Ailment #4 – The Junkyard Dog Factor

When the decision to outsource is made, it means jobs likely will be lost in the transition of work and jobs to the outsource provider. In response, employees typically will go to great lengths to hunker down and stake their territorial claim to certain processes that simply “must” stay in house. We call this disease the “Junkyard Dog Factor.”

Even if the majority of the jobs are outsourced, many companies choose to have their “best” employees stay on board to manage the new outsource provider. These same “best” employees are often the ones who were asked to help write the Statement of Work (SOW). Is it any wonder why the SOWs become rigid documents of the often less-than-optimal ways the company was performing the tasks that are now being outsourced?

Over time the “Junkyard Dog” ailment affects the outsource provider as well. Under a transaction-based model, the service provider is rewarded for work associated with the volume of the transactions. Unless otherwise compensated, the last thing an outsource provider wants to do is develop process efficiencies that eliminate their own work. Consequently, a company that otherwise might have set out on an outsourcing path to find an efficient and low-cost total solution instead achieves the lowest cost for an activity without really achieving their desired outcomes.

This phenomenon discourages innovation, first at the company outsourcing level and then within the outsource provider’s operations. The Junkyard Dog Factor often results in inefficient and overbuilt infrastructure, because personnel at each touch point in the process have tried to optimize their individual part to either keep jobs or earn revenue associated with tasks. The result is misaligned desired outcomes. The company does, indeed, get what it contracted for – but it is not really what it wanted.

Read More! Move on to Ailment #5 The Honeymoon Effect

Comments

  1. Junkyard Dogs can hurt their employers more than they imagine. It’s sad, but there are ways to avoid the problem and still honor an employee’s commitment to the company. Here’s one woman’s story: http://scvisions.blogspot.com/2011/04/jennifer-junkyard-dog.html

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