Shortly into his return at Apple after being ousted twelve years earlier, Steve Jobs wrote a two-by-two matrix onto a whiteboard during a meeting. The rows were labeled “desktop” and “laptop” and the columns denoted them for the “consumer” or the “pro.” Jobs then explained that Apple would make a single product for each of the four categories, no more, no less.
Every other project, existing or planned, would be phased out or killed off. Apple’s product catalogue, like Jobs himself, would be maniacally focused.
His approach, of course, would lead to Apple’s resurgence, one marked by a series of category defining products in the iPod, iPhone, and iPad, and set a course toward becoming the world’s first trillion dollar company, even in the wake of his death.
There are many other entrepreneurs whose success attests to the power of having a laser focus, but most business leaders, particularly in Asia, unfortunately still try to do too much. Before even getting to the point where we can define our flagship products like Jobs did with his quadrant, we are forced to contend with an organisation that has numerous capabilities that are adequate, but no speciality that is exceptional. I think this jack-of-all-trades, master-of-none problem lies in the fact we lack a way of improving what I like to call our organisation’s self-awareness.
Enough to Focus on Core Competencies?
We’re told all the time, for example, to focus on our core competencies. The rest, as common wisdom holds, should be outsourced. Yet we are provided with no ready framework for distinguishing what our core competencies are from the business functions we could justifiably entrust to a third-party provider.
Left to our own devices, we rely on our intuition, and that’s not always a good thing. I’ve seen a fast-moving consumer goods company outsource their customer support to a local BPO, who struggled to maintain the brand’s unique voice on social media. I’ve seen a consumer electronics company outsource their marketing to an advertising agency, who produced campaigns that moved away from the soul of their products. I’ve seen a information technology company outsource the bulk of their front-line sales to a reseller, who promptly hard sold their products in a way that irrevocably damaged the brand.
In other words, our intentions are always in right place, but our execution can be off. We know that we need to focus as a business in order to succeed, yet we routinely make the mistake of outsourcing essential functions that would have been better executed in-house. Sadly, there will never be any black-or-white rules to help us here (i.e. companies should always outsource A, B, and C, but never X, Y, and Z). What a business should turn over to a third-party partner or keep with its own people will always involve a constellation of variables, including the industry, the competitive landscape, and the company’s roadmap, to name a few.
Since I’ve dealt with the challenge of outsourcing from both sides of the aisle during my career — first, as the company in search of trusted partners, and now, as the head of a brand that offers support to other enterprises — I would like to offer a rule of thumb that can serve as a guiding principle for business leaders.
The Jobs Rule
I call this the Jobs rule: If a particular function takes away time, energy, and focus you could otherwise more fruitfully spend on your product, and can be competently served by a partner, you should get it off your plate immediately, just like the Apple co-founder with anything that did not fit on his quadrant.
The smarter brands intuitively employ the Jobs rule, weighing their decision-making with an acute sense of opportunity cost: What impact will building this capability in-house ultimately have on our product? From this perspective, it becomes much easier to safely decide what functions to keep within your company and which to outsource.
As the founder of Mober, I’m proud to say that many enterprises in the Philippines have gone through this thinking and emerged choosing us as one of their trusted partners. Rather than try to build an in-house fleet of vehicles and hire drivers to boot, they entrusted the same-day delivery of their products to us. It is personally rewarding to see the value we bring to both sides of this value chain.
Customers are delighted when the item they bought online or in-store arrives later that afternoon, and business leaders can rest easy knowing that we will smoothly handle their fulfillment. These are both telltale signs of outsourcing done right: While the company may be hired as a provider, they ultimately become a partner.
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