Competency + Capacity = Feasibility
When to outsource….when to keep a project in-house…that is the question.
When Toby Lucich started his company, Return Leverage Consulting, he knew from the outset that he didn’t plan on doing the bookkeeping. That was one part of the business he expected to outsource. “It’s not that I couldn’t do it,” he said. “It’s just that I knew it wasn’t the best and highest use of my time. I knew it was something that someone else could more quickly and efficiently, without putting it off as I might be tempted to do. Most importantly, outsourcing bookkeeping would allow me to do what I do best – consulting – servicing and generating new clients.”
Capacity
Having the capacity to do the work is something business managers, executives, and entrepreneurs often overestimate. Just because the ability to complete a project or task existsin-house doesn’t always mean that’s the best use of the team’s time and energy. Especially when the team member has unique skills that are regularly used to serve clients or advance the business. “I think sometimes we underestimate the emotional and mental energy consumed by tasks that aren’t our specialty. They tend to crowd front-of-mind work and operate as a distraction. Which no one needs,” Lucich added.
Competency
There are also times when your team may have the capacity, but they lack the competency. The task or project at hand requires a specific skillset or training that, in its absences, means it will take you or your team member much longer to do it. And there may be costly mistakes along the way while they try.
When you’re a new or growing business, there’s a temptation to do it all. But there are often issues of capacity and competency that must be realistically addressed first.
Time to value
Even when both competency and capacity exist, the concept of time to value should be recognized as well. You might like to putter around in PowerPoint and make beautiful presentations. You might have the time, and after a bit of trial and error, the ability. But someone who specializes in graphic design can probably do it a lot faster. So, if there’s an urgency to the matter, the time to value consideration points to outsourcing.
For the entrepreneur, you may ask yourself: Where does it make sense to enlist the experts?
How do you know when to outsource something? Consider these three criteria:
1) Are you procrastinating on this task? If I’m putting it off, it maybe be a sign that I don’t have the resources, skill proficiency, or knowledge to do it well.
2) Do you dread starting this task? If you view the task with dread rather than excitement, this signals that you don’t really enjoy doing it. While not every part of our work is going to excite and thrill us, some level of satisfaction should be to bring pride of ownership to the work. If it’s not you, there’s likely someone else who really enjoys this sort of thing. Lucich’s bookkeeper loves making sense of his receipts and P&L sheets.
3) Are you good at this task? If the answer is “yes,” maybe it’s time to reexamine priorities and shuffle some work so you can outsource something else and free up the time to take on the task. If the answer is “no,” then it’s likely time to look for an expert. There are times when it’s better to pay someone to do what they’re good at so that you can focus on what you’re best at. The same is true of your team members. It makes sense to pay for a freelancer or contractor when you might otherwise have your team spending inordinate amounts of time learning a new skill to tackle the same objective.
Perceived Downsides to Outsourcing
Cost. It’s easy to assume that you will pay a premium when you outsource to an expert on a given project. After all, contractors or consultants are entities with their own overhead to cover, and that cost is built into the hourly rate you’ll be paying.
But if that expert finishes the job in half the time your in-house staff (or you) could do it, you will likely find that the better value is the expert. Even at the higher rate.
Control. When you hand off a project to someone else, there’s often a fear that you’ve relinquished control.
But with a predetermined agreement about scope, budget, and timeline, coupled with clear and consistent communication, you can be assured of reaching your objectives and maintaining quality. Plus, there are often unexpected advantages that come with the fresh energy and eyes for a project that someone outside your organization likely has. They may introduce new ideas and expertise you’d not previously considered or been aware of.
When it’s all said and done, the value added by brining outside team members to the project often more than compensates for any downside. If you have a project to manage or a communications strategy to execute or develop, we’re here to help.