If you are looking to outsource or change processes in a multisite organization, you will face a typical organizational design challenge: how do I structure and locate teams to maximize their collective performance. In this article, I will share some of the most salient points which must be considered. This is a result of our work with our most successful clients.
Let’s talk about this concept — repeated ad nauseum by managers and HR staff all over the world like a sacred mantra — the concept of a team.
Everyone talks about teams and the team building. Inordinate amounts of money are spent on retreats, exercises and training which provide no lasting value. Rare is a job posting that does not include a requirement for a candidate to be a “team player”, which is just gratuitous in this context. Who would say that they are not one?
Aligned Win or Lose
Teams are the groups of individuals whose interests are perfectly aligned and who win and lose together, as a whole. In other words, there can never be a situation when one of the team members won and another one lost. To that end, they readily share resources and tools, and support each other.
Meanwhile, as Dr. Alan Weiss observed, most organizations have committees, not teams, meaning that while broadly referred to as a team, a group is most often comprised of people who look after their own interests or the interests of their respective home turfs. They can win and lose separately. Most project teams are committees, as are most task force groups and nearly all joint ventures.
Now, there is nothing wrong with committees and you may very well need to have a committee and not a team. The determination is made based on what you are trying to achieve. Once you know, appropriate incentives, structure and controls will have to be put in place.
In terms of multi-site working groups (I’ll use this generic term for both teams and committees), you have three choices.
1. Functional collocation. Take a whole function, such as a department, and have it be present at one physical location in its entirety. This familiar approach is common to business process outsourcing (BPO) or relocation to a lower-cost site. As an example, you may outsource the entire Accounts Payable or move it to your Sydney or Nova Scotia processing centers.
Pros: advantageous setting for continuous process improvement within the group, for establishing a true team environment uninhibited by distance or time, for settings where interactions with external teams are minimal or not time sensitive.
Cons: may become disconnected from the rest of organization and in especially severe cases, develop a “them against us” attitude; an effort need to be made to keep the leader of the function engaged with her peers and the rest of the organization. From a perspective of business continuity planning, there is a risk of having an entire function reside in one location. Can you live without your AP for a few weeks if the building becomes damaged in an earthquake?
2.Skill based collocation. Outsource your programming needs to New Delhi and keep the software QA team (testers) in Reading, Berkshire.
Pros: collocation of like skills to encourage creation of best practices, and sharing of tools and resources. Allows to realize savings from moving certain occupations to a lower-cost locale.
Cons: time and distance can significantly impact communication between the holders of disparate skill sets and, as a result, timelines of projects. The author has witnessed situations where what would take an hour for collocated situation, took three days in a remote setting, with all participants doing their best. There is a distinct danger of the remote group becoming disengaged. This needs to be consciously addressed. Location risk is the same as in the first scenario.
Overall, this approach is conducive to committees, not teams.
3. Resource pools. Keep a group of developers and testers in two different locations.
Pros: Cost savings combined with resiliency (location risk reduced), potential to form collocated, well aligned project teams. Potential to locate complete project teams in proximity to the end client, external or internal. Advantageous for projects and operations where localization of products or processes is important.
Cons: If left unchecked, prone to proliferation of divergent practices, procedures and processes.
Which of the three approaches is right for you? Define your objectives clearly, agree on the alternatives and the criteria, and design your future accordingly.