Risk and Organizational Change (and Innovation) at the PMI Global Congress – Part 3

I found the Project Management Institute’s Global Congress stimulating in an unexpected way. PMI is clearly realizing that the “soft” side of project management is a major critical success factor, which was why there were more sessions on subjects such as organizational change management and the psychology of risk management. Of course, this approach to project management places an enormous burden on the project manager (or outsourcing manager), who often does not have the stature or role in the organization to actually drive these aspects; it becomes more obvious that “change from the middle” (as I call it) will need to be institutionalized into both project management as well as outsourcing management methodologies. (See my blog on “Your Service Delivery Managers – Expected to be experts in everything!”)

 

 

 

As I listened to the sessions I selected, I had what might seem a paradoxical insight – that innovation could only thrive in an organization that actively practices change management. This insight came to me in a session that actually had nothing to do with either innovation or change, but in a session where we were discussing a series of scenarios in which projects were started without proper methodology. Several examples sparked my thoughts; every organization consists of people who develop ideas – sometimes harebrained, sometimes off-point, but sometimes brilliant. In my experience, the people with ideas are often not very compliant. They tend to be maverick, enthusiastic (often to a difficult degree), interlopers, and at the same time readily deflated if their ideas are not taken seriously.

 

 

 

To sustain innovation it’s not enough to have the “idea box.” A genuine innovation process needs a deep commitment in order for ideas to be taken seriously and changes made, if the ideas lead in that direction – even if the people offering the ideas may not be attractive to the organization. Such is the case in outsourcing; many companies have difficulty accepting that the service provider team may have creative ideas that will improve services or contribute to the business in other ways.

 

This is one of the most difficult organizational change management aspects of bringing outsourcing into a company. It’s too glib for an organization to say “NIH” and dismiss the ideas. The outsourcing service provider is doing your work and, therefore should not only have a place at the table to talk about ideas, but should also be involved in the strategy for the services. Who better to bring a new and better way than the people who are doing the work and have special expertise in it?

 

 

 

 

This is precisely where organizations struggle – particularly older, conservative organizations. An additional paradox is that often these organizations value people and relationships and feel affectionately toward the people on the provider side; however, they find themselves challenged to see service providers as genuine contributors and therefore hold them at arms distance. Creativity suffers as a consequence. I have seen many situations where service provider personnel are frustrated by the inability of the client company to hear.

 

 

 

Because of the “great recession,” companies today are seeking ideas more actively than during better economic times. However, without the organizational change to encourage acceptance of ideas from “outside” normal channels, coupled with the inability to actually act on them, ideas from service providers that have potential to provide real savings, service improvement, and revolution/evolution can end up on the cutting room floor. As a result, the essential group of people becomes deflated – just like people inside the organization– and ideas stop coming.

 

 

 

Outsourcing introduces massive change to organizations – often far deeper than companies realize in the beginning. The organizations with the most success are those that understand that initial outsourcing is only the start of change; from that point on, change in every way is constant. Companies that can embrace this and accept that its internal staff, service providers, and global economic environments will drive continuous change will do better than others. Additionally, those organizations that can get ahead of change and integrate it into their regular business practices will be most likely to excel in not only their outsourcing services and relationships, but also in the marketplace.

About the author

Cynthia brings 25 years of experience helping clients develop their sourcing governance and service management design. Having worked with more than 50 organizations to improve business management and service management processes in both single-provider and multi-provider environments, Cynthia has become a recognized expert in sourcing governance, vendor and contract management. She currently serves as the architect for ISG’s service methodology and global integrator of its products and services. Cynthia works to leverage ISG’s accumulated intellectual property resources to help enterprises create effective transformation and governance capability, and maintains a continuing role in the Strategy and Organizational Change Enablement practice.