Management guru and longtime GE CEO Jack Welch once said, "When the rate of change outside the company exceeds the rate of change inside the company, the end is near." This observation is truer now than ever before.
As companies grow from start-ups to mid-sized businesses, there is an understandable amount of focus on building and improving infrastructure, creating high performance teams, implementing best practice-based processes and enabling systems to support the growing organization and its clients.
During the growth cycle, the business often reaches an inflection point where outsourcing non-core functions like payroll and help desks becomes an attractive option. With the outsourcing options now available using a mix of internal and external services has become the norm. But what are high growth companies doing beyond the obvious?
In our current era of sustained economic uncertainty, the concept of outsourcing and using flexible resources has added a new dimension: flex leadership resources.
The flexible leadership approach is a logical upward extension of the Program Management Organization concept. The new twist is utilizing hands-on senior technology professionals on an as-needed basis to take on targeted management initiatives without incurring permanent overhead. Companies are successfully employing "flex leadership" when one or all three of the following conditions exist:
- a "variable demand" hits the business and the lean organization needs extra, experienced leadership bandwidth
- when that variable demand also requires unique experience or skills and
- the variable demand requires organization change management skills (e.g. helping the organization embrace the change).
Is in-sourcing the right path or just the familiar one?
As you look at your organization's needs, consider the aspects of out-sourcing at different levels for different benefits. At the support service level, outsourcing is a way to minimize resources devoted to non-core activities. At higher levels, it can help you complete an important initiative for which you would otherwise lack either the capacity, objectivity or technical expertise to handle, such as a system selection or a business process review. This can then help you accelerate progress toward strategic goals, manage an event or variable demand, and then return to your "normal" leadership structure and processes once the event is completed or integrated into your regular business environment.
When considering flexible leadership resources, you must retain ultimate responsibility for the initiatives outcomes and work with the "flex leader" as a trusted advisor and partner. Your top team still spends time on the initiative, but the time required can be vastly reduced by having a seasoned resource to manage the program's operating events and detail.
Remember, deciding to manage every aspect of the business with only internal management is also a decision. Complete in-sourcing means you are deciding to incur top salary talent on a permanent basis with defined capacity and expertise limitations. The implication is that you accept these constraints on leadership capacity and view leadership as a fixed constant vs. a flexible asset.
So how can you tell if it is right for you? Deciding if this option makes sense is fairly straight-forward. Ask yourself a few questions. Are there important things that are not getting done because the work requires a specific, senior-level perspective or experience that you just don't have? Thinking "I wish I could clone that person" indicates you need more capacity, but the need may not warrant a more permanent investment. Are you avoiding in a strategic decision like cloud computing or implementing an ERP system because the person who leads that function is behind the learning curve in that area? Is there an initiative that could benefit from having an independent leader help your team where differences of opinion are creating barriers to progress? You can implement a change while simultaneously educating your leaders by bringing in the expertise on a project basis. Some high growth companies find there is a need for a unique blend of pragmatic operating executive expertise with complimentary consultative skills to achieve knowledge transfer and change management.
If you've decided that flex leadership makes sense, how do you evaluate options? Flex leadership involves deploying experienced executives whose level of expertise enables them to temporarily expand your team to work in parallel with your in-house executive to manage a critical initiative. The temporary leader works with a cross-functional team as necessary, representing the IT department, and working within the organization to make progress.
When looking for an interim technology executive, look for strong, hands-on operating experience -- a "been there; done that," capability. They should have previously served in a similar role so they will be able to offer an objective viewpoint on what resources will be needed to meet your goals. This level of experience should enable the flex leader to quickly see the "big picture" but also execute at a highly detailed level.
With the pace of change in technology increasing yet significant economic uncertainty still exiting, 2011 will be a year of trying new ideas to stay lean and nimble. Growing companies may find that taking flexibility to the next level with flex technology leadership helps them minimize risk while pursuing new technologies that could ultimately accelerate business results.
Bill Jeffery is National Managing Partner of Tatum's Business Operations and Technology practice. During his 30-year career he has served in executive leadership roles within information services and management consulting organizations, including EDS, Union Capital Group and A.T. Kearney.