Moving from Outsourcing to a 360 Partnership

Transcription

1 Moving from Outsourcing to a 360 Partnership Erick Watson Microsoft China Strategic Partnership Group Northwest Chapter February 2011

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3 Cost will remain the #1 concern for companies who outsource (Gartner on Outsourcing 2010)

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5 Clear culture creates clear value >80M units shipped in first year <2M units shipped in first year

6 Sourcers must integrate via well-designed culture

7 1. ORGANIZATIONAL STRATEGY

8 Define & establish your culture Culture noun : a set of shared attitudes, values, goals and practices that characterizes an institution or organization.

9 Proclaim authentic values e.g. Microsoft Values: Integrity & Honesty; Open & Respectful; Big Challenges; Passion; Accountable; Self-Critical

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11 2. SOLUTION INTEGRATION

12 Begin with the basics

13 Lay claim to integrated value

14 Fight back against customer disintegration

15 3. CUSTOMER EXPERIENCES

16 Organize from customer s s perspective

17 Create customer evangelists U.S. Bricks & Mortar Shoe Retailers: 5 Online Shoe Retailers: >41,000 Zappos Market Cap: $1.2 Billion in 9 yrs.

18 Measure, track & improve DISCLAIMER: "Everything that can be counted does not necessarily count; everything that counts cannot necessarily be counted". Anonymous

19 Can sourcers achieve cultural integrity?

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21 Sourcers must integrate via well-designed culture

22 Cultural integrity delivers customer value

23 Erick Watson (425)

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25 Slide 03: Slide 04: Slide 05: courtesy of Microsoft Corporation Slide 07: Slide 08: Slide 09: Slide 10: Slide 11: courtesy of The Boeing Company

26 Slide 13: courtesy of Apple Computer Slide 14: courtesy of Warner Brothers Slide 16: Slide 17: courtesy of Zappos Slide 18: Slide 19: courtesy of Microsoft Corporation Slide 20: courtesy of the Hormel Company

27 Presentation to the Pacific Northwest Chapter of the International Association of Outsourcing Professionals February 2011 Madhu T. Rao, Associate Professor, Albers School of Business and Economics, Seattle University

28 A workgroup in which members are separated not only by time and space, but also in national, cultural, and linguistic attributes, and communicate primarily through electronic media. Advantages Global talent pool Lower Cost Cultural Synergies Enhanced creativity 24 hour work cycle Foothold in emerging markets Disadvantages Role ambiguity Lower individual commitment Greater levels of uncertainty Time-consuming decision processes Interpersonal conflict difficult to detect Misconceptions not easy to dispel

29 Is it really that important?

30 Without friendship and the openness and trust that go with it, skills are barren and knowledge may become an unguided missile. - Frank H.T. Rhodes (1983) President Emeritus, Cornell University

31 Trust consistently ranks as one of the top factors contributing to GVT effectiveness Trust may not affect actual performance, but does affect efficiency of team processes In study *, low-trust teams characterized by Lack of shared goals Primacy of individual goals No consideration of other opinions Power battles Misunderstandings and stress * Tucker and Pantelli, 2005

32 The willingness to be vulnerable to the actions of another party based on the expectation that the other will perform an action important to the trustor, irrespective of the ability to monitor or control the other party Mayer, et al., 1995 Types of trust Expertise trust (is the person good at what they do? Can they apply expertise to a given situation?) Personal Trust (is the person honest and ethical? Will he or she make good on his/her word?)

33 Virtuality requires trust to work technology itself is not enough Handy (1995)

34 If we are to enjoy the efficiencies of the [global virtual team], then we will have to discover how to run [such teams] on trust rather than control. (Handy, 1995)

35 Yet, global virtual teams exhibit structural properties that work against building high trust relationships Trust based on repeated personal exchanges Trust needs touch Trust depends on shared set of socially embedded values Trust takes time Trust derived from shared past and possible future interaction Trust built through computer-mediated communication less robust

36 Theorized: Trust is dynamic and evolving Trust starts low and builds with increased interaction over time Observed: Co-located and virtual teams with high initial trust even before meeting Explanation: People develop initial belief about trustworthiness based on their own dispositions and expectations Example: Non-response to

37 GVTs work under tight deadlines No time to build relationships and trust Expectations not based on first-hand experience Team members initially import trust from other familiar settings Swift Trust Members make categorical judgments of others based on positive stereotypes Deemphasizes personal dimensions Later based on actions

38 Unless one trusts quickly, one may never trust at all

39 Effects of technology secondary to those that result from group interaction High trust associated with Higher job satisfaction less process conflict Better perceived performance Trust not associated with better output Trust shows no significant effect where team/task structure strong.

40 Cultural Differences Trust and Leadership Team Action Processes Team Inter-personal Processes Global Virtual Team Performance

41 The extent to which society encourages: Performance Orientation: Performance improvement and excellence Assertiveness: Tough, confrontational, competitive behavior Future Orientation: Planning, investing in the future and delaying gratification Humane Orientation: Fairness, altruism, generosity, caring and kindness to others Institutional Collectivism: Collective distribution of resources and collective activities In-Group Collectivism: Pride, loyalty and cohesiveness in their organization or family Gender Equalitarianism: Equality of men and women Power Distance: Unequally shared power, dominance, and stratification by status Uncertainty Avoidance: Orderliness, consistency, structure, formalized procedures and laws

42 Cross-cultural trust has two main components Credibility (member has requisite skills) Benevolence (member has intent to contribute in positive way) Trust based on performance can compensate for lack of social interaction Absence of visual cues may actually promote trust

43 Even detecting a conflict is not straightforward Confrontational vs. Avoidance behavior Low context culture: separate issues from people High context cultures: perceive open disagreement as insulting Dealing with conflict Create protocols beforehand to deal with conflict Watch for unacknowledged conflict; difficult to detect in Require cross-cultural training at both individual and group level

44 GVTs need role differentiation GVT managers must actively provide leadership Shared concept of team meaning, focus, and function Cultures vary in their expectations of leaders Collectivist: autocratic but compassionate Individualistic: transactional leadership; reward-based exchanges Power Distance: centralized decision-making; strong direction; limited delegation All cultures respond to transformational leadership Inspire subordinates Coordinate both individual and group development needs Lead to high collective purpose/vision

45 Universal Facilitators of Leadership Effectiveness Being trustworthy and just Having foresight and planning ahead + Being positive and encouraging Being communicative and a team integrator Universal Impediments to Leadership Effectiveness Being a loner and asocial Being non-cooperative and irritable Being dictatorial Culturally Contingent Leadership Attributes Being individualistic Being status conscious Being a risk taker GLOBE, House et al 2004

46 GVT Leaders must Be effective cross-cultural communicators Promote a collective sense of belonging Promote shared team values Constantly share team assignments and plans Build intra-team participation Ensure all ideas are heard Monitor participation rates

47 Who is on a team is as important as what skills they bring to the table Both prior GVT work and cultural experience important Have communication and conduct protocols in place Rules of conduct; processes for resolution Watch for passive conflict Acceptable Response times Have at least one initial face-to-face meeting Can be videoconferencing Teams that meet 1-2 times/year have been shown to perform better than those which do not

48 Use team building exercises Encourage social ties and lateral communication between members Role differentiation and leadership critical Strong structure teams perform well in both high and low trust environments Leaders must be active Insist on cross-cultural training Should not insist on complete transformation of behavior to suit cultural differences Should insist on ability to work with diverse cultural contexts Establish virtual watercoolers and communities of practice Celebrate victories and milestones of members

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