As the models for shared services centers (SSCs) mature, organizations have growing confidence in their ability to deliver real shareholder value. Many organizations are now looking beyond the initial set-up phase and adopting a longer, more strategic perspective on the future direction of their SSCs model.

Once the foundations for a high-performance culture have been put in place and best practices in processes have been achieved, there may be a natural shift toward the expansion of services and/or an extension of reach. This may mean moving from the provision of traditional transaction-based activities at the lower end of the service pyramid to the higher value-add decision support and analytical services.

Due to this expansion, shared-service organizations could find themselves operating in multiple geographies across multiple lines of business. Despite this complex landscape (and some would argue as a result of it), there is still the need to maintain quality while continually reducing the cost to serve.

For some, the logical next step is to make the strategic decision to identify and focus on core activities by outsourcing non-core ones such as mailroom, scanning, accounts payable, and/or complete end-to-end processes.

Many SSCs begin to develop direct relationships with trade customers and vendors. This, together with the need to manage third-party providers, means the SSC is suddenly in the intricate world of multi-sourcing and multi-relationship management. Unless this is carefully managed, the result may be a fragmentation of the service delivery model against a backdrop of falling service levels and growing customer frustration. If the SSC fails to properly manage both the provider and customer expectations, it is more than likely heading for a major service dislocation.

When faced with this complexity, how does the SSC retain control over service delivery while managing the conflicting demands and expectations of its multiple customers?

Experience shows that leading change is more subtle than "creating a burning platform" to overcome the fear of change. Nor does change have to be "revolutionary" for it to achieve dramatic results. These and other myths about change must be dispelled.

Myth 1: Change Is Easier When You Are in a Crisis

It is true that a crisis can galvanize people into dramatic action. But, does it bring out the best in the greatest number of people? Does a crisis increase flexibility? Under stress, most people revert to type, become more entrenched and are actually less open to learning.

Granted, renewing a business that is prosperous is difficult because it is easy to become complacent, to lose focus. If managers handle change properly, however, prosperity allows them the time to bring people along with them. That is the key to sustainable change. The challenge is to create a sense of urgency for change during times of success. A sense of urgency pushes people out of their comfort zone into the so-called innovation zone, where they are willing to move into something new and try new behaviors while leaving behind the situation that made them feel comfortable and secure. By contrast, in a crisis, people are always in danger of falling out of their innovation zone directly into the panic zone, where fear either paralyzes them or drives them away.

One of the best ways to build a positive need for change is via a company's customers. The more real a manager can make the customer and their changing needs, the easier it will be to change while the business is still successful. Also, changing organizational procedures or structures is a good a way to prepare for change. Once a manager alters the environment in which people are used to working, e.g., by changing reporting lines, their behavior has to change accordingly. Always create an environment in which people feel they can comfortably experiment, take risks. That is the engine for innovation and continued prosperity.

Myth 2: Fundamental Change Has to Be Revolutionary Change

Individuals and organizations have a certain elasticity, or capability to adapt. But unless there is a conscious effort to work at it, over time, most of people become stiff, less elastic and less adaptable. To increase flexibility and fitness for change, people and organizations should start with smaller, incremental changes. For example, a company could improve a local claims handling process before implementing an entirely new nationwide automated system.

Why make a local, incremental change when the potential benefits of a revolutionary one would be far greater? Because the higher probability of a smaller success, plus the confidence it builds to manage change, is worth more than the very small probability of a huge success. The point is driven home by this actual situation: American agricultural experts were baffled when Indian subsistence farmers stuck with traditional farming methods that had minimal yields, when the experts offered a "green revolution," using fertilizers that would improve yields tenfold. The explanation is that if the outcome is uncertain – a bumper crop or no crop – certain subsistence is the logical choice.

Start immediately with incremental changes to build confidence, and then address fundamental issues such as organization structure and compensation programs. It is surprising what the cumulative impact of a 10 percent annual improvement in process efficiency has on fitness for change.

Myth 3: Before We Change, We Have to Be Clear About Our Destination

If a person waits to be absolutely clear about their destination before starting the journey, they will never start. More important than the destination, is painting a compelling picture of the future and inviting others to help create it. Principles that guide human behavior, values demonstrated by actions, build confidence in others that the journey itself will be rewarding.

An aspirational vision of the future can bring out the best in a great many people as long as they have confidence in their leaders to help create that future. An aspirational vision is a dream, not a destination. However, the more vivid the dream, the more powerful it is. The point is illustrated by the story of a traveler walking down a country lane in France who meets a man sitting on a pile of stones in a field, leaning on his sledge hammer. "What are you doing?" the traveler asks. "I am supposed to be breaking stones," the man replies. Further down the road the traveler meets a second man, who is working away at a steady pace. "What are you doing?" the traveler asks. "Making bricks," the second man replies." Further down the road the traveler meets a third man, who is working with tremendous energy. "What are you doing?" the traveler asks. "Building a cathedral!" the third man shouts without stopping.

Myth 4: Change Management Is Done by Professional Change Agents

In dynamic businesses, managing change is part of a manager's "day" job. It means having a split personality, improving existing ways of doing business while building entirely news ways of working. The goals are often in conflict and always in tension with one another. The "paradoxical manager" is emerging as the profile required to be successful today.

The ability to operate in two modes requires an unusually high tolerance for ambiguity. Previously, managers concentrated on keeping the business under control. They were paid to be sure there were no surprises. If there was a need for change, professional change agents were deployed to plan and guide the initiative. These people often came from internal staff functions like human resources or were consultants from outside of the organization. Therefore, their success was limited due to a lack of line authority and acceptance. Today, people in leading positions are faced with having to manage several business models simultaneously while encouraging change, and by definition, uncertainty. Managing change has become 50 percent of their "day" jobs.

Myth 5: Most People Resist Change Because They Are Afraid

The rate at which a person changes is a function of how dissatisfied they are with the current condition, how clear they are about the desired condition, and whether they know how to get there. If the cost of change (monetarily, psychologically or socially) is greater than the above, change will not take place. That is normal behavior.

Improvement = A + B + C > X

When: A = Dissatisfaction with the current condition,
B = Clarity about the new condition, C = The way to get to the new condition,
X = Cost of change in terms of both money and psychological or social factors

The choice of whether to change or not is made on a personal level. As the saying goes, "Change is a door that can only be opened from the inside." The role of a change leader is to build a coalition of those ready to implement change by creating an appropriate level of dissatisfaction with the status quo, communicating a compelling picture of the future by showing how the change will improve the current situation, and being as clear as possible about how to get there.

Conclusion: Change Is Key Task for Today's Manager

More and more, one of the key tasks of modern managers is starting and guiding people through the process of change. Since change activities in and of themselves are demanding, managers should not make life more complicated by operating by certain dogmas. What makes today's managers successful change leaders is the flexibility to cope with the specific needs in a changing environment and to work creatively with what is given.

Specifically, consider these three questions. Are you:

1.Paying enough attention to the development of soft skills?
2.Maximizing training effectiveness by following the experiential learning cycle?
3.Treating Lean Six Sigma training as leadership development?

If not, you may be wasting some of your organization’s key assets.

Paying Attention to Soft Skills

Do you think of soft skills as important in the human resources department, but irrelevant for those involved in Lean Six Sigma? A recent study by iSixSigma Magazine (“The Hard Truth About Soft Skills,” January/February 2008) could be an eye-opener.