Month: November 2010

Outsourcing is a good idea for most households and organisations. Asking someone else to do a task you’re not particularly good at or interested in makes sense and most of the service industries are based on the desire to get others to do the work you can’s or won’t do.

Take outsourcing too far and we lose touch. Just like the parents who outsource all their childrens’ upbringing to nannies, managers overdoing this can lose contact with the very reason their business exists.

Two stories in the last few days illustrate this; Silicon Alley Insider’s story on the dangers of outsourcing social media and an HP contractor’s employment practices in Western Sydney.

Hewlett Packard’s story is very instructive, like most of their world wide operations they outsource their Australian assembly operations to a contractor who then engages a labour hire company to engage hourly rate casuals to fulfil their orders.

This gives the big corporation plausible deniability on their employment practices and saves a few dollars on completing orders — it also means a loss of control of their brand and product.

HPs customers don’t care if poor work was the responsibility of Foxteq, the assembly company, or Weststaff, the labour hire company. They bought a product with an Hewlett Packard sticker and it’s HPs problem.

Outsourcing makes sense when it isn’t your key competency, but in the case of HP, hardware and support are key competencies. Over the years they’ve outsourced these to the degree they no longer have control of their own product.

Unfortunately HP aren’t alone as most of the IT industry decided long ago that IT wasn’t their core business; they were “virtual corporations” where management can sit back and count the pennies while brand consultants look after the products name and outsourced  manufacturers, assemblers and couriers can look after the production, support and logistics.

All this works well for a while but eventually it catches up with the business, as Dell found with the Dell Hell debacle. While Jeff Jarvis articulated it, many of Dell’s former customers had experienced the poor product quality and awful after sales support first hand.

Twenty years ago Dell could have bought time by engaging in massive advertising campaigns to hide their poor quality offering but today where everyone has a voice they are quickly caught out.

Silicon Alley Insider nails that problem for the social media PR channels, rightly saying a company’s voice is too valuable to be outsourced. Today our logistics, sales and support are just as an import part of an organisation’s voice as the PR team.

Outsourcing everything to save pennies is fine for companies that are run simply to deliver privileges to a pampered cadre of overpaid and unaccountable executives, but for most organisations outsourcing has to be done carefully and with the recognition those contractors are as much an ambassador for your brand as anything else you do.

There’s a number of good reasons for offering a free service or product, you could be trying to build a customer base, position yourself in the market, gain experience in a new field or simply want to give something back to your community.

But in this age of Google and Bing where knowledge is free and skills a cheap commodity how sustainable are the free models of doing business?

The Cooks Source plagiarism story and Gavin Heaton’s recent post on Why Social Media Consultants Are Broke illustrate the problems many knowledge workers are having in the new economy.

Gavin quotes Jessica Gottlieb on her Stop Working For Free You Tube clip. With Gavin’s point being that most social media people work for the love of what they do, not for money. Jessica’s views are a splash of cold water in the faces of those who write for at best a few pennies in the hope it will lead to something bigger.

While both Gavin and Jessica are right, there’s a bigger issue at work — that there’s no market for this work. There may be a need for it, but there is no one prepared to pay for it and there are hundreds, if not thousands, of people prepared to work for nothing.

The plagiarism carried out by the Cooks Source magazine is a good example of the free trap where Judith Griggs, the editor, not only believes she is doing the right thing stealing someone’s work but that she actually does the writer a favour.

It’s the idea you’re actually doing a writer a favour by ripping off their work that’s probably irritated most people criticising Judith. It wouldn’t be so bad if Judith did actually do anything to help the writers beyond cutting and pasting their text.

Sadly Judith isn’t alone in this and once you’re taken advantage of by her and the millions of others with these attitudes, you’ll find the demands for free escalate. All of a sudden you’re travelling around the country, taking support calls and being pestered to do all manner of further free stuff.

This isn’t the first time we’ve had to deal with a culture of free. Bill Gates dealt with in the same problem in 1976 where Micro-Soft’s Altair computer programs were being copied. His Homebrew Computer Club letter has become a sort of computer industry equivalent of Luther’s 95 thesis.

Gates’ letter though was written before the Internet where a culture of free has developed, driven often by corporations giving stuff away because capital has been cheap and labour often free. This developed in the dot com boom and has continued every since.

We’re now seeing the capital dry up and the question is how long the labour can afford giving things away. It may be the US and European recessions prolong that free supply as desperate people seek opportunities.

As The Joker said in the Dark Knight movie; “if you’re good at something, why give it away for free?” If you’re doing something for free,  identify why and set some goals on what you want that free work to achieve.