When SMBs (small to medium-sized businesses) or SMEs (small and medium-sized enterprises) think of the advantages of outsourcing, what comes to mind? Cost-saving, we can fairly assume, is first on the list. What else? Quick access to talent, swift scalability, running a 24-hour operation? We are all familiar with such benefits of outsourcing. What many SMBs do not know is just how many advantages of outsourcing there are in addition to the ones I have cited above.
While there are numerous ‘unknown’ outsourcing advantages for SMBs, in this blog post, I am only going to focus on what I believe are the most advantageous of these rather less well-known outsourcing advantages (or perhaps just the most interesting one), which is willpower. But before I make the link between outsourcing and willpower, first I need to put into context just how fleeting willpower actually is – and why outsourcing can play such a significant role in your success).
In a research study carried out at Stanford University by Prof. Baba Shiv, students were pooled into two groups. The first group had to memorize a 2-digit number and the second group was given a 7-digit one. After being asked to recite the number, the two groups were offered snacks, fruit salad or cake for their participation in the study. Those who were asked to memorize the 7-digit number were twice as likely to opt for the cake. The results were unequivocal. The more you think, the more your willpower gets depleted. Our mental energy works just like the gasoline in your car.
In another study that was conducted by Jonathan Levav of Stanford Graduate School of Business, the decisions of judges at parole board meetings in Israel were analysed. The results were remarkable. In the morning (after a break), you have a 65% chance of being released, whereas at the end of the day (before morning and afternoon breaks), that figure drops close to zero. As the judges get fatigued, they fall back onto what is the safest best, a default judgment, which in this case means no release for the prisoner.
The results of these two studies are not only staggering but profound. The decisions you make as a judge are more influenced by having a break and a snack than your years of experience and even the merits of the case! What does this mean for business leaders? And how can outsourcing help us manage our cognitive load in a better way, so that we can make better decisions for what truly counts? In the book The ONE Thing: The Surprisingly Simple Truth Behind Extraordinary Results written by Gary Keller and Jay Papasan, we find the answer to our first question:
“Willpower is so important that using it effectively should be a high priority. Everyone accepts that limited resources must be managed, yet we fail to recognize that willpower is one of them. We act as though our supply of willpower was endless. As a result, we don’t consider it a personal resource to be managed, like food or sleep. This repeatedly puts us in a tight spot, for when we need our willpower the most, it may not be there. Decisions tap our willpower. Willpower is a mental muscle that doesn’t bounce back quickly. If you employ it for one task, there will be less power available for the next one. We lose our willpower not because we think about it, but because we don’t. Without appreciating that it can come and go, we let it do exactly that. Without intentionally protecting it every day, we allow ourselves to go from a will and a way to no will and no way. If success is what we’re after, this won’t work. When we don’t think of resolve as a resource that gets used up, when we fail to reserve it for the things that matter most… we are probably setting ourselves up for the toughest possible path to success… Like any other limited but vital resource, willpower must be managed.”
There are 3 very powerful lessons that Keller and Papasan are giving us here from their highly articulate assessment on willpower:
Willpower is critical for making good decisions and critical for success
Willpower must be managed effectively, like other limited resources
We must save and protect willpower for what is truly most important
But how many SMB owners have the kind of relationship with willpower that Keller advocates? How many CEOs and directors pay attention to and respect their willpower? In fact, if anything, our work culture encourages us to do the very opposite. Managers who grind themselves until 10pm in office are seen as truly committed and loyal to their respective companies as opposed to those who might be adversely affecting the project due to irrational decision-making.
In short, it is clear that there is a discrepancy in how we should work and our attitude to how we do our work. Is this why so many SMB owners are all-seeing, all-doing and all-conquering? This is where and how outsourcing, in particular, can help SMB owners.
When you outsource a project, it is not just the project itself that is getting outsourced. All the logistics that go into executing that project now get outsourced as well. In such a scenario, you are getting a double ‘willpower-win’:
(a) in not having to think about the project and
(b) from not have to do any of the backend logistics to get the project up and running.
Similarly, if rather than a project, you outsource a role or a job function (that is, you hire a Virtual Employee or a remote offshore worker) once again the advantage of outsourcing is two-fold. Not only do you achieve cost-saving on the position that you outsource, you also no longer have any back office/support team management for that employee.
Let me cite an example here to put this into a better perspective. Say you are a small software development company. Your company has consistently been growing over the past few years, so you decide now is the right time to expand beyond your core competencies and also start offering web design and mobile application services.
The only problem you have is there is no more space in the office. By outsourcing these new roles, the benefits of outsourcing are that now you don’t have to worry about finding extra office space for the new department – things like setting it up, recruiting the staff, HR, accounts, IT, administration and legal matters. When you hire Virtual Employees, while you have a dedicated resource working for you (just like a local employee), you don’t need to have any of the back office/support team management that comes with it. The following short video demonstrates this well:
How does a cloud company help you streamline your business?
Thus, outsourcing doesn’t just save you time. It also reduces the number of decisions you have to make. Considerations such as where you will source another office from or what’s the most cost-effective method of recruitment won’t be your concern anymore. This protects your willpower for what is truly important – mission critical, revenue-generating projects, rather than undifferentiated administration, that is, set-up, management and maintenance.
To some, this may not seem like such an appealing advantage. They may ponder – “I already have an HR team, along with accounts and IT departments, so outsourcing those functions is of no great benefit.” But if you think about it on a practical level, this really is not the case.
Take a small business of 30 employees, for example. Such a company may already have in place all the relevant support departments. But the reality is that from time to time, C-level executives will still get pulled into matters of HR, IT, infrastructure and logistics. It’s inevitable. If you are a C-level executive in a small company for a fortnight, just keep a track of how many ‘undifferentiated administrative’ emails, discussions and meetings you get pulled into. You just might be surprised as to how many of your hours are going to waste. I am not saying that C-level executives run support departments, but their inputs are needed from time to time – inputs that actually add very little value to your business, but are still required.
Hence, suppose, this small business needed to hire, say, another 10 staff members and hired Virtual Employees instead of hiring locally, they would be reducing their ‘management & maintenance’ burden by 25%.
Think of all the tiny considerations, decisions, thoughts and activities that you have to devote to in matters of HR, IT, accounts, administration, legal and so on for each and every employee. In isolation, they are small, but if you add them up – every staff member across all the departments – it becomes a sizeable chunk of cognitive load. For a small business, the more staff you have, the more time you have to devote to in making back office decisions that have no impact on improving your company’s value proposition.
We can approach this ‘willpower outsourcing benefit’ from another angle, too. Think of it this way. Say you are a team of 5 staff members and you want to hire another 5 employees. Hiring 5 employees for a bigger and more established business would be a straightforward undertaking. But for a company of just 5, hiring 5 more staff members is actually a significant undertaking because it means doubling the capacity or staff strength. If you look at each additional hire in proportion to the size of the company, the smaller the company, the greater is the burden that each additional hire creates.
If you are a start-up or a one-man band, hiring even 2 members of staff can feel like a colossal effort. Rather than focusing on launching or differentiating your products or services, your time is consumed with employment contracts and payroll issues. That’s not a great way to ‘protect your willpower’, which should be saved up for more important tasks that will help in establishing your company.
Basically, a major advantage of small business outsourcing that is rarely realized and acknowledged is that it truly enables you to streamline your business and increase the level of focus on your most crucial projects.
Remember, when it comes to willpower, even ‘small wins’ are ‘big wins’. Having to memorize an extra 5 digits doubles the chances of you choosing chocolate cake over fruit salad.
Every HR meeting that you no longer have to attend, every recruitment interview that you are able to skip and every logistic that you no longer have to concern yourself with are ‘willpower wins’. And irrespective of whether you have HR, IT and Accounts managers handling these areas for you already, when you think about it on a practical level, we all know that for most small businesses, the CEOs will end up drawn into assisting with making decisions in these domains. That’s why CEOs spend a lot of time having meetings with HR, IT and Accounts managers.
In The ONE Thing, Keller and Papasan provide us with some practical tips on what we can do to protect our willpower. One of the recommendations is to just say ‘no’ to all those considerations that are not directly related to our ‘one thing’ (by which they mean our most important mission critical project). That we must stay disciplined and committed towards focusing solely on our ‘one thing’ by learning to say ‘no’ to our colleagues.
The reason Keller and Papasan so strongly assert that we commit to saying ‘no’ is because it is very easy to get distracted. When a colleague is right in front of you and only wants 5 minutes of your time, how many of us will reply with a ‘no’? But Keller explains that he himself goes so far as to avoid getting coffee in the morning to ensure he does not get side-tracked by a colleague. The point is that it is very easy to get distracted when a piece of work or issue is right there in front of us. It is easy to happen.
With such dedication and commitment to his ‘one thing’ (that is, working ‘on’ your business, rather than ‘in’ your business), it’s not hard to see why Keller has been so successful. The advantage of SME outsourcing (with regards to back office support departments, at least) is that now we don’t even have to be disciplined, now we don’t even have to say ‘no’, for now you won’t even be asked the questions.
SMB outsourcing can help in playing a huge role in eradicating many of our tasks that need to be done but actually offer no undifferentiated value. This can help us better manage and protect our willpower, so that we can apply the same level of ruthless focus that Keller advocates towards our most important projects, so that like him, we too can achieve truly extraordinary results in our industry.
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