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An outsourcing deal of an unprecedented nature shows one way to innovate in a global, mobile, and always-connected world.

By Charles Gardiner, Global Delivery Group Strategy and Technology Officer, Xerox

The snow has been falling steadily all morning, early in February as it is and one of the worst winters on record across the states. Six inches have piled up here at the Xerox Research Center Webster, in New York, and I hear it won’t be letting up anytime soon.

It’s been rough, I have to say, since I’ve been back home in the United States only for about five months now. I arrived in October, after spending nine years overseas, and so I’m just starting to get back to the American way.

Don’t get me wrong. Winter storms aside, this is an exciting place to come home to. It’s lovely to see new and interesting things happening — developments I’ve known about but now can be involved in.

But I won’t get too comfortable, because travel is one of the things I do a lot of here at Xerox. During my 33 years with the company, I’ve had the opportunity to work in Asia, Europe, and North America. These days, I try to spend a couple of weeks each quarter in Asia: India, Malaysia, and Singapore. I like to think of my career with Xerox in this way: I’ve always been with the company, but I’ve never been in the same place.

I’ve had some super experiences, but the really big one began in 2009, following the launch of Xerox’s global product development initiative, when I moved to Chennai, India, to establish the foundation for a unique partnership for product development and engineering.

When we began this journey, neither outsourcing nor operating in Asia were foreign concepts to Xerox, as they wouldn’t have been to many companies in various industries at the time. But this initiative would be quite different, an initial foray into the outsourcing of the product development process.

Many companies might wonder how we arrived at the decision to find an external partner for product engineering in the first place, even before they wonder if we’ve been successful.

Going for the Win-Win-Win

In a sense, you could say that the Internet of Things served as at least one motivation for taking what some might consider a rather daring decision.

Xerox is clearly involved in the Internet of Things — we have to respond to it, and we want to respond to it. With the Internet of Things, as objects become more connected and multi-connected, we get a new way to enrich and enhance our customers’ experience with us and with our devices.

So in 2008, as we at Xerox talked about ideas like the Internet of Things, personalization, and the user experience, we asked ourselves, “In this changing world of technology, what are the chances that any one company can be expert in multiple, evolving domains?” Since we figured the answer was “fairly limited,” it quickly became obvious to us that we needed a partner that had scale and experiences in other domains with technologies adjacent to ours.

Any partner who was going to help us with product development and be an integral part of our product development process needed to be willing to grow and evolve with us, to be in it with us for the long term. We even identified a little moniker to help keep the kind of relationship we wanted top of mind. We call it a win-win-win: a win for Xerox, a win for our partner, and a win for the people involved in the transitions. 

A company like Xerox, we realized, needed to be represented globally. At that point, with the majority of our global R&D expenditures in North America and Europe, it seemed appropriate to look East, to think about developing products uniquely for Asia and other developing markets and to access the talent there. We felt we could build the best of the best if we married the East with the West, bringing together the scale of Asia with our subject matter expertise.

Of course, putting this decision into action wasn’t easy or smooth. We had to take a variety of strategic and operational concerns into account, do a lot of homework on how best to address those, and spend untold hours building consensus. But in the end, we developed a proposal that we believed would get us to the win-win-win — and then we selected our partner, HCL Engineering and R&D Services.

Better Together Than Alone

Clearly, the choice of a partner is critical in any product development decision, but especially when you’re trying to do something as unique as we were. One way to think about this is in terms of a lock and key. You’re the lock, and somebody comes along with the key. The lock and key have to fit together. Anytime there is misalignment, you’re going to get stress points.

But even with the occasional stress point, we believe that we are better with our partner than we could be alone. If you think about a long-term relationship, as we do, you don’t have the fear of giving something up — of losing the ability to innovate. This isn’t a zero-sum game that would have us thinking, “If we let them invent, we won’t be inventing ourselves.” In fact, at Xerox we took the exact opposite view. “Collectively,” we thought, “we can invent more.”

The challenge was in finding a way to build on Xerox’s excellent history of technology innovation and to exercise our methodology in a new way. And we did that by challenging our partner to invent for us. We even track inventions in our service level agreements.

Now, you might wonder, “How can you take a thing like an invention, which by its very nature doesn’t exist yet, and develop a methodology and a process that make it possible for people who are fairly new to the domain to contribute and invent?” Well, I’d be happy to tell you that for the past two years we’ve achieved that and more.

Going back to that win-win-win, we’ve proven the success of this model. We get more inventions for Xerox, we get a partner that is learning how to invent for its own benefit, and the people in the labs get the satisfaction that comes with invention. One shining example is ConnectKey, an embedded software system for Xerox multifunction printers. Xerox introduced ConnectKey, a product of the development partnership with HCL, in February 2013.

People to People

So much gratification comes in the last win — the people part of all this. It’s been great to see new people grow in our domain — there are 1,200 individuals involved in this relationship now — and to watch them do great things at scale. In a way, this engineering relationship is as much about people development as it is about technology innovation.

You have to take the hearts and minds of the individuals with you or there’s no way you can be successful. That’s why it’s so important that we identified the win for the people as an important dimension. This wasn’t just about two companies.

It’s important to me that I’m not a stranger to the people who work at the global facilities. Toward this end, nothing beats taking a walk. While I lived in Chennai and now on my frequent trips back to India, Malaysia, and Singapore, one of the most important things to do is walk. We walk around the labs, and we walk around the organization. For senior leaders, managing by walking around is an old trick but a good one. You’ve got to get out, walk around, and make contact with the people, because ultimately it’s the people who deliver the results, not us.

In the five years we’ve been at this, we’ve found that we can engage more fully with people if we embed senior leaders in the local environment for 10 days to two weeks at a time. So we’re rotating some of our people through, giving them time to bond with the partner’s people both operationally and socially. This cements relationships and makes them easier to manage at a distance.

Living in India for four years helped me tremendously, too. At the good advice of a fellow I talked to before I left for India, “I left my Western head behind” and opened my mind to my new environment. Your perspective can’t help but change when you walk for four years in your partner’s shoes. Certainly the decisions you make are influenced by your environment; I know living in India changed the way I thought about problems.

That’s not to say I didn’t have constant reminders from the West about needing to maintain the strategic intent of the relationship. But because I was living in Chennai, I was able to bring the local perspective and the global perspective to bear when making decisions.

No Turning Back

From the start, I was part of a core team of individuals who believed that, in light of the changing technical world and the prospect of global development, we faced a “burning platform.” Once you set a direction to address a particular situation and start moving in that direction, you then have to burn the bridge behind you. There’s really no going back.

As I said, we had quickly come to the conclusion that solving the challenge of competitive product development in the modern era required the new and unique. I’m not aware of many other companies that have tried to solve this problem the way we did. But we believe this was a good competitive response to the burning platform that would give us access to scale and novelty while letting us maintain some expertise and know-how and not put ourselves at a disadvantage in the future.

It was not an easy task to create a system where our engineering partners could develop new concepts with us, halfway around the world. The relationship will sometimes have its rough edges, but you’ll never find Xerox second-guessing its decision. We’re in a partnership now, we’re developing globally, and we’re accessing scale as we never could before. The challenge now is continuing to operate and improve the model. We have to move forward. There’s no return. The bridge is gone.

Bringing in an outside company, such as HCL, to become an internal partner in this way is a tough balancing act. But I personally believe the burning platform was there and is still there for many companies. This is not just a Xerox challenge.

Originally published in CTO Straight Talk, No. 1 (August 2014)

The Takeaways 
When you choose a partner, think about it in terms of a lock and key. You’re the lock, and somebody comes along with the key. The lock and key have to fit together. Anytime there is misalignment, you’re going to get stress points.
Solving the challenge of competitive product development in the modern era requires a new and unique approach—getting access to scale and novelty while maintaining expertise and know-how.
Make sure to challenge your partner to invent for you—track inventions in your service level agreements.