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In an earlier blog post, I described the value of simple concepts. Most businesspeople are already more innovative than we give ourselves credit for. But we need to become more aware of our talent, to transfer our insights from one category to another, and to learn from others (and from ourselves). “Nuggets” — shorthand reminders of what we already know, but may have forgotten to put into practice — can help us do this by improving our focus.
Two nuggets, or concepts, that I have found useful pertain to leadership excellence. The first reminds you how to see your situation from multiple perspectives. The second can help break the habit of doing everything in-house.
1. Learn to pilot simultaneously at 30,000 feet and at ground level. We’re all familiar with the concept of grasping the big picture from far away, as if seeing it from an airplane at 30,000 feet. We’re also familiar with the value of observing a situation at ground level, immersed in the details and able to examine the facts closely.
Successful business leaders do both. They are visionaries who can execute — who understand the strategic value of the whole enterprise, but can also get down and dirty, make things happen, and bring about action. They know how to see both the forest and the trees.
When I was a partner at the accounting firm Price Waterhouse in the late 1990s (before it merged with Coopers & Lybrand to become PwC), my colleagues and I developed the idea of organizing differently to provide services beyond auditing. That was the vision from 30,000 feet. Armed with this vision, we then worked out a plan at the ground level.
Effective outsourcing is as essential to operational excellence as effective recruiting.
We picked three Fortune 500 companies to focus on: GE, PepsiCo, and Gillette. We identified executives in each company with whom we had a relationship and met with them in the U.S. and overseas to better understand their businesses and needs. We were still at the ground level. The next year or so was dedicated to identifying and executing projects to fill their specific needs. As the projects succeeded, we expanded these efforts. We began shifting from being audit-centric to being client-centric. This work added significantly to the growth of our advisory practice. Today, non-audit clients make up a significant number of PwC’s business.
2. Outsource at home. In the early stages of bringing a new product or service to market, don’t do everything internally. Consider outsourcing all but the most essential functions. Examine the entire spectrum of your normal business activities and evaluate those that are most critical to marketplace success. Focus on the most important activities, the core that differentiates your company. Build those tasks with your internal team, and outsource the rest.
You may be surprised what consultants and services can do. Upfront marketing and sales, back-office procurement, technology, and legal services can all be done by outsiders. Effective outsourcing is as essential to operational excellence as effective recruiting.
In the 1970s, working with the Gillette Company, I saw how outsourcing opportunities can emerge in a company’s backyard, if you are open to them. Even before it was acquired by Procter & Gamble, Gillette was renowned for its excellent merchandising and point-of-purchase displays in stores. Its shaving division’s promotions for Major League Baseball’s annual all-star game were held up as one of the industry’s best practices at that time. For example, consumers were asked to vote for their favorite players with special “official ballot” displays set up at retail stores. This served as a platform where Gillette could introduce innovative new products.
But this form of merchandising was also a significant drain of management time. For in those years, local in-store merchandising was the responsibility of the internal salesforce. Merchandising strategies had to have prior approval at headquarters. Since there was little value added at the retail store level, merchandising was one of those low-leverage but necessary chores that cry out for outsourcing. But there was no established business that could handle it, at least not to Gillette’s standards.
Relief came from an unlikely source: a working mother on the sales staff, who had extensive internal merchandising experience. She presented Gillette with a proposal to leave her job (which would give her the flexible hours she wanted) and take over the company’s in-store merchandising. Gillette accepted, and she started a new company. She recruited and trained a network of part-timers, mostly parents of young children, who could conduct in-store merchandising when their schedules permitted.
This outsourcing setup was a success, and it spread from shaving to other divisions, including toiletries and pens. And so an opportunity for Gillette was also the springboard for a business for the creative marketer, who subsequently served other companies as well.
I don’t recall the name of this individual, and I’m not sure her business is still operating. But I remember how far ahead of its time this innovation was. It didn’t even have a name at the time; the word outsourcing wasn’t coined until years later, in the early 1980s. Today, being open to flexible outsourcing opportunities is a hallmark of effective leadership.