For a long while now, I have privately been concerned about the negative impact modern work culture is having on the disintegration of work ethics within many of today’s firms. Many workers, whose jobs once forced them to think and focus, have today become reactive, easily-distracted and operational.
It first dawned on me about a decade ago, when I was enjoying one of those rare “in between jobs” periods, that I was still able to spend my whole day absorbed in front of my laptop. Let’s be brutally honest here – people think they are “at work” as long as they are sitting in front of their computer screen. Peoples’ obsessions with their favorite news pages, blogs, social sites and their 3+ email accounts has disintegrated work productivity for so many.
Too many office staff today have lost their focus and analytical value to their firms
How many people reading this blog are able to turn off their email for at least an hour, so they can focus on whatever work activity they need to finish? How many workers have become mentally lazy, preferring the cerebral chewing gum of short-term attention span theater than actually having to read, learn and think? How many people have evolved from problem-solvers to passive information jockeys, doing little more than responding to emails, passing on instructions, or forwarding along information someone else produced… with little (or no) value added by themselves? And how are you supposed to focus on being good at your job when you can’t concentrate on any one activity for more than five minutes, being expected to respond to emails as soon as you receive them?
I believe it is this culture of poor productivity, of reactive corporate political environments, that has resulted in operational business functions becoming, frankly, much too operational and failing to add real analytical value to their organizations’ leaderships. And while this may not seem like a big deal today, you only have to look at some recent workforce data from the McKinsey Global Institute, to understand how much trouble our businesses are going to be in, if many of our office workers fail to improve their analytical skills. According to McKinsey’s research, US firms are already short 200,000 data scientists per year, while we will have an excess of 300,000 office support staff by 2020:
This is a wake-up call for staff worried about being “one of the 300,000”
The net result is that many of today’s businesses are over-bloated with operational staff whose modus operandi is about maintaining the status quo, as opposed to exploring new ways to advance the business. The very nature that many businesses feel the need to hire “data scientists to improve their own self-awareness and strategic direction just about sums this up; they are essentially admitting defeat in improving the analytical and innovative capabilities of their own personnel, and are looking elsewhere to re-ignite their business fortunes.
However, it’s the existing personnel within a company which knows its business the best – the quirky institutional processes, the politics, the customers and suppliers etc. The keys to success are about forcing these people to open up their minds to work with real data to understand better how to streamline existing processes, to understand better their capabilities, to pinpoint where new consumer demand may be untapped, or where existing demand is going to dwindle… right across their supply chains. As the McKinsey data shows, the data scientists simply aren’t going to be there to slot into these positions at some future moment (when it may be too late). The really effective potential scientists are the ones busily managing their Facebook contacts, in between berating their providers for failing to bring any innovation to their procure-to-pay processes.
The Bottom-line: Analytics providers can help re-orient the workforce to be more effective, but only if firms have the desire to change
This data is also a massive wakeup call to the sourcing industry: organizations and analytics providers can work together to create stronger analytics based-relationships. This means not only training existing personnel to develop their own analytical personnel, but also re-orienting the work culture to re-focus the staff. Providers can deliver armies of people with tools to add analytical capability, but they will only be effective if the provider’s resources can be utilized as an extension to the client’s team, as opposed to a factory of data gatherers.
Hence, partnering with providers can help get frustrated enterprises from A to C a lot quicker, bypassing much of their painful naval-gazing exercises, where they bemoan their lack of talent – and in a way that is far less expensive and risky than simply hiring “data scientists” who either do not exist, or are far too expensive for their meager budgets.
I truly believe savvy partnering with providers can be really effective for a business seeking urgent and dramatic change to their very work culture. “Outsourcing” (yes, I said it) strikes fear into the staff, and forces them to justify their very existence in a company. It provides a trigger to force much-needed change into businesses. “Outsourcing” gets a bad rap because it scares people worried about their jobs… hey , if you’re worried about being outsourced, then make yourself more valuable to your organization. Employees need to get the message – and get it fast – if they don’t add analytical value to their organization, their own career opportunities are going to be limited. It’s for their own good – only possessing tactical operational skills is only going to get them so far. Who wants to be part of the 300,000 excess?
Today, I have to confess to being impressed by the armies of analytics staff and tools that providers are pushing at their clients. This is where the real change is occurring in business and is also providing the true differentiation points across the provider landscape. If providers can prove they can bring genuine analytical skills to their clients, then that’s half the job done… the other half is their clients wanting to change and break out of this disturbing holding-pattern in which so many companies find themselves today.
Posted in : Business Process Outsourcing (BPO), Finance and Accounting, Global Business Services, HfSResearch.com Homepage, HR Outsourcing, HR Strategy, IT Outsourcing / IT Services, kpo-analytics, Social Networking, sourcing-change, Talent in Sourcing
[…] Many of today's businesses are over-bloated with operational staff whose modus operandi is about maintaining the status quo, as opposed to exploring new ways to advance the business. […]
Excellent article, Phil. You have bravely articulated many of the issues impacting today’s workforce. I especially agree with your points about the declining focus and productivity of office workers. If we’re headed where these data points suggest, then these workers are going to be in trouble in the future,
Steve Hedges
Kudos for this great post, Phil. Businesses are suffering from a lack of analytical capabilities and a lack of willpower to get them. Outsourcing provides a viable option to change the game,
Ed
Phil, Interesting post. Cetainly demand for “analytical capabilities” is rising rapidly, seemingly outstripping supply of analytical-capable workforce. I don’t really understand your thesis about “getting back to a thinking workforce.” Since when were office/admin staff analytical? Paper-pushing, sorting, filing, etc. were never really analytical processes. Even working with data in Excel spreadsheets or with ERP systems inputting and reports are hardly analystical activities. These workers have been intelligent robots, for the most part. Now, when it comes to middle managers, whose main purpose is to intermediate information and resource claims in an organization and organize and coordinate work execution–the focus/consciousness ofthese poor people has surely become sliced and diced by electronic media. Finally, regarding the future generations of workers, they will have to be more analytical; and they will have to work in the midst of a continuous flow of digitized info from many sources. Digital flows everywhere is the new reality.
Excellent point of view. ‘Thinking’ to the most part is now sourced from a small corner of the organization that specializes in strategy. However the success will lie in how organizations leverage providers to do the ‘routine’ work and the ‘thinking’ work. As it is, the inherent contradictions in outsourcing keeps organizations from fully utilizing the value. It becomes harder for them to embrace this idea, unless they are willing to truly collaborate with providers.
@andrew – agree that some office staff were never analytical to begin with, but there is also been a large portion of mid-level operations staff which used to be analytical and have let those skills flounder in recent years, due to our shifting work environments. What is clear, is that orgs need analytical talent, and there is no reason why they cannot improve the skills of many of their existing staff. I cannot tell you how many qualified accountants I know who (as you point out) do little more than jockey speadsheets for their firms. Work on any F&A task-separation exercise and you will be amazed how much time the mid-to-high end finance talent spends on admin tasks. It’s the same with many consultants – they’ll pump out hundreds of slides of data, but where’s the real skill in interpreting what it means to the business and explaining how to act upon it? MBAs and CPAs don’t necessary mean you get analytical skill, but I do hold out hope than staff can be re-oriented to be more analytical. Outsourcing can really help, if the provider can work with the client to help improve their talent’s capability to interpret data, as opposed to merely store, archive and report it. As the pressure grows on CFOs to provide better, faster, more relevant data on their organizations internal and external environments, they will (and many already are) look at more managed service / managed governance options, as they simply cannot afford to spend a fortune on hiring new talent and interim consultants all the time. It’s a great opportunity for the smarter BPOs to get ahead of the game…
PF
Phil,
This is a pervasive problem that is plaguing enterprises today. Outsourcing can help, but are svc providers really delivering the quality of analytics talent companies need?
Paul McCullough
@paul – it’s a mixed bag, to be honest. We’re seeing some crack specialists, such as Opera and MuSigma which have some quality people and interesting models, the traditional “Big 4” firms and all the service providers competing aggressively in this space. Most the deals today are small and FTE-based or project-based and we are only really now starting to see broader managed services offerings start to get a serious review from clients. I would sum up my answer by simply saying you “get what you pay for”… evaluate the resumes and meet the people who are servicing your account. Look at the attrition rates and evaluate the tools the provider uses, then make a decision.
PF
@Phil. “What is clear, is that orgs need analytical talent, and there is no reason why they cannot improve the skills of many of their existing staff.” The first assertion seems very supportable, the second maybe less so. And while I do believe that analytical capabilities can be outsourced (and benefit the performance of a firm), it’s not very clear to me how outsourcing as such would support the skill development of workforce already in the firm. I’d be interested to understand more about that. In any case, the gap is real and must be filled. Whether this is done by growing a crop of new analytic saavy professionals in schools and businesses (see http://www.informs.org/Build-Your-Career/Analytics-Certification) or through outsourcing is an interesting question.
Phil,
I reject the idea that most people are not capable of being analytical which, in my means, they can conceive and manipulate models. Ask any one of them how their incentive compensation plan works.
Organizations need to take the responsibility for training their people, not relying on universities, service providers or rival firms. Many decades ago, i went to work for AIG as an actuary with no training other than math degrees. It took a few years, with the help of mentors and study time at work to pass the exams. We need a similar dedication and possibly organized syllabus (Ive heard the Society of Actuaries is working on this) to grow the the analytical talent we need.
I don’t spend much time in large organizations these days but I remember many years ago asking the Treasurer of a F500 company what all these people do all day. His response: “They spend their mornings deciding who are their friends and who are their enemies. They spend their afternoons rewarding their friends and punishing their enemies.”
I thought all that changed with BPR and the thinning of the workforce but I guess I was mistaken.
-NR
@andrew – your concern about outsourcing is valid. Outsourcing can only improve the analytical skills of the existing workforce if the provider brings genuine analytical talent to the table and is managed like an extension of the client’s existing team. Moreover, the analytics provider and client need to design specific training programs to improve the client’s team’s ability to approach their jobs with more business logic and cause-effect scenarios etc. As mentioned, this is more about re-orienting staff that simply adding a training program. It’s helping staff approach their jobs more analytically, with more focus. The smart providers will push their clients towards teaming scenarios as opposed to the “master/slave” model of outsourcing. The legacy providers will simply push low-cost offshore butts on seats to archive and manage data repositories and do web searches. Outsourcing in analytics only really works where the client takes the partnering approach and is determined to improve the analytical capabilities of its own staff in the process. The analytics / KPO deals that didn’t have this approach have tended to dwindle, or get canned altogether as the value created was too limited.
PF
@neil – the whole premise of the post is that many staff do have the capability to be analytical, and it’s the modern work ethos and culture that is preventing them from being so.
I would agree that orgs have to take responsibility for their own people, but why can’t they leverage the expertise from others to improve / help them re-orient themselves? Outsourcing (oh, how I hate that word) can create opportunities for clients to drive much-needed thinking and change into how they operate, and can also introduce talent to help them. As per my previous comment, it can also be a big waste of everyone’s time of not structured or executed correctly,
PF
Phil,
Today’s workforce cannot be boxed-in by a one-dimensional thought process of classifying them as having lost their focus and analytical/thinking ability. There are multitude of dimensions that contribute to the behavior you see in today’s work environment. People work for People and for the most part it is the leadership that is responsible to inculcate a culture of rote (or thinking and innovation) in a given work environment. While the barrage of information has shortened the attention span of the workforce, there is also the ‘quarterly focus’ from the top management and ‘do more for less’ mantra to bump up the EPS numbers in an era of flat or falling revenues that creates a culture of keeping the lights on by focusing on completing as many tasks or transactions as possible. No one wants to rock the boat or stick their neck out in improving the process or efficiency or do anything in the ‘larger interest of the company’. Most middle management is happy to just keep the status quo!
People are basically smart but will not do anything out of their comfort zone lest they topple the applecart – upset their boss or anyone senior within the larger organization, or having to take the extra overhead of getting something done (your idea so you do it!) without much support. People just want to get their regular paychecks, keep their jobs and hope to get a decent retirement after spending 30-35 years on rote job. In the process if they get a promotion or two, even better!
So, outsourcing or not, it is really up to the leadership of an organization to create a culture of innovation and creative thinking by establishing a non-threatening environment, mentorship & coaching, identification and nurturing of promising talent, being connected to the workforce and engaging with them regularly to talk about the big picture and show them the value of the contribution an individual makes as part of the team. In an insecure environment (political or economical) people just hunker down and do their job (without putting their thinking hat on). In an open, non-threatening and learning oriented environment, people will be motivated to be creative.
– Vikas
@Vikas – good to hear from you, old chap. Very few people today can even frame an “analytical question” – you have business people (with or without MBA degrees) who struggle to understand subtle, but basic analytical thinking. Sorry if you think I am putting people “in a box”, but we have a pervasive problem with today’s workers – far too many simply lack analytical thoughts processes and we will show you some data shortly which proves our point (in spades). There needs to be a cultural shift within organizations (as you point out) to change the attitude and approach many people have to their jobs and their careers, otherwise we’ll be left with a large surplus of non-core staff who are clearly expendable…
PF
What you write here is very true. Many people, including children sit at the computer and get hooked. They see the nature only on the monitor is not in reality.
Excuse me please for my bad english.
Best regards from Germany
We can also identify as a culprit a transformational culture where projects are delivered by project teams onto “targets”. I’ve been privy to numerous transformations, many to facilitate outsourcing, where the project is a new org chart and a ream of process documents; and the transition is a third party template. As indicated by Vikas, people have a motivation to preserve the status quo: it got them where they are today. Change that fails to recognise the culture, history and identity of an organisation, as well as ignore the change expected of the people, will indeed disengage and demotivate the workforce. The position of the project board is not sustainable: they would like the workforce to be both engaged and analytical, but also interchangeable components of a simplistic process.
The use of manufacturing tools such as Six Sigma on services was a forerunner of this dislocation between strategy/experts and the workforce. Outsourcing has taken up the baton, as its background in ITO has led to an IT systems/process oriented approach that often fails completely to account for people and culture. IT project managers, very often with personal traits that led to their affinity with IT, gravitated towards approaches that worked with numbers and boxes, rather than people and politics. A complex system is mistaken for a process, and only one dimension represented when outsourced or reorganised.
Your discomfort with the word “outsourcing” is one that I share. Not because it’s got a bad press, but because it sends the wrong message. The phrase you need is “cooperative delivery”: the first step in re-engaging the workforce is to recognise their value to the organisation, and what they could bring to a partnership with a Service Provider. This requires a different type of engagement and a different type of transformation; something on which both clients and service providers need guidance. There are few of us, as yet, utilising this approach, but our numbers are growing. My website will soon hold more insight into this subject as the winter break affords me some time.
Phil,
Kudos to you for calling this out – you’ve touched on the major reason why so many companies are failing to improve the value of their operations functions. People in HR, finance, procurement etc just “do”, they don’t “think”. This may have been an issue 10 year’s ago, but today I believe it’s far worse. The culture within so many firms needs to change – the types of people they hire, the way people are rewarded, the way they approach many work tasks. In addition, it’s not only companies, we also need to question the education system, if people are coming out of our colleges without an analytical capability.
This is going to be a long, challenging process for many firms, but at least with thought leaders such as HfS and McKinsey highlighting the issues we’re making a start,
Eric
@matthew – good input. We can bemoan “outsourcing” as a toxic term all day long, but at least if strikes a fear factor into staff who need to up their game. It’s about bringing in new capability to augment or replace the existing, as the existing isn’t doing its job…
PF
@Eric – good points, and thanks for the kind words. Definitely agree with your “think as opposed to do” comment. Also agree the problems start with the education system and is exacerbated by the corporates. I hate to say this, but it almost feels like it’ll take a real recession to force companies to rethink their whole approach to hiring and training staff – the last one didn’t force change, just created an environment of fear and reaction from firms, as opposed to transformative, proactive behaviour,
PF
Hi Phil,
You are right in the sense that ‘wanting to change’ is an important factor here. So, then it is maybe worth reflecting further also, that what led to this situation and how long does it take for change to be visible/effective – the future enterprise model as you call it? I think that this is about the nature of the marketplace/business ecosystem over the years and the changing expectations of business leadership, who may not have felt this need in the pre-2008 years…eventually organizations do get what they ask for of their people and so the intent must be there to drive this from the top.
On the point about Outsourcing, while the talk is always centered around value and business transformation and the future operating model, in reality a lot of the (traditional) construct still dominates; which is all about predictability, repeatability, of lowering costs and of efficiency – all of which require standard processes, metrics, good throughput, predictable outcomes not about scenarios and analysis – you know what i mean. So sure this may well be an opportunity for the BPO/KPO firms to drive up value, it has yet to be demonstrated significantly yet.
Also maybe worth considering therefore what some of the past analytics/niche acquisitions by service providers have led to in this context. CTS and IBM for example have made a few…
Manish
“The smart providers will push their clients towards teaming scenarios as opposed to the “master/slave” model of outsourcing.” That phrase sings to me. Teaming, partnering, alliances — all more flexible relationships than either traditional organizational structure or traditional outsourcing. I expect that flexibility is the direction many organizations are heading and I think they have a shot at replacing traditional organizational forms. Why? New entrants to the workforce seem to be less likely to stay in one organization. Tools like cloud-based work and recommendation engines make our work and reputations more transparent and mobile. Organizations are learning to gain from flexibility and transparency. People, technology, and organizational processes are moving – but how quickly? How quickly do we learn to lead in this environment?
Phil: I recognize my organization in your comments. We’ve become so enamored of “best practices” and pattern-matching on specific processes that we’ve become automatons. I think the idea of the knowledge worker posited by Henry Mintzberg, Peter Drucker, and Charles Handy 35-40 years ago is being supplanted by the “one-best-way” of scientific management from 100 years ago and propounded by Frederick Taylor.
Many of my colleagues report similar circumstances. Less decision-support, modeling, or innovation take place, while more LEAN and similar projects get funded to wring still more drops of efficiency from existing processes.
Not much blood left to squeeze from this rock.
The issue is critical and real and is the outcome of new tools introduced for communication/information sharing etc, which have so many positive impacts, beside some cultural change and soft path otions made available to some workforces. However, whether outsourcing can provide the solutions is a real question mark. The outsourcing agency is also deploying manpower exposed to similar work issues.
Phil
Good points, Phil. Yes, it is worrying to see the “consumerization” of office work across industries. The tendency to dumb-things-down is pervasive and independent thought or approach is scarce. I wonder if there is correlation between “quality of work” and what the associates feel about a place. Look at the Glassdoors list of Best-Places-to-work (http://www.forbes.com/pictures/efkk45eddil/no-1-facebook/) – I suspect these companies still require their associates to carry their thinking-hats to work everyday.
No easy answers as usual. The corporate center requires businesses to weed costly and sue-able errors away. That leads to process decomposition, decoupling, dumbing-down to a level where all traces of intelligence/originality is wiped out. This is true both when its done in-house or out-sourced/off-shored. Being in the outsourcing industry, I can assure you the problem is probably magnified with the outsourcing service providers. We are currently encouraging lemming-like behavior as that is what is expected from the contract. It is contrary to the aspirations of a young educated workforce but the culture tends to deaden it over time. The long term implications of this for future work forces is scary.
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The article shares an interesting insight into the lackadaisical routine and attitude of the workforce today. Most people are just happy to meet a comfortable set of expectations and don’t want to risk thinking beyond the usual. But this comfort positioning can be detrimental not only for the business but also for these individuals/professionals on a whole.
Our blogpost on “Our Fiercest BPO Competitor: The Status Quo!” http://www.minacsblogs.com/Vision2020/OurFiercestBPOCompetitorTheStatusQuo.aspx talks about challenging this very attitude of businesses and individuals.
This is true especially for successful businesses, as one might think we can now sit back and relax because we already have the formula down pat-high performing staff, best practices, optimized processes, and transformational tools. True, these strong foundational elements make it possible for an organization to do better and work smarter; however, to keep achieving excellence, you still need to keep challenging the status quo!
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