“In order for an organization to successfully outsource work on its core competencies, those outsourced contractors need to be well integrated with the team: they need to attend all the meetings and retreats, be in the same slack channels, give and receive feedback on their work, etc. This means that successfully outsourcing work requires a lot of the same management capacity which having in-sourced labor requires.”
It seemed to me like the key variable you’re trying to highlight is management costs or something similar (while “core competency” is just an indirect/less-explicit way of referring to that), but perhaps I’m misunderstanding? Is there a reason you can’t just make the Y-axis “Demand on management” (or some other cost/resource)?
After all, it seems quite plausible that a company’s “core competency” could be something like “ability to effectively outsource work and manage contractors,” in which case the diagram doesn’t seem to make as much sense: much of the work is through outsourcing.
Hmmm, no, I think the ability to outsource well is not itself easily outsourceable. E.g. if you have some method of identifying whether an outsourced factory will produce high-quality products, I guess you could train an outsourced team to do that identification, but that doesn’t seem remarkably easier than hiring staff and training them on your identification methods.
I think there may be some confusion over the semantics of “core competency”—I wasn’t trying to say you could outsource the outsourcing, I was just saying “a company’s biggest strength can be that it is effective at outsourcing”—but I feel like that confusion further reinforces my main point, in the first paragraph: it seems to me like “management complexity/demand” would be a better Y-axis label than “core competency-ness”?
I think you are saying something like: “outsourcing is a managerial task, therefore bottlenecks on outsourcing are by definition bottlenecked on management.”
I think this is true, but I don’t think it’s the most helpful way of phrasing it. E.g. many biology labs can’t outsource their research (or even have it be replicated by labs which are almost identical) because their work relies on a bunch of tiny things like “you should incubate the cells at 30°C except if you notice some of them starting to turn a little yellowish increase the heat to 32°C but then also you maybe need to add this nutrient bath…”
You could argue that documenting these procedures is a managerial task, and therefore the outsourcing is bottlenecked on management – again, I think this is true, but it seems more insightful to describe these biological procedures as a core competency of the lab. (To me, at least, YMMV.)
I suppose “management complexity/demand” might indeed be a bit too narrow, but either way it just feels like you’re basically trying to define “core competency-ness” as “difficulty of outsourcing this task [whether for management demand or other reasons],” in which case I think it would make more sense to just replace “core competency-ness” with “difficulty of outsourcing this task.”
My worry is that trying to define “core competency-ness” that way feels a bit unintuitive, and could end up leading to accidental equivocation/motte-and-baileys if someone who isn’t familiar with management theory/jargon interprets “core competency” as important functions X, Y, and Z, but you only mean it to refer to X and Y, reasoning that “Z is some really core part of our operation that we are competent at, but it can be outsourced, therefore it’s not a core competency.”
It seemed to me like the key variable you’re trying to highlight is management costs or something similar (while “core competency” is just an indirect/less-explicit way of referring to that), but perhaps I’m misunderstanding? Is there a reason you can’t just make the Y-axis “Demand on management” (or some other cost/resource)?
After all, it seems quite plausible that a company’s “core competency” could be something like “ability to effectively outsource work and manage contractors,” in which case the diagram doesn’t seem to make as much sense: much of the work is through outsourcing.
Hmmm, no, I think the ability to outsource well is not itself easily outsourceable. E.g. if you have some method of identifying whether an outsourced factory will produce high-quality products, I guess you could train an outsourced team to do that identification, but that doesn’t seem remarkably easier than hiring staff and training them on your identification methods.
I think there may be some confusion over the semantics of “core competency”—I wasn’t trying to say you could outsource the outsourcing, I was just saying “a company’s biggest strength can be that it is effective at outsourcing”—but I feel like that confusion further reinforces my main point, in the first paragraph: it seems to me like “management complexity/demand” would be a better Y-axis label than “core competency-ness”?
I think you are saying something like: “outsourcing is a managerial task, therefore bottlenecks on outsourcing are by definition bottlenecked on management.”
I think this is true, but I don’t think it’s the most helpful way of phrasing it. E.g. many biology labs can’t outsource their research (or even have it be replicated by labs which are almost identical) because their work relies on a bunch of tiny things like “you should incubate the cells at 30°C except if you notice some of them starting to turn a little yellowish increase the heat to 32°C but then also you maybe need to add this nutrient bath…”
You could argue that documenting these procedures is a managerial task, and therefore the outsourcing is bottlenecked on management – again, I think this is true, but it seems more insightful to describe these biological procedures as a core competency of the lab. (To me, at least, YMMV.)
I suppose “management complexity/demand” might indeed be a bit too narrow, but either way it just feels like you’re basically trying to define “core competency-ness” as “difficulty of outsourcing this task [whether for management demand or other reasons],” in which case I think it would make more sense to just replace “core competency-ness” with “difficulty of outsourcing this task.”
My worry is that trying to define “core competency-ness” that way feels a bit unintuitive, and could end up leading to accidental equivocation/motte-and-baileys if someone who isn’t familiar with management theory/jargon interprets “core competency” as important functions X, Y, and Z, but you only mean it to refer to X and Y, reasoning that “Z is some really core part of our operation that we are competent at, but it can be outsourced, therefore it’s not a core competency.”