Why Most Mid-Sized Businesses Fail at Outsourcing
I received a really good email the other day. It’s one that has a very common theme that I hear often.
Check it out:
Hi DeanI’ve been following your blogs and webinars for around a year now. I appreciate your willingness to share information and show us how you built a successful online business. I’m reaching out because of your apparent skill for outsourcing. I am having a hard time figuring out how to outsource effectively.My business has a lot of moving parts and a lot of the information and tasks flow directly through me. The business has scaled a bit over the years and I am still dealing with so many of the everyday tasks. Today feels like I have reached the peak (or bottom) of how much I can handle.Do you have a course or some videos I can look into for outsourcing. I think I missed the majority of those videos unfortunately.Thanks so much Dean!
I love these types of emails because it is a perfect display of what I like to call “Band-Aid chaos”. As business owners we tend to have a knee-jerk reaction to the pain we feel when we know that something can be better in our business but were not quite sure what the solution is. Often when you have a pain such as working too much in the day-to-day business of your company rather than being in a strategic role, we look for something that’s going to be the magic bullet that solves all of your problems but implemented by itself actually causes more long-term chaos because it’s not part of a bigger strategic system.
You add one Band-Aid and another wound pops up, so you add another, and another, and another… You never really solve the underlying problem in your business and you end up bleeding to death because instead of a Band-Aid you needed surgery.
Outsourcing is one of those “magic bullets” that often brings Band-Aid chaos to your organization.
In this article I’m going to help you see if outsourcing is right for you and show you how best to lay the foundation in your business prior to hiring people overseas and who you should be looking for when you do hire overseas.
Know Your Systems
The biggest and most necessary part of preparing to outsource is knowing all of the systems that are in your business. Whether you are a one-man show, or a 500 person organization, everything in your business has a systematic process that is part of a strategic systematic whole.
How do your sales staff introduce themselves to new prospects? How do your customer support staff answer frequently asked questions? When does your company send invoices and then follow-up when they are not paid? These are all systems that are part of an overall organizational system. Until you understand every part of your business is a system then it’s going to be very hard for you to hire on someone overseas for several reasons.
First, there’s never good to be any structure and if you’re hiring someone in a country such as the Philippines this can lead to very high turnover rates and the loss of very talented people. In certain countries there are strong cultural norms in which a person who feels like they are not providing value to their employer will literally run away. No warning, no explanation, they will just run away.
Systems Documentation First
Once you know all of your systems that are in your business, you need to document them all. I can’t tell you how many clients I’ve worked with whom I asked if they had documented processes and about 95% of them had absolutely no documentation whatsoever. However, some of them did have video training, but the accessibility of video training and having to watch a video anytime you wanted to do a process is very cumbersome and unrealistic.
We humans love documentation and we love step-by-step directions especially when we do not fully understand the task that we’ve been given. This is why the biggest and most successful businesses in the world have massive amounts of documents in their standard operating procedures. They know that their employees need direction… Written direction.
Here’s the good news and bad news… When you really dive into your business processes and see all of the systems are working in your business it becomes very easy to tell the steps in each of your business processes. It becomes very easy to see how to go from point a to point Z in a clean and step-by-step way.
The bad news is that documentation takes forever to create. There are a lot of gurus out there that will teach you how to document your systems but often you will be the one doing it and you will spend hours out of your day just finishing one business system out of the hundreds that you have. You are looking at completing all of this yourself in about a years time frame. That sucks.
Here’s the surprise great news though… You can actually hire people overseas to do the documentation for you. So rather than spending hours doing it yourself you can spend a few minutes on each process and have all of your business processes documented and your team working all of them to perfection in 3 to 6 months.
Augment, Don’t Replace
One thing that’s always bothered me about outsourcing is the shortsightedness of a lot of business owners. In order to save a few bucks they cut their staff and try to move everything overseas. Often this leads to disaster and a black stain on the company’s reputation.
Good companies augment their staff with people overseas. They empower their staff to work on highly valuable and fulfilling tasks that they otherwise couldn’t do because they were bogged down with low value administrative tasks.
Documenting your processes in hiring somebody for $2.50 to take care of all that low-level crap so your in-house staff can shine is one of the best ways to grow your business and have a happy and thriving organization.
Hire for Process Documentation Creation
Personally I never hire for anything other than process documentation creation. I want SOP’s done for me and my clients. Sure, sometimes you need to find someone who has a particular skill that can’t be learned very quickly, but 99% of the time when you hire on the basis of someone who can create SOP’s you are setting your business up for massive success.
Think of how McDonald’s is able to take anyone off the street put them in a uniform and get them working within a day or 2. They have massive amounts of documented systems on every bit of machinery within their kitchen with pictures and time limits for cooking etc. someone who has never worked a day in their life is easily put into the role of an employee.
The same should go for your business. Yes you have those highly skilled workers who have spent years in college getting a particular degree and credential so that they can do that highly skilled task, but 90% of the rest of your business can be done by someone if you simply had very detailed and documented instructions.
Why do those documents yourself? Why not hire someone else to do on? If your time is worth $500 per hour, $1000 per hour, $2000 per hour, spending even a single hour writing out standard operating procedures yourself is wasting a ton of your time and money.
If you want to outsource successfully know your systems, document your systems, and hire people to document your systems.