How to Get the Best from Outsourcing

There's a great little article ('Business Lifeforms') on the back pages of the UK's leading management magazine, Management Today each month. It's a spoof (at least I think it is!) about some fictitious key player in a fictitious organisation. For January, it's about Ken, who's a 'Facilities Manager'.

Now Ken has seen it all and truly worked his way up from the bottom to the top. Until, that is, a couple of years ago when new MBA-armed suits took over and decide to slash Ken's department (until now, running very, very smoothly under Ken's watchful eye) and Ken himself. Of course it all goes pear-shaped and the top dog has to come grovelling back to Ken, offer him loads of money and a big car, basically to ensure that the toilets aren't 'backing up' any more!

This is in direct contrast to Michael Gerber, in his fascinating book The E-Myth Revisited. There he talks about working 'on' the business and 'in' the business, making it clear that if you do too much of the grindstone not-my-expertise stuff yourself, you lose track of what you are really good at, and what you went into business for.

In a past life, I too experienced challenging outsourcing. At one time I had a great little local cleaner who I trusted (he even opened the store up for me - hmmm, that was a long time ago!). He did an excellent job and was on hand for emergencies. Then a new senior director decided to consolidate and outsource, for 'economy and consistency'. It was cheap - but the service was awful. Each time I got a new 'centrally sourced' cleaning company, they came with great intentions for the first 3 months and then dribbled off (with our money!) until it became unsustainable and another 'excellent contractor' came along.

The moment of truth for me, was when the director for one of these contractors, came along for the first time in a brand new 60K Merc (and it's a few years ago now). Then I knew where my money would be going. I went through 6 contractors in 5 years, even though my hands were tied by 'Head Office' contracts!

To solve this problem? There needs to be strong leadership at the start. Very clear standards required from outside contractors and severe penalties (yes, stop paying them even!) for under achievement. Corporate central contracts agreed there, but implemented and managed locally, leave a lot of space for waste.

And yes, in a small business, don't even think of doing the bookkeeping yourself as soon as you can afford not to - do what you do best, value it and get on with creating the business you love, not like struggling Sarah in the book. But, get someone who you trust and who will deliver. Chris Barrow, of Million Dollar Coaching Practice fame, suggests that the very first thing anyone going into a consulting business should do, is get a PA. And that modern day evolution, a VA (virtual assistant) has made this a real, low cost possibility for many.

Moral of the story?

If you are going to outsource, especially if your business is big enough, where it's not only the fashion, but it can have economic and logistic value, take the following steps:-

  • Find the best on the market, not the cheapest.
  • Set the standards yourself, and don't take theirs.
  • Be very clear on expectations and outcomes if standards aren't met.
  • Keep in very business-like, however much you like/know/are related to them.
  • Have clear timescales for regular review.
  • Have a named and senior contact in the organisation for whom there will be pain if they lose the contract.
  • Keep contract length manageable.
  • If things start going wrong tackle them early, before too much money is wasted.
  • If 'Head Office' agrees the contract, don't chase your own tail over non-delivery - get someone from there down as soon as there is a problem - you have enough to do.
  • Don't get involved in the problems any local operatives might have - refer them back.

    Martin Haworth is a Business and Management Coach. He works worldwide, mainly by phone, with small business owners, managers and corporate leaders. He has hundreds of hints, tips and ideas at his website, (Note to editors. Feel free to use this article, wherever you think it might be of value - it would be good if you could include a live link)

    ...helping you, to help your people, to help your business grow...

    In The News:

  • pen paper and inkwell

    cat break through

    What are Your Best Practices?

    Best Practices StudiesThese studies can be defined as inquiries into... Read More

    Vampire Meetings and How To Slay Them

    Meetings can be like mythical vampires ? sucking the life... Read More

    Creativity Management ? Quality from Quantity

    Creativity can be defined as problem identification and idea generation... Read More

    Weaknesses of Wishing

    When you're starting a business, you might wish for a... Read More

    Diversity Training: The Worst Possible Reasons to Request Executive Funding

    You're on your organization's diversity committee. You have the best... Read More

    What is Knowledge Management Anyway?

    When you think of all the things companies have, you... Read More

    Innovation Management ? Producing Great Products, Motivation

    Creativity can be defined as problem identification and idea generation... Read More

    Take Your Firm to the Next Level

    So you did such a good job in 2003 at... Read More

    Intercultural Management

    The role of a manager is evolving in response to... Read More

    Can Your Business Run Without You?

    If you are a business owner or a business owner... Read More

    Dealing with Marginal Performers: The Therapeutic Approach

    --PREPARATION: The purpose of the therapeutic approach is to spark... Read More

    Big Company Intelligence on a Small Company Budget

    Information is the lifeblood of the economy. That's especially true... Read More

    Deciding What to Delegate

    DECIDING WHAT TO DELEGATE: Once the benefits of delegation are... Read More

    Holding Effective Meetings Can Be Easier than You Think!

    I'm sure you've experienced those typical "headache" meetings! You know... Read More

    Importance of Just-In-Time Inventory System

    In today's competitive world shorter product life cycles, customers rapid... Read More

    Rethinking Workplace Security: How the Rules Have Changed

    The workplace has traditionally been a dangerous place. Very early... Read More

    Business Leadership Skills - Managing the Human Being Behind the Business

    Managing the Human Being Behind the Business It's... Read More

    Competencies for HR Professionals in Knowledge-based Industry with Reference to IT, ITES-BPOs

    Introduction"High performing HR function affects bottom line nearly 10%"- A... Read More

    1000 Managers Turned Their Plans Into Energy!

    I bet you can't tell me how leadership training and... Read More

    Problem-Solving Success Tip: Measure the Right Things.

    Measure the right things. It's not enough just to measure-you... Read More

    Executive ESP: A Pathway to Success!

    We all have psychic abilities that we use daily, although... Read More

    Communicate To The Four Main Personality Types

    You probably know this already, but there are generally held... Read More

    Change Management: Avoid Havoc In Very Uncertain Times

    Escalating gas prices...tensions and turmoil in the Middle East...a struggling... Read More

    10 Resolutions For The New Year!!

    Each year many people create a list of resolutions designed... Read More

    5 Creative Evolutionary Leadership Niche Strategies!

    I have a short story to share with you about... Read More

    Assertiveness Helps Accomplish Everything

    When trying to get something accomplished, assertive behavior is the... Read More

    Influencing the Organisation

    There is a saying about management that suggests some managers... Read More

    Entitlement Programs Kill Productivity

    In articles I've written over the years, I have used... Read More

    How to Dodge Distribution Difficulties

    It happened again. I ran into an old friend while... Read More

    Accountability Equals Meeting Success

    Leslie was the new manager of the group. She was... Read More

    Preventative Maintenance of Company Delivery Vehicles

    If you have company delivery vehicles at your small or... Read More

    Communication: Managements Responsibility

    I've just watched, again, an episode in the Back to... Read More

    Survival of the Fittest: The Road to Human Extinction

    I was watching a TV program some months ago about... Read More