Category Archives: Strategy/Planning
Outsourcing – not a strategy that is as simple as a make or buy decision
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” ((Since Mammone’s article may not always be accessible where I found it, you can download a PDF copy here)) .
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.
However, people may think that outsourcing gets you off the hook and solves all of the problems involved in the outsourced functions. The truth is that whether as a one armed paper hanger or a global giant like Boeing, outsourcing must be managed. You can not manage functions that you do not understand. So, the executive level of any organization (back to the single entrepreneur to global giant span) must understand all of the basic functions of a business (strategy, sales, marketing, product/service development, personnel, operations, finance, information systems, and legal (these are the most important ones)) in order to decide which must be internal and which can be outsourced. Then, you have to have enough knowledge of the outsourced functions to decide on the desired results required, choose vendors, and manage for the results. This may seem to be daunting for the low end of the size scale, but most of this stuff isn’t rocket science at the basic concepts level and one can always draw on people in your network and consultants (like me obviously) to help out.
Outsourcing is tricky business as demonstrated by Boeing’s Dreamliner problems ((here is a link to an article from Reuters about Boeing’s outsourcing issues. And here is a PDF download of the article.))
Podcast – Increase Your Value Through Customer Perception in Professional Services
Increase customer perceived value by managing expectations, making services visible, and following up.
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This podcast is 12 minutes 41 seconds long.
A text version is available here
Increase Your Value through Customer Perception in Professional Services
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:
- Pre-service awareness – establishing expectations
- Service engagement – making the process visible
- 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. Continue reading
Seven Reasons to Add a CFO – part-time or full – to Your Team
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. Continue reading
Podcast – “Price is only an issue in the absence of value”
Learn where value really comes from and how to leverage total value.
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This podcast is 7 minutes 21 seconds long