they are offering stability and safety and they recognise the importance of people to their organisations success. They’ll be with the businesses that actually understand that we are in a talent short market and always have been. The businesses who want to support and develop their people's skills and capabilities for the long-haul. Those businesses.

Don’t get me wrong, there are always people available in the market, but the ones that you want (those “unicorns” for want of a better phrase) – they’re in high demand, as they’ve always been, because, well - they’re unicorns! Now you’ll be trying to find a needle in an even bigger haystack.

Stop the lifting and shifting merry-go-round.

  • Stop removing headcount without understanding, IN DEPTH, what the work of the role is.

  • Stop consolidating roles without understanding the nature of the work that those people are actually doing – in detail!

Don’t skim over it and assume you know what’s involved in their role – do the work and respect the operator! Take the time and look at the activities being done.

Standardise, automate, embed.

Involving your teams in these activities will give you an engaged and motivated workforce who have the genuine ability to use their initiative, to innovate and to make a difference in building a sustainable business that will return the cost benefits.

I’ve said it before and I’ll say it again – put your chainsaw away. Use a horses-for-courses approach – nothing is vanilla. You need to build a fit-for-purpose solution, not just use a broadbrush.

Remember: SHIT IN, SHIT OUT.

Poor processes in house will be more expensive when you outsource them or offshore them or when you try to consolidate activities into a shared services centre.

And stop blaming the people who have been handed that shit sandwich (ie your vendors or shared services team). They are doing what they’re paid for.

*NB Shitshoring is my general term for all types of poor work transition / movement of work across teams and roles - that could be an internal team to an internal team as well as an outsourced provider or offshore team!

(If you’re ready to understand how to do this better, give me a call. No language warning required!)

Author: Jude Mahony


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