Project Capstone: Offshoring as a Strategic Lever

This page highlights my Capstone Project where I utilized my program learnings as a consultant to lead a client and their organization through an offshoring initiative.

Desired Outcome and Results

A dynamic organization, built to scale and thrive, must utilize every available people strategy to achieve its goals. A client company I am working with has a responsibility to its owners to deliver on value targets such that costs do not outpace revenue. To do this, they must deliver an aggressive product roadmap filled with features which customers will want to buy and manage costs while doing so. This will require increased development capacity that they could ramp up or down quickly, as well as feature skillsets that are fungible.

To achieve these goals, the client must move roles into an offshore environment, partnering with a firm who has resources ready to engage, providing an opportunity for them to increase capacity at a lower cost. Further, the resources are experienced in multiple coding languages and platforms, which expands their capabilities to develop faster and with higher quality. This offshore movement impacts onshore resources, resulting in position eliminations.

A reorganization of this magnitude requires engagement from multiple levels of leadership including executives and front-line managers. It also requires extensive planning to land organizational impacts and people impacts well. As such, this project scope will include what was done with this client:

1) Creating a project plan for execution of this organizational change

2) Planning artifacts to drive the program management and leadership buy in

3) Communication artifacts

4) Communication plan

Success Outcomes and Indicators of Achievement

Alignment with project goals as evidenced by leadership buy-in and adherence to decision making milestones.
Successful retention of key stakeholders and employees.
Successful communication of the project as measured by achievement of financial targets and successful acquisition of signed retention and separation agreements.

Project Process

This project started with a clear financial goal identified by the client's finance team. This goal was identified after analysis of their committed earnings target for both current year and beyond as well as analysis of other savings initiative across the company. The goal was to produce a certain number of in in-year savings for the current year and a certain number of run rate savings for following years. While they were undertaking this offshoring initiative, the company was also going through two additional transformative projects: 1) Aligning from three to one customer relationship management system; 2) Aligning from 3 disparate brands to one go-forward brand. These ancillary projects became important to them in selecting and prioritizing which resources on which products would be targeted for offshoring. It was important that they achieved the cost savings target, but it was equally important to achieve business continuity and not impact customers in the process.

Once the financial goal was set, the engineering, human resources and legal leadership teams met to brainstorm the project. They realized, in short order, that they would need to phase this project to manage the change throughout the organization without impacting their ability to deliver on a product roadmap. They then moved to create a project plan for each phase which included meeting with the offshore vendor, Zentech. During that meeting, they confirmed the vendor’s ability to ramp up the needed resources with

the types of skills and experience we

needed and used design thinking to

develop the phased ramping approach

which would bring one product

engineering team on at a time. Zentech

could prototype their solution set with

each team, gather insights about

execution and then refine for future

onboarding of additional team. They

created sub-milestones for hiring, training

and cross-training which aligned to the

client's dates for notification, cross-training and off-boarding. A weekly synch meeting was set to take the client through inclusion of the next level of leaders through the change process, identified as “Read In” dates on the schedule.

During the time they were holding weekly synch meetings, the I consulted with the human resources leadership team to create a Manager’s Change Toolkit which described the phases of the change, the change models we would be using (Kotter’s 8-Step and ADKAR), case for change, change stakeholders and communications plan including key messaging framework, talking points for leaders, a communication timeline and frequently asked questions document to help managers with any follow up questions that would come from employees. This toolkit provided a helpful resource to managers in absorbing this change and helping others do the same.

The leadership team had to make selections about which products/brands were being affected in the other ancillary corporate projects and how that would affect the engineering teams assigned to those products/brands. I helped guide them to use that analysis to prioritize the teams to be affected. They then had to determine which individuals would be impacted (experience job loss) or affected (not experience job loss, but some other change including job change, management change or project/product.) They also needed to analyze which affected resources would be critical to retain through the change. I conducted several brainstorming sessions with them to make these selections and discuss the knowledge, skills and experience that were needed both onshore and offshore. We used the MIRO board tool to help identify those resources and determine when we could “roll them off” to offshoring. I used color coding on the MIRO board and revised it multiple times over the weekly synch meetings. Every week, each synch meeting had a different set of “critical decision points” that needed to be reached to progress the project.

Once decisions were made impacted and affected resources, the engineering, finance, human resources and legal leadership teams began the work to analyze whether the selections met the target savings and whether the goals of improved quality and speed to market would be met with the changes. The human resources and legal leadership met to develop offerings for impacted and affected employees, consulting regularly with engineering leadership to create an equitable, robust and thoughtful set of offerings that would resonate with both impacted employees and help them weather the change and with affected employees and incentivize them to stay with the company through the change.

To create the communication artifacts, the human resources team conducted focus group meetings with different levels of leadership to test audience response to key messages. The feedback gained in those sessions resulted in a set of materials that had slightly nuanced tone and tenor depending on the audience. This was important to land the change news well and support the entire population.

As they moved through the weekly synch meetings, bringing in next levels of leaders along the way, using the adaptive leadership model, I supported each level of leadership with engagement training such that they could support the next level of leaders. Communications were a key part of this adaptation for leaders, impacted and affected employees, and the organization overall.

Final Outcomes

For Phase I of the project, the ramp of offshore resources started in March and the client completed the notification of impacted and affected resources as in May. They will start off-boarding their own resources in August and complete it by May of the following year. The client retained all key employees and successfully acquired exit documents for all impacted employees. They informed me that they also over-achieved their financial target by making other key personnel decisions with this program, which were not initially in scope but aligned to this program very well. While there were some challenges in aligning leadership at key decision points, collectively, the project was a success. They will continue to monitor organization impacts as a result of this change initiative and capture any key learnings that can be used should they have to drive something similar in the future.

Leadership Principles in Action

For this project, several leadership skills are required, however, there are three which will prove specifically beneficial to engage:

Adaptive Leadership is a model that supports helping others through a new change. Leaders of all levels will have to help each other prepare to help the organization accept and embrace this change, where systems perspective can help in assessing impacts of the strategic decisions to offshore.
Design Thinking will be important in developing a plan for the organization and how best to move forward with the change, including transition to a new offshore partner.
Change Management principles and approaches, particularly ADKAR, are critical in driving change throughout the organization and helping do so from the individual’s perspective.