strategic advantage – Today's Leadership Solutions

Diving deeper into how outsourcing strategic functions can seriously help your business

I’ve been writing a lot lately about business process outsourcing and how it can support smaller businesses and even give them an advantage over their large competitors. I want to dive deeper and give some concrete examples about exactly how some outsourcing solutions can be so beneficial. The landscape has changed so much and has really opened up some exciting tactical and strategic opportunities once you understand how to use them for your financial and competitive advantage.

The great thing about outsourcing now is that the options have increased so dramatically in the last few years. In the past, if you wanted to outsource, it felt like the only options were to contract with a big consulting company who would expect you to fall in line with their processes. This might work in some cases, but a lot of times some unintended consequences have been an erosion of your company culture, and a mismatch due to the cookie cutter nature of the solutions being offered. There are far more vendors out there now besides the big consulting companies who have some creative solutions from full service outsourcing to pieces, which provide greater customization and flexibility.

If you’ve been considering outsourcing, you may be under the impression that the only thing that makes sense is to outsource the tactical and keep the strategic in house. The argument is that only people inside your organization have the knowledge and capacity to undertake strategic endeavors, that the tactical is easy to hand off and that there is little impact to the organization regarding who undertakes it. This may or may not have been true in the past but it is definitely not true today!

Outsourcing only tactical is a strategy that mostly benefits the large consulting companies that have tactical processing ‘machines’ already built and are ready to fold you into their processes. This may very well make sense for some of your processes, but probably not as many as you think. To take the tactical out of your organization completely removes a key component of engagement and morale, which is in the daily touch points. Simply outsourcing “HR” sends a message to employees that you are okay with them calling a third party who doesn’t know them to answer personal questions and job concerns. Granted, some companies do a better job than others at handling this, but you are deluding yourself if you think that the employee experience is not affected by the transition of tactical HR to a third party vendor.

Contrary to popular opinion, strategic roles are often the ones best suited to outsourcing for several reasons. First, it’s almost always the case in small and growing businesses that key leaders are wearing too many hats and putting out too many fires to be as strategic as they’d like. A savvy consultant can work with key leaders enough to ‘pick their brains’ and then do a lot of the heavy lifting in terms of developing plans and road maps. It’s also often true that leaders and managers in small businesses just haven’t had the experience at the strategic level. To think that they’ll magically develop the ability just because they own or are brought into a growing company is unfair. It’s similarly difficult for them to select, hire, and manage a person at this level. The balance of power makes it difficult for the strategic person to be as direct as to issues or roadblocks as they often need to be, and the reality is that the simply overwhelming amount of tactical work that always need to be done will eventually take over the strategist’s daily tasks. Finally, fair or not, high level strategic leaders almost always command a higher wage than their tactical counterparts, making a full time strategic role something out of reach for smaller businesses.

The solution is outsource consultants who don’t simply approach your businesses needs as something they press into their machine and spit out a stock answer to. Canned training and off the shelf ‘solutions’ are not the answer for small businesses either. One of the best features about being a small business is the flexibility, personal feel, and ability to be unique. These features will get lost when you try to force ‘corporate’ solutions on them. The great news is there is a huge cadre of equally flexible, personal, and unique outsource providers willing and able to fill needed roles at highly strategic levels on an ‘as-needed’ basis.

There are some aspects that naturally lend themselves to this solution: Marketing, Finance, Recruiting, and Organizational Development come immediately to mind, although these are by no means the only ones. Having partnered with several consultants who specialize in providing these services to small and growing businesses, I can’t speak highly enough about the quality and customization. Not only that, these consultants genuinely care about their customers and their businesses. It truly becomes a trusted partnership that, because of the scaleability and flexibility, is highly accessible to most businesses.

Just to give you some examples of how this might look:

A CFO consultant may work with you on-call or monthly to provide support in obtaining financing, in creating budgets and forecasts, or in determining how to responsibly grow your businesses.
A recruiting process outsource company will recruit as you and for you, sourcing and qualifying candidates for you on an as-needed basis. Some will even take it further, and completely manage your recruiting and onboarding processes, and even your other recruiting vendors, allowing you and your managers to focus on operational issues.
An Organizational Development consultant can work with you to provide leadership or management training to shore up vulnerable areas, and help you prepare for growth with succession and employee development plans and can create performance management programs that improve profitability and efficiency.

The benefits are almost infinite. And the best part is that using these consultants often allows you the luxury of growing your existing staff into the demands of their new role. I’ve seen time and again organizations feeling like they had no choice but to let go of loyal employees just because the role grew beyond their current competence. This is a horrible situation for everyone and it doesn’t always have to be the case. By bringing in the right consultant, the pressure can be relieved, the work can still be done, and the staff member can often learn what they need to know from the consultant. That’s a much better outcome for everyone than the alternative.

So if you’re finding yourself overwhelmed with growing pains, don’t worry! Those are good problems to have, and help is closer than you know!

Carrie Maldonado is the founder of Today’s Leadership Solutions, a Seattle-based consulting firm providing comprehensive organizational development solutions for companies who are growing and who truly value their people. With certified Executive Coaches, Organizational Behavior Management (OBM) practitioners, SPHR-certified HR professionals, and Organizational Development Specialists, Carrie’s team brings a unique perspective and a cross-functional approach to providing workplace solutions that work. Carrie can be reached for consultation at carrie@todaysleadershipsolutions.com

How smaller companies can gain a true advantage over their larger competitors

I’ve said it before and I’ll say it again that there has never been a better time to be a smaller and growing business. There have been numerous shifts in the marketplace, culture, and worker mindset in the last decade that combined make it possible now more than ever from business owners to achieve their vision and grow profitable, prosperous companies that serve a greater purpose. In the past, only large companies with staggering overheads had access to the professional caliber programs that gave them such an advantage in the competition for customers and employees. That’s not the case anymore.

Outsourcing part or all of different business functions has evolved to the point where in many cases it is not just a financial necessity, but a true strategic advantage to do so. And the best part is that because so many professionals are opting out of their corporate day jobs into a gig economy, companies no longer need to feel burdened with guilt about reducing their reliance on traditional employees. This allows small companies to retain their nimbleness, family feel, and flexibility without sacrificing strategic muscle.

Take Human Resources (please, ba dum dum). When I started my career a hundred years ago, an HR Department was like a right of passage for growing organizations. First you had an ‘admin’ do it, and then maybe an Office Manager, but when you grew up you got your very own HR Person. That’s when you’d learn all the things you were doing wrong hopefully in time to stop doing them and avoid fines and penalties. No longer would anyone scramble to complete 5500 audits (what?) or freak out when the DOL audit came (actually, you still need to freak out about that), or wonder if it was okay for an employee to see her file, and what should be in it anyway.

At some point, a company might even grow to the point where even the HR Person is hard-pressed to meet all the personnel needs. Once the growth engine is in high gear you suddenly have a whole new set of issues that you never had before. You’re bringing on more people than you can train the way you’re used to training. You have different compliance requirements. You are losing touch with your employees. You need more managers, and you need to make sure your managers are doing things legally and representing you the way you need to be represented. You might have a lot more revenue, but far less visibility into where it’s coming from or where it’s going and if all that revenue is getting billed for and collected in a timely manner.

At this point, in the past, the logical next step was to keep investing internally. You’d add to the HR team. Hopefully the HR Person was as good a leader as an administrator, and able to think strategically as well as tactically because now you’d like them to manage a team of people. Maybe you add a recruiter, maybe additional administrative support, possibly a trainer and if you were really progressive there would be some sort of performance management component in there. If you had an HR person who was not capable of transitioning from tactical to strategic it was probably a very painful transition. If you got a strategic HR person capable of overseeing that, you then had the issue of ensuring that the rest of your team had the capacity and bandwidth to support the strategic endeavors.

A lot of the times, the best case scenario was some stellar corporate goals and strategic plans that if you were lucky got mostly implemented before the next wave of growth or change happened and it was all hands on deck (or in the weeds, as the metaphor may be). And then when tides and revenue turned or the dust cleared, and you realized that the shrinking margins were not a blip but a trend and you had to start cutting overhead, the first to go was the ‘cost-centers’ of training and employee development.

Anyway, that was life, but not anymore.

Business process outsourcing just may be the not-so-secret weapon that allows smaller companies to take advantage of all the benefits of full scale support functions without the overhead, while allowing the service provider the benefit of working exclusively in their greatest talent while enjoying flexibility and variety. For quite some time now, businesses have had the option to outsource functions like payroll or HR paperwork administration. The playing field has expanded dramatically and is now exploding with opportunity!

I am fortunate enough to be networked with some amazing CFOs who offer their services to businesses who could never afford a six-figure Finance specialist, nor do they have a need of one full time, but who definitely need expert advice and counsel on a regular basis. I uncovered a similar need from an HR perspective in that businesses under 100 people don’t really need a high powered strategic HR leader on staff full time. But you better believe they need access to one. And they can also keep costs way down if they hire someone like me to set up their HR processes and then train someone on their staff to run things, knowing I’m available for tough questions.

And that’s just the tip of the iceberg! With an ever-growing demand to not only get more efficient and profitable but also to be a destination employer in a tough marketplace, companies need to have strategic workforce management plans in place to survive, let alone thrive. There are too many choices for both employees and for customers to not hit on all cylinders here. There’s a couple schools of thought on how best to accomplish this. Most commonly, I hear advice to outsource all the tactical and keep the strategic in house. I think that makes perfect sense in some cases, but probably not for smaller businesses.

What I’ve observed is that if you have less than 75 employees, hiring someone to do the strategic work is not as viable as it sounds. First, these people tend to be a lot more expensive. Second, and I speak from experience, is that if you bring in a strategic person when there is a lot of tactical work to be done, it’s going to be really hard to get people on board with why they’re there.

So how does outsourcing help? Again, I speak from experience. I have run OBM projects AND leadership training as both a consultant and as an employee and I can say hands down commitment to and compliance with the programs run much higher when they’re done from outside. Where this model as fallen short in the past (in my opinion) is the lack of customization and follow through that really drives success. I got more traction from my leadership training as an employee because I could talk to people more regularly and reinforce it, and also because I could tailor the training to the company and their issues specifically. When I work with companies on training, sometimes they’ll just ask for a canned “time management’ course and I’ll usually decline because I don’t think that brings the best value. Far more effective is something tailored to this group’s problems, even if takes a bit more time to prepare it

And don’t even get me started on recruiting! That is one of the best opportunities to outsource. I know of several companies that will outsource some or all of your hiring, allowing recruiting to be completely scaleable and flexible. And not only that, there are providers who will actually manage all your vendors, or even work internally to oversee interviewing and onboarding. This can make all the difference in providing a professional brand when recruiting to attract the best candidates.

There are so many options available now that it’s no so much a matter of if you should outsource, it’s where first. And no, it doesn’t mean you don’t need employees by any means, but it probably does mean your employees will be freed up to do the things they’re best at, and your outsource providers will similarly be doing the same. Like I said, win-win.

P.S. I’ve got a great list of providers for HR, Finance, Training, Purchasing, OD…the list goes on. Please reach out at any time for more information carrie@todaysleadershipsolutions.com

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