I’m really looking forward to participating in the CCA Keynote Debate later today. I’ll be joining peers from across the industry to debate the importance of partnerships in business process outsourcing (BPO) – specifically focused on Customer Experience. As I’ve been preparing for the debate, I’ve been reflecting on the views of various management gurus that I’ve come across during my career.
Many years ago, the management expert and writer, Charles Handy, created one of the famous Irish management theories called the Shamrock Organisation. To cut a long story short, although now outdated, Handy’s theory sticks in my mind as it’s aligned to my belief that people are the core of a company.
The 2002 ‘Shamrock Organisation’ theory was simply described as the three leaves of a shamrock:
- First leaf; the central core of the organisation, the professionals and managers who define the core competence of the business. This group defines what the company does and is essential to the continuity and growth of the organisation.
- Second leaf; self-employed professionals or expert organisations hired on contract to supply expertise on a project basis. They will be paid in fees for results or on a project-by-project basis.
- Third leaf; the contingent workforce providing routine services to the rest of the organisation. There is no training or career track for these people and they may be paid by the hour or even be on a ‘zero hours’ type contract.
In some ways (not the zero hours type contract), the Shamrock Theory does still work today, but there are some distinct differences in the way that companies structure their relationships with external service providers. I would say that the three-leaf model looks more like this today:
- First leaf; employees working for an organisation and defining or delivering the core competence of the business. These people are responsible for setting the company apart from the competition by ensuring it offers the best product/service.
- Second leaf; companies and individuals offering their expertise to the organisation through continuous outsourced partnerships. This expertise may include services such as HR, IT, Legal, or customer experience. These services are vitally important to the success of the company, but do not define the core offer and therefore can be delivered by a third party.
- Third leaf; outsourced services, but those that are less strategically important than the second leaf. For example, cleaning your office or delivering office supplies.
Outsourcing of all services used to be viewed as a strategy focused mainly on cost reduction, but today, there is an increasing focus on ‘partnership’ for those operating in the second leaf of the shamrock. In this ‘leaf’ the most successful partnerships aren’t simply focused on cost reduction, they are based on shared objectives, appropriate risk and reward, and transparent, trusting relationships.
For example, outsourcing all your company’s IT systems may be a smart move – you can access the best IT support and infrastructure instead of delivering support internally – but it is essential that your systems work and allow you to compete. Therefore outsourcing IT – and indeed customer experience – requires a focus on identifying the best partner, not just a supplier that offers the cheapest price. On the other hand, finding a company that can deliver Post-it notes or empty your office bins is a different proposition. In this case it’s much easier to define what you need – i.e. 10,000 new Post-it notes each month – and set a budget. For this type of less strategic agreement –i.e. the third leaf – the focus is on price, assuming a basic level of service is agreed.
To conclude, it’s time for a new shamrock model for the twenty-first century that’s focused on the partnerships in the second leaf of the shamrock. In today’s fast moving world, the reality is that the border of the organisation is being redrawn around partners; who are increasingly ‘joining’ the team even if another company pays their salary…
Author: Craig Gibson (CCO, Webhelp UK)