The myth-busting continues

Equaterra's COO, Mark Robinson, shows us how to innovate

In case you missed it, there’s been another scintillating debate on the “I” topic.  If you have a few minutes, we suggest you visit the recent piece entitled “Busting the innovation myth” submitted to us by a top cabernet-infused advisor choosing to remain anonymous (for obvious reasons…).

A couple of insightful and accurate views worth highlighting were contributed by Equaterra’s enigmatic COO Mark Robinson (pictured innovating) and CSC’s President of the United States of global sales and marketing, Peter Allen:

Mark Robinson:

In ‘mainstream’ outsourcing, innovation is often external to the process (i.e. it does not take place within the bounds of the contracted services, but rather as an add-in contracted on a case-by-case basis, either by the incumbent provider of base services, or by other service providers. There are many reasons for this, but they boil down to three primary factors:

(i) Contract terms and obligations that are ‘fit for purpose’ for managing day-to-day service delivery act to suppress innovation;

(ii) The people engaged in the delivery of base services are not innovators (or, if they are, then they are probably not providing world-class base services); and

(iii) Clients find it hard to take the risks (and share the rewards) needed to spark innovation with a service provider that they are engaged with in managing the daily grind of commodity services.

However, there is innovation in outsourcing in two major areas. First, service providers are innovating in the design and delivery mechanisms for their service offerings, although this innovation occurs outside of client accounts and is most readily available to new clients (or to existing clients at major inflexion points, such as renewals). Second, there is an entire class of services known collectively as Knowledge Process Outsourcing where innovation is endemic to the services.

Peter Allen:

A toxic term, Innovation.

To most Providers, they are suspicious whenever that terms is used. Too often it is interpreted as “Client wants something for free.”

To most Clients, but not all, what it really means is, “Please give me proposals for ways to improve.”

A sourcing relationship can be a pathway for innovation only if the parties create an environment to nurture that outcome. Nurturing includes shared investments and shared risks/rewards. Else, it’s just one element on the checklist of “what don’t you like?”

In the new economy … innovation is a derivative benefit of a relationship that starts with solid delivery on core commitments.

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5 Comments

  1. Posted March 18, 2010 at 7:30 am | Permalink

    Permission is hereby retrospectively granted for a one-time use license to the above copyrighted image. Note that in this case, the client survived the innovation while the fish (68lb Mahi Mahi caught off the coast of Costa Rica last July 4th) did not…

  2. the advisor
    Posted March 18, 2010 at 11:11 am | Permalink

    Shhh…you are going to turn people on to one of my favorite “sourcing” destinations!

    Mark makes at least one point I wholeheartedly agree with. Outsourcers aren’t exempt from innovation–they can and should refresh, renew, and flat-out destroy and start over both their business models and their relationship models. But as of the second client they apply this innovation to, it ceases to be”new” and certalinly isnt differentiating to the client (though it may well be for the provider, who is rewarded for its innovation with the business).

    I defined innovation so narrowly because there is a disconnect between what is said and what is heard. Client hears “innovation” and does not interpret that means outsourcing business model innovation that will be applied roughly equally to them and all their competitors who choose to do business with the same provider.

    I was also hoping KPO would come up as it is a logical place for innovation to occur. Yet the concrete example of true, valuable, difficult to imitate, innovation delivered to one client seems to elude us still…

  3. Posted March 18, 2010 at 10:19 pm | Permalink

    If I may add one more primary reason to bust the innovation myths that the Famed Fisherman has listed (he sure does look cool and collected for a guy who pulled in a mega-fish in the hot tropical sun – is there a turbo-charged cervesa-filled intercooler sitting off camera?):

    Hitching your ride to a single vendor isn’t sufficient diversification to ensure innovation.

    Given the long list of available providers, what’s the chance that yours hits gold? Conversely, if you actually contracted for innovation, what’s the chance that your provider finds dirt instead? Remember the innovation funnel…

    I think a client’s R&D dollars are better spent elsewhere and managed by people with different skills than a client governance team and a vendor operations team.

  4. Posted March 19, 2010 at 10:14 pm | Permalink

    I think many would like to view Innovation as either as a loose free-range exploratory research or a pragmatic science to which people can be trained. What might be best to consider is that the use of outsourcing be used to drive domain based discovery. We have seen some of this through incentative based process improvements, hired research and knowledge based analytics. There are however gaps in cultures that preclude value transferrence because the receipients of innovative solutions may very well be ill prepared to accept it.

  5. Posted March 19, 2010 at 10:14 pm | Permalink

    I think many would like to view Innovation as either as a loose free-range exploratory research or a pragmatic science to which people can be trained. What might be best to consider is that the use of outsourcing be used to drive domain based discovery. We have seen some of this through incentative based process improvements, hired research and knowledge based analytics. There are however gaps in cultures that preclude value transferrence because the receipients of innovative solutions may very well be ill prepared to accept it.

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