Business Coaching for Owners & Managers of Small Businesses

Delegation and Outsourcing Share a Common Management Focus on What Needs To be Done, What Are the Results Required, and When?

 

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Yesterday I was scanning through the Tweets from my friend Bruce Peters and came across a reference to a blog posting by Bernadette Doyle, “Discern Your Strengths – Delegate The Rest“. Its always good to return to these complementary concepts – strengths and delegation (outsourcing), so I read on.

Ms. Doyle’s concatenation of “delegation” and “outsourcing” is a very productive idea. Delegation is normally seen to be a personal act by a manager. A manager delegates certain tasks or responsibilities to someone else in the organization. Outsourcing is most frequently the retention of a third party, external to the company, to perform a function or tasks. Setting these two side by side provides an interesting example of the overlap between the personal skills and attributes of the manager and the larger practice and processes of the organization.

Outsourcing is sometimes seen as a panacea, especially for startups. However, a sound knowledge of  business practices is required to make outsourcing really work.

 

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Outsourcing functions is a key element of every business’s strategy. Richard Mammone, Rutgers University BEST Institute, has written a brief article, “Humility and the Successful Startup: Every skill required to form a business should be judged on make-or-buy grounds. If you don’t have it, outsource it”^[[1]] .

Mammone’s argument is captured in capsule form here: “Every skill set required to form a startup should be subjected to a make-or-buy decision process. In other words, if you don’t have it, outsource it. Let me just stop here for a moment and mention that outsourcing is the strategic entrepreneur’s solution to most problems.”

Outsourcing is a great strategy. In fact, outsourcing is a fundamental component of every business strategy. Outsourcing decisions reflect the fundamental values of the organization.

Time management is an extremely popular topic. Is this productive?

A Google search for the phrase “time management” returns the droll news that there are more than 14,900,000 responses. Amazon lists 448 books with ‘time management” in the title or subject line. A similar search on Youtube.com returns over 2,000 videos about time management.

But, what can this really be about? Time is a concept we use to delimit the past from the present, and whatever future there might be. Einstein is reported to have said, “The only reason for time is so that everything doesn’t happen at once.”^[[1]] Perhaps because we, as human beings, are a fleeting moment, we have a special focus on time. We are very aware that our time is limited, unknowable.

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1. I could not find a reference citation for this quote. It is ubiquitous on the web. Perhaps it is apocryphal? In a recent re-read of David Allen’s Getting Things Done Penguin, 2001), he has a side note (p. 5): “Time is the quality of nature that keeps events from happening all at once. Lately it doesn’t seem to be working”. – Anonymous [↩]

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Increase customer perceived value by managing expectations, making services visible, and following up.

This podcast is 12 minutes 41 seconds long.

A text version is available here

Most professional services firms, and many other companies where services are a significant component,  are troubled by customers who do not perceive or understand the true value of what they are providing. They have difficulty getting customers to pay for upfront diagnostic/assessment work,  concept modeling, prototype development, and so on. In some cases, professional services firms have difficulty sustaining the customers awareness and proper valuation of the work done during an engagement. This is a problem in financial services, for example, where planning and execution services seem invisible, or entirely obvious, and thus not valued by the customer. After all, I can do stock trades myself on the Internet. Where is the value-add from paying a financial services firm a management fee to do that?

Here is a conceptual model for improving how customers value services.

There are three basic phases in a service event or client engagement:

1. Pre-service awareness – establishing expectations
   
2. Service engagement – making the process visible
   
3. Post-service follow up – the ongoing engagement

Lets walk through each of these phases and explore opportunities to increase customer perception of our value to them.

Why Should You Develop a Business Plan?

For every startup the development of a business plan is a  required first step. It is so obvious – business schools have course on writing the business plan and it is impossible to get funding without one. Teams coalesce around the labor. So, every startup has a business plan.

For the going concern, the ones that are now three or so more years old, the business plan (also called strategic plan -really the same thing) is forgotten, only stumbled on when a move forces someone to pick it up and wonder, “Should I just relegate this to the dumpster?”

This is not a good situation. A business without a plan is like a boat sitting in a pond just waiting to sink to the bottom for nature to compost it. Or, if it has the fate to be afloat in a stream, it will be carried along willy-nilly until it bumps into a stone or dead branch or reaches the ocean where nature will also send it to the big composter.

Every business exists in a world that is changing and filled with opportunities and threats. Your business plan is your set of oars to provide the means to pull in the direction you want to go in, to avoid the rocks. You might even row to shore and portage around the falls, to move to an entirely new river.

But, many people, even accepting the wisdom of having a plan, find it a painful exercise, all too easily avoided. This may be driven by the idea that a business plan involves dozens of pages of writing, lots of spreadsheets with numbers they really don’t believe (sometimes don’t understand). Business plans, strategic plans, these are just the exercises one does in business schools. Or it may be the folk wisdom that business plans are not a useful part of managing and they always end up on the shelf or hidden in a file cabinet only dusted off for display when in search of a bank loan.

However, shift your thinking to view the process of building a plan as a value in and of itself, and adopt a simpler more flexible business plan model you will find that building that set of oars for your little boat is fun and productive.

Many small businesses operate with only a bookkeeper and CPA to manage the finances. The owner or GM fills in, or at least think that they fill in,  for all of the duties of a Chief Financial Officer (CFO). As a result owners of these businesses frequently have inadequate financial information to effectively move ahead. And, they are frequently using scarce resources (their time) performing tasks far better done by a professional, experienced hand.

In this time of readily available outsourced or part-time professionals there are very few worthwhile reasons not to have your own CFO. Depending on your size, your CFO might appear once a month or several days a week.

So, let me list a few reasons for you to find a part-time CFO.

Learn where value really comes from and how to leverage total value.

 

 Price is only an issue in the absence of value [7:21m]: Play Now | Play in Popup | Download (256)

This podcast is 7 minutes 21 seconds long