This document discusses the importance of change management for shared services and outsourcing initiatives. It notes that change management is needed to manage resistance, motivate employees through transitions, ensure knowledge transfer and establish the right culture. It then introduces Deborah Kops and her company Sourcing Change, which provides resources for outsourcing and shared services change management. The document goes on to discuss the challenges organizations face with change implementation and the risks that occur when change management is not adequately addressed. It emphasizes that change management is about controlling and ensuring compliance with new business models and that this requires a focus on managing the "grey areas" of change.

1. The Change Management Imperative for
Shared Services and Outsourcing

2. Why is change management imperative
for shared services and outsourcing?
• Manage resistance from perceived ‘loss of control’
• Motivate outgoing employees to retain them
through the transition period
• Ensure effective knowledge transfer
• Ensure the right culture and values are created
• Embed new ways of working post go-live

3. Introducing Deborah and Sourcing Change
• Was tall and blond, now short
and dark
• Admits failure
• Deep experience as
buyer/provider
• On mission to help industry
succeed through
www.sourcingchange.com, the first
resource dedicated to outsourcing
and shared services change
management

4. Houston, (do) we have a problem?
• How many of you are struggling
with change?
• What is your definition of
change management?
• Where are you finding the
greatest challenges when
implementing shared services
and outsourcing?

5. Real purpose of sourcing change
Rapid control of and compliance to new
ways of working

6. Which means revolution…
• Moves fast—makeover through
takeover
• Not democratic--limited input
from stakeholders
• Initial degradation—majority
experience or perceive loss
• Collateral damage—loss of
position/jobs, new “rulers”
• Not optional—requires
mandatory modification of
behavior
“Revolution is an attempt to impose by any
means rapid and comprehensive changes
in the way people behave and think”

7. Where almost everything changes
• Enablers - the what, when,
how
• Outcomes - benefits from
the change
• Rules - ordained ways of
working
• Culture - faith in dogmas

8. Add loyalty, vision, attitude, performance

9. Add loyalty, vision, attitude, performance
GOVERNANCE

10. Complexity
GOVERNANCE
SPEED
ORGANIZATION WORK GENERATION

11. Grey matters: Revolution ensues …
• Loss of productivity and morale
• Business line
rejection/workarounds
• Passive resistance—”wait out
another program failure”
• Unnecessary noise
• Open warfare
“when rapid advances occur,
people think they are merely
numbers”

12. … and compliance becomes critical
• Credibility—is the sponsor
credible; is the change credible?
• Validation—can you get others I
trust to do it as well?
• Reciprocation—what’s in it for
me?
• Penalty—if I don’t change, what
will you do to me?

13. But we avoid dealing with grey …
• Tell, not engage, stakeholders
• Do not equip with skills to change/behaviours
• Do not position new “rulers” optimally
• Do not harness “self interest”
• Ignore the underpinnings of culture
• Do not acknowledge “taking” and use it effectively
• Do not deal with the psychology of change

14. …which results in risk…
• During solution - suboptimal deployment strategy,
inappropriate pace, unrefined organization
structure, scope diminution, inadequate response
models, insufficient championship, low
commitment levels, no defined incentives

15. …which results in risk…
• During solution - suboptimal deployment strategy,
inappropriate pace, unrefined organization
structure, scope diminution, inadequate response
models, insufficient championship, low
commitment levels, no defined incentives
• At announcement - grief, insurrection, departures,
lack of trust, inattention, loss of productivity, high
noise levels

16. …which results in risk …
• During transition -insufficient knowledge transfer,
loss of productivity, low morale, delays, rework,
insufficient training, inadequate response models,
wrong pace, improper staff reassignment/exits

17. …which results in risk …
• During transition -insufficient knowledge transfer,
loss of productivity, low morale, delays, rework,
insufficient training, inadequate response models,
wrong pace, improper staff reassignment/exits
• At steady state - passive resistance, solution
corruption, inability to expand scope, inadequate
communication, lost sponsorship, suboptimal
performance, duplicate organizations, rejection of
sourcing programs

18. Typical approach to change management

19. … which is not “better than before”

20. For compliance, manage the grey
• What changes for whom? Use what changes to
stage and pace
• What is the context in which the change occurs ?
Work with the culture
• How best to encourage compliance? Apply the
psychology of change

21. Stage and pace change

22. Work with culture

23. Change by the numbers
6 months to adopt/12 months to embrace/18
Months to expand. No 2 organizations change the same way.
Organization to speak with 1 voice. 3 stages to sourcing
change. Infinity = number of opinions. 10+
potential stakeholder groups. Reinforcement
of behavior 3 times more powerful than 1
announcement. Maximum attributes to change at once is 5.
change programs in effect 24/7. 3 components of
initial messaging in 4 phases. 2 most important messengers
are sponsors and managers. Majority of change efforts spend only
5 percent on employee concerns. Communication is a 2 way
street. Effective change results from communicating 7 times
and in 7 ways. 1 chance to get it right.

24. Parting words
• Change management is control of and compliance
to a new business model
• Result is revolution, not evolution, where almost
everything changes
• Compliance means focus on the grey
• The grey can be effectively managed!

25. Questions? Comments?
Resources for Outsourcing and Shared Services Change Management
deborah.kops@sourcingchange.com