From reception to the CFO's office was a good 5 minutes walk and along the way we passed rows of empty desks and silent computer terminals. Eventually at the end of a large room was a solitary office.
It was never going to be an easy move and our CFO was a mature clever man but even he was now wondering what he had done. "There used to be 450 staff out there, it was a vibrant place and I knew each of them by name. Over the years I've lost count of how many weddings and parties I've been to with them and now... well they've all gone".
While most CFO's will publicly continue to tell you about the value of outsourcing and the money their organization will be saving, it is also true that they and those 'left behind' to will have to deal with vast and personal change. The emotion and cost of change is something that is rarely included as part of the outsourcing project costs and even when attempts are made to include the cost of managing change it is usually woefully too little.
Not only the CFO or other Captains of industry but for most staff, when an organization undertakes a major change, like outsourcing, they feel a sense of loss. It's usually hard to put your finger on why or what but the affects can be profound - both for the staff member, their ongoing performance and ultimately the bottom line of the organization.
Even when an outsourcing initiative is well publicized, or is supported by skilled transition staff, when it actually happens for most it will still be an extremely uncomfortable time. Suddenly tens of staff with whom a person may have closely worked with, for a number of years, are outsourced and gone. They may have 'survived' and some would say "you were lucky to keep a job" quietly they may be excited about a new future or a change in role etc. However, for most the impact of unexpected and unwanted change, like outsourcing, is often a sad and difficult time.
Over the years psychologists have modeled how most of us deal with significant events and change. Whilst these models are usually reserved and employed for dealing with a death or maybe a divorce, their application is equally applicable for staff dealing with the affects of an outsourcing initiative.
Most people go through four emotional changes when they experience a major shock.
Not me!
The first announcement is usually met with denial. "No, not my job - this only happens to call centre staff" "They must be talking about somebody else's job" - once they look at it again it will soon go away".
Outsourcing initiatives can go wrong from the start because it didn't handle this first step correctly. The initial announcement needs to be made when you are sure that outsourcing is something you seriously want to look at. Staff will talk, especially if it seriously effects their jobs (don't be fooled into thinking that some loyal members of staff won't say anything) and you will only increase anxiety and the feeling that staff have been lied to if they 'discover' the initiative for themselves.
Of course there will still be some shock when you first make an announcement but letting staff know as soon as practical will also help your project. Usually teams of consultants arrive to start the measurement of processes etc..; you will no doubt want your staff to help them do this.
Give staff plenty of information - let them know what changes you are looking at, who might be affected. Give them your best estimate of the likely timeframe - remembering that these things always take longer than originally planned... Give them chance to prepare themselves and let the changes sink in. You cannot over-communicate now and it also helps to give staff a timetable of planned future announcements.
I'm not going to help you!
Anger and blame. It's not unusual for staff to get upset and angry. Some will even go so far as to actively resist the change. Whilst this is usually verbally it can also show in other ways, such as an increase in absence.
Unfortunately, in the worst cases this has even resulted in cases of malicious damage to property, corruption and or fraud. In such cases, an organization should make no allowance for the external factors driving this behavior and bring the full weight of any discipline procedure against the individual.
Fortunately for most this angry emotion simply needs an outlet and a carefully planned one to one counseling session for each member of staff (with sufficient time) is an ideal way in which to allow your staff to work through this emotion. For the most time People don't want your solutions, they just want their responses and reactions acknowledged by you.
As one client remarked - "what's the point, we are going to make them redundant!" At one level you can understand why a client might view this exercise as a waste of time. However the staff who 'survive' and the rest of the organization will be watching to see how their colleagues are treated. Don't be surprised about how disparate parts of an organization can and will come together and fight management over initiatives especially if their colleagues are being treated poorly.
To abate the anger stage senior staff must listen to what people have to say. Empathize with them. Don't tell them to snap out of it or pull themselves together. Denying their feelings will only drive the resistance deeper and make it last la lot longer.
OK so it's going to happen
You will want to spend time on getting staff through the angry stage because from here on in the change gets somewhat easier to do and achieve. The vast majority will work through the angry stage and come to accept the change - even if somewhat reluctantly.
You will start to see this acceptance by the way people start to act. Some will move focus onto trying to organize the pending change others will start making outline plans for a future and be making new demands of you - such as will you be retaining me?
Staff now needs practical encouragement and support. They will react well to any training they perceive as adding value to their future. Some may even get quite excited about what the future holds for them (most of us will know a story about someone who came to see being made redundant as the best thing that could ever of happened to them). Involve staff in planning and setting goals, it helps to focus on some short term wins to get early runs on the board - especially if is aligns to the benefits of the changes. People will respond well if they can see the positive impact of the change.
Committed
When employees commit to the change, they start focusing on the future instead of dwelling on what the past may have held from them. They start to have a clear sense of their future role and where they will be going.
Now that you are through the transition of change emotions it is time to set about consolidating the any change. It may be appropriate to implement a cultural change program. In addition recognize and reward people who are responding well to the desired change.
Time frame
When bringing about change for most projects, it is relatively easy to plan and execute when you want an event to come about. Once executed you generally move on to the next task and so on.
The hard part about a people change model, is that a model may not recognize that each person is an individual, who can (and does) emotionally effect and change others around them (treat one wrong and you do it to the all). Unfortunately people can move through the emotional stages of change at different rates and on occasion go backward if a future stage is done poorly or incorrectly. So whilst you may feel you have done enough to address each stage you need to remind yourself that this is a change model for each individual and therefore ask 'have you done enough for each individual' to allow you all to successfully get to the next stage.
On occasion, it may be impossible to tell people too much ahead of a change initiative because of market forces. However, if people are in denial, or are angry or resistant to change, productivity will be low. You might see a short term spike in response to the change but it is likely to be short lived until these stages are worked through and these basic issues addressed.
Outsourcing an area of your organization is a significant step and whilst vast effort is usually poured into ensuring the correct partner, contract location etc, etc.., so often the staff effected and dealing with the change is overlooked.
In designing and planning an outsourcing initiative you must plan your change management strategy to recognize and support the various emotional transition phases. This planning takes careful preparation and planning that goes hand in hand with the leadership obligation to do what is best for all concerned and for the long term objectives of the business.
Alsbridge specializes in developing communications and change programs for Outsourcing that can guide you through the very real issues of people faced with change.
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