Buying Knowledge: Outsourcing Intellectual Services
Do you have a strategic plan, an engineering study, a supply chain solution, or a new performance review system gathering dust on a shelf somewhere in the office? Did you invest substantial fees in a project that you hoped would move the business forward, only to have your management team go right back to doing what it did before?
Most organizations at some time need to outsource technical, analytical or creative services – services that result in the acquisition of new intellectual property. As a manager and a consultant with experience on both sides of the table, I am often struck by how unready most organizations are to undertake these projects. Too often there is a tendency to fall back on a “known quantity” consultant who has been used by the organization before, as if comfort, rather than performance, was the objective. Too often, the organization expects the consultant to tell the organization what it needs rather than determining and articulating its own needs. These are two leading reasons why so many of the expenditures on outsourced IP projects are largely wasted and fail to effect positive, lasting change in the organization. Perhaps worse, many business leaders see this happening and avoid taking on initiatives that are vital to the long-term development of the enterprise.
Typically, no one on the management team has either the time or the capability to provide the preparation, leadership and execution needed for a successful project. An experienced, independent interim executive can fill this crucial gap in the management team for the time required for successful outsourcing of your IP project. The contract executive can concentrate on four important areas: staff engagement and buy-in, managing the procurement process, contract supervision, and implementation.
Staff engagement and buy-in needs to precede the project. All levels of management, from C-suite to shop floor supervisors, need to be involved in defining the company’s requirements, in terms that make sense to them. The members of the management team are the “experts” in the enterprise. The best consultant cannot substitute for this depth of working knowledge. The key to staff engagement is to treat staff with the respect they deserve and provide them a role in determining how the organization moves forward.
An inclusive management workshop to air out all aspects of the business case for change is a good starting point. Following that, the interim executive can lead a working group through a process of developing terms of reference for the work to be outsourced. Again, this group should be representative of all management levels in the organization and, of course, include some of the “obstacle to progress” types on the management team. Encouraging the group to think ahead about appropriate metrics for monitoring the objectives of the project and the return on investment will be valuable at this stage. The individuals comprising the working group need to review and sign off on documented terms of reference.
While the procurement of intellectual services is more challenging, the purchasing process is no different in principle than the orderly, transparent procedure a company would use for purchasing packaging, office supplies or a delivery truck. Building on the working group’s terms of reference, the interim executive can now define the scope of work focused on the company’s real needs, identify a group of qualified suppliers, develop and distribute a clear Request for Proposal and organize an objective set of selection criteria. The working group should again get involved in reviewing the submitted proposals and recommending the chosen supplier to senior management. If necessary, the contract executive can also be called upon to play a role in contract negotiation with the selected supplier.
Contract supervision is always essential, but often neglected by over-worked managers. An experienced interim manager can fill this gap by ensuring that schedules are maintained, management team review and feedback are provided as required, milestones are achieved, change orders are managed and the project budget stays under control.
Staff engagement and buy-in are critically important in the follow up to the project. While the consultant can and should make some recommendations regarding implementation of the project’s results, the implementation plan is the organization’s responsibility. This is the time to lead the multi-level working group through a review of implementation tactics, cross-functional integration needs, management accountability and those all-important performance metrics. A second management workshop is sometimes helpful as a bridging exercise – from discussion of the project results to roll-out of an implementation plan.
A well managed outsourcing and contracting arrangement for IP projects will ensure that the organization knows what it wants and finds the talent it needs at a competitive cost. The results can be successfully integrated into the organization’s problem-solving and change initiatives. Like any other capital outlay, the investment in intellectual property will have a demonstrable ROI if it is managed correctly.
Managing Principal – British Columbia