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Good Corporate Culture in Outsourcing or Shared Services Centers


Eric Liebross

Senior Managing Director of Business Transformation, Auxis

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Anyone who has worked in a “good” corporate culture will immediately recognize it. There is a “buzz,” a spirit to the place, the people are focused and energetic. This kind of energy certainly applies to outsourcing, where the “right” corporate culture promotes the highest levels of performance, accountability and customer service.

On the other hand, it’s easy to identify a “bad” corporate culture: lack of a strategic vision; misalignment with the business objectives; overly bureaucratic; unable to unwilling to change; lack of trust; poor motivation and “energy” in the workforce; fear of failure; poor communication; poor teamwork; little or no creativity; no accountability and weak leadership. The list can go on, but like Justice Potter Stewart’s definition of pornography, “It’s hard to define, but you know it when you see it.”

What does a “good” corporate culture feel like?

The culture of an organization is reflected in its values, beliefs and behaviors. It is demonstrated in the ways that the people in the organization are led, and in how they act and think. It is unique characteristic of the organization, like its fingerprint.

A “good” corporate culture has a clear vision that is simple to articulate, understand and execute. It also has some or all of the following:

  • Structure and discipline that are supportive, not limiting.
  • Agility, flexibility and focus on achieving the business objectives, not the status quo.
  • Management is trusting and respectful, and able to verify the results to support that trust.
  • Good visibility over the team’s activities and performance.
  • A motivated workforce, with people who understand their roles, responsibilities and expectations.
  • An environment that celebrates performance and success, and has the confidence, freedom and willingness to be innovative, and has a “safety net” to manage the risk.
  • A performance-driven environment that thrives on both teamwork and competition.
  • Strong leadership that is not hierarchical and focuses on continuous improvement and empowerment.

Are outsourcing or shared services centers immune to the effects of “corporate culture?”

Certainly not.

The goal of both shared services and outsourcing is to reduce cost through lower labor costs and/or greater economy of scale amongst the labor force, as well as provide improved operational efficiencies through standardized processes and the increased use of technology.

But Outsourcing and Shared Services are more than just the provision of services that are consolidated to one location. Often, there is a shift in the culture of the organization providing these services. No longer is the organization internally focused and without performance metrics and accountability; which is often the complaint of business managers regarding these kinds of transactional operations. Outsourcing and Shared Service Centers are run as a business, delivering services to internal or external customers at a cost, with strict quality and timeliness service level standards. That’s quite a change from the typical internal back office operations.

In outsourcing or shared services centers, performance and accountability are established by having well documented roles and responsibilities that are understood and agreed to by all parties. There are well clearly defined “hand-offs,” where the responsibilities of one organization transition to those of the other (from the service provider to the customer, and vice versa.)

So what is the “right” corporate culture in a third party (outsourcing or shared services) model?

Within a positive and productive corporate culture, performance objectives are realistic and understood by all parties. They are measured and reported on regularly. Issues that impact performance are identified, and all parties work collaboratively to resolve them. There is no “finger-pointing,” blaming one organization or the other for failure to perform. It is a partnership that requires all parties to commit to its success.

There is a clearly defined vision with mutually agreeable expectations. Is the focus on cost savings, performance, efficiency, a combination? Those expectations are well understood by the outsourcing organization and it becomes part of its organizational “DNA.” The organization focuses on achieving the expected results, which are measurable and visible to all parties (customers, parent organization and other operating entities.)  There is strong communication between the parties, an open and frank dialog, and a positive atmosphere of mutual trust and respect. There is a strong orientation towards customer service; a “front of the house” mentality, rather than a “back office” perspective.

A “good” corporate culture for an outsourcing or shared services center also needs to be highly adaptable. While there always needs to be a focus on performance and customer service, third-party providers also must incorporate some of the cultural attributes of the clients who the service center is providing services for. Very few companies can successfully work with a “black box” outsourcer; where everything is done the outsourcer’s way, and client-service provider contact is kept to a minimum. Each customer requires certain levels of communication and day-to-day interaction, and a successful third-party service culture can adapt to the needs of its client. Some clients want more interaction and input; sometimes it may vary even within the departments of one client. Being adaptable to the needs of the client will minimize communication issues and help to ensure that a strong customer service framework is in place.

Further, if the service center is located offshore, you must account for the cultural aspects of that country and its people. For example, in many (non-U.S.) cultures, it is common that communication is low-key and non-confrontational, especially when it is face-to-face. While this approach may make for a more pleasant interaction, sometimes a frank discussion between the two parties may need to be held, which may be “culturally” difficult. In those instances, the service center needs to plan for this.

Some basic steps that a service provider can take to create the “right” corporate culture include:

  • Regularly communicate the key elements of the organization’s mission and objectives to its staff. Everyone should be acutely aware of they need to accomplish, and what must be done to get there.
  • Reward performance and the actions that other employees should emulate. Identifying and recognizing these behaviors is probably the most powerful way to influence the behaviors of others.
  • Discourage behavior that is contrary to the organization’s mission and objectives. Be aware of what is going on in your organization, and when you see things that run “against the grain,” act quickly to counter those unwanted behaviors through constructive feedback, as well through more stringent measures, when needed.
  • Lead by example. Make sure that management represents and models the types of behavior that it wants from its staff, and that it actively engages with employees to understand the “vibe” of the organization.

Creating the “right” kind of service center is not a “one-size-fits-all” effort.  It requires a strong vision, excellent communication internally and externally, and a focus on performance and customer service. This approach must also be flexible, adapting to the unique needs of each of the organizations that it serves.

Written by

Senior Managing Director of Business Transformation, Auxis
Eric brings more than 30 years of experience and a proven track record of success helping CFOs modernize and achieve peak performance in their back office to become more scalable, innovative and strategic oriented. He joined Auxis in 2002 and serves as Senior Managing Director, overseeing all Finance Transformation, Process Automation and Business Process Outsourcing services at Auxis. His areas of expertise include financial operations performance, shared services strategy, organizational and operating model design, process automation (e.g. RPA), and systems integration.

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