Farewell to the founding fathers (of the outsourcing variety)

By February 20, 2013January 3rd, 2022Archive

There’s been a little-remarked upon trend going on over the last few years—the retirement of many of the founding fathers of offshore outsourcing companies. Since 2009 by my reckoning, there’s been a steady trickle of departures of some of the leaders, particularly in the BPO sector. What are the implications for the industry?

Big integrated ITO-BPO- companies. Pure play BPOs and KPOs. Even specialist ITO firms have had a change of leadership. Look around and you’ll quickly see that the names at the top of the outsourcing houses have changed in the last few years. And, inextricably, the companies have changed as well, in subtle-and-not-so-subtle ways.

Their exodus is part of the natural lifecycle. Having made their bucks through over 10 years or so of hard graft, the vast majority of these founders have more than enough cash in the bank to forge new careers, do philanthropic work, sit on boards, or kick back and enjoy the families they hadn’t seen for years.

What’s changed?

  • No more sense of the founder Granted, over time, the dust accumulates on the portraits of every company or business founder. The passage of time aside, few companies currently embody the original visions of their first fathers or mothers. But in recent history, the names of some of these founders were synonymous with the companies they started, attracting top talent and gaining the loyalty of staff. Employee relationships with the companies were intensely personal. Today, with these leaders gone, it’s not so easy to detect the unique intangibles we collectively call corporate culture. As a result, we’re less able to differentiate one company from another.
  • Fewer personalities    Conference speaker lists aren’t quite so scintillating these days with some of the personalities now on the golf course. If you heard Mr. X or Y at the likes of NASSCOM or IAOP, chances are that he’d regale you with stories of the heady early days of the outsourcing industry, and use it as a parable for a meaningful life to boot. You’d marvel at his acumen, and wish you had had the opportunity to get in on the ground floor under his leadership.But now the early rock stars have been replaced by a managerial class who have most often come up through the ranks of the companies or businesses they now lead. Anointed for their dependability and predictability, as well as their track records growing margin, it’s not so easy to rattle off their names. Rather than inspiring, these leaders are focused on operations and shareholder value (not necessarily in that order) rather than designing new solutions. These folks are so busy managing, they don’t get out much amongst the industry faithful. And when they do, it’s a cameo appearance with Power Points rather than off-the-cuff inspiration.
  • Fewer risk takers The early leaders were extraordinary risk takers. They leaned on every relationship they ever had to take a chance on entering into a relationship with a fledgling company, and figured out the solution on the job. Because the companies they led were naturally smaller and in rapid growth mode, they were very hands-on, with remarkable intelligence about their markets and their business. Today, with expectations established by the street, the band of risk has narrowed to the point that any move today’s outsourcing leader makes is akin to mimicry—add new verticals, acquire a company with an adjacent but accretive offering, expand a delivery network into a hub in which someone else has already made an investment. For this next generation of leaders, going off-piste is not in the cards—and even if it were, this generation is not as well equipped to take the risk.

Certainly, these founders had the advantage of time and place, and took advantage of the tremendous nexus of technology, globalization, government policy, demographics, and a willingness of clients to explore new business models. And in a maturing space such as outsourcing, predictability and sustainability, rather than bold moves, are most highly rewarded.  But in an industry that is crying out for leadership, I mourn the retirement of these first movers. We all need inspiration that only these early outsourcing rock stars could provide.  I only wish I knew the names of the new guys.