The World Cup-winning England rugby union team of 2003 famously spent a great deal of time, effort and money on “critical intangibles” in their training, even down to how to make the players’ eyes work better so decisions in the game could be made that split-second faster.
But a similar level of attention to ‘the little things’ is not seen in the sourcing world. During the life of many outsourcing relationships, the focus has been primarily on the tangibles. The people involved in the arrangements are expert at finance or at law or assessing service levels, and most sourcing relationships are therefore buried in the data trying to prove whether something is working or not.
But so many of the critical intangibles are critically important – and often have a greater impact on the success of a sourcing relationship than the detailed achievement service levels. For example, do the two (or more) organisations’ cultures have synergy? In your approach to working with clients, are you co-operative or are you competitive? In your approach to working with suppliers do you naturally come from a trusting or suspicious basis, are you prescriptive or are you open to market influence and do you want to be commercially open or closed?
These factors are not ones that can be added up in a calculator or read, or even necessarily provided for, in a contract, but they will make a very real difference in whether an outsourcing relationship works. If you and your suppliers are at the different end of the spectrum on these measures, then while it does not necessarily mean that the relationship will fail, it is very likely to create a different set of achievements to those planned for or expected.
In the next series of blogs, I will be considering exactly what these intangibles are, how to ensure that they are paid close attention to, and whether it is actually these that make the difference between sourcing success and sourcing failure.