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OUTSOURCING

5 Keys to Effective Outsourcing

Do your vendors meet these criteria? Just as important, do you?
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If you’re running a start-up, you should be focusing on those things you’re terrific at (or going to be terrific at) and shedding everything else. Think of it as outsourcing uber alles: You need to bag everything you can’t do a lot better than a million other people, because just doing things as well as the next guy won’t cut it.

Selecting the right vendor or partner for the various services you are seeking to outsource isn’t easy. Everyone tells you what you want to hear, and virtually everyone will say that they can do anything you need.

The checklist below will help you develop a pretty good gut feeling as to whether a particular vendor is someone you want to be in business with. Getting these selections right is critically important. It’s worth the taking the time to do it right the first time so that you don’t end up doing it all over again in a few weeks or months.

Get yourself in front of the people who run the business - not the salesmen who sell business for them. Those are the folks you want to be looking at when you’re trying to decide if they’ll look after your interests when things get bumpy - as they always do. If the right people are willing to show up and make the right kinds of commitments and assurances, and if you believe them, then you’ve done the best job that you can.

I call these things the five A’s.

(A1) Ability and (Actual) Accomplishments

This one is pretty easy. You need to make sure that the potential vendor has actually done, and done well, the particular work you're asking them to do. You want people who have done it before, not the ones who merely think they can do it. These are things you can and should check out with their existing clients and customers. Also, make sure they have the resources to handle your additional business from the get-go. If their plan is to grow into your business, and add people to support it over time, forget it.

(A2) Anal and Accountable

Find a place that takes things personally, and you're most likely to find folks who are just as driven as you about how things should be done. There’s always a right way to do things --you've just got to find folks who are willing to commit the time, people and resources necessary to do the job right way every time. This is the culture you want in your own company, and it’s essential that the people and firms helping to support you share the same work ethic and attitude.

(A3) Aggressive and Assertive

In building your external team, you want people who are leaders in their own markets. These people don’t come cheap, but they’re worth the investment. These people also tend to be fast and aggressive, and they will challenge you to move quickly yourself as well. Good people ask hard, direct questions and won’t be pushed aside or put off.

(A4) Adaptable and Ambidextrous

You need to be sure that the partners you’re picking are committed to changing with the times and changing all the time. In addition to the sheer volume of change, there’s a related, equally crucial concern. Vendors who still believe that one size of anything fits everything are not the people you want as partners. Everything today needs to be customized and hyper-personalized to suit the precise and very exacting needs of each customer. Your suppliers need to be flexible enough to go in multiple directions at once, and to understand that what worked well for you yesterday might be a major problem for you today.

(A5) Always Additive

I don’t like people who come to play - I like people who play to win. People who are there just to save you a dollar (or to make themselves a dollar) aren’t going to be the ones to make a major difference for you. People who can add to the equation and keep raising the bar are force multipliers. You need to get them onboard and then get out of the way. Remember that customer expectations across the board are progressive. If you’re not pushing the ball forward, you’re losing ground to someone.

And, by the way, since every business is always “selling” themselves to someone, you might take a few minutes to ask yourself how well your partners, vendors, customers, suppliers, and employees would say that your own company satisfies the 5 A’s. Looking in the mirror isn’t always a narcissistic exercise. Sometimes it’s a harsh and necessary evil, and a very effective way to get the most accurate reflection of how the outside world sees your business.

Last updated: Nov 6, 2013

HOWARD TULLMAN | Columnist

Howard Tullman is the CEO of 1871 in Chicago where, at the moment, 260 digital startups are building their businesses every day. He is also the general managing partner of G2T3V, LLC and Chicago High Tech Investors – both early-stage venture funds; a member of Mayor Emanuel’s ChicagoNEXT Innovation Council; and Governor Quinn’s Illinois Innovation Council. He is an adviser to many technology businesses and an adjunct professor at the Kellogg Graduate School of Management. @tullman

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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