Managing external people effectively can improve businesses performance

October 2007

Many organisations rely on external partners such as suppliers and consultants to operate effectively. These people have valuable knowledge which is strategic to the organisation and often essential to the delivery of products and services, according to a new report from the Chartered Institute of Personnel and Development (CIPD).

Managing across boundaries investigates how organisations identify people operating beyond the traditional boundaries of the organisation who make a vital contribution to the business performance and how they extend their management practices to embrace these people to maximise performance.

Angela Baron, CIPD Organisation and Resourcing Adviser says: "Managing people who are strategically important to the success of the organisation but not necessarily directly employed is difficult to get right. But when done well it can really drive business performance.

"Organisational development depends on the ability of organisations to build and maintain relationships so that the necessary knowledge is shared with those working for the organisation and that the organisation's values and purpose is not diluted. But it is equally important that these relationships are managed to ensure that critical knowledge which is key to the organisation's product is protected.

"Trust is essential to create a safe environment where external people feel comfortable sharing their knowledge with the organsiation, in the same way clients feel comfortable sharing information about their business with their suppliers, consultants, contractors and partners. Only when this trust exists on both sides will the relationship strengthen and drive high performance."

The report draws on data from a wide range of case studies to demonstrate how high performing organisations rely on their ability to manage a wide ranging, complex network of relationships and value systems. It examines the following issues:

• How organisations can ensure that the knowledge they are purchasing from external suppliers is managed and retained to inform future activities.
  
  
• How organisations recognise the individuals external to their organisation who are crucial for their success.
  
  
• How organisations can ensure high standards of delivery across an increasingly complex supply chain.

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