Succeed by Design

Over the Christmas break, one of my CoreNet teaching partners from Deloitte Consulting sent me a copy of their Advisory Services’ 2008 Outsourcing Report. I found it to be a validation of what we teach in the CoreNet class on Strategic Sourcing as well as a strong personal motivator for me for 2008. The report deals with outsourcing across all disciplines but is directly applicable to corporate real estate.

One thing that struck me immediately was the contention that service providers should not be regarded as simply a way to lower costs but as partners in innovation. Amen to that! One of the most frustrating aspects of this business is the amount of potential benefit we end up leaving on the table because we can’t get our clients to look past their annual operating budget and to the bigger picture.

For 2008, I’m focused on creating success by designing the right model. When a company outsources its corporate real estate simply to reduce costs or to reduce headcount, the end has essentially been achieved. Both goals are fairly demonstrable and relatively short-term focused. The client will typically achieve savings (what I call “low-hanging fruit” savings) and will usually streamline staffing. However, once these are satisfied, the sentiment usually is: what’s next? In the context of the typical design of outsourcing contracts, there is no “next”–like my car’s annoying navigation system says, “you have arrived at your destination.”