Transformation (Part 4): the challenge with service providers

Missed Part 3 of the series? Read it here.

In the previous article of this series, we looked at the internal complexities of transformations: the ability to get people to embrace change is an art, after all. We took a look inside Sebastiaan Laurijsse's IT organisation - Laurijsse is the Director of IT & Digital Transformation Manager at NXP, and co-contributor to this article.

In NXP’s case, there is an even bigger challenge beyond simply getting the organization to embrace change: A lot of the work is outsourced, and it's critical that outsourcing providers embrace the change and transformation, too.

600 internal staff, 1800 external staff

"Our team consists of 600 internal staff and 1800 external staff, via service providers," explains Laurijsse. "Because of automation and digitalisation, you can do a lot more with just one person. so, you want to innovate together with your service provider and change the organisation to a diamond shape."

"But the service provider also sees opportunities: Using current SLAs, they can do more with less people and create better margins. The result is that the service provider feels that we are always looking for more for less, whilst in truth our world is more complex than that."

We don’t do projects, we do products

"This may sound very simple but represents a huge change. With a project, you grow a flower and then you’re finished. That’s when you throw the flower over the wall to operations, and as an operations team, you want to make sure that the flower stays alive as long as possible."

"We decided to no longer do projects," explains Laurijsse. "We add temporary capacity to the operations team so that the team that maintains the flower, also builds it. This creates care to make the right choices for the long term."

"How can the flower last as long as possible? How do we increase the smell so we sell more? How do we introduce different colours so we stay relevant? What we see is higher quality and a better outcome. This is one of our core strategies in our transformation."

 We don’t do products, we do projects

"We equip our people with these new skills – including staff from our service providers. We make them part of the team and part of the change. On an Indian employee level, we see that people want to stay with us because we have a purpose."

"What does that do for external providers? They are not used to this way of working. They are missing out on extra business, and want to know why they are not getting this project whilst they are doing the work. But we say, 'We have the people, why would we hire more?'," explains Laurijsse.

Top down vs bottom up

"In India we had a manager who was struggling with this philosophy. His organisation wanted him to deliver on 180 KPI’s and issue rapports. He was managing the people through a 'do this' and 'solve those incidents' approch. Whilst we believe in bottom-up decision-making and servant leadership, all our employees have the right to take their work off the backlog on the basis of priorities. But if I say 'left' and the local manager in India says 'right', then they will usually go the other way. After all, it’s the local manager paying the salary of the employees."

Culture

To get people’s buy-in, you have to know your target audience, and tailor your message accordingly. The same goes for India-based service providers. With 600 people internally and 1800 externally, Laurijsse had to get his service providers’ buy-in for the transformation.

That leads to the key question: Do you know your stakeholder well enough? Do you understand the culture?

In the next article, we will examine this more closely. Why are 21^st century intercultural skills seen as the #2 and #4 skillset of this decade – both by Singularity University and the Institute for the Future? And how is that relevant your work with outsourced and offshored teams?

Read Part 5 of the Transformation Series HERE.