Audrey Cushing, AVP Business Operations and Quality, discusses the positive effect when clients frequently interact with service providers which results in more strategic business value.
Please click on the video to the right to learn more about the author, her motivation for writing this white paper, and the impact of positive outsourcing relationships.
To discuss this white paper in detail, please contact Audrey using the information provided at the bottom of the page.
Remember playing with a Slinky as a child? Wasn’t it fun watching this simple spring-powered toy perform somersaults down the tallest staircase you could find? Besides being a play item used for our amusement, the Slinky was frequently used by educator Donna Meadows, author of the international bestseller, Thinking in Systems, to illustrate her belief that a system is a collection of interrelated parts that together form a unified whole.
Let me explain what this means. During student lectures, Meadows would grasp the top of the Slinky with one hand and hold the bottom of the toy in her other hand. When she pulled her bottom hand away, the lower end of the Slinky would drop and then bounce back up repeatedly.
She would then ask her students what made the Slinky bounce up and down. They would often answer “Your hand. You took away your hand.” She would then pick up the box the Slinky came in and hold it the same way, poised on her palm, held from above by the fingers of the other hand.
This time when she took her hand away nothing would happen. The box was just suspended. She explained to her students that the hands that manipulated the Slinky suppress and/or release energy that is latent within the Slinky’s spring. Understanding the relationship between (organizational) structure and behavior, Meadows believed, creates the ability for business leaders to gain insight into new opportunities and possibilities.
So, why is an outsourcing company writing about a Slinky and systems thinking?
Outsourcing engagements are systems. Characteristics of systems include goal-seeking, resilient, and adaptive behaviors. Outsourcing relationships also have untapped energy that is only released when there are regular interactions between service providers and clients. Otherwise, the relationship’s potential is suppressed – goals go unmet.
Outsourcing expert, Jeanette Nyden, explains in her book, Getting to We, that service provider/client collaboration and interactions energize outsourcing relationships – powering business outcomes and innovation, leading to limitless possibilities. Like the Slinky, dependent on human interaction to release its latent power, when service providers and clients interact frequently the engagement grows more and more robust resulting in strategic business value.
Regrettably, some service providers do not fully invest in their client relationships and, sooner or later when a problem emerges, like a Slinky encountering a barrier, the relationship gets stuck. The service provider scrambles to salvage the relationship, but it is often a difficult task. And, although the outsourcing relationship can be fixed, like untangling a snarled-up Slinky, it never really bounces back to its former state. At this point, clients may choose not to invest in fixing the relationship and opt to replace the service provider, costing the client valuable time and money.
The Outsourcing Center reports that poor governance is responsible for outsourcing failures as much as 62% of the time. The research found that governance structures in outsourcing arrangements are typically nonexistent or broken. Outsourcing relationship studies share a common theme: strong governance models matter!
Governance, the process of managing outsourcing relationships, is near and dear to the Vee Healthtek’s team. We believe that for our clients to get the most value out of an outsourcing relationship, a fervent commitment to governance is a must.
Did you know that the Slinky was created by accident? Mechanical engineer, Richard James, while attempting to create springs that could be used to keep fragile ship equipment steady even in rough seas, accidentally knocked one of the spring samples he was working on off the shelf. He watched in amazement as the spring “walked” to the ground instead of crashing to it. Together with his wife, Betty, he developed a plan to turn this unplanned invention into a novelty toy that is still popular decades later!
Strong and effective supplier governance is no accident. At Vee Healthtek, we start planning our annual governance strategy at the beginning of each year and we dedicate the fourth quarter to meeting with our clients. This includes creating a meaningful agenda specific to each client. During these year-end governance meetings, we celebrate successes achieved, review quality standards, and plan for new initiatives. We continue to collaborate throughout the year ensuring that our clients have visibility into our operations, resulting in proactive rather than reactive problem solving. Governance is never an afterthought.
Do you recall the Slinky jingle? “A spring, a spring, a marvelous thing! Everyone knows it’s a Slinky.” Vee Healthtek’s tag line could easily be “governance, governance, it’s a marvelous thing!” During our client governance meetings, a good deal of energy is released. The relationships are fueled and innovation emerges. In fact, we exited last year’s governance season with hundreds of new initiatives to tackle with and for our clients. These ideas transformed into action ranging from identifying new process automation opportunities to opening our new service location in the Philippines. Client Collaboration is the key.
This is exactly why governance is so important. It is the power behind outsourcing relationships that guarantees clients benefit from more than just labor arbitrage. Governance outsourcing fosters innovation and creates sustainable business value. As the outsourcing industry continues to evolve, clients are expecting outcomes beyond cost savings and meeting service level agreements. Governance is the solution.
Governance meetings are part of Vee Healthtek’s culture and strategy, in our DNA, used to power our client relationships. In 2020, unstopped by the pandemic, with careful planning and 100% virtual, our governance season was one of our strongest ever. Client participation was at an all-time high, unlocking an abundance of new ideas and innovation.
Over the years, innovative uses for the Slinky have been limited only by the imagination. During the Vietnam War, soldiers used the Slinky as a portable, extendable antenna for their radios. They fastened one end of the Slinky to their shirt and the other end over a tree branch, producing a clear radio signal even in very remote areas. Strong governance strategies and models lead to unlimited possibilities.
Richard James never imagined that the Slinky would provide a way for soldiers to receive communication so desperately wanted. Regular and interactive discussions with our clients also lead to limitless options.
The best thing about the Slinky is that it is simple. It’s merely a 78-foot piece of steel wire arranged in 92 coils. It looks like an old-fashioned bedspring pressed so flat the coils touch. The toy was so simple toy stores initially had absolutely no interest in adding it to their shelves. Toy store owners believed that children growing up in the 1940’s wanted bright and fancy toys, not a toy as simple as the Slinky. Were they ever wrong.
The James’s finally convinced Gimbel’s department store to hold a demonstration of the toy during the Christmas shopping season. Can you believe that over 400 Slinkys sold out in less than two hours?! With this new insight on the toy’s popularity, store shelves were stocked, and the Slinky became a global best-seller. Seventy-five years later, more than 300 million Slinkys have been sold. Just like the Slinky, the value of outsourcing relationships should never be underestimated.
Like the toy store owners and Meadow’s teachings, outsourcing collaboration requires a change in mind-sets among service providers and clients, many who may be used to more transactional or even, at times, adversarial relationships.
The Macmillan Dictionary defines governance as the “process of governing a country or organization.” Insight is defined as follows: 1. “A chance to understand something or learn more about it” 2. “The ability to notice and understand a lot about people or situations.” Based on these definitions, outsourcing expert, Kate Vitasek, promotes governance insight as the process of governing an organization or agreement (relationship) through learning and understanding. Do we ever agree!
And just like the Slinky – strong governance will never fade out of popularity with our clients. Strong processes, skills, and talented resources are the basis for any outsourcing engagement, but GOVERNANCE is the power behind successful outsourcing relationships.
With patience and care, a Slinky toy can provide enjoyment for years. Same with outsourcing relationships. When given the proper attention, these engagements are long lasting, rewarding, and enjoyable for both parties.
