Doug DavidoffBefore I begin I need to give a disclaimer, I provide outsourcing services.
Jim Collins, and many other thought leaders (myself included) often talk about how having the right people is often more important than having the right strategy. The problem with the advice that Collins, Brad Smart (Topgrading), and many other “staffing advisors” offer is that it really only applies to large, resource-rich, multinational organizations. What is right for GE, Honeywell or IBM is not necessarily right for mid-sized businesses.
The challenge mid-sized businesses face is that there is simply not enough money available to hire the best people for every seat on the bus on a full-time basis. Too often, you are forced to hire only ‘the people you can afford.’ This situation is doubly counter productive: you don’t get the level of talent or experience you need in the short term and you’ve given a valuable seat on the bus to a less-than-exceptional person who will probably have a less-than exceptional effect on your company’s overall culture and results long-term.
In addition to financial resources, there are two additional barriers mid-sized business face in getting the best people. First, with the exception of mission critical functions, mid-sized businesses don’t have enough work to justify hiring the best available talent on a full-time basis. Even if they could justify hiring them, non-mission critical work won’t keep great people engaged.
Finally, mid-sized businesses can’t get the best talent for non-mission critical work. Let’s say that as a growing business you decide that you need a top person on your bus in the seat of the VP in charge of business development efforts. Because you believe that the key to success is hiring the best people, you set out to find the best person. Now, what is the ideal candidate doing currently? They are probably the owner or president of another growth company. Or they are at the VP level in a much larger organization. So, before you even start looking, you have to accept the fact that you don’t have access to the best candidates. Again, you start out at a talent disadvantage.
What’s the solution? Don’t hire for every position. The mantra for a mid-sized business in the ever-flattening 21st Century, should be: Only hire employees for mission-critical tasks. Outsource everything else, even positions thought un-outsource-able. Business guru Peter Drucker put it best: “I believe you should outsource everything for which there is no career track that could lead into senior management.” His reasoning? “Most look at outsourcing from the point of view of cutting costs, which I think is a delusion. What outsourcing does is greatly improve the quality of the people who still work for you.”
Is having a chief financial officer mission-critical to your organization? If not, outsource it. Is a vice president of Human Resources mission-critical? If not, outsource it.
This approach gives you two key benefits:
1. You can concentrate your capital on nurturing and promoting the employees you can’t do without.
2. You get access to better people, often better than the multinationals have at a similar position. For instance, I provide a variety of highly strategic business development functions for mid-market companies, from training and coaching their sales team to helping them upgrade their marketing efforts. I prefer working “with” my clients as a “virtual” executive part of the time to working “for” someone else full-time, no matter how big they are. As a result, my clients get the benefit of top-level strategic skills without having to put a full-time senior executive on their payroll when they don’t really need to.
Bob Corlett, a talented staffing advisor to mid-sized organizations (and a contributor to my fast-growth newsletter) has an excellent article about this approach. I encourage you to read it.
Until next time, Doug