The Pareto Principle states that 80% of results are yielded by 20% of the work one does. Therefore, it makes sense to outsource the other 80% of work, which only produces 20% of results, right? But out of everything you do for a business, how do you know what exactly to outsource to virtual assistants and what should be kept in-house instead?
Here is a list of things you should not outsource as a startup.
1. Your company’s core competencies
Core competencies are, in their essence, what your company does best.
To evaluate your core competencies, you should evaluate the products, services, skills, and abilities that allow you to deliver unique value to your customers. It is imperative to know your strengths and strategies to understand what makes your offering better than its competitors. Some examples of core competencies are quality, customer service, innovation, or marketing. However, there are no set frameworks to evaluate this - core competencies are unique to each company. Focus on what makes you different.
Outsourcing inherently introduces an element of risk, and you do not want to risk underdelivering on what should be your selling point. Therefore, it does not make sense to outsource your business’s core proficiencies.
2. Executive Leadership and Company Vision/Culture
The CEO is the driving force behind a company. While all roles within a startup are important, the CEO decides the direction and vision of the business. They, along with other top executive leadership members, are also vital in establishing the company culture. Without a company culture that follows your ideal mold, you may run into frequent HR concerns and find difficulty in maintaining the quality and motivation of your team.
Outsourcing is essentially tapping into a resource external to your company to do a temporary job for you. Thus, an outsourced CEO will likely not be solely invested in your company for the long-term. Without a CEO that has 100% buy-in, it will be difficult to establish the vision and culture of the company in a way that you want. Outsourcing such an important role will likely have severe ramifications.
3. Strategy (marketing and business)
Strategy is another differentiating factor that can transform the direction of a company. It revolves around critical decision-making processes that are crucial to running and maintaining a successful business. A good business strategy encompasses planning the products, services, expansion and contraction decisions, and internal hiring practices that allow your company to move closer to its ultimate goals and vision. On the other hand, a good marketing strategy involves a detailed plan to acquire and retain new customers. Ultimately, both of these play an enormous role in driving revenue and contributing to the long-term viability of your company.
Since being successful in both requires an intimate familiarity with your company’s brand and vision, it makes more sense to keep big-picture strategy decisions in-house. Team members within the company will likely be better prepared to make long-term decisions that can push the company toward its ultimate goals. This is not to say that external strategy consultants aren’t useful, only that ultimate decision-making would better be done in-house.
4. Customer facing experiences
Any interactions with current or potential customers are vital in establishing your trustworthiness as a company. Every customer touchpoint is an opportunity to build rapport with your customers and cement a connection. Whether it be customer service or personalized outreach, having an actual member of your team on the other end can solidify your company’s reputation.
As outsourcing relies on outsiders to do internal work, it may be harder to monitor the success of customer interactions. Additionally, poor quality customer interactions may tarnish your reputation; if a user has a poor experience with your customer service, they might not return to use your product or services. Conversely, a good experience with customer service may actually serve as a differentiating strength to your company and become an additional value-add for the customer. Word of mouth is immensely important for a startup, so for such an important facet of your company that can affect how future customers view you, it would probably be best to keep this in-house.
In a similar vein, relationship-building is something that should likely be done in-house as well. This involves creating and maintaining partnerships, sales functions, leadership roles, as well as some aspects of customer service. Building long-lasting and value-add relationships involves a deep element of trust, which may be hard to establish if the partner or customer is solely interacting with a person external to the company. Furthermore, sales roles require the representative to connect with a potential customer by telling the story of the company. Thus, a familiarity with the company is required to be an effective salesperson in cultivating the company-customer relationship.
Although it may seem tempting to outsource relationship building, since a significant time investment is required to be successful, it is crucial that these functions be kept in-house. Outsourcing these tasks to a virtual assistant could result in the loss of an important partnership or unsuccessful customer interactions. Therefore, for a responsibility that influences an element as important to a startup as trust, it would be best not to outsource.
6. Competitive advantages
Competitive advantages are what set you apart from your peers. They are what make your offering unique or more attractive than others in the same industry.
Some of these may overlap with core competencies, such as quality, customer service, or innovative ability. However, a competitive advantage can also manifest in the form of lower prices, better reputation, ability to produce products at a lower cost, and more. Thus, while a competitive advantage is similar to a core competency, it has a broader focus on company positioning and encompasses all aspects where your company may excel over another.
Therefore, if any of the functions you are considering outsourcing involve your competitive advantage, it may be best to keep these in-house. As mentioned above, outsourcing to a virtual assistant, while helpful, does inherently introduce an element of risk. It might not be worth it to outsource and potentially risk underperforming in an area that could otherwise elevate you above the competition. In fact, underdelivering may even drive your customers to your competitors instead.
7. Certain aspects of human resources
While some of the more mundane responsibilities associated with HR may be outsourced, such as initial stages of hiring, vetting, and sourcing candidates, there remain some aspects of human resources that should be kept in-house.
One aspect is termination. Although it might be tempting to hire an external person to have tough conversations with current employees, it appears disrespectful to the terminated individual and leaves them with a bad impression of the company, which they might pass along to other potential employees. As a result, it would be better to have an internal employee initiate termination discussions.
The final say on hires should also be an internal decision. Although a virtual assistant may help in the beginning of the recruiting cycle, only people within the company can truly know what kind of character you are looking for to fit within the team. Some candidates may seem qualified on paper, but if they do not fit the established company culture, they may not be the best hire. Thus, the final decision on whether or not to bring someone on board should be made by an internal leader.
Employee development is another area that should be hosted internally. Employees should feel supported, both emotionally and in their careers. This encompasses wellness sessions, professional development programs, and more. Any initiative to further the well-being of employees should be undertaken by internal management, as coming from an external source may seem disingenuous or impersonal.
8. Things you may not understand
The most tempting things to outsource are tasks you may not understand as the leader of a company. For instance, if you are tech-focused, then CRM may be entirely foreign to you, and it might seem like a better idea to outsource it to a virtual assistant to manage. However, this would be a mistake. If you are unfamiliar with something, you have a limited ability to gauge the quality of work done, and it will be harder to hold a virtual assistant accountable for their deliverable. Furthermore, since the outsourced virtual assistant would be building a system from scratch, a later hire may find it inefficient and scrap the whole thing, resulting in the outsourcing becoming an ultimate waste of time and capital.
Instead, it makes more sense to hire someone with relevant experience in an internal role that encompasses this task or try to learn some of it yourself. This will help you understand the effectiveness of the work done, and will likely be more beneficial in the long run.
In conclusion, while there are immense benefits to outsourcing your repetitive tasks to a virtual assistant, there remain some tasks that should be undertaken in-house, or at least carefully considered before outsourcing. Focus on maintaining the quality of your business’s strengths - that crucial 20% of work! - and outsource the other 80% of tasks that eat up time and capital.
For ideas of tasks that you should outsource as a startup, check out Pareto’s 30+ tasks to delegate. We’re looking forward to helping you delegate at maximum efficiency and effectiveness.