Managing Your Outsourced Employees

Topics: Growth

How to Manage Employees in a Partner Company In the process of growing your business, you may one day sign a Master Service Agreement (MSA) with an outsourcing partner. There could be manufacturing, web design, content production or other skills that you don’t want to bother bringing in house. And, you may assume that you have laid out all of the details in the MSA so clearly that you’re assured success with this new partner. Is it that simple? Not likely.

March 18, 2011

How to Manage Employees in a Partner Company

In the process of growing your business, you may one day sign a Master Service Agreement (MSA) with an outsourcing partner. There could be manufacturing, web design, content production or other skills that you don’t want to bother bringing in house. And, you may assume that you have laid out all of the details in the MSA so clearly that you’re assured success with this new partner. Is it that simple? Not likely.

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A well-written MSA won’t get you all the way to the final product you need. Working with a team that is not nearby can be very challenging. Just saying, “Let’s get to work,” doesn’t mean you’ll get the results that you want.

Communication Break Downs

Even if your partner is located nearby you, their corporate culture, leadership model, decision-making processes and basic organizational structure are likely to be very different. These differences are even more pronounced when the partner is offshore. Perhaps you have experienced some of these common misunderstandings with your outsourcing partner:

What Corporate Means by “Get to Work”	What Partner Means by “Get to Work”
“First, hit some milestones on time and within expectations, then our relationship can be built on that success, and you have earned my initial trust.”	“This is the time to earnestly start building credibility and relationships with your team through intense sharing and dialogue. Based on that shared understanding and base of trust, our work will progress smoothly.”
“The (MSA) is the action plan and we refer to it often.”	“We will start building the action plan with the MSA as a guidepost, deviating from it as necessary.”
“We expect to reward completing milestones and following the written plan in the MSA.”	“We expect to be rewarded for functionality that works, but it may look different than what is written into the MSA.”

Focus on Research and Alignment

Realizing how that one phrase “get to work” could be interpreted differently by both organizations, how do we get the newly formed unit to work together, ramp up quickly, share knowledge, align goals, encourage self-monitoring of milestones and, ultimately, hit the targets agreed upon in the MSA? I recommend two must-dos: 1) research and 2) alignment.

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Research

First, do your research to understand your partner. Research on a Fortune 500 organization is relatively easy. Companies are ranked based on many parameters including revenues, corporate governance, sustainability, equality, diversity and the like. If your partner is not a Fortune 500 company, you can still find out important information about them. If they are located internationally, The Corruption Perceptions Index by Transparency International, an organization advocating for stricter implementation of the UN Convention against corruption, is a good place to start. You’ll get a general sense for how trustworthy the potential partner is.

Alignment

Once you understand this larger picture, you can find out more details by talking to other people in your industry about their experiences with this partner. You should also talk to people at your company to find out if you have any company history with this potential partner. Once you’ve collected that basic knowledge, you can tackle the alignment issue. It breaks down into the following areas: a) goals, b) structure, c) reporting relationships, and d) communication model.

a) Goals – This may be common sense first step, but, surprisingly, it is often missed. The team leader needs these goals to get the two groups working together as one team. And, the most central goal should be the motivating factor throughout the entire project. Research in the communication field, particularly by Charles R. Berger’s Uncertainty Reduction Theory, demonstrates that a key component in a team dynamic is curiosity and the resulting strategic questioning that enable better planning and ultimate execution of that plan.

b) Structure – When developing project teams that are working toward a common goal, the team structure can make or break your success. Creating a single team out of two separate ones can be best achieved with something called the extension team model. In the extension team model, your corporate team is paired as peers with the outsourced team. Led by a single team lead, the overall group collaborates on strategy, works together on the plan and spreads work out evenly among them. This structure leverages the diversified ideas and experiences of the membership represented on the team. In fact, diversified teams are proven to be more innovative, if managed well, and more productive overall, as Nancy J. Adler, of McGill University School of Business, reports in her insightful book International Dimensions of Organization Behavior.

c) Reporting relationships – Surprisingly few professionals know exactly how to define the matrix organizational structure, although it entered business lingo back in the 1970’s. The most common understanding of a matrix reporting structure is where the product structure is overlaid by the functional structure. Think of this visually as a grid rather than a hierarchically-organized organizational chart. Typically, this means one professional has at least two different, direct-reporting relationships where one manager is nearby the employee and the other one is located remotely. This basic structure, with increasing usage in globally distributed workforces, requires professionals to have extremely well-developed influencing skills.

Gone are the days when a manager has her team nearby, allowing for team lunches on Fridays and Monday huddles in the conference room. Now, that same manager has responsibility for people located in other places who may also have direct managers sitting with them. The team lead’s primary task is to keep her project a priority for the remote team member by developing a strong alliance with her team member’s nearby manager, using highly-tuned influencing skills in order to keep her project on the top of the task list.

d) Communication model – Integrated communication is only achieved through individual commitment. You can build the best plan out there, but if your team isn’t personally committed to it, it will not work. Research proves that the more frequent and varied the contact between team members, the higher the productivity. In order to build this commitment, co-author the plan with your team, keep the lines of communication open, foster an atmosphere of discovery and curiosity amongst your team members and most importantly, model the communicative behavior you are expecting from your team.

Regards,

Lynne Tarter, SPHR
Global Communicator

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