Is Innovation in Outsourcing Insanity?

By February 1, 2013April 6th, 2022Archive


I’m obsessed with the concept of innovation resulting from outsourcing. I’d love to find a real example of true, game-changing, big things that turn the delivery model on its head, taking clients to new heights of performance. But the risk aversion and contractual precision of the outsourcing industry work against innovation, not to mention a broader business trend that rewards incrementalism and penalizes big breakthrough ideas. Would an outsourcing provider be insane to pursue innovation?

You may not have heard of Peter Thiel, the founder of PayPal. Thiel is also the founder of the Thiel Fellowship, which tempts under-20 talent to forego university education by funding “radical innovation.”  He believes that there are many career paths, such as entrepreneurship, for which higher education is not useful and it simply leads them to waste years when they may have been doing something more productive

Thiel has been consumed about our growing comfort with incremental change at the price of forgoing radical change for several years, He bemoans the dearth of companies brave enough to do big things, and says that “anything non-incremental is seen as insane.”

How does this sit within the context of outsourcing? Can outsourcing result in a bold leap forward, or would any outsourcer, and their clients, for that matter, be insane to try push through changes in delivery that alter the game?

After all, outsourcing is about control and risk. Do something different and the old controls are no longer operative. Change any expectation about outcome, and the risk profile rises dramatically, with established service level agreements no longer having the same validity. Wouldn’t be better to move the dial slowly rather than pursuing a big bet in technology, or ways of working?  Especially if there’s no reward for doing so–just punishment.

Perhaps it’s all a moot question. After all, the way we outsource is all about a single word: NO! No uncertainty, no (or as little as possible) disruption, no noise, no customization, no red on the dashboard, no investment, no change we can’t handle.

What’s actually left that is not incremental, a bit of improvement around the edges? Is it insanity to try to do more? Perhaps there’s just no room for insanity.